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Sun Not Setting on Texas Railroad Commission

The Law Office of C. William Smalling, P.C. May 28, 2017

The Texas legislature recently passed a bill that extends the mandate of the Texas Railroad Commission until 2029. While this does not come as a surprise, all state agencies are subject to sunset provisions. The Texas Sunset Advisory Commission was established in 1977 to evaluate state agencies to determine whether an agency's are needed and, if so, make recommendations to lawmakers on how it can be run more efficiently.

In this regard, the RRC has been under scrutiny by Sunset over the last year, and a number of recommendations were made to revamp the states oil and gas regulator. One recommendation was to change its name to the Texas Energy Resource Commission to better reflect its mission. There had been a push to rebrand the RRC as activists felt that most Texans had no idea what the commission does - a far flung notion at best, and this proposal was rejected. The RRC has operated under that name for over 125 years and lawmakers were not about to flout tradition.

Other recommendations made by Sunset were also rejected, including one that would change the ruling structure of the commission. Currently, the agency is run by three publicly elected commissioners and critics have long argued that the commissioners accept large campaign contributions from the oil and gas industry.

Although most of the recommendations were ultimately dismissed, bill does include some new initiatives including: (1) a Monitoring and Enforcement  Strategic Plan for the commissions Oil and Gas Division, (2) an Alternative Dispute Resolution Policy, and (3) new Pipeline Safety and Regulatory fees. Finally, passage of the bill was viewed favorably by RRC chairwoman Christi Craddick. In a public statement Ms. Craddick said that certainty in oil and gas regulation is critical for the energy industry.

With the next energy boom on the horizon, Texas will derive a number of economic benefits, but safeguarding the environment in communities across the state will also pose challenges. In the final analysis, the legislation does not usher in sweeping changes to regulatory oversight of the energy sector in Texas. However, oil and gas companies still must adhere to a wide range of rules and regulations imposed by state and federal government agencies. Ultimately, meeting these regulatory obligations requires  the advice and counsel of an experienced health, safety and environmental regulation attorney in Texas.