Officials’ energy ties detailed
Review: Many with authority over industry have financial interests in it
Late last month, as Texans were digging out from a historic winter storm and days-long power outages, the state’s chief oil and gas regulator had a clear message: Natural gas producers are not responsible for the disaster.
“Some media outlets would have you believe that natural gas producers and frozen transmission lines caused the power shortages across the state,” said Christi Craddick, who chairs the threemember Railroad Commission overseeing the industry, during a
Texas House hearing Feb. 26. “But … these operators were not the problem. The oil and gas industry was the solution.”
Craddick and her father, Tom Craddick, a well-known Republican state representative who sits on two Texas House committees overseeing oil and gas, have direct financial ties to that industry, including with some of the same gas-producing companies that have admitted to shutdowns of their own facilities during the storm.
The father-daughter pair, who hail from Midland — the heart of the West Texas oil and gas boom of the past decade — own and manage land across the state that generated more than $100,000 from Texas’ largest natural gas producers in 2019, according to forms they submitted to the state Ethics Commission last year. The companies include XTO Energy, a subsidiary of Exxon Mobil, and Pioneer Natural Resources, both of which reported equipment failures during the storm.
Critics say the ownership stakes reflect a conflict of interest for the Craddicks and exemplify a major ethics loophole in Texas, where regulators are allowed to have financial interests in the companies they oversee, unlike in some other oil-rich states. The ties are also newly relevant in light of last month’s blackouts, which left more than 9 million Texans without power and may turn out to be the costliest weather event in the state’s history.
Adrian Shelley, director of the advocacy group Public Citizen’s Texas office, said regulatory agencies in the state are “explicitly in service of industry.” He added that in the absence of robust conflict-of-interest laws preventing such situations, many Texans assume energy regulators are controlled by oil interests.
“For (Christi) Craddick, in all of her visits to the various state committees, there hasn’t been any earnest self-reflection of the agency’s role. It’s just been a strict defense of the industry,” Shelley said.
Craddick declined an interview request. In a statement, she said she is transparent about her in
vestments and that the Railroad Commission “has no jurisdiction regarding mineral interests, royalty payments or stock investments.”
The commission issues operating permits and has other enforcement authority over energy operators including oil and gas producers, pipeline operators and mining companies.
Craddick has made supporting the oil and gas industry a central component of her political platform. In campaign donation solicitation documents obtained by the Washington Post, she used the phrase “energy galore” to describe the state’s economy while asking contributors for help fighting “wildeyed, harebrained socialistic schemes that would wreak havoc on our Lone
Star State and spread misery across the country.”
Rep. Tom Craddick said in a statement that his business interests reflect that he lives in Midland. The Legislature meets once every two years, and lawmakers earn just $600 a month and usually hold other jobs.
“My assets reflect the business of our hometown and the surrounding region,” he wrote. “Simply put, I live where I work.”
Some of the most powerful statewide elected officials, along with more than two dozen Texas lawmakers with authority over the energy industry, also have significant financial interests in it, according to a Post review of hundreds of pages of personal financial disclosures filed with the Ethics Commission. They include Attorney General Ken Paxton and his wife, state Sen. Angela Paxton, who received at least $5,000 in investment income from
XTO Energy in 2019. Lt. Gov. Dan Patrick and his wife in 2019 earned more than $15,000 in investment income last year from pipeline company Energy Transfer Partners.
The Post’s review defined a “significant” investment as more than 100 shares or $5,000 worth of stock, or investments in more than one energy company.
The attorney general’s office and Angela Paxton did not respond to requests for comment.
Through his spokeswoman, Sherry Sylvester, Patrick declined an interview request. “What you are referring to are simply stock dividends,” Sylvester wrote in an email. “He has a diversified portfolio of many businesses and industries in mutual funds that his stockbroker manages.”
At least 13 members of the Legislature who regularly weigh in on energy-related issues through their committee assignments draw some form of personal income from oil and gas, either through stock dividends, owning land where oil and gas drilling occurs, or directly through businesses they own or work for.
They include Rep. Craig Goldman, R-fort Worth, chair of the Energy Resources Committee. Goldman has proposed requiring natural gas producers to harden their infrastructure and owned hundreds of thousands of dollars’ worth of Exxonmobil stock as of 2019, the disclosures show.
Rep. Jay Dean, R-longview, recently proposed a bill barring new rules that restrict “directly or indirectly, the use of natural gas or propane” in commercial and residential construction. He is CEO of one oil field services company and a paid consultant for another, his 2020 disclosure form states. He also sold more than $5,000 in Pioneer Natural Resources stock in 2019 and received investment income from two other oil companies.
Dean and Goldman did not respond to requests for comment.
More than 9 million Texans lost power during the storm. Many resorted to boiling snow after water plants lost power, pitching tents in their living rooms to keep warm, and moving in with friends and neighbors, despite the warnings of public health officials to maintain social distancing.
The crisis has prompted widespread outrage in Texas across the political spectrum, especially because a similar disaster occurred during a cold snap almost exactly a decade ago that led to multiple investigations and calls for reform. But officials declined to place any mandates on the energy industry to harden its infrastructure, instead opting to raise the price of wholesale power in the hopes of incentivizing companies to invest on their own so they could realize bigger profits.
That wasn’t enough to prevent a far worse power failure last month, when temperatures dipped far lower for a much longer period of time and over a much larger swath of the state. State data shows 356 generators experienced outages during the storm, compared with 193 a decade earlier. Unlike other states, Texas has its own power grid, which is almost entirely cut off from the rest of the country, largely preventing it from importing electricity as its power plants went down.
Public outrage has focused so far on the electric power industry and its regulators, many of whom have already resigned.