As Drilling Grows, Is Enforcement Shrinking?

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Oil rigs drilling in Midland County

Oil and gas exploration is up in the state of Texas. Over 100,000 new wells were drilled in the last five years, some of them hydraulic fracturing operations looking for “tight oil” and shale gas trapped in layers of rock far below the surface. So while business booms and holes are being drilled into the ground left and right, who’s regulating the industry?

Oil and gas drilling in Texas is under the watch of the Railroad Commission of Texas, an elected panel of three commissioners. They monitor and permit wells, and are charged with enforcing violations. A report today by Greenwire analyzes the Railroad Commission’s enforcement and regulation of drilling, and finds it “unfocused and lax”.

According to a Sunset Advisory Commission review cited in Greenwire’s report, where an independent panel looks at the utility of state agencies, “of the more than 80,000 oil and natural gas production-related violations found in fiscal year 2009 [by the Railroad Commission], field staff forwarded less than four percent to the agency’s central office for enforcement action.” The Texas Commission on Environmental Quality, on the other hand, which regulates energy production and environmental issues in the state, forwarded about twenty percent of the 11,000 violations it found to its enforcement office. “Even modest fines for less serious, but frequent violations can substantially affect compliance,” the commission’s report says, “especially once word spreads that coming into compliance will no longer suffice to avoid a penalty.”

The sunset review compares the Railroad Commission to a police force that only tickets four percent of speeders. From the sunset review’s report:

Field staff record all violations, but the Commission does not specifically track repeat violations unless the violation is one of the 4 percent brought forward to enforcement. As a result, the Commission cannot be certain that operators are not committing repeated violations, only to come into compliance before the Commission assesses a penalty. This approach is comparable to police only issuing tickets to 4 percent of speeders. If the police give a driver a warning, the driver may slow down that day, but without a sanction the driver will likely return to speeding in short order. Further, if the police do not track warnings issued, an officer would not know if a speeder was a first-time offender or a recurring violator that places the public in jeopardy.

What did the Railroad Commission have to say in its defense? The commission’s executive director John Tintera told Greenwire that “no agency can have a police officer behind every stop sign. We prioritize our inspections, and we respond to every complaint. In seeking compliance, we have many tools, one of which is to go to enforcement.”

The full report from the Sunset Advisory Commission: