(a) Definitions. The following terms, when used in
this section, shall have the following meanings, unless the context
clearly indicates otherwise.
  (1) Affected person--A person who, as a result of actions
proposed in an application for a storage facility permit or amendment
or modification of an existing storage facility permit, has suffered
or may suffer actual injury or economic damage other than as a member
of the general public.
  (2) Cavern--The storage space created in a salt formation
by solution mining.
  (3) Commission--The Railroad Commission of Texas.
  (4) Emergency shutdown valve--A valve that automatically
closes to isolate a gas storage wellhead from surface piping in the
event of specified conditions that, if uncontrolled, may cause an
emergency.
  (5) Fresh water--Water having bacteriological, physical,
and chemical properties that make it suitable and feasible for beneficial
use for any lawful purpose. For purposes of this section, brine associated
with the creation, operation, and maintenance of an underground gas
storage facility is not considered fresh water.
  (6) Gas storage well or storage well--A well, including
the storage wellhead, casing, tubing, borehole, and cavern used for
the injection or withdrawal of natural gas or any other gaseous substance
into or out of an underground gas storage facility.
  (7) Leak or fire detector--A device capable of detecting
by chemical or physical means the presence of stored product gas or
the escape of stored product gas or the presence of flame or heat
of a fire.
  (8) Operator--The person recognized by the Commission
as being responsible for the physical operation of an underground
gas storage facility, or such person's authorized representative.
  (9) Owner--The person recognized by the Commission
as owning all or part of an underground gas storage facility, or such
person's authorized representative.
  (10) Person--A natural person, corporation, organization,
government, governmental subdivision or agency, business trust, estate,
trust, partnership, association, or any other legal entity.
  (11) Pollution--Alteration of the physical, chemical,
or biological quality of, or the contamination of, water that makes
it harmful, detrimental, or injurious to humans, animal life, vegetation,
or property, or to public health, safety, or welfare, or impairs the
usefulness or the public enjoyment of the water for any lawful or
reasonable purpose.
  (12) Storage wellhead--Equipment installed at the surface
of the wellbore, including the casinghead and tubing head, spools,
block or wing valves, and instrument flanges. Spool pieces must have
a length less than six feet to be considered a part of the storage
wellhead.
  (13) Surface piping--Any pipe within a storage facility
that is directly connected to a storage well, outboard of the wellhead
emergency shutdown valve and used to transport gas, brine, or fresh
water to or from a storage well whether such pipe is above or below
ground level.
  (14) Underground gas storage facility or storage facility--A
facility used for the storage of natural gas or any other gaseous
substance in an underground salt formation, including surface and
subsurface rights, appurtenances, and improvements necessary for the
operation of the facility.
(b) Permit required.
  (1) General. No person may create, operate, or maintain
an underground gas storage facility without obtaining a permit from
the Commission. A permit issued by the Commission for such activities
before the effective date of this section shall continue in effect
until revoked, modified, or suspended by the Commission, or until
it expires according to its terms. The provisions of this section
apply to permits to conduct gas storage operations issued prior to
the effective date of this section, except as otherwise specifically
provided.
  (2) Conflict with other requirements. If a provision
of this section conflicts with any provision or term of a Commission
order, field rule, or permit, the provision of such order, field rule,
or permit shall control.
(c) Application.
  (1) Information required. An application for a permit
to create, operate, or maintain an underground gas storage facility
shall be filed with the Commission by the owner or operator, or the
proposed owner or operator, on the prescribed form. The application
shall contain the information necessary to demonstrate compliance
with applicable state laws and Commission regulations.
  (2) Permit amendment. An application for amendment
of an existing underground gas storage facility permit shall be filed
with the Commission:
    (A) prior to any planned enlargement of a cavern in
excess of the permitted cavern capacity by solution mining;
    (B) when required in accordance with paragraph (3)
of this subsection;
    (C) prior to the drilling of any additional storage
wells;
    (D) prior to an increase in the maximum operating pressure
above the permitted pressure; or
    (E) any time that conditions at the storage facility
deviate materially from the conditions specified in the permit or
permit application.
  (3) Increase in capacity. The owner or operator of
a storage facility shall notify the Commission if information indicates
that the capacity of a cavern exceeds the permitted cavern capacity
by 20% or more. Such notification shall be made in writing to the
Commission within 10 days of the date that the owner or operator of
the storage facility knows or has reason to know that the cavern capacity
exceeds the permitted capacity by 20% or more. The notification shall
include a description of the information that indicates that the permitted
cavern capacity has been exceeded, and an estimate of the current
cavern capacity. Upon receipt of such information, the Commission
or its designee may take any one or more of the following actions:
    (A) require the permittee to comply with a compliance
schedule that lists measures to be taken to ensure that conditions
at the storage facility do not pose a danger to life or property,
and that no waste of gas, uncontrolled escape of gas, or pollution
of fresh water occurs;
    (B) require the permittee to file an application to
amend the underground gas storage facility permit;
    (C) modify, cancel, or suspend the permit as provided
in subsection (f) of this section; or
    (D) take enforcement action.
(d) Standards for underground storage zone.
  (1) Geologic, construction, and operating performance.
