| Perspectives on Texas

For years it’s always been the same: When it comes to the office of Texas railroad commissioner, there’s not a more important elected position in Texas — and perhaps the nation — that so few people seem to know or care about. But that may be changing.

The state’s latest oil and gas boom, like those that came before it, has been a mixed blessing. Frenzied development is creating rapid economic growth, high-paying jobs, increased tax revenues, and wealth for mineral rights owners and industry investors. But it’s also stirring concerns over water usage, groundwater contamination, air quality, damaged roads and even earthquakes.

Square in the middle of all this is the Railroad Commission (where “railroad,” for historical reasons, is Texas slang for “oil and gas”). Though largely trusted within the oil and gas industry, the commission is widely distrusted by the public. Texans are confused by its misleading name, and they’re worried about commissioners’ coziness with the industry they regulate.

The commission is increasingly being called upon to change, and I have some ideas about how to do that.

The commission should focus on the two primary duties of government — serving as a protector of liberties and rights, and as a conflict referee. In its quasi-judicial regulatory role, the commission has done a reasonable job of developing a framework that reconciles the competing interests of major oil companies, independent oil companies and mineral rights owners. By favoring small independents and landowners, the commission likely played a significant role in establishing the economic and technological conditions that led to our latest boom.

For perhaps rational historical reasons, however, surface rights have largely been left out of the commission’s purview. The shale boom is leaving an increasingly large geographic footprint that is encroaching on places where many Texans live and work. The legal dominance of mineral rights over surface rights means that increasing numbers of Texas landowners have little or no recourse over oil and gas operations near, or sometimes even on, their property.

In addition to its authority to conserve and prevent waste of petroleum resources, the commission also has the authority to protect groundwater and the public from oil and gas operations. The small number of past issues, in spite of the large number of wells that have been drilled, is testimony that efforts have been largely, if not universally, successful.

But the shale boom is resulting in an increasingly large number of wells. Public fear and distrust have led to widespread concerns that hydraulic fracturing is an imminent threat to both public safety and water supplies under strain by drought and population growth. 

For these reasons, we must increase public trust in the Railroad Commission, and we can do so through competency, transparency and simplicity.

Leadership and staff who have requisite educational and experiential backgrounds are the cornerstones of unbiased competency. The commission doesn’t need to employ all needed expertise but should have staff capable of engaging the state’s deep bench of academic and professional oil and gas experts. Trust will inevitably increase when railroad commissioner is seen as a technocratic position rather than a political one.

Increased transparency should begin with Sunset Commission recommendations on political activities and recusal policies. Changing the Railroad Commission’s name, eliminating its role as industry champion and enhancing media interactions are also essential. An obscure commission seen as favoring a particular private interest, especially a rich and powerful one, erodes public trust.

Simplification should begin by reducing the commission’s purview over critical natural resource issues. The Alternative Energy and Alternative Fuels Research and Education divisions should be eliminated. The Pipeline Safety and Gas Services divisions would be best administered by other agencies capable of dealing with transportation issues and regulation of state-sanctioned monopolies.

Overly complex regulations benefit no one. They tend to be incomprehensible and lag behind technological innovations. They’re difficult to administer and often favor the largest, best-connected interests. A sunset review policy for regulations seems prudent.

The conversation about the commission, however, shouldn’t end after November. With one of its three leaders near the top of the Texas ballot every two years, the Railroad Commission should be the focus of a continuous public discussion for years to come.