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2017-025 Gas Well Inspections Date: April 21, 2017 Report No. 2017-025 INFORMAL STAFF REPORT TO MAYOR AND CITY COUNCIL SUBJECT: The Department of Development Services Gas Well Inspections Division Business Efficiency Assessment. BACKGROUND: The Gas Well Inspections (GWI) Division is presented with a unique opportunity to assess its level of service. Since the adoption of the most recent gas well ordinance in August 2015, the GWI Division has realized attrition resulting in 3 vacant positions. This has enabled the reassessment of the skill sets needed to implement the ordinance. The current structure of the division is reflected in Figure 1 below. Figure 1: Current Division Structure Director of Development Services GWI Administrator 2 GWI Inspectors (vacant) Gas Well Coordinator (vacant) The implementation and associated impacts of the ordinance were not realized until the latter part of 2015 revaluated in anticipation of increased gas well production and to streamline the implementation of the ordinance by placing specific functions in the appropriate arena. There are 3 components to the current gas well ordinance which are outlined below; 1. Zoning districts and associated limitations 2. Subdivision platting 3. Gas well drilling and production As result, the GWI Division fulfils 2 distinct and different functions necessary to achieve the regulation of gas well development; 1. Relationship to surface development (land use compatibility) 2. Operations Date: April 21, 2017 Report No. 2017-025 The infancy stage of gas well development is the spatial assessment of the gas well site as it relates to surface development. It is through the permitting and project review process that the site locations are reviewed and compatibility with the surrounding land uses is established by requiring specific setbacks based on the nature of the uses, ensuring access routes to the site do not compromise existing infrastructure, mitigate nuisance such as noise, notification disclosures, and environmental protection. This function requires the expertise of a land use planning professional. The operations function is initiated upon the approval of the gas well site plans/plats and continues through the lifecycle of the site/well. This inspections arm of the division is unique and requires an experienced professional in the gas well industry to be able to effectively enforce and discern gas well drilling and production regulations described in the ordinance. Responsibilities include; evaluating for compliance with state, federal and local regulations, site inspections, monitoring operations, environmental and erosion controls measures, nuisance prevention, security measures, integrity of equipment, proper equipment usage, general housekeeping, review of required testing and surveys, site visits relating to notices of activity and responding to public complaints and emergencies. In addition to bi-annual inspections, there are six initial inspections conducted that align with the different stages of the gas well development lifecycle which are; 1. Predrilling 2. Drilling 3. Completion 4. Flowback 5. First sales 6. Plug & Abandonment. It is important to note that each stage of development poses unique operations that present higher risks to safety, health, and the environment. Recommendation In order to enable a comprehensive and thorough method of implementation of the two primary functions of the gas well ordinance it is recommended the GWI Division become more weighted in the operations arena and the land use compatibility function align with the Planning Division. It is further recommended that the Gas Well Administrator position be reclassified and tailored to Gas Well Inspector Supervisor. This position will manage the operations function of the Gas Well Inspections Division described above. This approach provides the operations function to align with industry standards and responsibilities. The City has 226 single well sites