NGL Water Sols. Eagle Ford, LLC v. R.R. Comm’n, No. 03-17-00808-CV, 2019 Tex. App. LEXIS 10302 (Tex. App.—Austin Nov. 27, 2019, no pet. h.)
This case involves a dispute as to whether a competitor saltwater disposal well operator is an “affected person” under 16 Tex. Admin. Code §3.9(5)(E) and, thus, whether such competitor has standing to challenge an application for disposal well permit.
NGL Water Solutions Eagle Ford (NGL) operated a saltwater disposal well under a permit issued by the Texas Railroad Commission (RRC). In April of 2016, one of its competitors, Blue Water, filed an application to operate a commercial injection well at a nearby location. NGL protested the application. At the RRC hearing, Blue Water claimed that NGL was not entitled to protest Blue Water’s application because NGL was not an “affected person”. NGL argued that Blue Water’s permit was not in the “public interest” because there was no present industry need for additional disposal capacity in the area, because NGL had existing injection wells with excess capacity in the area.
The RRC examiners found that NGL did not present sufficient evidence that it “has suffered or will suffer actual injury or economic damage other than that of the general public or as a competitor.” As a result, the RRC determined NGL was not an “affected person” under Statewide Rule 9, and therefore was not entitled to protest Blue Water’s permit application. Because there were no remaining protests, the RRC remanded Blue Water’s application for administrative review, where it was approved administratively.
Shortly after the RRC issued Blue Water’s permit, NGL filed suit against the Texas Railroad Commission (RRC) and Blue Water Disposal, alleging the RRC erred when it denied NGL “party status” to protest Blue Water’s disposal permit, and when it subsequently approved and issued the permit administratively. The Austin Court of Appeals affirmed the RRC and trial court, noting that § 3.9(5) defines “affected persons” in a way that “contains an express exclusion – the person must suffer actual injury or economic damage other than as a member of the general public or as a competitor.” “Rather than presenting evidence of injury or economic damage other than that of a competitor, NGL challenged the merits of the application on the ground that the proposed well would not be in the “public interest” by offering evidence of excess disposal capacity… [I]ts evidence did not identify harm or economic damage other than as a competitor.” As a result, the court held that the RRC acted within its discretion by remanding the permit for administrative approval.
Ana Navarrete
Latest posts by Ana Navarrete (see all)
Austin Brister
