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A Texas Commission Just Voted to Change the Way The State Monitors The Oil and Gas Industry

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Last session the Texas Legislature voted for a review of the Railroad Commission of Texas, the agency that regulates the oil and gas industry. Yesterday, a Texas Sunset Commission charged with the review voted on seven recommendations put before them. So, which changes did the Sunset Commission approve, and which did it deny?

1) REAUTHORIZE THE AGENCY: Approved.
This won approval. Who’s going to terminate the agency that regulates the largest oil and gas industry in the U. S.?

2) CHANGE ITS NAME: Denied.
The Railroad Commission (RRC) regulates oil and gas, pipelines, natural gas utilities and coal and uranium surface mining. It hasn't regulated railroads since 2005. When Sunset commissioners voted to reauthorize the Railroad Commission, they amended the measure, removing its tandem name change as “Texas Energy Resources Commission.” Why the controversy? “The official reason given is history, the 125-year-old agency,” says Cyrus Reed, Conservation Director of Sierra Club’s Texas chapter. “It's confusing in a modern state and anti-democratic. It leads to elections where people are voting for officials to run an agency, and they don’t know what it does.”

3) IMPROVE OVERSIGHT OF TEXAS PIPELINES: Approved.
Texas has 46,000 miles of interstate pipeline, and recent pipeline breaks and an explosion in central Alabama put this potential hazard in the spotlight. The change now authorizes the Railroad Commission to charge a pipeline permit fee adequate for education and damage prevention, which ran a $1.8 million dollar shortfall in 2015.

4) INCLUDE SEISMIC DATA IN RAILROAD COMMISSION RULES: Approved.
This addition to the commission’s agenda, introduced by Commissioner Lt. Col. Allen West, counters the RRC’s long-standing assertion that a connection between earthquakes and injection drilling isn’t proven. West cited research studies and action by Oklahoma state government to the contrary. “Good news,” says Andrew Dobbs, legislative director for Texas Campaign for the Environment. “This recommendation calls for including data to prevent earthquakes caused by fracking, and that rules should seek to prevent seismicity caused by disposal wells.” Funding cannot be diverted to the general fund, a common occurrence in the Texas legislature.

5) IMPROVEMENTS TO OIL & GAS MONITORING: Approved (mostly).
Sunset commissioners endorsed six changes, including a strategic plan by RRC to track and measure the effectiveness of its monitoring and enforcement. A staff report given the commission said the agency "continues to struggle to provide reliable data to show the effectiveness of its efforts. Basic questions such as how many severe violations occurred, what percentage of violations were repeat … and how many operators with severe violations did not face legal enforcement last year remain unanswered.”

Tracking and reporting of the numbers of oil and gas violations will be required annually. “Huge,” says Dobbs. “Now we’ll have real data to hold them and oil and gas producers accountable for infractions.” There won't be publicly accessible, searchable web data on enforcement actions.

6) INCREASE BONDING REQUIREMENTS FOR ABANDONED WELLS: Denied.
Insufficient financial bond amounts required of oil and gas operators to cover a portion of the cost for well plugging and site remediation, should the operator go out of business, have left the state with a backlog of 9715 unplugged wells, Sunset staff reported. The health and safety hazard of deteriorating wells and the $166 million financial liability to fix the backlog did not move commissioners to accept their recommendation.

7) MOVE CONTESTED HEARINGS AND GAS UTILITY OVERSIGHT TO OTHER AGENCIES: Denied.
The recommendation to move hearings of oil and gas cases contested by citizens out of the RRC’s facilities to the State Office of Administrative Hearings used by all other state agencies failed. So did moving utility ratemaking for natural gas to the Public Utility Commission, which sets rates for all other utilities as of 2014. Concerns for fairness, transparency and adequate tracking of hearings were cited by staff.

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