Agency weighs name change

The Texas Rail­road Com­mis­sion reg­u­lates en­ergy, not train traf­fic.

Austin American-Statesman - - FRONT PAGE - By Asher Price ash­er­price@states­man.com

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.

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