The 89th legislative session was a busy one for the Texas oil, gas, and energy industry. This article summarizes several, although not all, of the bills affecting the industry that were passed during the 89th Texas Legislature. All bills discussed in this article are effective September 1, 2025, unless otherwise noted.
Relating to Oil and Gas Waste
HB 4426 attempts to address inconsistencies in permit durations for commercial surface disposal facilities, which are essential to managing oil and gas waste, that resulted in unnecessary renewals for compliant facilities. HB 4426 amends Subchapter D, Chapter 91 of the Texas Natural Resources Code by adding Section 91.118, which sets a 10- year term for permits issued to commercial surface disposal facilities, with the option to apply for successive renewals within the boundaries of the existing permit. The statute authorizes the Railroad Commission of Texas (RRC) to consider the applicant’s past compliance with RRC rules and permits for similar facilities when deciding the length of a new permit or when renewing or amending a permit. Under Section 91.118, a renewal application must be submitted at least 120 days before the permit expires.
SB 2122 attempts to generate revenue to support the RRC’s ability to modernize its oil and gas waste management programs and rules as waste volumes from unconventional exploration and production increase. SB 2122 amends Section 91.1013 of the Texas Natural Resources Code by requiring applicants for fluid injection well permits to submit a nonrefundable fee of $200 to the RRC. Additionally, applicants for a permit to store, treat, or dispose of certain oil and gas waste must pay a nonrefundable fee ranging from $200 to $1,000 based on the type of permit requested.
Relating to Produced Water
HB 49 attempts to address the expanding “produced water” recycling industry to encourage the reuse of produced water as an alternative to injection well disposal. HB 49 amends Section 122.003 of the Texas Natural Resources Code by expanding liability protections for produced water treatment facilities to include oil and gas producers, surface estate owners, and any third party that transports produced water from a producer to a treatment facility. It also narrows indemnification exceptions by limiting liability for personal injury, death, or property damage to cases where the exposure occurred due to gross negligence, intentional wrongful acts, or negligence in failing to follow specific rules or permits for handling oil and gas waste. Additionally, the statute prohibits awarding punitive damages to claimants for a tort based solely on the person’s negligence and regulatory noncompliance.
SB 1145 attempts to address regulatory uncertainty within the oil and gas industry regarding land application permits for produced water, which are currently within the administrative authority of the RRC. SB 1145 amends Section 26.131 of the Texas Water Code by transferring the RRC’s authority to issue permits for the land application of produced water that has been treated for beneficial use to the Texas Commission on Environmental Quality (TCEQ). It also requires the TCEQ to adopt standards that prevent the pollution of surface and subsurface water.
Relating to Plugging Wells
SB 1759 attempts to address well plugging challenges, encouraging oil and gas operators to contribute to cleanup efforts by providing immunity from civil liability to oil and gas companies assisting in “emergency” response efforts. SB 1759 amends Chapter 91 of the Texas Natural Resources Code by adding Subchapter U, which defines an “oil or gas emergency” as an emergency related to an oil and gas operation, “including the uncontrolled release of oil, gas, or produced water from an oil or gas well or other type of well regulated by the commission.” The bill gives the executive director of the RRC the authority to declare an “oil or gas emergency” for 30 days and to renew that declaration for public health and safety until the emergency no longer exists. It further provides immunity from civil liability to any person who assists in the “oil or gas emergency,” except for in the case of gross negligence, recklessness, or intentional misconduct.
SB 1146 attempts to address challenges with plugging orphaned wells by encouraging surface estate owners and operators who own an interest in an oil and gas lease or mineral estate of a tract on which an orphaned well is located to pay to have an orphaned well plugged. SB 1146 amends Section 89.045 of the Texas Natural Resources Code, providing that persons who pay the RRC to plug or re-plug a well are not liable for damages. It also amends Subchapter C, Chapter 89 of the Texas Natural Resources Code by adding Section 89.049, which authorizes an operator in good standing or a surface owner to contract with an RRC-approved well plugger to plug or re-plug an orphaned well without assuming responsibility for the well’s operation or control. It further ensures that such actions are conducted according to RRC rules, provides certain protections against liability, and mandates that the plugging or re-plugging operation be supervised and approved by the RRC.