that can support additional gas well drilling, In addition, most of the multi well sites can also support additional wells. With minimal modifications, these sites will provide opportunities for the gas well operators to pursue in-field development at lower costs and lower risks with infrastructure in place. It is predicted gas well development will become more active in the near future, and it will be necessary for the Gas Well Inspections Division to fill the vacant Inspector positions. The proposed functions are illustrated in Figure 2 below. Date: April 21, 2017 Report No. 2017-025 Figure 2: Proposed Gas Well Division Structure Director of Development Services GWI Operations Division Planning Division GWI Inspector Supervisor Gas Well Land Use Planning Supervisor Gas Well Inspector x2 Future Predicted Activity Over the course of the past two years drilling, completion, re-completion and workovers have been at their lowest levels of activity. This could be attributed to the decline in natural gas pricing. In the past, workover activities typically increase as depressed gas prices begin to improve. This has been a precursor and a leading indicator of future drilling activity improvement. Recently gas prices appear to be modestly rebounding and as a result workover activity has also increased. For example, from April 2016 to October 2016, there were a total of 11 workovers and from November 2016 to present, there has been a total of 31 workovers. Exhibits Exhibit 1 Summary of Gas Well Inspections Role Exhibit 2 Gas Well Inspection Form Exhibit 3 Gas Well Inspection Form ETJ Exhibit 4 Gas Well Development Plat Checklist Exhibit 5 Gas Well Development Site Plan Date: April 21, 2017 Report No. 2017-025 FAQs 1. How many gas wells are located within the City of Denton? 294 2. 3. How many gas well plats are located within the City of Denton? 100 4. 5. How many gas well production sites have been created as a result of the current ordinance? 4 GWSP16-0005 Eagleridge, Scout Unit located at 2013 N. Masch Branch Road. This is a new site and no wells drilling on the site GWSP16-0007 Eagleridge, Tetra Pak located at 3003 Airport Road. This is an existing site that was replatted to accommodate the Tetra Pak addition GWSP17-0001 Eagleridge, Guyer 1 located at 7491 S. Teasley Lane. This is an existing site and was replatted to accommodate Guyer High School expansion. GWSP17-0002 Eagleridge, Guyer 2 located at 7501 S. Teasley Lane. This is an existing site and was replatted to accommodate the Guyer High School expansion. 6. How many workovers by operator? Refer to Figure 3 Below Figure 3: Workover Activity Workover Activity - 1 Year Reported in 6 month increments Operator 4/16-10/16 11/16-4/17 Total Eagleridge 10 20 30 Devon 1 2 3 Endeavor 0 4 4 Enervest 0 4 4 Trinity 0 1 1 Total 5 11 31 42 STAFF CONTACT: Munal Mauladad Director of Development Services 940-349-8313 Munal.Mauladad@cityofdenton.com 215 W HICKORY STREET DENTON, TEXAS 76201 940.349.8451 FAX 940.340.7707 DEVELOPMENT SERVICES April 21, 2017 SUBJECT: Role of Gas Well 1. Inspection new and existing gas well sites: a. There are six initial inspections made at the following phases of gas well development: i. Pre-drilling: Inspecting for compliance with the site plan ii. Drilling: Inspecting for compliance with Fire codes, site plan layouts and nuisance mitigation iii. Completion activities: Inspecting for compliance with nuisance mitigation, sound level reports, and site layout iv. Flowback: Inspecting for compliance with nuisance mitigation, flaring, dust and odor, traffic, light and sound v. First sales: Inspecting for compliance with site layout for the production operations of the wells, and the gas well equipment vi. Plugging: Inspecting for compliance associated with restoration and RRC filed reports b. Annual inspections are conducted two times a year for all sites within the City and its ETJ. Within the ETJ, gas well inspections are limited to inspecting only to ensure that the number of wells drilled does not exceed what was platted and to ensure required signage is in place. c. Inspectors also respond to Notices of Activities reported by the operator. Activities that require reporting to the City are; i. Site preparation ii. Drilling iii. Completion iv. Recompletion v. Rework/Workover vi. Setting surface casing vii. General maintenance 2. Responding to public inquiries and complaints. The Division seeks to ensure responses are provided in a timely manner and collaborates with other City departments and regulatory agencies as necessary to resolve issues at gas well sites. The Gas Well Inspection Division gas well ordinance, but also with state and federal law. The following matrix outlines the various regulatory bodies that influence gas well drilling and production activities in Texas. Level Regulatory Body Scope of Influence Environmental National environmental regulations such as the Clean Air Act place limits Protection Agency on emissions and discharges from industrial operations, including oil and (EPA) gas. regulate the manufacture and distribution of chemicals used and produced Federal by industrial operations, including oil and gas development. Occupational OSHA Regulates worker and site safety, including personnel training, Safety and Health chemical labeling, required personal protective equipment, and other Administration measures to limit worker exposure to operational and chemical hazards. (OSHA) Railroad The RRC is responsible for regulating almost all aspects of oil and gas Commission development in Texas, including processes from well drilling to well (RRC) plugging. RRC maintains records of operating companies as well as their mineral leases, wells, and production levels. RRC regional offices conduct periodic inspections of well sites and can issue violations for improper equipment operation. State Texas Commission on TCEQ reviews air emission calculations for pad sites and issues permits Environmental for the maximum amount of allowable emissions of regulated pollutants. Quality (TCEQ) Texas Department of Health and exposure to naturally occurring radioactive material (NORM), which can Human Services be presenting in piping and storage tanks on pad sites. Gas Well GWI reviews and issues Gas Well Site Plans and permits. Inspections GWI reviews subdivision plats and other development projects for Division (GWI) compliance with setbacks and other provisions of the ordinance. GWI conductions initial and bi-annual inspections of all gas well pad sites within the City and its ETJ. Watershed The Watershed Protection department review Gas Well Site Plans to Protection ensure storm water protection and erosion control is provided. The department conducts initial site inspections to ensure erosion control measures are installed properly. Fire Department The Fire Department issues permits for gas wells and storage tanks. Municipal The Fire Department conducts inspections of pad sites to ensure tanks are in good operating condition, secondary containment measures are functional, and lightning protection is in place. The International Fire Code establishes minimum setbacks between production equipment (i.e. wellheads and flammable liquid containers) and buildings. The Fire Department reviews Gas Well Site Plans to ensure setbacks are met and site access is adequate. Police Department The Police respond to citizen concerns regarding safety and noise violations at pad sites. 2 GAS WELL INSPECTIONS DIVISION PLANNING & DEVELOPMENT DEPARTMENT City Hall West: 221 North Elm Street | Denton, Texas 76201 (940) 349-8372 | www.cityofdenton.com/gaswellinspections G AS W ELL D EVELOPMENT P LAT C HECKLIST REQUIREMENTSSPECIFICTOAGASWELLDEVELOPMENTPLAT AnypersonproposingoramendingaDrillingandProductionSiteonatractoflandlocatedinDivisionIof the/źƷǤ͸ƭExtraterritorialJurisdiction(ETJ)shallprepareandsubmitacompletedGasWellDevelopment ApplicationalongwithaGasWellDevelopmentPlatChecklistform. ThefollowingmustbeincludedineachapplicationpackagesubmittedtotheCityforreview. 