Your Guide to the Sunset Advisory Report on the Texas Railroad Commission

Photo courtesy of RRC

Barry Smitherman is the Chair of the Railroad Commission of Texas.

“What does the Texas Railroad Commission oversee?” If it was a question on Who Wants to Be A Millionaire?, a lot of Texans would lose their spot in the hot seat.

Here’s a hint: the answer is not “railroads.” In fact, the commission regulates Texas’ booming oil and gas industry.

So the first suggestion in the recently released Sunset Report (a review of state agencies) is a name change. Apparently, the agency still receives complaints about train noise.

Commission Chairman Barry Smitherman says changing their name is a good idea. “With the increase of oil and gas activity I think we would be well-served to have a name that is easy for the public to understand,” he told StateImpact Texas.

Though the Railroad Commission does raise concerns over the proposal in its official response to the Sunset report, saying that a name change without an amendment to references to the “Railroad Commission” in the state constitution could lead to legal trouble for the agency.

Whether or not the Railroad Commission becomes the “Texas Energy Resources Commission” (the suggested new name) will be up to state lawmakers in the upcoming legislative session.

Limits to Fundraising

It’s often pointed out by critics of the agency that commissioners are regulating the same industry players they depend on for campaign money. Indeed, the Sunset Advisory report cites witnesses who “testified that it was hard to fully divorce contributions from decisions with tens of thousands of dollars donated every month.”

To mitigate potential conflicts of interest the report calls for the commission to limit political donations, allowing commissioners to solicit money only within a “a year and a half time frame around the election, rather than throughout the full six-year term.”

The commission disagrees with that recommendation in their official response to the review, saying commissioners “should be held to the same standards as all other statewide-elected executive branch officials,” though individual commissioners appear to differ in how they think campaign contributions should be handled.

In the most recent Railroad Commission meeting, Chairman Smitherman suggested that a year and a half was ample time to raise funds, and that the commission could formalize a system in which only commissioners who were facing a re-election would solicit money.

Commissioner David Porter disagreed, and the proposal was punted to a later date when incoming commissioner Christi Craddick can weigh in.

Enforcement

The Sunset Report also takes the commission to task for lax enforcement. The report says the underfunded department needs a more complete policy for the staff when implementing penalties. One specific change is to improve their rating system when assessing guideline compliance, so severe violations will be rated higher than others and can be prioritized.

The Commissions says it has already reformed enforcement protocol. Pointing out that in the past year is made changes to:

• Require the Commission to develop an enforcement policy to guide staff in evaluating and ranking oil-and natural gas-related violations. (In April 2011, the Commission revised a 2008 document and directed staff to use a Notice of Violation Guidance Document as an internal guide for inspections and enforcement policy.)
• Require the Commission to formally adopt penalty guidelines. (In August 2012, the Commission formally adopted penalty guidelines.)

Below are some other suggestions outlined in the sunset report.

– A better watch on oil pipelines and pipeline safety and construction.

– Freeing money from the Oil and Gas Cleanup Fund. The amount of drilling sites has doubled, so the report wants to stop the cap on cleanup money.

– An end to the Commission’s marketing of propane saying that “its promotion program unnecessarily conflicts with its role as a regulator.”

You can read the full Sunset Review report here and the Railroad Commissions official response here.