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Bid to reform Texas Railroad Commission, state's oil/gas regulator, fails

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Bid to reform Texas Railroad Commission, state's oil/gas regulator, fails

  • Editor/a
  • Jim Magill
  • Materia prima
  • Gas natural

Texas lawmakers have failed to pass legislation that would have reformedthe agency chiefly responsible for regulating the oil and natural gasindustry in the state.

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A legislative conference committee Monday was unable to resolvedifferences between the House and Senate versions of the Sunset Bill for theTexas Railroad Commission, which would have implemented a number of reformsfor the agency, including changing the name to the Texas Oil and GasCommission, to more accurately reflect its mission.

The changes were recommended by the Texas Sunset Advisory Commission,which reviews state agencies every 12 years and makes reform recommendationsto the Legislature.

"We couldn't come to an agreement with the Senate. It failed to pass,"State Representative Jim Keffer said Tuesday. Keffer is the chairman of theHouse Energy Committee and the sponsor of the House version of the legislation. "It is a disappointment," he said.

In the event the Legislature is unable to come to an agreement on aSunset bill in a regular session, the law that set up the Sunset Commissioncontains a provision that resets the clock on the Sunset process.

Under this provision, the Texas lawmakers agreed to pass a "safety net"bill, which retained the TRC in its present form for the current two-yearperiod and which will restart the Sunset Commission review process to come upwith the Sunset legislation for consideration in the next regular legislativesession, which convenes in January 2013.

"It will be business as usual for the next two years" Keffer said.

Although the members of the conference committee tried to reachcompromise on several areas where the two versions of the legislationdiverged, they were unable to resolve two outstanding issues.

One of the "final sticking points" was a Senate provision to change theterms of office for the three commissioners to four years from six.

Senate members of the committee offer the change in term length as acompromise from the version of the bill passed by the Senate, which wouldhave changed the commission's governing structure from a three-member boardto a single commissioner.

Another area of disagreement between the two bills concerned limitingthe types of hearings held before the TRC. The Senate version of the bill,sponsored by Sunset Commission Chairman Glenn Hegar, would have transferredsome hearings -- those involving enforcement and gas rate utility issues --from the TRC to the State Office of Administrative Hearings, while under theHouse bill the TRC would retain its current hearing authority.

Keffer said he worried that any major changes to the structure of theTRC could trigger intervention into the commission's operations by the USEnvironmental Protection Agency or other federal agencies.

"If you change the governance it opens the door to the JusticeDepartment or the EPA refusing to renew the underground disposal permit," hesaid. The EPA gives the TRC authority under the permit to regulateunderground disposals in the state.

In recent months the EPA has clashed with state officials on a number ofissues, including air emissions standards and regulation of some natural gasdrilling operations.

"Given the attitude that the EPA has toward Texas, we're just veryconcerned to opening that door those agencies," Keffer said.

--Jim Magill, jim_magill@platts.com