Produced Water Management in Texas: A Historical and Current Overview & What Chapter 4 Means for You

Produced water, a byproduct of oil and gas extraction, presents significant management challenges due to its large volume and complex composition. Texas has a long history of regulating and managing this waste stream, with evolving roles for the Railroad Commission of Texas (RRC) and the Texas Commission on Environmental Quality (TCEQ).

As of July 1, 2025, the Railroad Commission of Texas rolled out its most extensive overhaul of oil-and-gas waste regulations in over 40 years. Statewide Rule 8 (16 TAC 3.8) has been retired and replaced by the new 16 TAC Chapter 4, Subchapter A. This streamlined framework merges and updates provisions from SWR 8 and SWR 57, while introducing fresh compliance steps for everyone who generates, hauls, or handles oilfield waste in Texas.

1. History of Produced Water Management in Texas: Past Disposal and TXRRC Regulation

Historically, produced water management in Texas has been closely tied to the state's dominant oil and gas industry.

• Early Disposal Methods (Historically)

  • Since the 1930s, the primary method for disposing of produced water (often referred to as brine) has been underground injection. This involves injecting the water back into the same or similar geological formations from which it was extracted, or into non-productive formations. While a significant portion of injection wells (Class II wells) are used for enhanced oil recovery (EOR), about 20% are specifically for saltwater disposal. Due to their ubiquity and lower cost compared to treatment and reuse, disposal wells remained the prevalent solution for decades. Produced water from oil and gas operations is not classified as hazardous waste under federal law, allowing its disposal in Class II injection wells which have fewer safety requirements than Class I hazardous waste wells.

    
    

• TXRRC's Historical and Evolving Role

  • The Railroad Commission of Texas (RRC) has been the primary regulator of oil and gas production in Texas since 1919. Its jurisdiction extends to protecting underground drinking water through the regulation of underground injection activities, a program approved by the U.S. Environmental Protection Agency (EPA) under the Safe Drinking Water Act.

    
    

    • Early Regulations: The RRC established rules for oil and gas waste storage and disposal, with amendments in the 1980s (e.g., Rule 8) and new rules in the 1990s addressing specific waste types like Naturally Occurring Radioactive Material (NORM) and hazardous oil and gas waste. The RRC also gained authority to require financial assurance for commercial disposal facilities.

      
      

    • Modernization and New Rules (Overhaul of Statewide Rule 8): Recognizing the increasing volume of produced water, growing interest in water conservation, and pressures from rising formation pressures and seismic risk, the RRC has significantly modernized its waste management rules.

      
      

      • Effective July 1, 2025: The RRC finalized a substantial overhaul of Statewide Rule (SWR) 8, replacing it with 16 TAC Chapter 4, Subchapter A. This marks the most significant change to oilfield waste rules in four decades, consolidating, modernizing, and expanding existing provisions, including parts of SWR 57.

        
        

      • Mandatory Requirements: The new regulations introduce mandatory manifesting, monitoring, and mass balance for oil and gas waste, requiring detailed characterization and documentation.

        
        

      • Pit Classification: Pits are now classified and regulated as infrastructure, with new requirements for registration, liners, setbacks, and closure. While limited exemptions for unpermitted disposal exist, most operations will require formal permitting.

        
        

      • Facilitating Recycling: The updated framework also expands recycling opportunities for produced water and solids under clearer, tiered permitting structures.

        
        

      • New Notice Provisions: There are new notice provisions for permitted applications and stricter rules for out-of-state produced water and waste haulers.

        
        

      • New Disposal Pathways: Senate Bill 1145 authorizes the RRC to issue permits for the land application of treated produced water, marking a shift from sole reliance on underground injection. House Bill 49 provides liability protections for entities involved in the beneficial reuse or transfer of treated produced water, aiming to encourage broader adoption of water reuse practices.

        
        

2. Current Status of Regulation by TCEQ and its Effect on Generators

While the RRC traditionally regulated oil and gas waste associated with exploration and production, the Texas Commission on Environmental Quality (TCEQ) now plays a crucial role, particularly concerning discharges into state waters.

• TCEQ's Current Regulatory Scope

  • Effective January 15, 2021, the TCEQ gained authority from the U.S. Environmental Protection Agency (EPA) to issue federal permits for produced water, hydrostatic test water, and gas plant effluent discharges into Texas surface waters. This authority was transferred from both the EPA and the RRC, consolidating the permitting of these discharges under TCEQ's purview.

    
    

    • General Permits: As of January 10, 2024, TCEQ issued a new Oil and Gas Extraction Texas Pollutant Discharge Elimination System (TPDES) General Permit No. TXG310000. This permit specifically regulates wastewater discharges from certain onshore stripper well facilities east of the 98th meridian, coastal facilities, and territorial seas facilities into state waters.

      
      

    • Monitoring and Remediation: TCEQ actively monitors waterways for indicators of surface water quality potentially affected by oil and gas activities. The Office of Waste at TCEQ is also responsible for remediation efforts related to petroleum-derived pollution.

      
      

3. How Produced Water Needs to Be Recycled or Disposed Of

The shift in regulation reflects a growing emphasis on alternative management strategies beyond traditional underground injection, particularly recycling and beneficial reuse.

• Disposal (Underground Injection - RRC Regulated): The most common method of disposal remains underground injection into Class II wells, regulated by the RRC. These wells inject produced water back into the geological formations from which it originated or into other non-productive formations. While produced water is not federally classified as hazardous waste, its disposal still requires strict adherence to RRC rules to protect groundwater.

