After Eight-Year Battle Over Reforming the Railroad Commission, Oil and Gas Industry Wins
A nearly decade-long battle between environmentalists and the oil and gas industry to reform Texas’ energy regulatory agency came to a close last week — and Big Oil won. Environmental advocates say the Lege caved to industry pressure, demonstrating the power of the oil and gas lobby in Texas.
Since 2010, the Railroad Commission (RRC) has been reviewed three times by the Sunset Commission, which audits about 130 state agencies typically every 12 years to ensure they’re still necessary and operating efficiently. Each review prompted staff at the Sunset Commission to issue scathing reports and identify “critical concerns” that hobble the RRC from effectively regulating the oil and gas industry and protecting the environment. But in the two previous sessions, lawmakers failed to pass bills that implement those reforms.
Last week lawmakers finally closed the loop. Industry lobbyists and regulators lauded lawmakers for passing House Bill 1818, the sunset bill that extends the RRC’s operation for another 12 years and makes modest improvements to pipeline safety and enforcement reporting requirements. One agency commissioner said the bill would ensure that the agency in charge of overseeing the oil and gas industry in Texas would become “even stronger.”
But that’s not how environmental advocates see it.
“HB 1818 basically does nothing,” said Luke Metzger, director of Environment Texas. “It allows the agency to continue business as usual … It’s a big, oil-friendly bill.”
Though the end of the eight-year struggle over the agency is likely a welcome respite for battle-weary lawmakers, HB 1818 carries few substantive changes and is largely a win for the industry. The 11-page proposal incorporates few changes recommended by Sunset Commission staff and sidesteps the most meaningful reforms. Provisions such as changing the agency’s name to reflect what it does — it has nothing to do with railroads — or limiting campaign contributions to RRC commissioners never made it into the bill.
“Before Sunset Commission even met, [the commissioners] had made up their mind,” said Carol Birch, a lobbyist for the consumer and environmental advocacy group Public Citizen. “Nobody would even talk to you about it. They just wanted this clean bill.”
That’s a response to past legislative fights, which in 2011 and 2013 became contentious before ultimately failing. As a result, Representative Larry Gonzales, a Round Rock Republican who chairs the Sunset Commission and filed HB 1818, and other members decided to avoid any controversial proposals that could keep the bill from becoming law this session. Since 2011, the Lege has also become less ambitious in its plans for the RRC, knowing that altering the governing structure of the agency and changing its name are hard sells. Members of the oil and gas industry have opposed those changes, claiming the RRC should keep its name because of its historical significance and that the current board structure works fine. Environmental advocates say HB 1818 — now headed to Governor Greg Abbott’s desk, where it will almost certainly become law — does very little to address their long-standing concerns.
Birch said many reforms haven’t progressed because there’s an implicit understanding that voting for them will be perceived as anti-oil and gas. That’s a significant concern for lawmakers in Texas, where the oil and gas industry is responsible for about 13 percent of the state’s GDP and is a significant contributor to legislative campaigns. A recent report from Texans for Public Justice, a government accountability group, found that the energy and natural resources industry is the top funding source for the state’s 181 lawmakers. The industry contributed 11 cents on average for every dollar lawmakers raised. Oil and gas lobbyists also significantly outnumber environmental advocates.
“There’s a handful of us and a gazillion of them,” said Birch. “They don’t come and testify on bills. They all do it behind the scenes.”
She likened the Legislature’s malaise to “battle fatigue.”
“They were trying to do something meaningful the first time they tackled it,” she said. “The next time they tried to do less. Each time they’ve tried for less and less to the point where they’ve completely given up.”
In 2011, the Legislature seemed somewhat more willing to take on the oil and gas industry. That session lawmakers passed a first-of-its-kind bill requiring oil and gas companies to disclose chemicals in fracking fluids. Lawmakers also came close to passing substantive reform that year. Both the House and Senate passed versions of a bill that changed the RRC’s name to the Texas Oil and Gas Commission and restricted commissioners from accepting political donations during non-election years.
But the bill ultimately failed. Lawmakers couldn’t decide whether the agency should retain its authority to conduct hearings over enforcement and gas utility issues. Members of the oil and gas industry opposed moving those hearings out of the RRC and lawmakers ended up deadlocked. In the end, lawmakers passed a “safety net” bill that temporarily extended the agency’s authority to operate for two more years.
The Sunset Commission went through the motions again in 2013. Having learned from their experience the previous session, the commission dropped changes to restructure the agency. But this time lawmakers got hung up on an ethics provision requiring the agency’s commissioners to fundraise only during the 17 months prior to re-election to reduce conflicts of interest. The RRC commissioners, chosen through partisan elections, lobbied against it and the bill languished in the House. Again, lawmakers passed a “safety net” bill extending the agency’s operations, this time for four years.
Lawmakers this year were much more careful about keeping the bill on track, and even Sunset staff appear to have lost confidence in the Lege. The 2016 report left out past recommendations to restructure the board and limit commissioners’ ability to take campaign contributions. And the Sunset Commission killed other controversial measures so they never made it into HB 1818. Instead, lawmakers added a provision to the bill that required RRC contractors to use E-Verify to check the immigration status of workers.
Meanwhile, bills that implement more controversial reforms, such as renaming the agency to Texas Energy Resources Commission and requiring it to post enforcement data online, have languished this session. They’ve either been left pending in committee or haven’t been called for a vote.
Birch, the Public Citizen lobbyist, pointed to an ethics reform bill that her group has been championing as an example. Much like past proposals, it would prevent commissioners from accepting political contributions during the 17 months prior to an election. The proposal was voted out of committee, but it was never placed on the House calendar and fell victim to legislative deadlines.
“Nobody wants to take responsibility [for helping pass the bill],” Birch said. “If they wait till the last second, they can just say they didn’t have time. It’s easier to explain that calendars didn’t have time, than say we don’t want ethics reform.”
In the end, politics and lawmakers’ instinct for self-preservation has put the environment and Texans’ health at risk, said Birch, the Public Citizen lobbyist. “They’re all just playing games at the public’s expense.”