Episode Transcript
[00:00:13] Speaker A: Hey, friends, thanks for joining us again for another episode of Conservation Stories. Today we're going to be talking about an issue that I think that you're going to really want to know about and be aware of. It has to do with our surface owners and the use of that land by oil and gas companies and what they can and cannot leave on your property in regards of waste. So I think you all know that I have a background in oil and gas, and I'm not an anti oil and gas person. I think that we need that sector, and I think for the most part, a lot of those companies are doing a great job. However, there are some things that we need to talk about. And so we have asked Gabriel Rio to join us today, and he works for milestone environmental services and they're the ones that kind of brought this to my attention. And I would love for you, Gabriel, to give us a little bit about your background and milestone before we move into the topic of this Texas waste rule.
[00:01:20] Speaker B: Sure, of course. Thank you so much for having me on. I'm thrilled to talk to you all today.
So I have a. I've been spent about the last 20 years of my career managing waste for the oil and gas industry. And I've done this in Texas, Louisiana, New Mexico, Oklahoma, North Dakota, Wyoming, a whole lot of different states around the country. Right now, I am the president and CEO of a company that I founded about ten years ago called Milestone Environmental Services.
We operate today 14 facilities that work to manage and dispose of these wastes in a responsible way. It's a combination of oil and gas, waste landfills and slurry injection sites. But we manage the types of waste that really come from the drilling process and the production process. So I'm not talking as much about produced water, which is a really big topic and comes out in high volumes. I'm really talking about things like oil based mud, water based mud tank bottoms, drill cuttings, the stuff that quite often is left in reserve pits next to drilling locations. So that's really what we do and what we manage. And we work with operators large and small.
Our biggest network of facilities is in the permian basin. And we work with just about every, just about every Emp operator out there to some degree. So we find that most of the oil and gas industry does a really solid job of this, but there are some gaps. And I'd love to. Love to talk to you about.
[00:02:59] Speaker A: Yeah, and I know. I mean, when I think about the way things were a long time ago, when I was a little girl, my granddad had some land that had it, unfortunately, did not own the minerals. He only owned the surface. And the mess, the mess that was left out there, you know, and we'd go out there to hunt and, oh, it just was. I mean, I can still remember even as a child, and I remember the conversations around the table and the frustration of, your hands are tied. There's nothing you can do about it, you know? And I know that so much of that has changed because now, as somebody that's in that industry to some degree, I've visited many sites, and they're so clean. You know, people care, and they cared long before they were being made to care, you know? So I know a lot of these companies have had, you know, their, what people call, like, you know, sustainability goals. They had those long before they were thinking about those things. Long before, you know, even people think maybe the Biden administration has made them do this. But no, they were doing and thinking about this long before, but there are still things that are out there. And, you know, just recently, my, our company, our land service company was made aware of a client that we've worked with in the past that has, you know, just this huge puddle of what is probably oily mudd. And what you're saying, you know, even the welding, shavings, all these different things that are just left behind, it's just a mess. And he's saying, what can I do? Is there any recourse for this? So tell us, is there in the state of Texas?
[00:04:39] Speaker B: Well, that's a great question, and I'm sorry to hear that your client is dealing with that.
They're certainly not alone, that it's happened to lots of different people. I will say that, you know, 95% of operators in the state of Texas do a much better job with and don't leave that behind for a long time. But one of the challenges that we have right now is that the rules that the, of course, this industry is regulated by the Texas Railroad Commission, and the rules around oil and gas waste management haven't been updated since 1980. 419 84 was a very different oil field than we have today. There was a lot of vertical wells, shallow wells, small amounts of waste that were produced for each one. And also there was just no infrastructure available for professional disposal and professional management of the waste. So the challenge is so that the Railroad commission has rules that authorize oil and gas operators to put in these pits, and they're called authorized pits. Under the rules, the operators don't need permits for them, and they don't. And under the current rules today, operators don't even have, they don't have to test the depth to groundwater, they don't have to test the soil quality. They don't have to give any consideration for that groundwater, and they also don't have to put in liners under the rules today. Now, most oil and gas companies do better than that, but the operators do look to the Railroad commission of Texas to set the standards by which they operate. So one of the challenges for your client, and not knowing the specifics about this particular case, but one of the challenges in situations like these is that that landowner can go to the railroad commission and find out that that PITA that's left on their property that's just looks like a pond of oily, sludgy stuff, is actually compliant with state rules, and there's not much that the railroad commission will do about it.
