Whistleblower Lawsuit Supports Our Worst Suspicions About How the Railroad Commission Regulates Oil and Gas

As if the job of inspecting oil and gas wells wasn't complicated enough ...
As if the job of inspecting oil and gas wells wasn't complicated enough ...

Frederick Wright presumably knows a thing or two about the oil and gas business. He's a petroleum engineer who has worked on both sides of the fence. He spent some time with the Bureau of Land Management. Eventually, he worked for more than a decade as engineer in oil and gas fields.

In 2007, he joined the Railroad Commission of Texas as an engineering specialist, charged with overseeing regulatory compliance within a 16-county area. The next year, he was promoted. Three years later, Wright was promoted once again. At the end of 2012, he received his most recent merit bonus. Never had he been subject to any disciplinary action, according to court documents.

That was until February, when the Houston district director allegedly asked Wright to approve "completion reports" on oil and gas wells that were out of compliance with rules dealing in "the equitable and efficient recovery" of mineral resources. Wright managed to convince the operator to agree to modify the well in exchange for an approval. No harm, no foul.

But when he was allegedly asked by the director to fudge yet another completion report, Wright filed a complaint through the appropriate channel. On May 17, Wright received a written reprimand, stating that the agency was hearing "unsolicited" complaints about him from oil and gas operators. It warned that he needed to "improve his relationships with operators." Wright appealed the disciplinary action and demanded that specific complaints be provided to him, but was rebuffed, court documents say.

He claims the agency responded by stating that his only problem was a "continued resistance to acknowledge constructive guidance from [his] supervisors."

Wright believes this was all a pretext, and that his superiors were attempting to create a record of performance issues with a single goal in mind.

On June 20, the agency fired Wright "for cause." He filed an open records request for documents that might explain his dismissal. The Railroad Commission handed over two complaints against him. Both pertained to Wright's strict enforcement of the rules, court documents say, conflicting with the more lenient treatment they'd received from others.

And both, he believes, were solicited by the agency. "One of these complaints referenced a phone call in which the matter had been previously discussed. ...The other complaint specifically stated that it was being provided specifically in response to the request" of the deputy director of field operations in the agency's oil and gas division.

According to Wright's complaint, the email read, "Please send me your issues with Fred. I have received a couple of others. Want to compile everything. Thx for your help."

By now you may have gathered that Wright isn't the kind of guy who's going to drop it. He filed a lawsuit last week for whistle-blower protection under state law, and is seeking damages for retaliation.

The Railroad Commission declined to comment on pending litigation. But if what Wright is saying is true, it affirms everything we've come to believe about a regulator that does very little regulating. Through the Texas Legislature's Sunset Advisory Commission, we already know that only 2 percent of all documented violations by oil and gas operators were sent up for enforcement action last year. We know that commissioners use the agency as a "springboard" to higher office, where "tens of thousands of dollars" are donated each month by the very industry they're supposed to regulate. And we know that there are no rules against commissioners receiving campaign donations from operators whose contested cases they are hearing.

Bipartisan legislation this year to remedy some glaring conflicts of interest was vetoed shortly after it reached Governor Rick Perry's desk, by the way.

Bearing that in mind, Wright's allegations aren't all that astonishing. If he doesn't settle out of court, this could get interesting.

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