Agency weighs name change
The Texas Railroad Commission regulates energy, not train traffic.
Quick question: Which state agency regulates train traffic?
If you answered Texas Railroad Commission, you’d be wrong.
While it regulated railroad rates and tariffs in the 19th century, the agency has long had nothing to do with choo-choos. But efforts to change its name to something that reflects its real activities — regulating Texas’ potent energy industry — have stymied all comers.
The Sunset Advisory Commission is holding a public hearing Wednesday at the Capitol on the latest staff recommendations to call it the Texas Energy Resources Commission. Next year, state lawmakers will have another go at a name change, and whether they succeed might serve as a litmus test of whether the Legislature has the stomach to beef up the long-limp enforcement arm of the agency, another staff suggestion.
Critics have said the commission’s name is well-known and would be expensive to change. But the reason the name has persisted might have less to do with some under---
the-dome affection for its quaintness than blunt political power and regulatory oversight.
An agency with “energy” in the name is likely to get far more scrutiny than one with the oldtimey-sounding “railroad” moniker. For nearly a century, back to when the Legislature first granted the commission authority over petroleum pipelines, the Railroad Commission has been the chief regulator of oil and gas. It surrendered the last of its rail oversight responsibilities in 2005.
“That the Railroad Commission continues to operate under its misleading name is not a trivial matter, but rather one that can lead to public confusion and accountability,” Jay Doegey and R.A. Dyer, members of the Atmos Cities Steering Committee, a group representing 150 Texas cities on gas utility regulation, wrote to Sunset Advisory Commission director Ken Levine on Nov. 30.
In an interview, commission Chairman Barry Smitherman endorsed a name change. “It has nothing to do with railroads and is confusing to the average citizen,” he said. “It’s appropriate to have a name that more accurately reflects what we do.”
In a written response to the Sunset staff report, Smitherman and the agency’s other two commissioners —David Porter and Buddy Garcia, who no longer serves on the commission — said they favored a name change.
“Changing the name of the Commission would help citizens better understand the Commission’s duties and ensure increased transparency for its primary role in overseeing energy exploration and production in Texas,” reads their response. “The Commission should be held to the same standards as all other statewide-elected executive branch officials.”
Craig McDonald, director of Texans for Public Justice, which tracks money in politics, likes to call it the “The Oil and Gas Protection Institute.”
“It’s the poster child for being a captured agency,” McDonald said, referring to its historically light touch with the industry it regulates — and from whom the commissioners get much of their campaign cash. Changing its name would be a start to changing its image, he said.
Name-changing legislation proposed in 2005, 2009 and 2011 all failed to pass.
Oil and gas interests have historically registered themselves as neutral or opposed to a name change, often citing costs to the agency itself.
The Railroad Commission said changing its name would cost $93,610, which would pay for expenses such as changing letterhead, regulatory forms, business cards and envelopes.
“While the current name is clearly a misnomer, it is a well-known misnomer recognized in energy circles around the world,” wrote Mark Sutton, executive director of the Oklahoma-based Gas Processors Association, in a Nov. 30 letter to state Rep. Dennis Bonnen, R-Angleton, who chairs the Sunset Advisory Commission.
The Texas Oil and Gas Association has declared itself neutral on changing the name of the Railroad Commission.
The name was questioned in the same Sunset staff report that suggests lawmakers give the agency statutory direction to improve its enforcement.
The commission has taken steps in-house: creating an enforcement policy that ranks oil-and natural gas-related violations, formally adopting penalty guidelines, and posting oil and gas enforcement data on its website. However, sunset staff wrote in a November report that the Railroad Commission “still needs to take additional enforcement action to deter serious and repeat violations.”
In fiscal year 2012, the agency forwarded a little more than 2 percent of the 55,000 violations identified by inspectors for enforcement action, sunset staff found.
“The Commission needs to take consistent enforcement action against violators to assure the public that the agency is closely monitoring the industry as it continues to expand into suburban areas and affect peoples’ day-to-day lives,” the sunset staff found.
The historical footdragging on enforcement might not be all that surprising: In the 2012 election cycle, Railroad Commission candidates got 38 percent of their campaign contributions from the oil and gas industry, according to Texans for Public Justice.
Railroad commissioners in their recent response said they disagreed with a Sunset recommendation to limit campaign contributions.
At times, other agencies have had to swoop in to take action against violators. In November, the Travis County district attorney’s office announced a conviction related to an oil and gas waste operation in East Texas.
The district attorney’s Environmental Protection Unit, which has statewide jurisdiction, had charged Pemco Services, Inc. with water code vio- lations at its landfarm. “Landfarming,” which is regulated by the Railroad Commission, is a method of treatment and disposal of low toxicity wastes by plowing them into the soils to dilute them and promote their breakdown.
Prosecutors, working with investigators at the Texas Parks and Wildlife Department, had found that from 2002 to 2009, Pemco had dumped nearly 57 million gallons of drilling fluids at its landfarm in Jefferson County in violation of its permit.
Tests of water and soil in the area found high amounts of pollutants such as petroleum, barium and chromium. For years, commission officials exchanged letters with their Pemco counterparts notifying them of the problems, according to a stipulation of agreedupon facts in the Pemco conviction, but the agency appeared to never take enforcement action.
“Apparently this case never went to civil enforcement at the Railroad Commission,” said Patty Robertson, who heads the Travis County Environmental Protection Unit. “It probably should have but it didn’t.”
The Railroad Commission did not drop the ball, said spokeswoman Ramona Nye. “If violations are found by our inspectors, Railroad Commission staff generally will work with operators to bring their leases or facilities into compliance with RRC rules before enforcement action is sought.”
In February 2012, Pemco addressed the issues; soil samples confirmed that Railroad Commission requirements had been met.
Based on the earlier violations, however, a Travis district judge in November ordered Pemco Services to pay $1.35 million in fines. Pemco also agreed to pay $14,534.31 in restitution for lab analyses to Texas Parks and Wildlife. The company also spent $1.1 million to clean up the landfarm, which is now closed.
The most senior railroad commissioner has been on the job for about two years, and Smitherman said with a new executive director and a new head of the oil and gas division the agency has a new take on enforcement. “Remediation is important, but bad actors should be punished,” he said.
As for the name change, already newly elected state Rep. Jonathan Stickland, R-Bedford, an oil and gas consultant, has prefiled such legislation.
“The times have changed and it’s time to catch up,” he said.
“It’s better to do things the right way and upfront.”
The Texas Railroad Commission regulates the oil and gas industries and many argue that its misleading name is confusing to citizens.