And the other challenge with the rules today, and this has deep roots in Texas law, one of the challenges about the rules today is that the commission does not require that oil and gas operator to prove to them that they have the permission, that they have consent, that they provided any notice to the landowner that this is going to happen, because, you know, those, those rights are quite often, you know, tied to the mineral estate. And if you're listen people, anybody listening to this podcast understands very well that the, you know, the mineral estate and the surface estates are quite often separate in Texas. And I've seen time and time again that when oil plays boom, mineral owners tend to do very, very well. And quite often it's the surface owners that end up being left with the mess.
Those environmental impacts are really very, very real and need to be addressed. And we look to our regulatory agencies to be able to do that. But they're a bit, they're behind the times right now. They also say, to be fair, we've been drilling for oil and gas in the state of Texas for 100 years now, right. And 100 years ago, when this all started or even 50 years ago, there just wasn't much infrastructure to be able to deal with this stuff. We didn't have the industries that we have today that have popped up to be able to do this professionally. And so operators didn't have much of a choice back in the 1970s or 1980s but to bury that waste on the surface property where they were drilling. And also back in the 1980s, the drilling waste was less problematic than it is today. It was drill shavings. It was rock. It was rock shavings and dirt, and it was water based mud. It was usually a freshwater mud that they were using. But with the advent of shale drilling and the technologies that have changed, drilling chemistry has gotten a lot more complicated and oil based mud is being used a lot more. And so the material that's in that waste is just a lot more difficult to manage properly. And it's more apt to do things like contaminate soil and contaminate groundwater, which results in rancher stock ponds that cattle don't want to drink from.
We see those. We see those types of issues all the time and it's unfortunate. It really doesn't have to be that way. The easiest way, of course, to manage this stuff is to dispose of the waste the right way. As the drilling operations occurring, it's much harder to clean up a mess after it's been made, just like anything else.
[00:09:35] Speaker A: Yes, that's true. I know we've had a client on hedgesthem works in, you know, reclamation mostly. And he's moved kind of into the solar space of helping people. You know, he's a soil scientist, you know, so we've heard some stories, you know, from him about, you know, going in and what it takes and, you know, to get that soil back to health is, you know, you just. You just. It can be avoided. It's a problem that doesn't have to happen.
[00:10:07] Speaker B: That's exactly right. And we see all the time, we work with a lot of landowners, particularly in the Permian, and they take us on their ranches and they show us the area where a reserve pit was left in place 40 years ago and still nothing's growing there. And you can see little scraps of plastic that are still working their way up out of the soil that have been buried, you know, been buried 40 years ago. So the challenges that landowners, that surface owners in particular face on this stuff is very. Is very real and needs to be managed. You know, one of the other challenges that we've had for a long time is that, you know, these, since these pits are authorized and don't require authorized by rule and don't require a permit, there's no tracking of them.
[00:10:53] Speaker A: Right.
[00:10:54] Speaker B: So the railroad commissioner knows where they are.
[00:10:56] Speaker A: Right. Yeah.
[00:10:58] Speaker B: You don't know where they are. Really. A landman like yourself doesn't know. Like if you're. If you're doing due diligence on a property for. For a. For a client, they don't know where that is.
And we've seen instances as well in the state where people have built houses on old reserve pits not knowing they were there. People have drilled water wells through an old waste pit.
And that just contaminates the aquifer.
[00:11:22] Speaker A: Right.
[00:11:23] Speaker B: Right.
[00:11:23] Speaker A: Yes, exactly.
[00:11:23] Speaker B: So without knowing where this stuff is and what it is, and particularly without having given your permission for it to be there in the first place, it makes it. It makes it really difficult and for surface owners to be able to manage it.
[00:11:37] Speaker A: Well, there's some surface owners that we, you know, that are also the mineral owners that we, we've called in the past. And, you know, they've been burned and their land. The surface is important to them. It's. It is important. It is more important to them than being wealthy.
