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RCRA Box 321 

Prepped by Ryan Dugan 

Document Number: 

232) OGRC-S0025 

Docket Number: 

F-93-OGRC-FFFFF 

Printed 5/8/2007 3:36:32 PM Sheet 232 of 259 
P.2 

KENT HANCE, Chairman 

JOHN SHARP, Commissioner 

JAMES E. (JIM) NUGENT, Commissioner 

RAILROAD COMMISSION OF TEXAS 

OIL AND GAS DIVISION 

OG-RC- sooas 

JIM MORROW, P.E. 

Director 

WILLIS C. STEED, P.E. 

Director, Field Operation! 

(512)463-683 0 

MEMORANDU M 

TO: 

FROM: 

SUBJECT: 

DATE: 

DISTRICT DIRECTORS 

REX KING, ASSISTANT DIRECTOR 

HELD OPERATIONS 

REVISION OF STATEWIDE RULE 57 

MARCH 28, 1990 

Statewide Rule 57 has been repealed and replaced with a new Rule. A copy of the new rule is 

attached. The changes are substantial. You should read the new rule and become familiar with 

it. The rule officially becomes effective on April 16th. We are, however, allowing the 

discontinuance of Form T-5 and P-9 immediately. The new application and revised R-2 are being 

developed at this time. The district will be involved in inspections relative to the permit approval 

process. We may also be involved at some point in attempting to determine the amount of bond 

to be required. Written procedures will be developed for these processes later. 

In reading the rule, I noted the following significant points that you may get calls about: 

1. Permits will be granted administratively after application is made to 

Austin. "NOTICE'' details included in Rule. 

2. Reclamation plant operators must have a bond or letter of credit 

in amount of $100,000 to cover closing of site if necessary. May 

be lesser amount if appropriate. 

3. Permits will remain in effect until cancelled at request of operator. 

(New Applicants) Existing current permits must renew at renewal 

date. After that date, they will remain in effect until cancelled at 

request of operator. 

4. Railroad Commission may cancel as noted in (c)(8) (A),(B). 

An Equal Opportunity Employer 
P.3 

Memorandum to District Directors 

Page 2 

March 28, 1990 

5. T-5, P-5 forms are discontinued. Instead a completed run ticket 

shall be made on all movements to a reclamation plant. 

6. The net.oil shall be charged back to the lease or other facility. 

7. The net oil removed from any active facility shall be charged back 

no matter what the destination is. 

8. Any tank bottom material put on the ground (lease roads, etc.) must 

be covered by a minor permit issued by the district. 

9. Refer to (f)(1) As long as there is a report filed with the Railroad 

Commission on the facility involved in the oil movement/tank 

cleaning, all that is required is a properly executed run ticket with 

both the reclamation plant acknowledging the receipt and the 

operator/generator reporting the net oil as disposition. 

If there are not monthly reports filed on the "Source Facility", a 

letter of authority from Field Operations in Austin is required. For 

example, if a reclamation plant wanted to pick up oil from a washout 

pit at a saltwater hauler's facility, a Letter of Authority would be 

required. Imports to reclamation plants require a Letter of 

Authority. 

Call me if you have questions. 

Rex K>ng, Assistant Director 

Field Operations'' 

JRK/njw 

Attachment 

cc: Mr. J. H. Morrow, Director Mr. Bill Gallagher, Manager 

Oil and Gas Division Technical Permits 

Mr. Richard Buerger, Assistant Director 

Production Allocation 
P.4 

RAIL3QAD COMISSTCi: OF TEXAS 

CTT. AND CAS DIVISION 

PACE ]' OF i: 

The Railroad Cormrission of Texas adopts new section 16 T.A.C. §3.57 

(Statewide Rule 57) with changes to the proposed text published in the 

October 6, 1989 issue of the Texas Register (14 Tex Reg 5305). Subsections 

(b)(4), (c)(7), (c)(8), (c)(9), and (e)(2) are adopted with changes. All-other 

changes in §3.57 are editorial and ncn-substantive in nature. 

The new §3.57 reduces paperwork requirements, simplifies permit issuance 

procedures and makes 53.57 consistent with 16 T.A.C. §3.8 (Statewide Rule 0). 

Paragraph (c)(7) now requires a $100,000 bond rather than the $250,000 bond 

proposed in the version published in the October 6, 1989 Texas Register. 

Paragraph (c) (8) has been clarified; current annual permits may be renewed so as 

to remain in effect until cancelled. At the time of renewal, compliance with 

the (c)(7) bond requirement will be necessary. 