SB 1150 also attempts to address the increasing number of orphaned wells in Texas. SB 1150 amends Section 89.023 of the Texas Natural Resources Code to set stricter conditions for granting extensions on the deadline for plugging inactive wells, particularly those inactive for more than 15 years and completed more than 25 years ago. The bill adds criteria for granting extensions based on an operator’s financial hardship, compliance history, or inclusion of the well in an approved compliance plan and requires an operator to submit a sworn financial statement certified by a certified public accountant if seeking an extension for financial hardship. It also mandates that inactive well transfers include written affirmations of compliance and establishes an administrative penalty for violations. Section 89.023 takes effect September 1, 2027. SB 1150 also amends Subchapter C, Chapter 89 of the Texas Natural Resources Code by adding Section 89.049, which requires the RRC to provide an annual report on inactive wells; Section 89.050, which requires operators of wells that have been inactive for 15 years to submit an annual report with the results of certain tests; and Section 89.051, which requires the RRC to adopt necessary rules to regulate and monitor inactive wells.
Relating to Wildfire Safety Concerns
HB 143 and HB 2663 attempt to address safety concerns at oil and gas well sites in light of the wildfire that blazed through the Texas Panhandle in late February and early March 2024, which burned over one million acres.
HB 143 amends Section 91.019 of the Texas Natural Resources Code by requiring operators to construct, operate, and maintain electrical power line poles in a way that prevents and remediates any obvious issues, such as damage, wear, leaning, or cracking. It also requires landowners and lessors to inform the RRC of any problems with an electrical power line, pole, or related equipment that does not meet the standards in the statute. The RRC in turn is required to notify the Public Utility Commission of Texas (PUC) and the operator within three days of the problem and to include a description of the condition and whether the well is abandoned. The RRC and the PUC must resolve the condition within 10 days by either having an inspection and requiring the operator to mitigate any dangerous conditions identified, disconnecting the electric service, or taking other actions “necessary and appropriate to resolve the condition.”
HB 2663 amends Section 89.029 of the Texas Natural Resources Code by requiring an operator to submit a written affirmation with an application for an extension of the deadline for plugging an inactive well. If the well has been inactive for at least 10 years, and the operator does not own the surface estate on which the well is located, the operator must affirm that it has removed all surface equipment associated with the well “and all equipment associated with providing electric service to the well’s production site, except for equipment owned by an electric utility.” It also requires the RRC to impose an administrative penalty (a maximum of $25,000) to anyone who fails to terminate electric services to the well’s production site after providing an affirmation or to remove all equipment and materials. HB 2663 became effective May 29, 2025.
Relating to Texas LNG Exports
HB 2890 and SB 2037 attempt to address issues that impacted the Texas liquefied natural gas (LNG) industry as a result of former President Joe Biden’s executive order placing a pause on LNG exports to non-free trade agreement countries.
HB 2890 amends Title 7 of the Texas Government Code by adding Chapter 760, authorizing the governor to “develop and execute an interstate compact for the [LNG] industry among states that border the Gulf of America” without the need for congressional approval. HB 2890 became effective May 28, 2025.
SB 2037 amends Section 5.555 of the Water Code, adding a requirement that the TCEQ provide a response to public comments on a permit application (or renewal) for a project to construct or modify an LNG export terminal within 120 days after the closing of the public comment period. SB 2037 also adds Section 5.559, requiring the TCEQ to establish an expedited permit application review process for such projects, including a requirement for administrative law judges to conduct preliminary hearings within 60 days of the date that a contested application is referred to the State Office of Administrative Hearings. SB 2037 further amends Section 382.056 of the Health and Safety Code by applying the above referenced timing requirements to an application for a pre construction permit, amendment, or renewal in connection with a project to construct or modify an LNG export terminal.
