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Railing at the need for oil reform in Texas
Stephen Ewart, Calgary Herald
Published: Friday, May 17, 2013Few things say oil like the Texas Railroad Commission.
And, the obvious incongruity notwithstanding, that's the way it's going to stay in the Lone Star State in the aftermath of the most recent intersection of political process and regulatory reform for state, provincial and federal governments over North America's booming oil and gas sector.
A bill to overhaul the 122-year-old regulator of oil and gas development in Texas expired once again in committee at the state legislature this week.
Among its objectives, the legislation proposed updating the name of the body that hasn't regulated a railroad since 2005.
"We have nothing to do with railroads," commission chairman Barry Smither-man told the committee in March as he put forward the names Texas Energy Commission or Texas Oil and Gas Commission to better reflect the current mandate.
For all the big issues - from ethics to red tape - it's the name change that attracted most of the attention.
The agency - officially The Railroad Commission of Texas - was pressed into service to oversee production of crude oil after the Spindletop gusher in 1901 made Texas the epicentre of the oil world.
It was 1938 before Alberta introduced Canada's first provincial regulatory body to oversee its nascent oil and gas industry.
Both regulators are experiencing historic changes to their mandates, structures and technical capabilities as issues and public concerns multiply with the boom in drilling from Alberta's oilsands to the Eagle Ford Shale in Texas. The reforms from two of the leading oil and gas jurisdictions reveals the challenges in keeping pace with the advances in multi-stage fracturing or cumulative effects management and ever-increasing expectations on operators.
It's evident there's no one-size-fits-all solution for regulation or reform.
In June, a multi-year overhaul of Alberta's Energy Resources Conservation Board will see it become the Alberta Energy Regulator.
In contrast to all the angst in Texas, there have been a half-dozen names for Alberta's regulator over the years. It began as the Petroleum and Natural Gas Conservation Board in 1938; became the Oil and Gas Conservation Board in 1957; the ERCB in 1971; the Alberta Energy and Utilities Board in 1995 and back to the ERCB in 2007.
In Texas, the Railroad Commission retained the same arcane name as it began regulating oil pipelines in 1917, oil and gas production in 1919 and natural gas delivery in 1920.
It's actually a global brand. "It has a great history. I would hate to see that name go away." Rep. Myra Crownover, vice-chair of the Energy Resources Committee told the Houston Chronicle earlier this year. "It's much ado about nothing."
Discussion around regulatory reform has been ongoing for decades. The process typically evolves at one of two speeds - glacial or Big Bang.
The phrase Big Bang was used to describe the sudden deregulation of financial markets by British Prime Minister Margaret Thatcher in 1986. In Canada, an example of an abrupt change was Ottawa using the 2012 budget to repeal the Canadian Energy Assessment Act.