Paragraph (c)(9) has been altered to state that an operator objecting to a 

permit cancellation nay request a hearing. This change was necessary in order 

to properly place the burden of proof. Paragraph (e)(2.) now states that on-site 

and off-site disposal of wastes not taken to a reclamation plant may require a 

minor permit. Additionally, the revised paragraph allows the comnission to 

analyze the wastes before granting a miner permit. 

Cccrrission Forms T-5 and P-9 will be replaced by the mmifest system set 

out in 16 T.A.C. 53.72, causing a reduction in paperwork. The new section will 

eliminate the delay and expense of a hearing by allowing administrative approval 

of reclamation permits. Cfrice approved, permits will no longer be subject to 

annual renewal, thus further reducing paperwork. By reducing paperwork 

requirements, the new section will cause a decrease in cost for state 

government. Applicants for reclamation plant permits must now show evidence cf 

financial responsibility to insure operation and closure of the plant in 

compliance with commission rules and state law. Toward this end, the 
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RAILRCrM- COMISfIOi: OF T3CAS PAGE 2 OF 12 

OIL ATT. GAS DIVISION 

reclamation plant operator shall subrcit a $100,000 bond or letter of credit. 

Additionally, the new section should help prevent pollution through its 

requirement that wastes generated during reclaiming operations be handled in 

accordance with 16 T.A.C. §§3.8, 3.9 and 3.46 (Statewide Rules 8, 9 and 4G). 

Conoco, Inc. commented that the rule should say that a minor permit, as per 

Statewide Rule 8, is required to autliorize the spreading of oily solids on lease 

roads. The. caimission incorporates appropriate language in subsection (e)(2). 

Comments from Top Oil Company, Peden Tank Truck Service and Gap Resources, 

Inc. voiced opposition to the bond requirement, cf paragraph (c)(7). Asserting 

that the amount required is too high and the bond requirement itself is 

unnecessary, the caumentors recoefmended striking this particular paragraph. In 

response, the ccamissicn has lowered the amount required from $250,000 to 

$100,000. The commission believes the bond is necessary to prevent the public 

from paying the cost of rule violations. Additionally, paragraph (c)(7) clearly 

states that a lesser amount vri.ll be sufficient if the operator demonstratez that 

a smaller sum is adequate to operate and close the facility in compliance with 

state lav; and commission rules. 

A comrent receiv&d from Texas Mid-Continent Oil and Gas Association 

requested tliat the term "other hydrocarbon wastes" be defined as "oily waste 

materials" rather than "cily materials." The commission has adopted this 

comment in order to further clarify the adopted rule. 

A further corrmenL from Texas Kid-Continent Oil and Gas Association 

concerned clarification of the term "authorized person." The Association 

requests expansion of the term "authorized person" to include waste generators 

and all other properly permitted carriers. The cotmrLssien believes this 

expansion is unnecessary. Isothing in the current definition cf "authorized 

person" prohibits a waste generator from hauling its own waste to a reclamation, 

plant. 
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RAILROAD CCMGSSICN OF TEXAS FACT. 3 OF 12 

Oil, AID CAS DIVISION 

A final comment from Texas Mid-Continent Oil and Gas Association requested 

clarification that pipeline facility wastes are among those wastes for which 

reclamation is authorized. The rule refers to production facilities throughout 

the text. Because a pipeline, facility is considered a production facility, the 

commission believes this proposed addition is unnecessary. 

A coament was received from Gap Resources claiming that subsection 

3.57(e)(2) gives tacit authority not to follow the rule by providing a reporting 

system for those who do not take wastes to reclamation plants. The conmissicn 

disagrees with this comment. Subsection 3.57(e)(2) provides that the net crude 

oil content of any tank bottoms or other hydrocarbon wastes removed from an 

active facility and delivered to a site other than a reclamation plant be 

reported as a disposition from the facility. TM's paragraph is included for 

those who dispose of facility wastes in other ways, such as spreading oily 

solids on lease roads. All such disposal mist be in accordance with 16 T.A.C. 

§§3.8, 3.9 and 3.46 (Statewide Rules 8, 9 and 46). 

A further comment from Gap Resources, Inc. concerned subsection 3.57(c)(2). 

This paragraph requires performance of a shakeout test upon removal of fluid 

from a tank. Gap Resources, Inc. contends that the test shculd be performed 

when wastes are removed from the lease. The carmission disagrees with this 

comment. For documentation purposes, it is necessary to conduct this test uponremoval from the tank. 