You know, it is their heritage. It's been in their land for, you know, their family for generations.
Then they're reluctant to let somebody back on their land again. So in the end, it hurts the industry.
[00:12:08] Speaker B: I always add, I'm a fierce advocate for oil and gas. I'm on the board of directors for the Texas Oil and Gas association. I'm on the board of the Energy Workforce and Technology Council, which represents oilfield service workers, about 650,000 around the world. And what I always say is, I really think people sometimes say it's anti industry to be highlighting these environmental issues and to be advocating for tighten, tighter rules and regulations. I take the opposite approach. I really think it's anti industry to make the argument that the industry can't do better or that it's just too expensive to put in a liner to try to protect groundwater. I really think that when we allow bad operators to do things like leave an oily pond on your client's property, that puts a black eye on the industry. And it really betrays the good work that these. That, you know, that hundreds of thousands of people are doing around the world to provide energy. And it opens us up to attacks, whether it's from, you know, from environmental groups or it's attacks from the, you know, from the EPA or from government agencies, it really just leaves us exposed in ways that we just don't need. So doing things the right way, it's just, it's just, you know, it's just good hygiene and it's just good, good business practices that protect us all.
[00:13:34] Speaker A: Yeah, exactly. And, you know, that really is a government's job. You know, they're to protect and defend us. It's their job to ensure those things are happening. And, you know, I'm. I had not even thought about what you mentioned about. There's no way to track where these are. I mean, we know where there are, you know, wells that haven't been capped. We know where those are. You know, even though, you know, in the. For the most part, you know, something needs to be done about those as well. This, you know, issue is somebody needs to run the title and all that stuff, you know, and. And figure out who's gonna cap it. But this is. This is an issue that it sounds like to me, you really have the support from. From oil and gas and a lot of places because people really do, for the most part, want to do the right thing. And, you know, sometimes when we, you know, interact with a reluctant landowner on, you know, a drilling lease, you know, my response is always, you know, it is just as important to me to have a relationship with you that's solid because I want to be able to do business with you again. And so, you know, I want to work with this. And I I can just say as someone that has. Has been in the industry, that there are some really, really great people in the industry, and our mission at Sarah really has to do with human flourishing. And I think there are a lot of things that go into that, and one of them is the balance that we need. And, you know, as. As much as, you know, some people might want to cut off fossil fuels if we look at what that would do to human flourishing, that can't be part of our mission.
[00:15:20] Speaker B: Yeah, I totally agree with you. I think Chris Wright at Liberty.
Liberty Energy Services has done a really nice job of articulating this, but the reality is, without oil and gas, the earth would not be able to support and maintain 8 billion people, and our prosperity wouldn't be nearly at the level where it is today. And the advancements in our society would be way behind where they are today now. And so that. But that balance is important. Right? So, doing. And it's not hard. It's really not hard to put in place the protections to make sure that landowners and the. And the environment. The local environment around us is protected. It's not hard, and it's not expensive, and there's. It's just at the end of the day, being a good neighborhood. Right. I think that's what we all work on in Texas.
[00:16:08] Speaker A: So true. It's so true. And I think that, you know, people in Texas would generally say that's part of, you know, we're. We're golden rule followers. You know, we want to do to other people, but this is. This is not that. This is not that. This is something different. And maybe when. When this regulation was put in, in the eighties, it was sufficient, but now that we know that it's not sufficient. What can we do?
[00:16:30] Speaker B: So, yeah, thanks for asking. So the Railroad commission of Texas, like I said, they have not updated their rules since 1984. They're doing it again right now. So I think that's why this podcast is very timely. So the Railroad commission has published a draft set of rules on their website for public comment. So if you go to RRC dot Texas dot gov and kind of navigate to the rules page, you can see the rules themselves. Now, I'll warn you that the rule, the published rule is 275 pages long.
It's more than I want to read, but I'm happy to provide some additional resources, either through my own, through Milestone's website, which is milestone dash es.com, or my LinkedIn page. I have a lot of resources on there personally as well. But the rare commission is asking for public comment on these rules right now. And that public comment period lasts until October 15 of 2024. So. And as we stand here today, that's about another month from, from when we're recording this. It's, it's not a lot of time, I will tell you that those, those, those rules have been in the works at the commission for about two and a half years.
