Roxanna Miranda/The Rider
Alejandra Yañez | THE RIDER
Updated at 2:32 p.m. Feb. 11
SpaceX plans to extract methane near its Boca Chica launch site to fuel its rockets after a dispute is settled between one of its subsidiaries and Dallas Petroleum Group, state documents show.
The Texas Railroad Commission conducted a hearing Jan. 22 to consider allowing a change of operator for gas wells in Cameron County from Dallas Petroleum Group to the SpaceX subsidiary, Lone Star Mineral Development.
During the hearing, Tim George, an attorney for the SpaceX subsidiary, said the company plans to use natural gas to power its rockets.
“Lone Star acquired the leases, it’s an affiliate of SpaceX … [and it intends to] use methane for fuel,” George said during the Jan. 22 hearing. “And so the hope is that they can produce these properties by reentering these inactive wells and restoring the production for use in connection with … rocket facility operations.”
The two wells in question are near the SpaceX Boca Chica launch site. The hearing did not consider any additional drilling requests.
“Both of these wells are inactive wells under Statewide Rule 15,” George said. “And there’s been no activity–regulatory activity for a period of greater than 12 months. In fact, there hasn’t been any production or injection since 2014. So it’s been a long period of time that these wells have sat idle.”
George said one of the reasons for the hearing is due to SpaceX’s presence at Boca Chica and its goals of expansion.
Dallas Petroleum has filed a lawsuit in Cameron County’s 445th District Court against three companies–Sanchez Midstream Partners LP, Sanchez Midstream Partners GP LLC and Sanchez Oil & Gas Corp.
“And so that’s why we’re here today; there’s a lawsuit. Dallas has sued Sanchez, and SpaceX’s entity called Dogleg has intervened in that lawsuit.”
Dogleg Park LLC is a land acquisition affiliate of SpaceX.
Dallas Petroleum claims that it should continue to be the operator of record because it has a good faith claim, according to documents obtained by The Rider.
“I’m looking at the definition, and it says you have to have a right, you know, there’s some qualifications–in a mineral estate, but you’re not claiming rights in a mineral estate,” said Jennifer N. Cook, a Railroad Commision administrative law judge.
After Cook makes a ruling, the parties will have about 25 days to file exceptions and replies, according to an email sent to The Rider by Andrew Keese, a spokesperson for the Railroad Commission of Texas.
“RRC’s commissioners will then consider and vote on the case during an open meeting,” Keese’s email states.
According to the docket for the RRC hearing, the closing briefing was done off the record.
Both parties filed a motion to amend the schedule and Judge Cook granted the motion Jan. 22. The schedule is as follows:
–February 22, 2021: Initial Closing Arguments for Both Parties
–March 8, 2021: Reply Closing Arguments for Both Parties
–March 15, 2021: Lone Star’s Response
A hearing was set at 10 a.m. Tuesday in the 445th District Court on defendants Sanchez Oil & Gas Corp.’s motion to expunge lis pendens, or pending legal action, according to county records.
“That case was actually passed,” Mary Lou Garcia, the 445th District court coordinator told The Rider Wednesday afternoon. “Parties came to an agreement, so that hearing was not held.”
Both parties filed a Rule 11 and a notice of withdrawal for the motion, according to Garcia, but the lawsuit continues. According to the Cornell Law School website, Rule 11 refers to signing pleadings, motions and other papers.
According to the Rule 11 agreement, Dallas Petroleum Group’s release of the lis pendens “is not a release of its ownership claims asserted in the underlying lawsuit.”
Sanchez Oil and Gas Corp. agrees to withdraw its motion to expunge and pass the hearing currently set for Feb. 9 and agrees not to pursue its motion not to expunge.
There are eight steps to drill for natural oil and gas and they are established by the Railroad Commission of Texas. These steps can be found on its website.
For SpaceX to be able to drill, it must first file an organization report showing its legal identity. Then it must file a W-1 form with an attached plat and check for a fee, based on total depth, to the commission.