The new section is adopted under the Texas Katural Resources Code §§81.051, 

85.042, 85.051, 85.059-85.062, 85.201, 85.202, 85.203, 86.042, 91.109 and 

91.141, which provide the Railroad Commission cf Texas with the authority to 

odopt rules that are necessary to administer and regulate reclamation of crude 

oil. 
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RALLRCAD COMMISSION OF TEXAS 

OIL AIT' GAS DIVISION 

PAGE 4 OF 12 

§3.57. Reclaiming Tank Bottoms, Other Hydrocarbon Wastes, and Other Waste 

Materials. 

(a) Applicability. This rule is applicable to reclamation of tank bottoms 

and other hydrocarbon wastes generated through activities associated with the 

exploration, development and production (including transportation) of crude oil 

and other waste materials containing oil, as those activities are defined in 

subsection (a)(30) of §3.8 (Statewide Rule 8) of this title (relating to water 

protection). The provisions of this rule shall not apply where tank bottoms or 

other hydrocarbon-bearing materials are recycled or processed onsite by the 

owner/custodian and are returned to a tank or vessel at the same lease or 

facility. This rule is not applicable to the practice of recycling, cr reusing 

drilling mud, except as to those hydrocarbons recovered from such mud recycling 

and sent to a permitted reclamation plant. 

(b) Definitions. The following words and terms, when used in this 

section, shall have the following meanings unless the context clearly indicates 

otherwise. 

(1) Tank bottoms - a mixture of crude oil or lease condensate, water, 

and other substances that is concentrated at the bottom of producing lease tanks 

and pipeline storage tanks (commonly referred to as basic sediment and water or 

BS&W). 

(2) Other hydrocarbon wastes - oily waste materials, other tiian tank 

bottoms, which have been generated in connection with activities associated vri_th 

the exploration, development, and production of oil or gas or geothermal 

resources, as those activities are defined in paragraph (a)(30) cf $3.8 ' 

(Statewide Pule £) of this title (relating to Water Protection)". The term 

"other hydrocarbon wastes" includes, but is not limited to, pit hydrocarbons. 
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RAILROAD CCWGSSTON OF TDJAS 

OIL AND GAS DIVISION 

I-AGZ-5 OF 12 

slum oil, spillage and leakage of crude oil or condensate from producing lease 

or pipeline storage tanks, and crude oil or condensate associated with pipeline 

ruptures and other spills. 

• (3) Authorized person - A tank bottoms cleaner or transporter that is 

under contract for disposition of untreated tank bottoms or other hydrocarbon 

wastes to a person who has obtained a permit to operate a reclaiiiation plant. 

(4) Affected person - A person who has suffered or will suffer actual 

injury or economic damage, other than as a member of the general public arid 

includes surface owners of property on which a reclamation plant is located and 

surface owners of adjoining properties. 

(5) Director - The director of the Oil and Gas Division or a staff 

delegate designated in xnriting by the director of the Oil ar,d Gas Division or 

the commission. 

(c) Permitting process. 

(1) Removal of tank bottoms or other hydrocarbon wastes from any 

producing lease tank, pipeline storage tank, or other production facility, for 

reclaiming by any person, is prohibited unless such person has either obtained a 

permit to operate a reclamation plant, or is an authorized person. Applicants 

for a reclamation plant operating permit shall file the appropriate form with 

the coumission in Austin. 

(2) The. applicant shall give notice by tailing' cr delivering a copy 

of the application to the county clerk of the county wliere the reclamation plant 

is to be located, and to the city clerk or other appropriate city official of 

any city where the reclamation plant is located within the corporate limits of 

the city-, or. or before the t3.t:e the application is mailed to or filed with the 

cotrmis'sion. 
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RAILROAD CttMLSSiCF OF TEXAS I'ACE 6 Or 11 

OIL AIT- GAS DIVISION 

(3) In order to give notice to other local governments and interested 

or affected persons, notice of the application shall be published once by the 

applicant in a newspaper of general circulation fcr the county where the 

reclamation plant is to be located, in a form, approved by the centralssion. 

Publication shall occur on or before the date the application is mailed to or 

filed with the commission. The. applicant sliall file with the commission in 

/JUStin proof of publication prior to the hearing or administrative approval. 

(4) If a protest from an affected person or local government is made 

to the commission within 15 days of receipt of the application or of 

publication, or if the commission determines that a hearing is in the public 

interest, then a hearing will be held on the application after the corcission 

provides notice of hearing to ail affected persons, local governments, or other 

persons who express an interest in writing in the application. 