And, and one of the challenges is, and one of the things that I think some people are frustrated by is that there was a draft set of rules that was published last year in October, and those rules were actually pretty good. They, they didn't ban pits, which I think some people wanted to see, but they did increase the construction standards. They required liners. They required, you know, consideration for depths to groundwater. They required soil samples before and after.
[00:18:21] Speaker A: Just the common sense things step in the right direction.
[00:18:24] Speaker B: Yes. And particularly if you're going to dig a pit and you're going to leave some waste on someone's property for all time by burying it there in place forever, then a certain amount of diligence was required in that rule around it. So. But then what happened since then is some smaller operators and had weighed in and just said that, well, putting in liners and pits is too expensive.
And their voices, unfortunately, were louder during that period than the folks that were more responsible and also than landowner voices, because I don't think landowners were really.
[00:19:06] Speaker A: Oh, no.
[00:19:06] Speaker B: Engaged or they just didn't know. Right.
[00:19:09] Speaker A: Right.
[00:19:09] Speaker B: So the commission published, they updated it, published a second draft in August 24. So eight, you know, ten months later, and they pulled all of those pit rules back to where they were in 1984. So the reserve pits. Yeah. So the reserve pits, the mud circulation pits, workover pits, all of it, were pulled all the way back to the 1980s. And I think what the commission was trying to do was protect the, some small businesses from undue regulation. And of course, you know, we're Texans. We don't love agencies getting in and over regulating. Right. That's not, that's right. So that they were, they think they were trying to protect some smaller operators but ended up throwing out the baby with the bathwater in this case, because, you know, the average, the average reserve pit in the Permian, so they're about an acre and a half to two acres. Some of them can get as big as four acres size. And they hold tens of thousands of barrels of this stuff of oil based mud, water based mud. And that's not something that should just be authorized to put on someone's property without notice or consent, without consideration for groundwater or soil contamination.
And I will say on the notice and consent piece, some of that has deeper roots in Texas law that go beyond the railroad commission. But, and surface use agreements usually cover this topic to some degree. But some of these suas are so old as you, as you know, being a landman. Right. Some of these suas are so old that they just don't really adequately provide the protections that the landowners need and they don't give a lot of consideration to surface owners.
[00:20:59] Speaker A: So how would, how would this impact, you know, like what we've seen, you know, from our client where, you know, this, this may, has been there for four years. Is there any, are people worried that now they're going to have to go back and clean up a mess on multiple pieces of property?
[00:21:19] Speaker B: No. So the commission's proposed rules don't, they don't address anything about going back and cleaning up old, old pits or old sites that are, that are already done. What really their rules govern is what happens going forward.
[00:21:36] Speaker A: So that wasn't part of the problem then, was the cost of what that would be. Okay. Okay.
[00:21:42] Speaker B: Yeah. Well, I will say some people push back without reading or understanding what's in the rule as well.
[00:21:47] Speaker A: Okay. Yeah. That happens a lot.
[00:21:48] Speaker B: So I think sometimes there are people that are afraid of that, but that's not at all what the rule says. Some people are afraid that, that the rule will, you know, ban pits entirely. And it doesn't. It just, it just sets out reasonable construction standards so that if you do have a pit put in place, then, you know, then it has to be built correctly. It has to use the right liners. You have to know how deep groundwater is and if groundwater is shallow, then, you know, you probably need to put in a well to test it and monitor it. So those are the kinds of things that were in the proposed rule that then they then stripped back.
