USA – TEXAS Law and Practice Contributed by: Gerald J. Pels, Elizabeth E. Mack, Gerald D. Higdon, Susan Rainey, Elizabeth Corey and Brett A. Miller, Troutman Pepper Locke LLP
graphic information. If a permit is denied and admin- istrative remedies are exhausted, the decision can be appealed to a state court. The Texas legislature’s business courts initiative recently formed the Fifteenth Court of Appeals, which now has statewide exclusive jurisdiction over permitting challenges and enforce- ment actions involving industries regulated by TCEQ and RRC, rather than Austin’s Third Court of Appeals. The TCEQ-RRC MOU identifies specific requirements applicable to waste generated from oil and gas activi- ties, including drilling, production, completions, treat- ment, and other field operations, as well as associated disposal activities, such as recycling, on-site waste treatment, and commercial disposal operations. The RRC recently adopted new comprehensive regula- tions, effective 1 July 2025, governing the handling, storage, treatment, and disposal of oil and gas waste. The new RRC rules update the requirements for oil and gas pits by requiring registration for common pits. The RRC imposes pit liner requirements if groundwa- ter is present within 50 feet, the pit holds fluids with a high solids concentration, or the pit is used to treat and recycle produced water. Commercial waste management facilities, including oil and gas waste landfills, must comply with updated siting, design, and operational requirements, provide increased financial security, and implement ground- water monitoring programmes, in addition to record- keeping and reporting requirements. 4.3 Regulators’ Approach to Policy and Enforcement State agencies and the EPA each have detailed enforcement policies and/or matrices that can be reviewed to understand the basis for potential penal- ties. Generally, permitting liability is considered strict, meaning liability can be conferred without fault or intent to violate. While EPA Region 6 typically does not share penalty calculations, Texas agencies, including the TCEQ, will typically provide the basis for their pen- alty calculations. Texas penalty assessments take into account the degree of environmental harm; however, the duration of the violation and other specific factors are implicated. Finally, in Texas, a regulated entity’s compliance history can be considered in penalty assessment and permit renewal applications, which
may subject facilities to higher enforcement penalties and stricter permit conditions. Compliance scores are publicly available. 4.4 Transferring Permits/Approvals Whether an environmental permit is transferable is programme-specific. In many instances, air permits can be transferred, while other permits cannot. Each environmental permit should be reviewed for specific conditions that could affect transfer, and of course, statutory and regulatory provisions should also be carefully reviewed. Sale or merger transactions involv- ing changes in ownership, operation, or identity often trigger permit transfer obligations. Permit transfers may have time restrictions related to agency approv- als that are relevant to closing date requirements. 4.5 Consequences of Breaching Permits/ Approvals Breaching permit terms or operating without a permit can have significant consequences. It is important to understand that facilities must operate as represented in a permit application. Thus, changes to equipment or operations will typically be considered a violation. Federal and state statutes authorise per-violation fines and penalties, and the cost of challenging assess- ments that are not negotiated can be significant. In certain circumstances, criminal enforcement can be sought, as can injunctive relief. Regarding liability, operators generally face strict lia- bility for permit and other programmatic violations. In 2023, the Texas legislature approved penalties of up to USD40,000 per day for certain violations related to the release of pollutants, an increase from its previous maximum of USD25,000 per day. Fines and penal- ties vary depending on the nature of the violation, and criminal liability can generally be imposed for know- ingly violating the law. In certain cases, the amount of a penalty may depend on the size and profitability of the violator. Regarding clean-up, Texas typically enforces strict joint and several liability starting from “status.” That is, clean-up liability exists for owners and operators, based upon that status. Under federal 5. Environmental Liability 5.1 Key Types of Liability
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