An underground gas storage facility may be created, operated, or maintained
only in an impermeable salt formation in a manner that will prevent
waste of the stored gases, uncontrolled escape of gases, pollution
of fresh water, and danger to life or property. This section does
not authorize storage of liquid or liquefied hydrocarbons in an underground
salt formation. A permit under §3.95 of this title (relating
to Underground Storage of Liquid or Liquefied Hydrocarbons in Salt
Formations) is required to convert from storage of natural gas to
storage of liquid or liquefied hydrocarbons in an underground salt
formation.
  (2) Fresh water strata. The applicant must submit with
the application a letter from the Groundwater Advisory Unit of the
Oil and Gas Division stating the depth to which fresh water strata
occur at each storage facility.
(e) Notice and hearing.
  (1) Notice requirements. The applicant shall, no later
than the date the application is mailed to or filed with the Commission,
give notice of an application for a permit to create, operate, or
maintain an underground hydrocarbon storage facility, or to amend
an existing storage facility permit, by mailing or delivering a copy
of the application form to:
    (A) the surface owner of the tract where the storage
facility is located or is proposed to be located;
    (B) the surface owner of each tract adjoining the tract
where the storage facility is located or is proposed to be located;
    (C) each oil, gas, or salt leaseholder, other than
the applicant, of the tract on which the storage facility is located
or is proposed to be located;
    (D) each oil, gas, or salt leaseholder of any tract
adjoining the tract on which the storage facility is located or is
proposed to be located;
    (E) the county clerk of the county or counties where
the storage facility is located or is proposed to be located; and
    (F) if the storage facility is located or is proposed
to be located within city limits, the city clerk or other appropriate
city official.
  (2) Publication of notice. Notice of the application,
in a form approved by the Commission or its designee, shall be published
by the applicant once a week for three consecutive weeks in a newspaper
of general circulation in the county where the storage facility is
or is proposed to be located. The applicant shall file proof of publication
prior to any hearing on the application or administrative approval
of the application.
  (3) Notice by publication. The applicant shall make
diligent efforts to ascertain the name and address of each person
identified under paragraph (1)(A) - (D) of this subsection. The exercise
of diligent efforts to ascertain names and addresses of such persons
shall require an examination of the county records where the facility
is located and an investigation of any other information of which
the applicant has actual knowledge. If, after diligent efforts, the
applicant has been unable to ascertain the name and address of one
or more persons required to be notified under paragraph (1)(A) - (D)
of this subsection, the notice requirements for those persons are
satisfied by the publication of the notice of application as required
in paragraph (2) of this subsection. The applicant must submit an
affidavit to the Commission specifying the efforts that were taken
to identify each person whose name and/or address could not be ascertained.

  (4) Hearing required for new permits. A permit application
for a new underground gas storage facility will be considered for
approval only after notice and hearing. The Commission will give notice
of the hearing to all affected persons, local governments, and other
persons who express, in writing, an interest in the application. After
hearing, the examiner shall recommend a final action by the Commission.
  (5) Hearing on permit amendments.
    (A) An application for an amendment to an existing
storage facility permit may be approved administratively if the Commission
receives no protest from a person notified pursuant to paragraph (1)
of this subsection or from any other affected person.
    (B) If the Commission receives a protest from a person
notified pursuant to paragraph (1) of this subsection or from any
other affected person within 15 days of the date of receipt of the
application by the Commission, or of the date of the third publication,
whichever is later, or if the Commission determines that a hearing
is in the public interest, then the applicant will be notified that
the application cannot be approved administratively. The Commission
will schedule a hearing on the application upon written request of
the applicant. The Commission will give notice of the hearing to all
affected persons, local governments, and other persons who express,
in writing, an interest in the application. After hearing, the examiner
shall recommend a final action by the Commission.
    (C) If the application is administratively denied,
a hearing will be scheduled upon written request of the applicant.
After hearing, the examiner shall recommend a final action by the
Commission.
(f) Modification, cancellation, or suspension of a
permit.
  (1) General. Any permit may be modified, suspended,
or canceled after notice and opportunity for hearing if:
    (A) a material change in conditions has occurred in
the operation, maintenance, or construction of the storage facility,
or there are material deviations from the information originally furnished
to the Commission. A change in conditions at a facility that does
not affect the safe operation of the facility or the ability of the
facility to operate without causing waste of hydrocarbons or pollution
is not considered to be material;
    (B) pollution of fresh water is likely as a result
of continued operation of the storage facility;
    (C) there are material violations of the terms and
provisions of the permit or Commission regulations;
    (D) the applicant has misrepresented any material facts
during the permit issuance process; or
    (E) injected fluids are escaping or are likely to escape
from the storage facility.
  (2) Imminent danger. Notwithstanding the provisions
of paragraph (1) of this subsection, in the event of an emergency
that presents an imminent danger to life or property, or where waste
of hydrocarbons, uncontrolled escape of hydrocarbons, or pollution
of fresh water is imminent, the Commission or its designee may immediately
suspend a storage facility permit until a final order is issued pursuant
to a hearing, if any, conducted in accordance with the provisions
of paragraph (1) of this subsection. All operations at the facility
shall cease upon suspension of a permit under this paragraph.
Cont'd...