(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 an application for an underground gas storage project permit or an amendment or modification of an existing underground gas storage project permit, has suffered or may suffer actual injury or economic damage other than as a member of the general public.       
        (2) Commission--The Railroad Commission of Texas.       
        (3) Fresh water--Water having bacteriological, physical, and chemical properties that make it suitable and feasible for beneficial use for any lawful purpose.       
        (4) Leak detector--A device capable of detecting by chemical or physical means the presence of hydrocarbon vapor or the escape of vapor through a small opening.       
        (5) Gas storage or underground gas storage--Storage of natural gas or other gaseous material in a productive or depleted reservoir, exclusive of gas injection for enhanced recovery.       
        (6) Gas storage project--All surface and subsurface rights, appurtenances, and improvements necessary for conducting underground gas storage operations in a gas storage reservoir.       
        (7) Gas storage well or storage well--A well used to inject or withdraw natural gas or other gaseous material stored in a productive or depleted reservoir, exclusive of a well used to inject gas for enhanced recovery.       
        (8) Operator--The person recognized by the commission as being responsible for the physical operation of a gas storage project, or such person's authorized representative.       
        (9) Person--A natural person, corporation, organization, government, governmental subdivision or agency, business trust, estate, trust, partnership, association, or any other legal entity.       
        (10) 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.       
        (11) Productive or depleted reservoir--A subsurface sand, stratum, or formation that is productive of, or has previously produced, oil, gas, or geothermal resources.       
      (b) Permit required.      
        (1) General. No person may operate a gas storage project without obtaining a permit from the commission. A permit issued by the commission for operation of a gas storage project 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 gas storage projects permitted 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. An application to operate a gas storage project shall be filed with the commission by the owner or operator or proposed owner or operator. The application shall include the following:      
        (1) compliance with safety requirements--information demonstrating compliance with the provisions of subsection (i) of this section;       
        (2) request for reservoir designation--a request for designation of a productive or depleted reservoir as a gas storage reservoir, supported by the following:                  (A) information demonstrating that the reservoir is suitable for gas storage; and                   (B) information demonstrating the amount of recoverable native gas remaining in the reservoir;         
        (3) compliance with standards for injection wells--information demonstrating compliance with the provisions of subsections (j), (k), and (l) of this section for each gas injection well. The requirements of this paragraph do not apply to wells used for gas withdrawal only;       
        (4) water protection letter--a letter from the Groundwater Advisory Unit of the Oil and Gas Division stating the depth to which fresh water strata occur in the project area;       
        (5) public interest--a request that the commission issue an order containing the findings described in the Texas Natural Resources Code, §91.174(a), if such an order is desired by the applicant;       
        (6) fees--the fees required under §3.78 of this title (relating to Fees and Financial Security Requirements) for each gas storage well in the storage project that will be used for injection.       
      (d) Permit amendment. An application for amendment of an existing gas storage project permit shall be filed with the commission as specified in paragraphs (1) - (4) of this subsection.      
        (1) Expansion of reservoir. An application for permit amendment shall be filed prior to expanding the areal extent of the gas storage reservoir.       
        (2) Increase in pressure. An application for permit amendment shall be filed prior to increasing the gas storage reservoir pressure above the maximum permitted pressure.       
        (3) Adding storage wells. An application for permit amendment shall be filed prior to adding additional gas storage wells to the project.       
        (4) Material deviation. An application for permit amendment shall be filed at any time that conditions at the storage project deviate materially from the conditions specified in the permit or permit application.       
      (e) Standards for storage reservoir. A gas storage project shall be operated only in a productive or depleted reservoir in a manner that will prevent waste of oil, gas, or geothermal resources, uncontrolled escape of gases, pollution of fresh water, and danger to life or property.     
      (f) Notice and hearing.      
        (1) Notice requirements. By no later than the date the application is mailed to or filed with the commission, the applicant shall give notice of an application for a permit to operate a gas storage project, or to amend an existing storage project permit, by mailing or delivering a copy of the application to:                  (A) each mineral interest owner, other than the applicant, of the proposed gas storage reservoir;                   (B) each leaseholder of minerals lying above or below the proposed gas storage reservoir;                   (C) each leaseholder of minerals offsetting the proposed gas storage reservoir;                   (D) each owner or leaseholder of any portion of the surface overlying the proposed gas storage reservoir;                   (E) the clerk of the county or counties where the proposed gas storage reservoir is located; and                   (F) the city clerk or other appropriate city official where the proposed gas storage reservoir is located within city limits.         
        (2) Publication of notice. Notice of the application for an original or amended gas storage project permit, 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 gas storage project is located. The applicant shall file proof of publication of the notice prior to any hearing on the application or administrative approval.       
        (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 the names and addresses of such persons shall require an examination of 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. An application for a new gas storage project permit 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) If the commission receives a protest regarding an application for amendment of a gas storage project permit 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 or its designee determines that a hearing is in the public interest, then the applicant will be notified that the application for amendment cannot be administratively approved. The commission will schedule a hearing on the application upon 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.                   (B) If the commission receives no protest regarding an application for amendment of a gas storage project permit from a person notified pursuant to paragraph (1) of this subsection or from any other affected person, the application may be approved administratively.                   (C) If the application for amendment of a gas storage project permit 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.         
      (g) Modification, cancellation, or suspension of a permit.      
        (1) General. A permit may be modified, suspended, or canceled after notice and opportunity for hearing under any of the following circumstances:                  (A) a material change in conditions has occurred in the operation of the gas storage project, 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) fresh water is likely to be polluted as a result of the continued operation of the gas storage project;                   (C) there are material violations of the terms and provisions of the permit or of applicable commission orders or regulations;                   (D) the applicant has misrepresented material facts during the permit issuance process; or                   (E) injected fluids are escaping or are likely to escape from the storage project.         
        (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 permit for underground gas storage 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 underground gas storage operations shall cease upon suspension of a permit under this paragraph.       
      (h) Transfer of permit. A gas storage project permit may be transferred from one operator to another operator if both of the following requirements are met.      
        (1) Notice. Written notice of intended permit transfer is submitted to the commission at least 15 days prior to the date the transfer takes place.       
        (2) No objection. The commission or its designee does not notify the present permit holder of an objection to the transfer prior to the transfer date stated in the notification in paragraph (1) of this subsection.       
      (i) Safety requirements for gas storage projects.      
        (1) Leak detectors.                  (A) Within two years of the effective date of this section, leak detectors shall be installed and in operation at each gas storage well that is located 100 yards or less from a residence, commercial establishment, church, school, or small, well-defined outside area, and at each structurally enclosed compressor site. For purposes of this section, the term "small, well-defined outside area" means an area such as a playground, recreation area, outdoor theater, or other place of public assembly that is occupied by 20 or more persons on at least five days a week for 10 weeks in any 12-month period. The days and weeks need not be consecutive.                  Cont'd...