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Texas Energy Industry: Legislature Greenlights Railroad Commission for 12 More Years

by Chris Hosek

Principal, Texas Star Alliance

Re-authorization of Railroad Commission provides a predictable regulatory environment

When many people hear the word “sunset,” they have visions of a beautiful evening in Texas as the sun slowly dips beneath the horizon. In the Texas legislature, the word “sunset” takes on a very different meaning, and the feelings conjured up are not of romance and peace, but apprehension and heartburn.

That angst is over for the Railroad Commission as the legislature passed the Railroad Commission Sunset re-authorization legislation. The Railroad Commission is the regulatory body that oversees Texas’ energy industries including all levels of the oil and gas industry, pipeline safety, gas utility rates and the permitting and reclamation of coal and uranium mines. This is extremely good news for Texas and the energy industry, yet this re-authorization was anything but easy.

Outside of Austin, little is known about the Sunset process.  The Sunset Commission is an entity that the Texas legislature created in 1977 to evaluate the efficiency and efficacy of all state agencies.  It varies, but about 130 agencies fall under the jurisdiction of the 12-member Sunset Commission.

All agencies go through the Sunset process about every 12 years, but not all at once as the workload would be too great. If an agency’s Sunset bill does not pass, the agency will cease to exist. The Sunset process is integral to the continuation of Texas state government as we know it. In fact, the failure to pass a Sunset bill this session for the Texas Medical Board has triggered the Governor to call a special session.

The Sunset Railroad Commission re-authorization legislation was passed after three separate attempts in three different sessions. That’s correct. This is the third consecutive legislative session that the Railroad Commission Sunset bill has been filed.

Normally, sunset bills take only one session to pass, making this trifecta extremely unusual. Unfortunately, in past legislative sessions, the Railroad Commission Sunset bill has been mired down in regulatory policy disputes, campaign issues, and politics. With each failure, a temporary stay of the agency was passed, allowing the Railroad Commission to operate until the next legislative cycle. Consider this a legislative Band-Aid.

Finally, this session, under the leadership of Chairman Larry Gonzales, Chairman Drew Darby and Senator Van Taylor, the Railroad Commission sunset bill was passed and signed by the Governor.  Through active legislative engagement, Chair Christi Craddick and Commissioners Ryan Sitton and Wayne Christian all played important roles in this success.

Also during the session, several policy issues were raised to alter or dramatically change the Commission.  These ranged from major issues such as changing the hearing process to minor issues such as changing the name of the agency itself. Since the three Commissioners are elected at the statewide level, several electoral issues were proposed, including a moratorium on the collection of campaign contributions as well as actions they may need to take if they choose to run for another office. As the Sunset bill went through the process, these issues were debated and vetted. None of these issues were attached to the bill.

Why was this so positive for Texas? The passage of the Railroad Commission Sunset bill reaffirms the stability of the Railroad Commission itself. The bill establishes a predictable regulatory environment where Texas Energy companies may continue to lead the nation in innovation, environmental protection, and energy production.

Perhaps now, when the energy industry thinks of “sunset,” images of that beautiful Texas sky will come to mind.

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