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The Texas Railroad Commission Will Not Ride Off Into The Sunset

In Texas, all state agencies effectively have an "expiration date": each is periodically abolished, by operation of law, unless the Legislature passes a bill to extend its existence.  Established in 1977, the Texas Sunset Advisory Commission evaluates agencies and issues recommendations to lawmakers.  According to the agency's website, "Sunset answers a basic question for the Texas Legislature: Are an agency’s functions needed, and if so, how can the agency work better and save money for Texans?”

The Texas Railroad Commission—the regulatory body that oversees the oil-and-gas industry—has been closely scrutinized by Sunset staff in three separate investigatory cycles over the last year.  The agency recommended a host of sweeping of changes for the RRC, but last week the Texas Senate dismissed the overwhelming majority of them when it passed House Bill 1818, which had previously been approved by vote of the House.  The bill is now headed to the office of Governor Greg Abbott for his signature.  The bill, which would extend the RRC’s mandate through 2029, will become law unless the Governor affirmatively vetoes it.

Among the amendments recommended by Sunset staffers was to dub the RRC, rather antiseptically, the “Texas Energy Resources Commission.”  Activist groups have been advocating for the branding reboot for ages, on the theory that the name—admittedly an artifact of vintage agency duties—leaves people scratching their heads and, if you credit the conspiracy theorists, equips the Railroad Commission to operate surreptitiously in the shadows.

The name change was roundly rejected by the Legislature, in a move that was applauded by those in the oil-and-gas business.  The Railroad Commission has deep roots in the Lone Star State, having operated here continuously under the same name for over 125 years.  The notion that bureaucrats would disrupt a long-standing tradition did not sit well with many industry insiders.

Another perennial attack leveled at the RRC is that the three elected commissioners who run the agency fill their campaign coffers with money from the same companies they regulate.  According to the estimates of some industry watchdogs, approximately sixty percent of the campaign funds raised by RRC commissioners can be traced to the energy sector.  To the chagrin of the Sierra Club, House Bill 1818 does nothing to address this dynamic.

All of this is not to suggest that the legislation is entirety bereft of new initiatives.  Among other things, the bill provides for:

  • a Monitoring and Enforcement Strategic Plan for the RRC’s Oil and Gas Division (Section 81.066);
  • the promulgation of an Alternative Dispute Resolution Policy (Section 81.065); and
  • the imposition of Pipeline Safety and Regulatory Fees (Section 81.071).

Christi Craddick, the Railroad Commission's current chairman, had this to say about the bill’s Senate approval in a public statement:

Passage of the Railroad Commission’s Sunset review legislation has come at a critical time for the agency and energy industry. With Texas gearing up for another energy boom, certainty in regulation is critical for energy companies who now are making hiring and investment decisions in communities across the state.

The full text and legislative history of House Bill 1818 is available here.