What should a Karnes County oilfield contractor have in place before the next MSA or storm?

Karnes City is the county seat, about 52 miles southeast of San Antonio. U.S. Highway 181 and State Highways 72, 80 and 123 serve the county.

For oil and gas, Karnes is RRC District 2, which the Railroad Commission handles from its San Antonio office along with District 1. Karnes is on the RRC's list of 27 Eagle Ford counties. Oil was first discovered in the county in 1930.

For state roads, Karnes is in TxDOT's Corpus Christi district, not the San Antonio district. So a Karnes City contractor deals with a San Antonio regulator and a Corpus Christi highway district.

FEMA's Hurricane Harvey major disaster declaration (DR-4332, incident period August 23 to September 15, 2017) designated Karnes County for both individual assistance and public assistance. FEMA records also show Karnes in the 2005 Hurricane Rita declaration and the February 2021 severe winter storm disaster (DR-4586).

The San Antonio River drains the central and southern parts of the county, and Cibolo Creek and Ecleto Creek drain the north.

Before storm season, check:

• Flood and wind on the equipment floater at your yard and on job sites. Some forms exclude or sublimit flood by location.
• Windstorm deductibles on your building and contents. Some property policies use a separate named-storm deductible.
• Comprehensive on parked units. Without it, flood damage to a truck is not covered.
• Freeze. The 2021 winter storm reached Karnes County. Pumps, lines and water tanks can freeze and split. Ask how your policies treat freeze damage to equipment.

See oilfield equipment insurance.

In an April 2012 presentation, TxDOT listed immediate Category 1 energy-sector road expenditures by district. Corpus Christi, which includes Karnes, had the largest amount on the list at $10,363,415.

That traffic is what Karnes City contractors drive in every day: sand, water, chemicals and equipment on two-lane state and farm roads.

• Auto limits. TxDMV requires at least $500,000 for vehicles over 26,000 pounds, but MSAs commonly ask for $1,000,000 plus umbrella.
• Permits. TxDMV oversize and overweight permits, including fracking trailer and well servicing unit permits, should match your auto schedule.
• Fluids. Hauling produced water or other non-hazardous oil and gas waste off a lease for hire needs an RRC waste hauler permit, and the load needs pollution coverage that follows the truck.

See water hauling insurance and do I need pollution coverage to haul produced water.

The first commercial uranium deposits in Texas were found in Karnes County in 1954, and mining in the county and neighboring counties kept a uranium processing mill near Falls City running into the early 1990s.

That history doesn't mean any particular property has a problem. It does mean that when you buy or lease a yard in Karnes County, you should know what the site was used for before you move in.

The insurance reason: pollution policies generally do not cover conditions that existed before you got there. If something is found later, you want a record showing it was not yours. Ask the landlord or seller about past use, and keep what they tell you in writing. See oilfield pollution liability.

Send the insurance and indemnity sections of your MSA, your current certificates, your auto schedule and equipment list, and your yard address. If ISNetworld or Avetta rejected a certificate, send the notice.

Karnes County work is Texas work, so Chapter 127 governs. We check whether your limits match the indemnity you agreed to and whether flood and wind are covered where your equipment actually sits. Your attorney reviews the contract, and a licensed insurance specialist goes over the results with you.