(5) If no protest from an affected person or local government is 

received by the centralssion within the allotted time, the director may 

administratively approve the application. If the director denies administrative 

approval, the applicant shall have a right to a hearing upon request. After 

hearing, the examiner shall recommend a final action by the commission. 

(6) Applicants must demonstrate they are familiar with eocmission 

rules and have the proper facilities to comply with the rules. 

(7) It shall be a.permit condition that a reclamation plant operator 

maintain financial responsibility and resources to operate and close the 

reclamation site in accordance with state la;, commission rules, and the permit. 

The operator shall show evidence of financial responsibility by submitting e . 

bend or letter cf credit in the amount of $100,000 ii a form prescribed by ttie 

commission. The. bond or letter of credit cay be in a lesser amount provided the 
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RAILROAD CQ-IM1SSI0N OF TEXAS PACT 7 CF 12 

OIL AM- GAS DIVISION 

operator shows that the lesser amount will be sufficient to operate and close . 

the reclamation site in accordance with state law, commission rules, and the 

permit:. The bond or letter of credit shall be renewed and continued in effect 

until its conditions have been met or release is authorized by the commission. 

(8) Except as provided below, a permit to operate a reclamation plant 

shall regain in effect until cancelled at the request of the operator. Existing 

permits subject to annual renewal may be renewed so as to remain in effect until 

cancelled. Such renewal shall be subject to the requirements of paragraph 

(c)(7) of this section. A reclamation plant permit may be cancelled by the 

commission after notice and opportunity for hearing, if: 

(A) the permitted facility has been inactive for 12 months; ci" 

(B) there has beer, a violation, or a violation is threatened, of 

any provision of the permit, the conservation laws of the state, or rules or 

orders of the commission. 

(9) If the operator objects to the cancellation, the operator rust 

file, within 15 days of the date shown on the notice, a written objection and 

recuest for a hearing to determine whether the permit should be cancelled. If 

such written request is timely filed, the cancellation will be suspended until a 

final order is issued pursuant to the hearing. If such request is not received 

v;ithin the required tine period, the permit will be cancelled. In the event cf 

.an emergency which presents an imminent pollution, waste, or public safety' 

threat, the commission may suspend the permit until an order is issued pursuant 

to the hearing. 

(10) A permit to operate a reclamation plant is net transferable. .'. 

nev permit must be obtained by the nev: operator. 

(d) Operation of a reclamation plant. 
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RAII-ROAD CG-XiSSIOK OF TEXAS 

OIL AND GAS DIVISION 

I'AGt 5 OF 1^ 

(1) The following provisions apply to any rer.oval of tank bottoms or 

other hydrocarbon wastes from any oil producing lease tank, pipeline storage 

tank, or other production facility. 

(A) Notwithstanding the provisions of §3.72(a) (8) cf this title 

(relating to Manifest to Accompany Each Transport of Liquid Hydrocarbons by 

Vehicle), an operator of a reclamation plant or an authorized person shall 

execute a manifest in accordance with §3.72 of this title (relating to Manifest 

to Accompany Each Transport of Liquid Hydrocarbons by Vehicle) (Statewide Rule 

85), upon each removal of tank bottoms or other hydrocarbon wastes from any oil 

producing lease.tank, pipeline storage tank, or other production facility. In 

addition to the information required pursuant to §3.7.2 of this title (relating 

to Manifest to Accompany Each Transport of Liquid Hydrocarbons by Vehicle), the 

operator of the reclamation plant or other authorized person shall also include 

on the manifest: 

(i) the camission identification nunber of the lease or 

facility from which the material is removed; and 

(ii) the gross and net volume of the material as determined 

by the required shakecut test. 

(L) The operator of the reclamation' plant or other authorized 

person shall fill out the manifest before leaving the lease or facility from 

which thfc liquid hydrocarbons are removed, and shall retain a copy cn file for 

two years. 

(C) The operator of the reclamation plant or other authorized 

person shall leave a copy of the manifest in the vehicle transporting the 

material. 
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RAILROAD COMMISSION OF TEXAS 

OIL AND GAS DIVISION 

?AGE V CF 12 

(2) The operator of a reclamation plant or ether authorized person 

shall conduct a shakeout (centrifuge) test on all tank bottoms or other 

hydrocarbon wastes upon removal rrom. any producing lease tank, pipeline storage 

tank, or other proouction facility, to determine the crude oil content and lease 

condensate thereof. 

(3) The shakeout test shall be conducted in accordance with the most 

current A.P.I, or A.S.T.M. method. 

