When I told my friends I was running for Texas Railroad Commissioner, the first thing they asked was what I knew about railroads. It’s actually quite remarkable how many Texas voters are unaware that the Railroad Commission has primary responsibility for regulating our oil and gas industry. Those inclined to conspiracy theories suggest that politicians and powerful industry executives actually prefer an obscure Commission. But even in the absence of conspiracy, low public awareness of such a powerful State agency increases distrust in an electorate that is already deeply suspicious and cynical of government.
Since the discovery of the Spindletop field in 1901, Texas’ oil and gas industry has been a hugely significant part of our economy (as well as our culture). The industry currently accounts for a fourth of the Texas economy and employs nearly 15% of working Texans. The State is in the midst of its latest oil and gas boom. Production of Texas oil has risen by over 250% since the beginning of 2010, approaching 3 million barrels per day and representing $100 billion in revenue to the State.
This latest boom, as with past ones, is a mixed blessing. Frenzied development is bringing rapid economic development, good paying jobs, increased tax revenues, and wealth to mineral rights owners and industry investors. But it’s also bringing concerns around water usage, ground water contamination, air quality, damaged roads, housing shortages, and even earthquakes.
Over many decades, the Commission has (perhaps arguably) done a reasonable job of providing a regulatory framework that reconciles competing interests of major oil companies, independent oil companies, pipeline operators, and mineral rights owners. Recent technological innovations, however, have enabled the commercial extraction of oil and gas resources over very large geographical areas. In Texas it is quite common for mineral rights to be severed from surface property rights. Since under Texas law, surface rights are subservient to mineral rights, surface owners are increasingly impacted, with little say over (or financial compensation for) operations near or sometimes even on their property.
The Commission’s activities are confined to a fairly narrow set of issues, yet have a significant impact on many Texans as well as the State as a whole. The Commission has responsibility to resolve conflicts that inevitably arise between property rights, public safety, protection of our common natural resources, and the right to engage in free and prosperous commerce. As the only executive position in the State that comes before voters every two years, debate about the Commission’s activities should be regular and frequent. Let’s start with the following suggestions for changes in Railroad Commission governance.
- Adhere to Sunset Commission recommendations with regard to political activities and recusal policies of Commissioners.
- Work with the Legislature to change the Commission’s name and increase its focus on critical oil and gas issues.
- Increase transparency, including better and timelier publicly-available data for waste water well injection rates and pressures. Work with other State agencies to make water and air quality data near oil and gas operations better and more readily available to the public.
- Institute a sunset policy for all its regulations. Regulations that are complex, incomprehensible, or lag technological innovations serve no one well.
- Make it clear that it is not the role of the Railroad Commission to promote any particular industry or technology. These activities should rightly be left to private enterprise.
- Work with the Legislature to place surface property rights on a more equal footing with mineral rights.
In the coming months before the November election there is an opportunity to have many rational and intense debates about our Railroad Commission.