The Texas Railroad Commission (RRC) is supposed to be responsible for the environmental regulation of natural gas drilling in the state of Texas, but environmental regulation is simply not in its DNA. Rather, the RRC is a public bureaucracy that serves private corporate interests; its modus operandi is to promote the industry it claims to regulate, thereby essentially violating its own reason for existence. This has been recognized in an official report commissioned by the state legislature. But before looking at some of their findings, here’s a bit of the RRC’s history.
Created in 1891 to regulate the railroad industry, the RRC had a twin mandate: to protect the consumer from price gouging and unfair practices, as well as to encourage economic growth. At least a decade prior to the oil boom in Texas (in the 1930′s), it gained jurisdiction over oil and gas production as well (among other things).
The RRC’s primary activity over the following decades was to regulate the overproduction of oil and gas through the use of quotas. This satisfied one of their original mandates (in a very narrow interpretation) because it benefited the growth of industrial giants by propping up their profit margins. But it neglected their other mandate: to protect consumers from excessive prices. Upon the peaking of American oil production in 1973, the RRC’s ability to set production quotas and thereby control the price of oil shifted to OPEC, which used many of the regulatory procedures pioneered in Texas (an irony of history probably lost on most patriotic Americans who hate OPEC for their “anti-free market” price fixing).
So it’s not part of the history of the RRC to protect consumers and it’s even less part of their history to protect citizens by protecting their environment. Rather, they regulate in such a way that oil and natural gas production benefit the corporations undertaking the enterprise as much as possible, without letting them hurt themselves (eg. by overproduction for reasons of supply and demand). Their environmental regulations are a PR exercise.
To see how this is so, there’s nothing better than an article appearing in the local Denton Record-Chronicle last March which documents the Railroad Commission’s current practices regarding hydraulic fracturing. Much of their information comes from the Sunset Advisory Commission, an investigative agency of the Texas legislature, which basically concluded their 2010 report by suggesting that the Railroad Commission has been completely co-opted by the industry it is supposed to regulate. I’ve excerpted the statistical crux of their argument below, but the article and report contain much more.
The Railroad Commission also came under fire from the Sunset Advisory Commission, a state-appointed committee that reviews agencies every 12 years. The November 2010 report found that the agency rarely uses enforcement actions against violations it finds. In 2009, the agency performed about 128,000 inspections. Regulators found more than 80,000 violations, but 96 percent of the violators were not fined.
Moreover, the sunset commission found the agency doesn’t track repeat violators, so it “cannot be certain that operators are not committing repeated violations.” Inspectors found 18,000 water protection violations in 2009, yet the agency took enforcement action on fewer than 1 percent. The agency received 681 complaints from residents related to oil and gas production. In investigating those complaints, inspectors found nearly 2,000 violations. Only 91 resulted in enforcement action.
“When the public sees so few enforcement actions for violations found from its complaints, the public’s confidence in the Commission’s enforcement process is undermined,” the report stated.
The sunset commission also claimed the agency’s credibility is undermined by its promotion of the industry products it is supposed to regulate. Three agency employees distribute grant money that promotes the use of propane as an alternative fuel, according to the report. The agency awarded more than $17 million in state and federal grants in 2009 for purchasing or modifying propane-fueled vehicles. According to the report, “sunset staff could find no other state agency that promotes a product it also regulates.”