Thank you for sharing!

Your article was successfully shared with the contacts you provided.
Click here for the full text of this decision FACTS:Pioneer Exploration Ltd. applied to the Texas Railroad Commission for a permit to convert an old gas well in Wise County, (the Dinwiddie 1-A well) into a commercial well for the disposal of oil and gas waste by underground injection. Several Wise County residents, including Texas Citizens for a Safe Future and Clean Water and James G. Popp (Texas Citizens), opposed Pioneer’s application. Because residents opposed the application, the commission held an administrative hearing, during which all parties were allowed to present evidence. The commission requires that applications for injection wells include the identification of any wells located within a one-fourth-mile radius of the proposed injection well to ensure that there are no penetrations that could become a conduit for migration of the injected waste. In the area known as the Barnett Shale the area where the Dinwiddie 1-A is located the commission’s practice is to apply more stringent criteria to applications for injection wells, requiring that all wells located within a one-half-mile radius of the proposed injection well be identified. Pioneer exceeded this requirement by including in its application a review of all wells located within a one-mile radius of the Dinwiddie 1-A. During the initial administrative hearing, which was held on May 20, 2005, Ronald Wefelmeyer, who prepared Pioneer’s application, testified that there were no wells located within a one-fourth-mile radius of the proposed well. Wefelmeyer further testified that of the 14 wells located within a one-mile radius of the proposed well, all except one were cased in accordance with the surface-casing requirements established by the Texas Commission on Environment Quality (TCEQ) and that the remaining well was plugged properly according to the TCEQ’s requirements. Wefelmeyer also stated, while looking at an exhibit showing the geologic cross-sections of the underground strata in the area, that a particular well, the Donaldson No. 1, was not correctly located on the commission’s maps, which were relied on by Pioneer in completing the application and preparing the exhibits. Wefelmeyer testified that the Donaldson No. 1 was actually closer to the Dinwiddie 1-A than indicated on the maps. Later testimony by James Popp suggested that there was an additional well, referred to during the remainder of the May hearing as the “mystery well,” located within a one-fourth-mile radius of the Dinwiddie 1-A and improperly identified on the commission’s maps as being located elsewhere. The commission’s underground-injection-control staff became concerned about the existence of the “mystery well” and indicated that they may have taken another position or a more active role at the hearing if they had been aware of the existence of this well. In response, the hearing examiners recessed the hearing to allow Pioneer the opportunity to supply the commission’s staff with additional information regarding the “mystery well.” Texas Citizens argued that because Pioneer failed to identify the “mystery well,” the application should be dismissed. The hearing examiners refused to dismiss the proceeding, stating that unless the application was “dismissed with prejudice, it could simply be refiled in any event. And we think it’s a waste of the parties’ time and a waste of the commission’s time to adopt a procedure which would contemplate having to start over on this case, bring everybody back for another hearing.” The examiners stated that all parties would have an opportunity to present any evidence they cared to present when the hearing was reconvened. By letter dated June 6, 2005, the commission informed Pioneer that it no longer considered Pioneer’s permit application to be administratively complete and listed a number of items required in order for the application to be complete. Pioneer subsequently amended its permit application and provided the commission with supplemental information. The hearing on Pioneer’s permit application was reconvened on Oct. 6, 2005. Wefelmeyer testified that he had identified the “mystery well” as the Donaldson No. 1, the well that had been mislocated on the commission’s maps. The commission’s maps erroneously represented that the Donaldson No. 1 was outside of a one-half-mile radius of the Dinwiddie 1-A, when in fact the Donaldson No. 1 was within a one-fourth-mile radius and should have been identified as such in Pioneer’s application. In the interval between the May hearing and the October hearing, Pioneer performed a remedial cement squeeze job on the Donaldson No. 1, which satisfied the concerns of commission staff regarding risks posed by the proximity of the Donaldson No. 1 to the Dinwiddie 1-A. As a result of the remedial cement squeeze, Pioneer’s application was declared administratively complete by the commission. On Dec. 2, 2005, the commission’s hearing examiners issued a Proposal for Decision (PFD), recommending issuance of the permit. The commission adopted the PFD and issued the permit. After exhausting its administrative remedies, Texas Citizens sought judicial review of the commission’s decision. The district court affirmed the commission’s decision and this appeal followed. HOLDING:Affirmed in part, reversed and remanded in part. The court reviewed the commission’s decision under a substantial-evidence standard. In its first issue, Texas argued that it was denied an opportunity for a fair hearing, because the administrative hearing should have been terminated at the time the commission determined that Pioneer’s application was not administratively complete. Texas Citizens asserted that the hearing examiners violated agency procedural rules by allowing Pioneer to amend its application and reconvening the hearing at a later date and that this failure to follow procedure resulted in a denial of Texas Citizens’ procedural due process rights. Due process, the court stated, requires notice and an opportunity to be heard at a meaningful time and in a meaningful manner. Because the commission did not violate agency procedures in recessing and subsequently reconvening the hearing and because Texas Citizens was given a fair hearing with ample opportunity to respond and to present evidence and argument on each issue involved in the case, the court held the commission’s administrative proceeding on Pioneer’s permit application did not violate Texas Citizens’ due process rights. Under Texas Water Code �27.051(b)(1), the court stated, the commission must make a finding “that the use or installation of the injection well is in the public interest” before issuing an injection well permit. In its second issue, Texas Citizens argues that the commission took too narrow a view of “the public interest” by focusing only on the increased recovery of oil and gas and disregarding the public interest concerns presented by Texas Citizens. The court noted that administrative agencies have wide discretion in determining what factors to consider when deciding whether the public interest is served. But the court held that the commission abused its discretion by limiting its public interest determination to the conservation of natural resources. As a result, the court remanded the matter to the commission to reconsider its public interest determination, using a broader definition of “the public interest” that includes public-safety concerns where evidence of such concerns has been presented. OPINION:Henson, J.; Law, C.J., and Waldrop and Henson, JJ.

Want to continue reading?
Become a Free ALM Digital Reader.

Benefits of a Digital Membership:

  • Free access to 1 article* every 30 days
  • Access to the entire ALM network of websites
  • Unlimited access to the ALM suite of newsletters
  • Build custom alerts on any search topic of your choosing
  • Search by a wide range of topics

*May exclude premium content
Already have an account?

Reprints & Licensing
Mentioned in a Law.com story?

License our industry-leading legal content to extend your thought leadership and build your brand.


ALM Legal Publication Newsletters

Sign Up Today and Never Miss Another Story.

As part of your digital membership, you can sign up for an unlimited number of a wide range of complimentary newsletters. Visit your My Account page to make your selections. Get the timely legal news and critical analysis you cannot afford to miss. Tailored just for you. In your inbox. Every day.

Copyright © 2021 ALM Media Properties, LLC. All Rights Reserved.