AUSTIN, Texas — A bill in the Texas House of Representatives (HB 1818) to reauthorize the Railroad Commission for another 12 years does not address most of the critical reforms that the agency urgently needs, Public Citizen said today. The Legislature is scheduled to vote on the legislation next Tuesday.
Many provisions could substantially advance the protection of public health and the environment — key to the Railroad Commission’s core mission. But they aren’t in the legislation.
From previous sunset reviews and Public Citizen’s 2016 “Oil and Gas Regulation Best Practices Study,” it is clear that five amendments are key to improving the commission’s most important functions.
These five critical reforms include: penalties large enough to stop pollution; limits on political contributions at the time that decisions are being made; tougher laws to ensure oil wells are plugged; data showing who the bad actors are on the commission’s website; and changing the commission’s name to reflect the fact that this agency regulates oil and gas. More specifically:
- Campaign Contributions/Conflicts of Interest – At the Texas Railroad Commission, political spending is out of control. The amount of money given by donors connected to oil and natural gas has increased tenfold over the past 10 years.
“There appears to be no state agency in the nation with closer financial ties to the industry it’s supposed to regulate than the Texas Railroad Commission,” said Carol Birch, legislative counsel with Public Citizen’s Texas office. “The potential for conflicts of interest is enormous.”
This potential for conflicts of interest in policymaking functions and contested case hearings needs to be eliminated, Public Citizen maintains. Significant limits should be put on the source, timing and amount of campaign contributions to commissioners.
- Bonding Increases – Bonding requirements are an important piece of the system supposedly designed to ensure that operators plug wells at the end of their productive lives, and that funds are available for the state to plug wells that operators fail to plug. The current bonding requirements were established more than 25 years ago, and since then, plugging costs have increased 106 percent. Unplugged wells can poison the state’s aquifers with heavy metals and radioactive materials. Insufficient bonding requirements also divert other commission funding sources to pay for well plugging operations — money that could be spent on inspection, enforcement, permitting staff, information technology upgrades or other regulatory functions. Texas must increase its bonding requirements to reflect current costs, or the black hole of unplugged wells will continue to grow.
- Penalties and Enforcement – The state must increase maximum penalties and establish a penalty policy that ensures compliance, deters repeat violations and takes into account the economic gain from noncompliance.
The current fines – established three decades ago – do not deter companies from breaking the law. Raising the maximum penalty from $10,000 to $25,000 per day would help dissuade repeat offenders, Public Citizen maintains. The Texas Commission on Environmental Quality already has a maximum fine of $25,000 per day.
“The Texas Railroad Commission now has repeat violators who treat fines like a minor traffic ticket. We need a higher fine structure to make those violators comply with the law,” said Rita Beving, North Texas organizer for Public Citizen.
- Searchable Data on Website – There is a critical need to increase transparency by requiring the Railroad Commission to create a searchable database with information relating to inspections, complaints and enforcement actions – including fines and penalties – and make it available on its website.
“There is an astounding lack of transparency at the Railroad Commission compared to other states as well as other Texas state agencies,” Birch said.
- Name Change for Transparency – The commission needs a name that describes what the agency actually does. Oddly, one thing that does not fall under the Railroad Commission’s jurisdiction is railroads. Every major daily newspaper in the state has said it’s time for a name change that reflects the commission’s real functions.
“There’s no legitimate reason for using a 19th century, misleading name,” said Lon Burnam, legislative specialist with Public Citizen.