I run an oilfield service company out of Odessa. What should my insurance be built around?

Ector County, with Odessa as its county seat since 1891, is in RRC District 08. The district office is in Midland.

The county's oil history is long. TSHA records the first discovery in 1926, followed by the Penn field in 1929 and the Cowden field in 1930. Production peaked at nearly 62.2 million barrels in 1948, and through 1990 the county had produced about 2.73 billion barrels, making it the second most productive oil county in Texas at the time.

Odessa grew up as the shipping and oilfield supply center for that boom, and a petrochemical complex was built near the city in the mid-1960s. Supply, rental and fabrication businesses are part of that tradition, and their contracts raise their own questions.

That matters for contracts. Texas Chapter 127 defines an agreement pertaining to a well to include acts collateral to well services, "including furnishing or renting equipment, incidental transportation, or other goods and services." Rental and supply agreements can be in scope. The same definition excludes construction, maintenance or repair of pipelines and fixed associated facilities. If you do both kinds of work, see Texas oilfield anti-indemnity act.

Northern Ector County includes fields on the Central Basin Platform. A 1998 study published through the National Energy Technology Laboratory describes the Goldsmith field (Permian and younger reservoirs) and Andector field (Ellenburger) as one structure in northern Ector County, extending northwest into Andrews County, on an Ellenburger thrust anticline at the eastern edge of the platform. The UT Bureau of Economic Geology also lists Ector among the Spraberry Trend counties of the Midland Basin.

Old fields mean a lot of lease maintenance, waterflood stations, injection lines, pump houses and well workovers. That work is roustabout and well servicing work, and the MSA questions are specific:

• Care, custody or control. If your crew is working on the operator's pump or line when it fails, your GL may exclude damage to property in your care. See what is the care, custody and control exclusion.
• Pollution. A leak from an injection line is a pollution event. See contractors pollution liability.
• Completed operations. A fitting you installed can fail months later. See ongoing vs completed operations additional insured.

See roustabout company insurance and well servicing insurance.

On October 26, 2019, a pumper responded to an alarm at a waterflood station in Odessa. According to the U.S. Chemical Safety and Hazard Investigation Board, water containing hydrogen sulfide released from a pump, and he was fatally exposed. His spouse later drove through the unlocked gates looking for him and was also fatally exposed. Odessa Fire Rescue and the Ector County Sheriff's Office responded.

The CSB listed six safety issues:

• no personal H2S detector worn,
• no lockout/tagout performed, and no written lockout/tagout procedure,
• H2S confined inside the pump house,
• no safety management program,
• an H2S detection and alarm system that did not work, and
• deficient site security.

Texas regulates H2S through Rule 36. Where it applies, operators must use trained service company personnel and get written certification from the service company that its people were trained. The rule's definition of a public area includes dwellings, businesses and public roads, and new warning signs must say "Caution" and "Poison Gas."

The insurance side has two pieces. An injury to your own worker is a workers' comp and employers liability claim. An injury to someone who is not your employee, on a site you are working or controlling, is a liability claim, and some policies treat a gas release as pollution. Ask how your GL and pollution coverage handle an H2S release. See what is employers liability coverage and what happens if an employee is hurt on an operator's lease.

In September 2021 the RRC told operators that saltwater disposal injection "likely contributes" to seismic activity in the Gardendale Seismic Response Area, which it described as running from northeast Ector County to southwest Martin County. It counted six felt earthquakes of magnitude 3.5 or greater since February 2020, including two magnitude 3.6 events northeast of Odessa, and notified the operators of 76 permitted disposal wells in writing.

In December 2021 the RRC suspended the permits of 33 deep disposal wells in the SRA. The current operator plan keeps deep disposal shut in.

For Odessa water haulers and SWD service crews, that means:

• routes and disposal sites that change when regulators act,
• more miles and more auto exposure,
• an RRC waste hauler permit for produced water hauled for hire off the lease, and
• a clear answer on who pays for a spill at the disposal site.

See water hauling insurance and what is an RRC waste hauler permit.

TSHA lists Interstate 20 with US 80 running west to east through Ector County, US 385 running north and south, and State Highway 302 running west to east. Rigs, tanks and fabricated equipment move out of Odessa on all of them.

• Oversize and overweight loads need a TxDMV permit before they travel on public roads. Transportation Code 623.142 provides a permit for oil well servicing and drilling machinery on TxDOT roads, and TxDMV issues an annual permit for well servicing units.
• County roads can carry load limits set by the commissioners court with TxDOT's concurrence under Transportation Code 621.301.
• Your equipment floater should cover overturn and collision in transit, and your auto policy should list the units that pull it.

See oilfield equipment insurance and what is contractors equipment inland marine.