[UPDATE: Two more legislators have filed bills. Read more here.] The Railroad Commission of Texas -- that ill-named agency that is supposed to regulate oil and gas (and coal and uranium mining as well) -- is going through “Sunset,” a process intended to improve state agencies. Unfortunately, the members of the Sunset Commission only recommended modest reforms such as adding a pipeline permit fee and ordering them to come up with a “strategic plan” on their weak enforcement regime.
Well, it’s a few months later and so far no “Sunset” bill has been introduced but stay tuned. Some legislators, however, who did not serve on the Sunset Commission, have stepped up to the plate and introduced a number of important reforms.
State Rep. Rafael Anchia (D-Dallas), having lived through several other attempts to reform the Railroad Commission, was apparently fed up with the tepid reforms recommended by Sunset Commissioners. First, since the Commissioners failed to adopt the recommendation to change the name, he filed legislation to change the name.
HB 237 would adopt the Sunset staff recommendation that the Sunset Commission didn’t adopt, and change the name of the Railroad Commission to the Texas Energy Resources Commission, a name more reflective of the actual work of the agency and one common Texans would be able to recognize.
Not to be outdone, State Rep. Larry Phillips (R-Sherman) filed both HB 642 and HJR 47, which would constitutionally change the Railroad Commission of Texas to the Texas Energy Commission, a slight variation on the Sunset Staff Report recommendation.
In addition to the name change, Anchia filed two other previous Sunset recommendations. First, HB 464 would limit the amount and timing of the political contributions that the Commissioners (who are statewide elected officials) take from the very industries they are charged with regulating. The bill would limit the time that a Commissioner can take political contributions essentially to election season and would also prevent a Commissioner from knowingly accepting contributions from a party that has a contested case hearing before the Commissioners. In other words, since the RRC often considers natural gas rate cases, a Commissioner could not accept a contribution from the gas company asking for a rate increase during that process.
Anchia also introduced HB 247, a key demand of the Sierra Club that the Railroad Commission put its enforcement and inspection and complaint data online and make it searchable. Currently, the RRC only puts general aggregated information online but there is no way for the public (even a landowner who might want to lease to an oil and gas company) to know which companies or wells are complying with the law, and which might have issues.
Sierra Club will be working through the budget process to secure funding to make this online database a reality this legislative session.
Rodriguez Weighs In
Similarly, State Sen. Jose Rodriguez (D-El Paso) filed the same bill in the Senate, SB 568. In a November letter to the Sunset Commission, Sen. Rodriguez proposed adding this bill concept to the Sunset Commission's recommended changes to the Railroad Commission. In that letter, and in an August letter to Sunset, he noted that TCEQ has deployed a similar database to much better effect when compared to the Railroad Commission:
“… I have seen the results of RRC's new inspection system, and it's still woefully inadequate. In a letter dated June 22, 2016, I asked both the RRC and the Texas Commission on Environmental Quality (TCEQ) to provide me a total number of spills the agencies had documented in calendar years 2014, 2015, and 2016 to date. In their reply, TCEQ was able to provide succinct paragraphs detailing a total number of oil and gas spills for each year, and how many of those were referred to another agency. By contrast, I received no such succinct response from RRC, nor did I receive a spreadsheet, report, or database. What I received was a compact disk containing, quite frankly, a jumble of documents—and they only dated back to 2015. I appreciate RRC being so forthcoming with the volume of documents it provided my office, and I also appreciate that these documents may be proof that the agency is putting to use a new inspection database. However, these documents also seem to bear out Sunset staff's concern that RRC will continue to fail in capturing necessary data.”
Senator Rodriguez also filed two other reform bills. First, SB 567, related to enforcement, would increase Railroad Commission penalties for violations not related to pipeline safety from a maximum $10,000 per violation per day to a maximum $25,000 per violation per day. Increasing the maximum penalty would bring the Railroad Commission in line with the Texas Commission on Environmental Quality, which has a similar $25,000 penalty cap, as does the Attorney General of Texas. Second, the bill would require the Railroad Commission to redesign their policy for determining how large a penalty should be. Specifically, the bill would require that the Commission, with input from the public, create new penalty guidelines that take into account "the seriousness of the violation and any hazard to the health or safety of the public resulting from the violation."
In Rodriguez’s November letter, he also proposed adding this bill concept to the Sunset Commission's recommended changes to the Railroad Commission. This change in law would respond to one complaint he'd previously made to the Sunset Commission in August:
“I am convinced that the agency's reliance on self-reporting, coupled with its overriding focus on bringing operators who violate state law into compliance—rather than bringing to bear RRC's substantial enforcement power—results in a system where operators can violate the law with near impunity, knowing full well they'll likely face no adverse consequences for violating the law. This was the conclusion of Sunset staff, who found that RRC referred just two percent of total violations for legal enforcement in 2015, down from four percent in 2011. . . I'm inclined to believe the RRC's focus on continually checking on repeat violators is not only ineffectual in actually ensuring compliance, but also unduly ties up staff from responding to other spill events. For instance, the Sunset staff reports that RRC field inspectors followed up on 15,056 known oil and gas violations 46,133 times. At best, this seems to be inefficient, unnecessary work for RRC staff. Instead of coddling these repeat violators with unlimited chances, RRC should more readily use its enforcement power to ensure compliance after the first violation. This would be a much better use of staff time, and thus taxpayer dollars. Unfortunately, as it stands now, concerned citizens reported to the El Paso Times that they simply stopped reporting spills to the RRC because they knew agency staff wouldn't respond. Maybe staff was simply too busy checking in, once again, on a recalcitrant oil and gas operator.
Finally, Rodriguez also filed SB 569, requiring a rules review on spills. This study bill directs the Railroad Commission to review its rules regarding the prevention, reporting, and documentation or unpermitted discharges of oil and gas waste, and the enforcement of penalties for such waste. The resulting report would be due to the Texas Legislature on Sept. 1, 2018.
The Railroad Commission of Texas has outdated and confusing rules on spills. Operators don’t seem to know when and what they are required to report, and how and when they clean up those spills. SB 569 would be a great first step to “clean up” their spill rules.