1.GasWellDevelopmentApplication; 2.CompletedGasWellDevelopmentPlatchecklist; 3.Appropriateapplicationfee(s);and 4.ExhibitsAthroughDbelow* *EachExhibitshallbesubmittedoruploadedasaseparatesheet.Includethewordͷ9ǣŷźĬźƷ͸andthecorrespondingletterinthe prefixofthedocumenttitle,e.g.,ExhibitAΑCoverPageandProjectInfo. Checkif Provided ExhibitA:CoverpagethatincludesavicinitymapoftheDrillingandProductionSite;aSheetIndexthatidentifies thenumberofExhibitswithtitlesforeach(exhibittitlesshallbeginwiththewordͷ9ǣŷźĬźƷ͸andincludethe respectiveletter);theDrillingandProductionSiteName(aka:ProjectTitle);thedateofpreparation;theƦƩĻƦğƩĻƩ͸ƭͲ hƦĻƩğƷƚƩ͸ƭͲandpropertyƚǞƓĻƩ͸ƭnames;Cityprojectnumber;andasignatureblockforboththeGasWell AdministratorandtheCitySecretary.AddanotetotheCoverPagestatingthereasonforamendment,ifapplicable. ExhibitB:AmappingexhibitwithanaccuratelegaldescriptionoftheDrillingandProductionSitethatwasprepared andcertifiedbyaRegisteredProfessionalLandSurveyoroftheStateofTexas.Provideclosuresheetofbearingsand distancesusedinlegaldescription.Theexhibitshallincludeexactlocation,dimension,anddescriptionofallexisting public,proposed,orprivateeasements,andpublicrightofwaywithintheleasearea,intersectingorcontiguous withitsboundary,orformingsuchboundary.Describeandlocateallpermanentsurveymonuments,pins,and controlpointsandtieandreferencethesurveycornerstotheTexasStatePlaneCoordinateSystemNorthCentral Zone19831999datum.ProvideproposedpipelineƩƚǒƷĻΓƓƚƷĻthataseparateapplicationmaybenecessaryifthe proposedrouteencroachesontoanypubliceasement,rightofwayorlandownedbytheCityofDenton. ExhibitC:AdrawingoftheDrillingandProductionSiteshowingclearsiteboundarylinesandthelayoutofthesite. Includea1,000footbuffercirclearoundtheboundaryoftheDrillingandProductionSiteforreference. ExhibitD:AccessandTransportationPlanidentifyingthepointsofaccessandroutestobefollowedontheroad networksupportinggaswelldevelopmentontheDrillingandProductionSiteovertime. IREVIEWEDTHECHECKLISTANDALLSUBMITTALSFORCOMPLETENESSANDACCURACY. ______________________________________________________________________ SignatureDate GAS WELL INSPECTIONS DIVISION DEVELOPMENT SERVICES DEPARTMENT City Hall West: 221 North Elm Street | Denton, Texas 76201 (940) 349-8372 | www.cityofdenton.com/gaswellinspections G AS W ELL D EVELOPMENT S ITE P LAN C HECKLIST REQUIREMENTSSPECIFICTOAGASWELLDEVELOPMENTSITEPLAN AnypersonproposingoramendingaDrillingandProductionSiteonatractoflandlocatedwithintheCity ofDentonshallprepareandsubmitacompletedGasWellDevelopmentApplicationalongwithaGasWell DevelopmentSitePlanChecklistform.TheSitePlanmaybecontingentonapprovalofacorresponding SpecificUsePermit(SUP)orWatershedProtectionPermit(WPP),ifrequiredforthesite. ThefollowingmustbeincludedineachapplicationpackagesubmittedtotheCityforreview. 1.GasWellDevelopmentApplication; 2.CompletedGasWellDevelopmentSitePlanchecklist; 3.Appropriateapplicationfee(s); 4.ExhibitsAthroughJbelow*;and 5.ProofofrequiredInsuranceandSurety. *EachExhibitshallbesubmittedoruploadedasaseparatesheet.Includethewordͷ9ǣŷźĬźƷ͸andthe correspondingletterintheprefixofthedocumenttitle,e.g.,ExhibitAΑCoverPageandProjectInfo. Check boxas Provided ExhibitA:CoverpagethatincludesavicinitymapoftheDrillingandProductionSite;aSheetIndexthatidentifies thenumberofExhibitswithtitlesforeach(exhibittitlesshallbeginwiththewordͷ9ǣŷźĬźƷ͸andincludethe respectiveletter);theDrillingandProductionSiteName(aka:ProjectTitle);thedateofpreparation;theƦƩĻƦğƩĻƩ͸ƭͲ hƦĻƩğƷƚƩ͸ƭͲandpropertyƚǞƓĻƩ͸ƭnames;Cityprojectnumber;andasignatureblockforboththeGasWell AdministratorandtheCitySecretary.AddanotetotheCoverPagestatingthereasonforamendment,ifapplicable. ExhibitB:AmappingexhibitwithanaccuratelegaldescriptionoftheDrillingandProductionSitethatwasprepared andcertifiedbyaRegisteredProfessionalLandSurveyoroftheStateofTexas.Provideclosuresheetofbearingsand distancesusedinlegaldescription.Theexhibitshallincludeexactlocation,dimension,anddescriptionofallexisting public,proposed,orprivateeasements,andpublicrightofwaywithintheleasearea,intersectingorcontiguous