Texas Railroad Commission Overhaul in the Works

For the third time in six years, the Texas Railroad Commission will be up for legislative scrutiny when the Legislature convenes in Austin January 2017. But members of the state agency that regulates oil and gas in Texas, along with their critics, are going to be ready for it.

Last week, Commissioner Christi Craddick announced her “Oilfield Relief Initiative,” a plan to improve efficiency at the state’s oil and gas regulatory agency and reduce its regulatory administrative burden.

During Craddick’s tenure, the commission has evaluated its methods and rules, and pushed through an overhaul of its outdated technology systems.

“These initial ideas brought forth in the initiative will save extensive time for our staff and tens of millions of dollars for oil and gas operators,” she said in a news release. “This initiative serves as phrase one of a long-term effort to streamline our operations.”

Ben Sheppard, president of the Permian Basin Petroleum Association, said in the statement that the streamlining efforts are especially timely given the current industry downturn.

Among Craddick’s proposals:

  • Identify agency reports and filings that can be reduced or eliminated
  • Amend production requirements for marginal and stripper wells
  • Revise its internal inspection system to allow commission inspectors to prioritize drilling rig inspections and hydraulic fracture treatments in sensitive areas
  • Review all commission forms required for application and reporting purposes to determine the efficacy of collected data 

The commission moved forward on several initiatives Aug. 9, including amendments to statewide Rule 3.15, which addresses the definition of "inactive" wells. Other recommendations will be reviewed at subsequent meetings of the commission. Kimberly Corley, executive director of the commission, said she hopes to have all recommendations finalized by the end of the year.

Similar to other state agencies, the Railroad Commission is subject to a “Sunset” review once every 12 years – the point of which is to determine whether the agency continues to serve a purpose or should be eliminated, also known as "sunseted" in legislative vernacular. The Railroad Commission has been on the agenda for review since 2011, which will be four sessions ago based to the Texas Legislature’s meeting schedule of 140 days every odd-numbered year. In total, when the Legislature convenes in 2017, it will be the third time in six years that the commission is under review. 

But it’s not enough for some long-time critics of the agency. A study from Public Citizen, an environmental lobbying group, said Aug. 17 that other states continue to “outshine” Texas when it comes to regulating the oil and gas industry.

“Other oil and gas states have stronger mandates to protect public health and the environment. States that do better in regulating the industry require more frequent inspections and have fines large enough to deter violations,” said Carol Birch, legislative counsel for Public Citizen’s Texas office, in a news statement. “Other states also have stronger ethics protections − Oklahoma, for example, strictly limits campaign contributions from the oil and gas industry to prevent conflicts of interest. Compare that to Texas, whose commissioners take industry contributions all year long, even when not running for election.”

Public Citizen said in the statement that the group studied nine states in which oil and gas is a major participant in the local economy.

An award-winning journalist, Deon has reported on energy, business and politics for almost 20 years. Email Deon at deon.daugherty@rigzone.com

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