So I think what I've understood, after talking to commissioners directly, they have told me that they want to hear voices from the public on this and particularly. And this is why I'm excited to be with you, particularly voices from landowners, because they hear what the industry has to say. They hear what the environmental industry has to say, and everybody's got some sort of a financial interest, but when they hear from landowners, that means a lot. So if they can hear from landowners just to say that, look, we need pits, particularly reserve pits and mud circulation pits, which are the biggest, which are. There are thousands of them installed in the state of Texas every year, that we need reserve pits and mud circulation pits to be better regulated than they are today. That's a voice that they want to hear. And unfortunately, look, the railroad commission is, you know, the railroad commission rules are highly technical. They are not some but thing that gets. Not something that gets a lot of press and a lot of attention. So the general public very rarely weighs in industry like the oil and gas industry does weigh in a lot because they pay more attention to this. Right. And they can hire lobbyists that can. That can. They can stay on top of it, and they generally push back against more rules. But I think for landowners, like the listeners of this podcast, to weigh in through the railroad commissions, through the railroad commission's open comment period, I think is very impactful, and I think they need to hear from people who say, look, I need better protection of my. Of my ranch and of my. Or my farm or my land so that, you know, so that these types of problems don't keep happening in the future. And what I worry about is, you know, if we not. Not that the rule is getting worse than it already is, because today it's. It's pretty lax already. But the. If we. If we miss the opportunity now, then, you know, who knows? Maybe it's another 40 years before the commission decides to visit again. It's been 40 years since the last try. So, you know, so we don't want to enshrine this issue for our children, our grandchildren, and the legacy that is our land for another couple generations to come.
[00:25:01] Speaker A: Yeah, that's. That's. You know, I've. I actually recently heard someone, you know, make a comment about how, you know, water, you know, like, the thing that our hope is, like, the next generation. And I'm like, yeah, I don't think we can punt this to the next generation. I think that this is something we gotta keep. And, and we, you know, we have a. One of our initiatives here is a project called our legacy is tomorrow's water. We're working on Ply Lake restoration. And, you know, the reason we refer to that way is because we want people to really understand that we are going to be known. I mean, there's some really. There's some really important things happening right now that we can make an impact on. And we will be remembered for what we did, good or bad, you know, in the years to come. Like, so it's our legacy. Is it gonna be a good legacy? There's gonna be a negative legacy. Like, are people gonna say, why didn't you? You absolutely knew. You could say people maybe were uninformed a few generations ago, but your generation was absolutely informed. And I think this is one of those issues where, you know, this is.
This is kind of a no brainer. I mean, yeah, it is.
[00:26:16] Speaker B: I agree. We have. We have the knowledge, we have the resources, we have the infrastructure available to solve the problem. And these are the. These are. These are the very real environmental issues, right. That affect real people every day. I mean, I think that when people start thinking about the environment and oil and gas, too often they get caught up in, you know, fracking, whether that's. Whether that's a problem or they get caught up in climate change, which is, you know, people can argue about, but the. But the local environmental impact of what happens to a person land when an oil and gas well is drilled on that property is something that we should be paying a lot of attention to. And it can. It can be done very responsibly and very cleanly and with. With minimal long term impacts on that land.
But without good standards set by, you know, set by. Set by our government, then it's, you know, then you're just at the whim of, is that a good operator that, that's working on your property? Are they. Are they going to work to best. Best practice standards or not? And how do you really trust that?
[00:27:28] Speaker A: Right? And even if I have that surface agreement, does that. Does that landowner have the money to fight? You know, if I have to, as a landowner, enforce that agreement in that contract, that's going to cost me money. And. And do I have the time and the energy? You know, most landowners are probably, you know, smaller landowners are probably gonna. They're probably not gonna do it because they are gonna look at an oil company and they're gonna think, law, you're on retainer. This is gonna be years in the making. It's gonna be a headache. I'm not gonna mess with it.
[00:28:02] Speaker B: And we see that, right. I mean, and the, and so sometimes the operator that drills on your property is not the operator that owns that well 30 years later.
And they do have. Of course they are. And a lot of times that is drug out for a long time. And it's not just the money that the landowners have to spend. It's also the time, it's the aggravation, it's the stress of all that stuff that builds up as this stuff drags on.
And again, there are so many operators that I work with that are really work hard to do the right thing, and they are very good people.
[00:28:40] Speaker A: I totally agree. I totally agree. But I think it's like a lot of industries, like, you know, you, you know, the majority has to, has to stand up and say, we're going to police ourselves, you know, and, and we want, we want to show really, the world that we, we want to do what's right, you know, and that we're willing to, you know, even if, if, you know, there's a minority of people that are opposed to this, we're still going to do, make an effort to make sure that we can make this happen in any way, if we can, if possible. So the call to action for landowners, and not just landowners, right. I mean, because everyone who is going to be drinking groundwater, which is like most of us, wants to make sure that that's safe. And we all have a vested interest in making sure that our land is taken care of, even if it's not our own.
We have a vested interest in this as citizens of the state. So a call to action for people is to make some contacts. And we will provide in the notes of this show there's going to be some easy links for people to go right to there. We're going to make it as easy as possible, and we'll provide those in social media everywhere. But can you kind of just give us a little bit of, like, what, why, what are we going to be? What are we asking them to do and who we're asking them to contact?
[00:30:12] Speaker B: Yes. So it's the railroad commission of Texas that needs to hear from concerned citizens of Texas and from landowners specifically on the proposed rules for oil and gas waste management. They're asking for public comment between now and. Sorry, October 15.
And we'll provide in the show notes the link that you can use to comment through their website. You can also email your comments to the railroad commission, and that email address will be provided there as well. We also understand that sometimes it's hard to know exactly what to tell them because these rules are technical. So we'll provide some draft language that you can use and you can copy and paste it into the email. And I would love it if people would include their own comments and why they believe it's so important. But then also tell the commission specifically that, you know, these, what they were called. Schedule a authorized pits in the newly proposed waste management rules for oil and gas need to be better regulated. And we'll provide, we'll provide the language, we'll provide the links. And I really appreciate you getting word out. And I think the other thing that people can do, in addition to just commenting, please share the word.
[00:31:30] Speaker A: Absolutely.
[00:31:31] Speaker B: Share the word with your neighbors. Share the word with other people that you think would be concerned. And you don't. And again, you don't have to be a landowner. We're all Texas citizens. We all drink Texas water. We breathe Texas air. We rely on the oil and gas industry in the same way. So let's advocate and let make sure the commissioners know how this impacts us and that they take our comments into consideration. Because I've been told very directly by commission staff and the commissioners themselves that they look at every single one of the comments that comes in from the public. They discussed every one of those comments.
They are obligated to respond in these public comment periods. They're obligated to respond to every comment that's submitted that's meaningful.
So they will pay attention. Now, how will they vote is a different question, but I think that's very much dependent on how much people speak out on this.
[00:32:33] Speaker A: Well, and for people to, I mean, we could do a whole nother podcast on why the railroad commission is the one that oversees oil and gas industry in Texas. That's a whole other story.
[00:32:44] Speaker B: There's a whole different topic.
[00:32:45] Speaker A: But we have six of these. We have six of these railroad commissioners, and we're electing these folks. So it's important to know that these are elected offices and that that's part of the reason why they're going to listen.
[00:32:58] Speaker B: Yeah, that's right. And there are, these are elected officials. There's actually three of them. One of them is elected every other year.
And so there's an election on this in November. So. But I think really what they need to hear is your comments.
Not at election day. It's more, make sure you submit your comments to the railroad commission by October 15 and get your friends to do the same.
[00:33:28] Speaker A: Yes, yes. Absolutely. Share share this podcast and when you see it come across social media, share that as well. Gabriel, I am just really grateful for the work that you're doing. I think it's important. And I love the fact that you, my favorite place is the middle, which is really hard place to find, and.
[00:33:50] Speaker B: It'S a hard place to nuance in the, in government and in anything such as anything political is super hard. It really is. It is.
[00:33:57] Speaker A: And it gets harder every day. But I appreciate we have a lot in common with that, and I just value the people that do the hard work to find that place. And I appreciate you making us aware of the issue. And I look forward to working together as we promote this through our listeners and beyond. Like, would love to connect you with other people that I think would be helpful to you.
[00:34:22] Speaker B: Thank you so much. And I love the work that, I love the podcast. I love the work that y'all are doing to bring attention to these issues. And thank you so much for the time today and for help, help getting the message out, because I really do believe this is an important issue that affects, particularly Texas landowners in a really significant way.
[00:34:42] Speaker A: I agree. I agree. Thank you. And thanks, listeners, again for joining us for this really important, timely and time sensitive episode. We hope that you will really take this to heart and know that for every person that contacts the railroad commission, there's, you know, dozens and dozens that don't, and they are aware of that. So it's really important to take the time and reach out to them regarding this issue. We look forward to visiting again on another episode of conservation stories.
