LEGISLATIVE BUDGET BOARD Austin, Texas FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION May 5, 2011 TO: Honorable Jim Keffer, Chair, House Committee on Energy Resources FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB1134 by Hegar (Relating to the issuance of permits for certain facilities regulated by the Texas Commission on Environmental Quality.), Committee Report 2nd House, Substituted No significant fiscal implication to the State is anticipated. The bill would prohibit the Texas Commission on Environmental Quality (TCEQ) from promulgating new or amending existing authorizations [Permits by Rule (PBR) or Standard Permits (SP)] for the oil and gas industry without performing a regulatory impact analysis (RIA), extensive monitoring, and correlated modeling. The bill would limit the use of worst-case modeling inputs and require actual credible air quality monitoring data. Air quality monitoring data and the evaluation of that data would be required to be scientifically credible and could be generated by an ambient air monitoring program conducted by or on behalf of the TCEQ or by a local or federal government entity, or a private organization. The bill would provide a definition of planned maintenance, startup, and shutdown (MSS) activities and would extend the deadline for filing an application to authorize MSS activities until the earlier of January 5, 2014 or the 120th day after the effective date of a new or amended permit under the provisions of the bill necessary to maintain certain affirmative defense criteria. The bill would also require that any PBR or SP adopted or amended by the agency that authorizes planned MSS activities must also conduct a RIA, perform monitoring, and perform correlated monitoring. The bill would only apply to a PBR or SP adopted by the agency after the effective date of the bill, which is September 1, 2011 or upon receiving a two-thirds vote of both houses. The TCEQ reports that it adopted a new PBR and SP in January 2011 for counties in the Barnett Shaleregion, a 23-county area in the vicinity of Fort Worth. For purposes of this fiscal note, it isassumed that the bills provisions would apply to all counties in the state except for those in theBarnett Shale and that the TCEQ would have until January 5, 2014 to adopt a PBR for the area outside the Barnett Shale. Passage of the bill is expected to result in the TCEQ requiring additional staff hours duringrulemaking projects to perform the additional research and documentation needed to meet theproposed RIA requirements, depending upon the number of additional rulemaking projects. Thisestimate assumes that air monitoring would be done using existing equipment and analysis resources.It is estimated that the additional costs the agency would incur upon passage of the bill could beabsorbed using existing agency resources. If additional air monitoring would be needed to meet therequirements of the bill, costs to the TCEQ could be significant but would depend on the number ofmonitors needed. However, because the bill would allow local, Federal, or private entities to provide monitoring, this estimate assumes that the costs to TCEQ would not be significant. Local Government Impact No significant fiscal implication to units of local government is anticipated. Source Agencies:455 Railroad Commission, 582 Commission on Environmental Quality LBB Staff: JOB, SZ, TL
LEGISLATIVE BUDGET BOARD
Austin, Texas
FISCAL NOTE, 82ND LEGISLATIVE REGULAR SESSION
May 5, 2011
TO: Honorable Jim Keffer, Chair, House Committee on Energy Resources FROM: John S O'Brien, Director, Legislative Budget Board IN RE:SB1134 by Hegar (Relating to the issuance of permits for certain facilities regulated by the Texas Commission on Environmental Quality.), Committee Report 2nd House, Substituted
TO: Honorable Jim Keffer, Chair, House Committee on Energy Resources
FROM: John S O'Brien, Director, Legislative Budget Board
IN RE: SB1134 by Hegar (Relating to the issuance of permits for certain facilities regulated by the Texas Commission on Environmental Quality.), Committee Report 2nd House, Substituted
Honorable Jim Keffer, Chair, House Committee on Energy Resources
Honorable Jim Keffer, Chair, House Committee on Energy Resources
John S O'Brien, Director, Legislative Budget Board
John S O'Brien, Director, Legislative Budget Board
SB1134 by Hegar (Relating to the issuance of permits for certain facilities regulated by the Texas Commission on Environmental Quality.), Committee Report 2nd House, Substituted
SB1134 by Hegar (Relating to the issuance of permits for certain facilities regulated by the Texas Commission on Environmental Quality.), Committee Report 2nd House, Substituted
No significant fiscal implication to the State is anticipated.
No significant fiscal implication to the State is anticipated.