withitsboundary,orformingsuchboundary.Describeandlocateallpermanentsurveymonuments,pins,and controlpointsandtieandreferencethesurveycornerstotheTexasStatePlaneCoordinateSystemNorthCentral Zone19831999datum.ProvideproposedpipelineƩƚǒƷĻΓƓƚƷĻthataseparateapplicationmaybenecessaryifthe proposedrouteencroachesontoanypubliceasement,rightofwayorlandownedbytheCityofDenton. ExhibitC:AmapshowingthedistancefromtheboundariesoftheDrillingandProductionSitefromallProtected UsesandResidentialSubdivisions.ThemeasurementshallbecomputedinaccordancewithDDCSection 35.5.10.2.D.Iftheseparationdistance(s)fromProtectedUsesandResidentialSubdivisionsdonotmeetthesetback requirementsofDDCSection35.5.10.2,theapplicationalsomustincludeacopyofthewaiversapprovedpursuant toDDCSection35.5.10.6.A,ortheapprovalofasetbackvarianceapprovedbytheBoardofAdjustmentpursuantto DDCSection35.5.10.6.B.IftheOperatorseekstoqualifytheproposedDrillingandProductionSiteforan administrativewaiverpursuanttoDDCSection35.5.10.6.C,theinformationthereinrequiredshallbesubmitted withtheapplicationforsiteplanapproval. ExhibitD:AsiteplanoftheDrillingandProductionSite,capableofbeingrecorded,showingclearsiteboundary linesandthelocationofallƚƓΑƭźƷĻimprovementsandequipment,including:tanks,pipelines,compressors, separators,andotherappurtenancesinrelationtotheboundariesofthesite. GAS WELL INSPECTIONS DIVISION DEVELOPMENT SERVICES DEPARTMENT City Hall West: 221 North Elm Street | Denton, Texas 76201 (940) 349-8372 | www.cityofdenton.com/gaswellinspections G AS W ELL D EVELOPMENT S ITE P LAN C HECKLIST ExhibitE:ErosionandSedimentControlPlan.Exhibitmustincludecontactinformation;aphysicalsitedescription including:landuses,generalvegetationandsurfacewaterinnearproximity;topography/contourlinesbothpre andpostconstruction;hydrologicanalysisincluding:stormwaterdirectionalflow,outfalls,waterwellrelated structuresandwatersources;receivingwaters;soils;projectnarrativewithgeneraltimeline;wellpadsiteplan including:fuelingareas,wastedisposalcontainers,hazardousmaterialsstorage,andproductandcondensate storagetanks;soilstabilizationanderosioncontrolmeasuresincluding:listofselectedstormwatermeasures,site mapofselectedstormwatermeasureslocationsandfinalstabilizationplans;solidwastemanagementplan, septic/portoletlocation;andmaintenanceplanforstormwatercontrolsincludingscheduleandtransferof ownershipprovision.SeeGasWellErosionandSedimentControlPlanGuidanceDocumentfordetails. ExhibitF:AnAccessandTransportationPlanidentifyingthepointsofaccessandroutestobefollowedontheroad networksupportinggaswelldevelopmentontheDrillingandProductionSiteovertime,andtheinternalcirculation planforthepropertycontainingtheproposedsite,includingprovisionstoprotectvehicleaccesstoNeighborhood Streets.ThePlanshallcontainspecificationsforconstructionoftheaccessroad(s)andonsitefirelanesthatmeet thestandardsforemergencyaccesssetforthinDDCSection35.22.2.E.Amapshowingtransportationrouteand roadforequipment,supplies,chemicals,orwasteproductsusedorproducedbythegaswelloperationshallbe included.Themapshallillustratethelengthofallpublicroadsthatwillbeusedforsiteingressandegress.Notethat siteaccessviaaNeighborhoodStreet,asdefinedintheDDC,isnotpermitted.Thewatersourceproposedforboth thedrillingandfracturingstagesshallbeidentifiedinthePlan,togetherwithadesignationwhetherthewateristo behauledorpipedtothesite. ExhibitG:LandscapePlan.Theprojectreviewplannerwilldetermineifabufferisrequiredbasedontheadjacent landuse(s).IfPlannerdeterminesbufferisrequired,thenalandscapeplanmustbesubmittedinaccordancewith theCityof5ĻƓƷƚƓ͸ƭLandscapePlanChecklist.NoteveryDrillingandProductionSiterequiresalandscapeplan. ExhibitH:ATreeInventoryandaPreservationPlanandMitigationPlanpursuanttoDDCSection35.13.7. ExhibitI:ANoiseManagementPlan,preparedinaccordancewithDDCSection35.22.2.F.2. ExhibitJ:ProofofissuanceofNoticeofActivitiespursuanttoDDCSection35.22.7. IREVIEWEDTHECHECKLISTANDALLSUBMITTALSFORCOMPLETENESSANDACCURACY. ______________________________________________________________________ SignatureDate