(e) Reporting of reclaimed crude oil or lease condensate on commission 

required report. 

(1) For wastes taken to a reclamation plant the following provisions 

shall apply.. 

(A) The net crude oil content or lease condensate from a 

producing lease's tank bottom as indicated by the shakeout test shall be used to 

calculate the amount of oil to be reported as a disposition on the monthly 

production report. The net amount of crude oil or lease condensate from tank 

bottoms taken from a pipeline facility shall be reported as a delivery on the 

monthly transporter report. 

(B) For other hydrocarbon wastes, the net crude oil content or 

lease condensate of the wastes removed from a tank, treater, firewall', pit, or 

ether container at an active facility, including a oioeline facility, shall also 

be reported as a disposition or delivery from the facility. 

(2) The net crude oil content or lease condensate of any tank bottoms 

or other hydrocarbon wastes removed from an active facility, including a 

pipeline facility, arid disposed of on-site or delivered to a site other than a 

reclamation plant shall also be reported as a delivery or disposition from the 

facility. All such disposal shall be in accordance with §§3.8, 3.9, and 3.46 of 

this title (relating to Water Protection, Disposal Wells, and Fluid Injection 

into Productive Reservoirs) (Statewide Rules 8, 9 and 46). Operators may be 
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RAILROAD COMMISSION Or TEXAS PAGE 10 OF 12 

OIL AND GAS DIVISION 

required to obtain a minor permit for such disposal using procedures set out in 

§§3.8(d) and 3.8(g) of this title (relating to water protection). Prior to 

approval of the minor permit, the caimission may require an analysis of the 

•disposable material to be performed. 

(f) General provisions applicable to materials taken to a reclamation 

plant. 

(1) The removal of tank bottoms or other hydrocarbon wastes from any 

facility for which monthly reports are net filed with the commission must be 

authorized in writing by the commission prior to such removal. A written request 

for such authorization must be sent to the cocmission office in Austin, and must 

detail the location, description, estimated volume, and specific origin of the 

material to be removed ,t as well as the name of the reclaimer and intended 

destination of the material. If- the authorization is denied, the applicant mayrequest a hearing. 

(2) The receipt of any tank bottoms or other hydrocarbon wastes from 

outside the State of Texas mast be authorized in writing by the commission prior 

to such receipt. However, written approval is net required if another entity 

will indicate, in the appropriate monthly report a corresponding delivery cf the 

same material. If the request is denied, the applicant'may request a hearing. 

(3) The receipt of any waste materials other than tank bottoms or 

ether hydrocarbon wastes must be authorized in writing by the commission prior 

to such receipt. The commission may require the reclamation plant operator to 

submit an analysis cf such waste materials prior to a determination of whether 

to authorize such receipt. If the request is denied, the applicant may request 

a hearing. 

(4) The operator cf a reclamation plant shall file a report on the 

appropriate commission form for each reclamation plant facility by the 15th day 
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RAILROAD COMMISSION CF TDIAS 

OIL AND CAS DIVISION 

FACE ll OF II 

of each, calendar conch, covering the facility's activities for the previous 

ironth. The operator of a reclamation plant shall file a copy of the monthly 

report, in the district office of any district in which the operator made 

receipts or deliveries for the month covered by die report. 

(5) All wastes generated by reclaiming operations shall be disposed 

of in accordance with §§3.8, 3.9, and 3.46 of this title (relating to Water 

Protection; Disposal Wells; ard Fluid Injection into Productive Reservoirs). No 

person conducting activities subject to regulation by the comassion may cause 

or allow pollution of surface or subsurface water in the state. 

(g) Cocrmission review of administrative actions. Administrative actions 

performed by the director or commission staff pursuant to this rule are subject . 

to review by the centralssioners. 

(h) Policy. The provisions of this rule shall be administered so as to 

prevent waste and protect correlative rights. 

This agency hereby certifies that the section as adopted has been reviewed 

by legal counsel and found to be a valid exercise of the agency's legal 

authority. 

Issued in Austin, Texas on YDdfj^Ju / y 1990. 

ATIZ-err S . 

'Ss7rV-%f><^ 

RAILROAD COMMISSION OF TEXAS 

becretaiy 
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FATI.POAD COMMISSION OF TDIAS PAGE 12 OF 12 

OIL AND GAS DIVISION 

CERTIFIED: A 

{AAl /A,L., 

Cril Payne, Certifying Official 

Asst. Director, General Law 

Title ot Certifying Official 

Railroad Commission of Texas 

Name or Agency 

For further information, please call Phillip Danks at (512) 463-6932.