Fracking operation says it will comply with water rules

PRESIDIO COUNTY — A fracking operation in northwest Presidio County says it’s working to comply with local water rules.

Helios Energy, an Australian company with a U.S. headquarters in Houston, earlier this year announced a fracking operation in northwest Presidio County near Marfa and Valentine, as The Big Bend Sentinel previously reported. That raised concerns for  Presidio County Underground Water Conservation District that the company wasn’t complying with water-reporting rules.

Helios said in a September 4 news release that it had already used 64,000 barrels of “completion fluid,” which often includes water. Regulators at PCUWCD say they need three pieces of information from Helios: who owns the water well the company is using, how much water it’s used so far and what it plans to do with produced water from fracking.

After months of trying to bring the company into compliance, the water district last week voted unanimously to increase pressure on the company by having the district’s lawyer, Mike Gershon, send the company a violation notice. It was part of an escalation that could have ultimately seen the district fine the company or call a company representative before the board — steps which PCUWCD has reportedly never taken before.

By sending a formal notice on legal letterhead, the district hoped to emphasize to Helios executives the importance of water-reporting rules. But water officials called off their decision on Friday, after Helios contacted the water district and The Big Bend Sentinel to express their commitment to compliance.

In a phone interview with The Big Bend Sentinel, Rick Vannoy, a consultant and representative for Helios, and Julian Ayala, a consulting landman for the company, said they aren’t avoiding compliance but instead are stuck in a “pickle” as they try to honor their commitments to both regulators and the landowners who own the well.

Before Helios can report details on the water well it’s using, these company representatives say they first want to ensure they have permission from the landowners, whom they said the company already has a surface-use agreement with. (In a follow-up call later on Friday, Ayala said Helios had received verbal agreement from at least one landowner and was just waiting on paperwork.)

Further complicating matters, it’s also unclear if the well was ever registered to the owners. They say that has left Helios and its lawyers wondering if the water well is grandfathered out of water regulations. Still, Helios says it’s willing to register the water well — it just wants to make sure the landowners are involved and represented.

“We want to be in compliance, but we don’t want to sign off on things that the landowners don’t want to sign off on,” Ayala, the landman, said.

Helios is also trying to determine the status of the well in question, which was reportedly built decades ago by another oil company and may have never been registered. They said Helios’ legal team is working on the issue, and that the company is “happy to pay” any late penalties relating to the delay.

The landowners — a pair of sisters, one of whom lives in Georgia and the other of whom lives in Ireland — could not be reached for comment by press time.

A refresher on the nuances of water and fracking policy in Presidio County: The Texas Railroad Commission, which permits oil and gas wells in Texas, does not have legal authority to regulate the “withdrawal or use” of water for oil and gas projects. Nor does the Texas Water Code require permits for water wells used “solely to supply water for a rig that is actively engaged in drilling or exploration operations” for oil and gas.

Under state water law, PCUWCD also has exemptions for these types of oil-and-gas water wells. Still, district rules require these users to make periodic reports about the total amount of water they’re using, so that PCUWCD can meet its own obligations to monitor county water.

The water district first learned about the fracking operation in July, when Trey Gerfers, chairman of PCUWCD, was asked about it at the Water Symposium of the Big Bend Conservation Alliance, where he’s currently board president.

In public meetings and in interviews with The Big Bend Sentinel, water regulators have repeatedly acknowledged that Helios — an Australian company with ties to China — may not be fully aware of the nuances of county-level water policy in Far West Texas. They said the company has been cooperating with water regulators, at one point offering PCUWCD regulators a chance to visit the Helios operation in Presidio County.

In part for those reasons, PCUWCD has given Helios the benefit of the doubt, Trey Gerfers told the The Big Bend Sentinel. And in a follow-up interview on Friday, Gerfers welcomed the update, saying the “wisdom” of that approach “is being borne out.”

“We want to understand where people are coming from first, and then take action,” Gerfers said. As he sees it, “starting with a soft touch” is more effective than being “belligerent from the outset.”