No Reforms for Railroad Commission This Session

REUTERS /Anna Driver/LANDOV

While it's called the Railroad Commission of Texas, it actually deals with regulating oil and gas in the state. And a name change isn't likely to happen this session.

A name change and several ethics reforms on the table this legislative session for the Railroad Commission of Texas, which oversees oil and gas drilling in the state, have died.

The Texas Energy Report was the first with the news, tweeting this afternoon: “RAILROAD COMMISSION SUNSET DEAD FOR THIS SESSION.”

After a lengthy review of the agency, required by state law under the Sunset review process, the Railroad Commission will continue instead with the same name and without any reforms. So what happened?

For one, there were conflicting ideas on how to reform the commission. A more industry-friendly plan in the House, HB 2166 by state Rep. Dennis Bonnen, R-Angleton, which ended up being stripped of many of its reforms (and ultimately a name change) didn’t ever make it out of the House.

But a stronger Senate bill, SB 212 by state Sen. Robert Nichols, R-Jacksonville, had better luck, until today.

It would have made Railroad commissioners resign if they were going to run for another office. Commissioners would not have been allowed to accept contributions from parties with contested cases before the commission. And campaign contributions to run for re-election to the commission would only have been allowed in the 17 months before an election. It would have also renamed the commission the Texas Energy Resources Commission, a much more apt title. (The Railroad Commission no longer has anything to do with railroads.)

Despite the fact that those reforms sailed through the Senate, they died today in the House Committee on Energy Resources. The office of Committee Chairman Rep. Jim Keffer, R-Eastland, told StateImpact Texas that the committee couldn’t agree on the bill, so they opted not to vote it out.

Losing those reforms is a disappointment for the environmental community.

“We think it’s a major failure of this legislature to not fix the Railroad Commission,” says Tom “Smitty” Smith, Texas Director of the environmental justice group Public Citizen. His group had sought the campaign contribution reforms. Much of the campaign funding for Railroad Commissioners comes from the oil and gas industry they regulate, Smith says.

So what’s next? The sunset review process says an agency under review must have its Sunset bill pass, or it essentially gets shut down. That is unlikely to happen with the Railroad Commission, however, as lawmakers hope the agency is spared in what’s called a “schedule bill,” legislation that essentially kicks the can on a review of the agency to a legislative session further down the road. The Railroad Commission could be added to a basic schedule bill already in the Senate, HB 1675, also by Rep. Bonnen, which could give it several more years without reform. A similar move was used in the 2011 legislative session when lawmakers couldn’t agree how to reform the Railroad Commission.

“One of the big issues is the question: Who really controls the Railroad Commission?” Smith of Public Citizen says.

He notes that there’s a conflict between traditionalists who want to keep things as is, and more reform-minded lawmakers who want changes at the commission, and it’s playing out during an unprecedented statewide oil and gas drilling boom. “That fight is really what has caused this particular bill to die for the second session in a row,” he says.

Update: In an emailed statement Wednesday evening, Deb Hastings, executive vice president of the Texas Oil & Gas Association, says:

“The Texas Oil & Gas Association (TXOGA) is disappointed that SB 212 or HB 2166, the Sunset bills for the Texas Railroad Commission, did not pass the Texas Legislature.  TXOGA testified in support of the House and Senate versions of the Sunset bills.  Maintaining the Texas Railroad Commission, which regulates the oil and gas industry, was among the top priorities of the oil and gas industry this session.  The Texas Railroad Commission has effectively overseen the oil and gas industry for generations and we hoped to end this session with certainty about the agency’s future.  We hope the agency will be continued through a sunset safety net bill, but there are no guarantees in this process.  Passing a Sunset bill for the Railroad Commission would have been far more assuring to keep the state’s regulatory agency for our industry in place.”