  
  

• Recycling and Beneficial Reuse (RRC Encouraged & Regulated): Texas is actively promoting the recycling and beneficial reuse of produced water to reduce reliance on fresh water and traditional disposal methods. The RRC has implemented new rules and is supported by recent legislation that facilitates these practices:

  
  

  • On-site Recycling Flexibility: The RRC's new 16 TAC Chapter 4, Subchapter A (formerly SWR 8), effective July 1, 2025, facilitates the recycling of produced water for reuse in drilling, fracking, and completion operations. This can often be done without requiring a separate RRC permit, provided specific design, groundwater monitoring, and siting requirements are met, offering more flexibility to operators.

    
    

  • Liability Protection: House Bill 49 provides new liability protections for entities involved in the beneficial use or transfer of treated produced water, which significantly encourages its reuse by reducing associated risks for operators.

    
    

  • Land Application: Senate Bill 1145 authorizes the RRC to issue permits for the land application of treated produced water. This creates an additional pathway for managed reuse, moving beyond just subsurface injection or surface water discharge.

    
    

  • Clarified Ownership: A recent Texas Supreme Court ruling (June 27, 2025) clarified that the drilling company holding the oil and gas lease owns the produced water, considering it "oil and gas waste" and part of the mineral rights estate. This clarification of ownership streamlines the process for operators to manage, sell, or reuse produced water.

    
    

4. Effect on Generators

Key Implications for Produced Water Generators (Oil and Gas Operators)

These regulatory changes have several key implications for produced water generators (oil and gas operators):

• Increased Compliance Complexity: Generators must now navigate distinct, though sometimes overlapping, regulatory requirements from both the RRC (primarily for subsurface injection and, increasingly, on-site reuse and land application) and the TCEQ (for surface water discharges). The overhaul of SWR 8 (now 16 TAC Chapter 4) introduces more detailed characterization, documentation, and permitting requirements for various waste management activities.

  
  

• Incentives for Reuse: The new RRC rules and legislative support provide strong incentives for generators to explore and implement produced water recycling and reuse programs. This can lead to reduced disposal costs, lower freshwater demand, and improved environmental performance.

  
  

• New Business Models: The liability protections and new permitting options for land application create opportunities for operators and service providers to develop new treatment and reuse business models.

  
  

• Operational Flexibility: The ability to recycle produced water on-site without an RRC permit (under specific conditions) offers greater operational flexibility and potentially faster project execution.

  
  

• Enhanced Accountability: Mandatory manifesting, monitoring, and mass balance requirements under the new RRC rules will necessitate more rigorous tracking and documentation of all oil and gas waste, including produced water.

5. Disposing of produced water versus recycling it has several key implications for oil and gas operators (generators)

• Disposing of Produced Water (Primarily via Underground Injection)

  • Costs: While historically a cost-effective option, disposal costs can fluctuate based on transportation distances, injection well capacity, and disposal facility fees. In areas with limited injection capacity, costs may rise.

    
    

  • Environmental Concerns: Although federally not classified as hazardous, large-volume disposal still carries environmental considerations, including the potential for induced seismicity in certain geological areas and the permanent removal of water from the hydrological cycle.

    
    

  • Regulatory Burden: Generators must comply with RRC regulations for Class II injection wells, including permitting, well integrity testing, and reporting.

• Recycling Produced Water

  • Cost Savings (Potential): Recycling can lead to reduced disposal costs, especially if freshwater is expensive or scarce, and can lower transportation expenses. However, initial investment in treatment infrastructure can be significant.

    
    

  • Water Conservation: Reduces the demand for freshwater, which is crucial in water-stressed regions, by reusing water for drilling and hydraulic fracturing.

    
    

  • Reduced Disposal Volume: Decreases the volume of water sent to disposal wells, potentially mitigating issues like induced seismicity and prolonging the lifespan of existing disposal infrastructure.

    
    

  • Resource Recovery: Advanced recycling processes may allow for the extraction of valuable minerals (e.g., lithium) from produced water, creating new revenue streams.

    
    

  • Operational Flexibility: The RRC's new rules (16 TAC Chapter 4, formerly Statewide Rule 8) facilitate on-site recycling for drilling and fracking without requiring a separate RRC permit under specific conditions, offering greater operational flexibility and potentially faster project execution.

    
    

  • New Business Models: Legislative support, such as liability protections provided by House Bill 49, encourages the development of new treatment and reuse business models for operators and service providers.

    
    

  • Public Perception: Engaging in recycling initiatives can enhance a company's environmental stewardship image and improve community relations.

In summary, Texas is moving towards a more integrated and sustainable approach to produced water management, emphasizing reuse while maintaining strict regulatory oversight over both disposal and discharge. In essence, Texas is moving towards a more integrated and sustainable approach to produced water management, emphasizing reuse while maintaining strict regulatory oversight over both disposal and discharge.

For more information, you can refer to:

• https://www.b3insight.com/texas-railroad-commission-finalizes-overhaul-of-statewide-rule-8/?utm_content=338230794&utm_medium=social&utm_source=linkedin&hss_channel=lcp-18451549

• https://www.rrc.texas.gov/about-us/

• https://www.rrc.texas.gov/announcements/02112025-implementation-for-16-tac-chapter-4-new-and-amended-rules/

• https://www.ironsight.app/rrc-chapter-4

• https://www.rrc.texas.gov/oil-and-gas/applications-and-permits/environmental-permit-types/all-about-chapter-4/

Incoming TXRRC Waste Profile (Form EP-9) and Waste Manifest (Form EP-10) Forms