An Unusual Search Warrant and What It Says About How Texas Regulates Drilling

The Texas Environmental Enforcement Task Force affidavit for a warrant to search the Houston office of the Railroad Commission in 2010

As the legislature considers making changes to the Railroad Commission of Texas in the future, a search warrant is now shedding light on how the Railroad Commission interacted with criminal investigators in the past.

An affidavit for the warrant, obtained by StateImpact, shows that during a 2010 investigation of a state-regulated site used for disposing drilling fluids, the Texas Environmental Enforcement Task Force said it wanted to seize documents it said were being withheld; withheld not by the company that ran the disposal site, but by the Railroad Commission that was supposed to be regulating it.

Missing Documents

In the affidavit for the warrant, investigators said a staff member in the Railroad Commission’s District Office in Houston had promised to turn over “copies of everything” pertaining to the disposal site. But the investigators said instead, the file they received was missing “particular correspondence” between the Houston office and the company that ran the disposal site which was located in Jefferson County. Investigators said they therefore needed a search warrant to seize documents and other materials from the Railroad Commission’s Houston office.

Dave Fehling / StateImpact

The Railroad Commission's District Office in Houston

Patty Robertson, the Chief Prosecutor for the Texas Environmental Task Force (a multi-agency group with statewide jurisdiction run out of the Travis County District Attorney’s office), wouldn’t comment on the search warrant. But for a previous post on the prosecution of the disposal site, Robertson told StateImpact: “For over a decade the company was out of compliance with their permit and there was little done to regulate them.”  In fact, Robertson said, “The company pretty much ignored the Railroad Commission.”

A ‘Startling’ Use of a Search Warrant

For the Task Force to use a search warrant as it did is highly unusual according to environmental prosecutors and private practice lawyers.

“I think startling is the word,” said Tracy Hester, an environmental lawyer now with the University of Houston Law Center.

“Usually a search warrant is not going to be seen issued from one government agency to another,” Hester told StateImpact. He adds, “Typically, whenever there’s a criminal investigation you’re going to see an effort to coordinate among multiple agencies that might have overlapping jurisdiction.”

Railroad Commission Was ‘Fully Cooperative’

The Railroad Commission’s spokesperson, Ramona Nye, downplayed any perception of conflict.

“(The) Commission staff at our Houston District office was fully cooperative with the Task Force’s approach.  Further, the warrant was served with the full cooperation and participation of the Commission’s Liaison to the State’s Environmental Task Force, who has served on that Task Force for over 20 years,” wrote Nye in an email to StateImpact.

Dave Fehling / StateImpact

Aerial photo of disposal site in Jefferson County: part of a binder of documents gathered in the investigation by the Task Force

Previously, Nye had defended the Railroad Commission’s regulation of the disposal site, contending that the Railroad Commission often tries to get voluntary compliance to correct violations without resorting to enforcement action. She said that was the case at the site which was eventually cleaned up by the owner and closed.

But does the Railroad Commission rely on such voluntary compliance too often?

The One Percent

According to data the Railroad Commission now posts on its website, inspectors find thousands of violations each month at oil and gas sites, but enforcement action is taken on just over 2% of them.

That’s actually more than in 2010 when it was just 1% as was pointed out last week when the issue came up at a hearing by the House Committee on Energy Resources. Lawmakers are considering a bill to revamp the Railroad Commission.

Tom Smith, Texas Director of environmental group Public Citizen, said while the Railroad Commission may be taking enforcement action somewhat more often, it’s way behind another state where gas and oil well drilling is surging.

“When you look at Pennsylvania, it was one out of four of the referrals that resulted in some sort of a penalty.  And so we’re under-performing,” Smith told the committee.

More Enforcement Actions in Other States

Smith was referring to how Pennsylvania is increasing the number of inspections and how in 2011, state regulators found 4,069 violations of which 976 received enforcement action according to data compiled by the environmental group Earthworks.

In Texas by comparison, the Railroad Commission says last year it found 55,960 violations at oil and gas operations and referred 1,208 for enforcement action.

The energy committee also heard from all three Railroad commissioners with Chairman Barry Smitherman telling lawmakers that an oversight report had already spurred changes.

“The Railroad Commission has strengthened its oil and gas enforcement actions by adopting a penalty matrix for violators and penalty guidelines based on the risk posed by the violation’s severity,” Smitherman said.

The committee is also considering changes to address what critics have long complained fosters a coziness between the oil and gas industry and the three elected officials that head the Railroad Commission.

“The money to influence the election comes overwhelmingly from that allegedly regulated industry,” said Rep. Lon Burnam, a Democrat from Fort Worth and member of the Energy Resources Committee.

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