The bill would prohibit the Texas Commission on Environmental Quality (TCEQ) from promulgating new or amending existing authorizations [Permits by Rule (PBR) or Standard Permits (SP)] for the oil and gas industry without performing a regulatory impact analysis (RIA), extensive monitoring, and correlated modeling. The bill would limit the use of worst-case modeling inputs and require actual credible air quality monitoring data. Air quality monitoring data and the evaluation of that data would be required to be scientifically credible and could be generated by an ambient air monitoring program conducted by or on behalf of the TCEQ or by a local or federal government entity, or a private organization. The bill would provide a definition of planned maintenance, startup, and shutdown (MSS) activities and would extend the deadline for filing an application to authorize MSS activities until the earlier of January 5, 2014 or the 120th day after the effective date of a new or amended permit under the provisions of the bill necessary to maintain certain affirmative defense criteria. The bill would also require that any PBR or SP adopted or amended by the agency that authorizes planned MSS activities must also conduct a RIA, perform monitoring, and perform correlated monitoring. The bill would only apply to a PBR or SP adopted by the agency after the effective date of the bill, which is September 1, 2011 or upon receiving a two-thirds vote of both houses. The TCEQ reports that it adopted a new PBR and SP in January 2011 for counties in the Barnett Shaleregion, a 23-county area in the vicinity of Fort Worth. For purposes of this fiscal note, it isassumed that the bills provisions would apply to all counties in the state except for those in theBarnett Shale and that the TCEQ would have until January 5, 2014 to adopt a PBR for the area outside the Barnett Shale. Passage of the bill is expected to result in the TCEQ requiring additional staff hours duringrulemaking projects to perform the additional research and documentation needed to meet theproposed RIA requirements, depending upon the number of additional rulemaking projects. Thisestimate assumes that air monitoring would be done using existing equipment and analysis resources.It is estimated that the additional costs the agency would incur upon passage of the bill could beabsorbed using existing agency resources. If additional air monitoring would be needed to meet therequirements of the bill, costs to the TCEQ could be significant but would depend on the number ofmonitors needed. However, because the bill would allow local, Federal, or private entities to provide monitoring, this estimate assumes that the costs to TCEQ would not be significant.
The bill would prohibit the Texas Commission on Environmental Quality (TCEQ) from promulgating new or amending existing authorizations [Permits by Rule (PBR) or Standard Permits (SP)] for the oil and gas industry without performing a regulatory impact analysis (RIA), extensive monitoring, and correlated modeling. The bill would limit the use of worst-case modeling inputs and require actual credible air quality monitoring data. Air quality monitoring data and the evaluation of that data would be required to be scientifically credible and could be generated by an ambient air monitoring program conducted by or on behalf of the TCEQ or by a local or federal government entity, or a private organization.
The bill would provide a definition of planned maintenance, startup, and shutdown (MSS) activities and would extend the deadline for filing an application to authorize MSS activities until the earlier of January 5, 2014 or the 120th day after the effective date of a new or amended permit under the provisions of the bill necessary to maintain certain affirmative defense criteria. The bill would also require that any PBR or SP adopted or amended by the agency that authorizes planned MSS activities must also conduct a RIA, perform monitoring, and perform correlated monitoring. The bill would only apply to a PBR or SP adopted by the agency after the effective date of the bill, which is September 1, 2011 or upon receiving a two-thirds vote of both houses.
The TCEQ reports that it adopted a new PBR and SP in January 2011 for counties in the Barnett Shaleregion, a 23-county area in the vicinity of Fort Worth. For purposes of this fiscal note, it isassumed that the bills provisions would apply to all counties in the state except for those in theBarnett Shale and that the TCEQ would have until January 5, 2014 to adopt a PBR for the area outside the Barnett Shale.
Passage of the bill is expected to result in the TCEQ requiring additional staff hours duringrulemaking projects to perform the additional research and documentation needed to meet theproposed RIA requirements, depending upon the number of additional rulemaking projects. Thisestimate assumes that air monitoring would be done using existing equipment and analysis resources.It is estimated that the additional costs the agency would incur upon passage of the bill could beabsorbed using existing agency resources. If additional air monitoring would be needed to meet therequirements of the bill, costs to the TCEQ could be significant but would depend on the number ofmonitors needed. However, because the bill would allow local, Federal, or private entities to provide monitoring, this estimate assumes that the costs to TCEQ would not be significant.
Local Government Impact
No significant fiscal implication to units of local government is anticipated.
Source Agencies: 455 Railroad Commission, 582 Commission on Environmental Quality
455 Railroad Commission, 582 Commission on Environmental Quality
LBB Staff: JOB, SZ, TL
JOB, SZ, TL