Posts Tagged ‘Texas Railroad Commission’

Neighbors for Neighbors (NFN), an organization of residents near Luminant Mining’s Three Oaks Mine, filed late Monday for a contested case hearing on an EFH subsidiary’s request to renew the mining operation in Lee and Bastrop counties.

In its filing, NFN asks the Texas Railroad Commission, the agency that administers mining law in Texas, to require Luminant Mining to post cash or an outside bond to cover the estimated  $60 million cost of cleaning up the strip mine. The group points out since EFH, the parent company of Luminant Mining, is expected to file for bankruptcy by the end of this year, there may not be funds to cover the cost of cleanup.  Click here to see a copy of the filing.

“Does a company have to go bankrupt and walk away from its mines in order for regulators to step in?” asked NFN president Travis Brown. “It would be the height of irresponsibility for Texas to allow a company going bankrupt to say, ‘Trust us, we’re good for it.’ We want Luminant Mining to post real bonds to assure that the mining restoration gets done.”

Russel Bostic, a local rancher and NFN member, said “I live next to the mine, and the company has condemned and is planning to use my land. My family wants our land to be restored to its original condition so we can return.”

Lignite coal mined at Three Oaks is used to supply Luminant’s two coal-fired power plants near Rockdale.

Under federal and state law, mining companies are required to restore mined areas to their original condition.  Those companies must also set aside money so resources will be available for the restoration, even if the company abandons the mine.  The law was created because many U.S. mines were abandoned when companies went bankrupt, leading to contamination of surface water and groundwater.

In Texas, Luminant Mining is responsible for the operation and cleanup of eleven active strip mines. If EFH goes bankrupt and sufficient cash has not been set aside for cleanup, taxpayers could end up with the estimated $1.01 billion cost of cleaning up all the mines.

Instead of requiring that $1.01 billion be set aside in cash or a real bond, the Railroad Commission allowed Luminant to “self-bond,” which means the company is relying on a “guarantee” that their own assets will cover the bonds without having real cash bonds set aside that the state can readily access.  In recent years, EFH has shifted to third party guarantee of the bonds, but the third party is another subsidiary of EFH, so still them.

In its current request for a mining permit for Three Oaks, Luminant Mining is again asking to post a self-bond for cleanup.

Brown said, “The company recently said in a community meeting at the mine that they intend to pledge assets for the cleanup bond. They said they need to operate the mines and coal plants to generate revenues to pay the new debt.  But nowhere in their most recent 8K [financial statement to SEC] do they make that commitment.”

Brown added, “This is especially disturbing since the company also says – in the same 8K – that they expect the price of gas to go up and coal to stay low. That’s the same poor business plan that has led to this bankruptcy.”

Michele Gangnes, an NFN member and a bond attorney, said “The law is clear, and Texas regulators should take immediate action to demand a cash bond so taxpayers and the environment are protected.”

Gangnes added, “In many states, Luminant Mining would be required to put up a cash bond before allowing the Tree oaks mine to expand. But EFH has been playing a shell-game, and state regulators have allowed it. We are asking the Railroad Commission to guarantee that EFH has to set cash aside or post a third-party bond specifically for cleanup of the mines in this bankruptcy deal.”

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Texas’ governor is at it again.  Just 15 minutes ago, dozen’s of bills went down in flames under the governor’s veto pen.  This included a bill essential to providing more efficient enforcement of ethics violations in the Texas political process: the Ethics Commission sunset bill (SB 219), which passed by 97 percent in the House and 94 percent in the Senate.

Why veto such an overwhelmingly popular bill? It is because of a provision in the bill that would require members of the Railroad Commission to step down if they announce their candidacy for another office. This again demonstrates that the governor is more interested in protecting powerful politicians than protecting Texas residents.

Members of the Railroad Commission frequently seek higher office. Recently, two commissioners ran against each other for the same U.S. Senate seat. The commissioners, who serve more like judges than elected state officials, oversee complex oil and gas cases that require familiarity with the law and impartiality. When commissioners use their position as a springboard to run for another office, they often go absent from the commission, and the demands of campaigning reduce their ability to do their job.  This portion of the legislation could have been used as a model for how to adequately reform the Railroad Commission, but instead the governor shot it down.

It is worth noting that 81-93 percent of the total campaign donations to the commissioners come from the oil and gas industry, which is overseen by the Railroad Commission. Perhaps that’s why in 2012, despite handling 82 contested cases, the commission didn’t deny a permit to an oil and gas company even once. Clearly, the industry doesn’t want to risk losing members of the Railroad Commission who have been carefully cultivated.

It is a bad sign for democracy when a single person can veto the will of almost an entire legislature, and when a sunset bill for an entire state agency is sunk because of just one provision that would inconvenience the oil and gas industry.

Click here to see other bills vetoed by the governor and his justification for some of them.

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Excerpted from Julia Trigg Crawford’s facebook page.

Julia on her ranch before Keystone starts work

Julia on her ranch before Keystone starts work

Crews from TransCanada/Michels/Universal Field Services and others I don’t recognize started arriving yesterday in preparation for the destruction on our place. Within hours of their arrival the pasture inside “their” fenced in area was shredded, road signs designating “work area” went up, hundred of timbers used to support heavy machinery were unloaded from 18 wheelers and stacked, and most gut wrenching was the “blading” of our land by a trackhoe in preparation for even more heavy equipment. I’ve attached a photo of my land a few months ago and what I witnessed yesterday. I intend to share as much of this process with you as I can.

But just as the workers were really getting going, yesterday afternoon a monstrous wind and thunderstorm blew in, forcing all the men off their equipment, scurrying for cover in their nearby pickups. A sign perhaps?

I was told our place is the final link, the last piece of property needed to complete TransCanada’s conveniently uncoupled and renamed Gulf Coast Segment of their Keystone Project. Furthermore, they will work 7 days a week if needed to overcome any delays, weather or otherwise. All eyes are on us folks, we really are The Last Stand.

Day one of Keystone's destruction of Julia Trigg Crawford's ranch

Day one of Keystone’s destruction of Julia Trigg Crawford’s ranch

All this while our appeal is freshly delivered and active at the 6th Circuit Court of Appeals in Texarkana. Unbelievable. TransCanada’s decision to move forward and initiate construction during our legal case just strengthens my family’s resolve to continue fighting. We maintain, now more than ever, that they never had the right to take our land in the first place. Their claimed Common Carrier status? A rubber stamp handed out by the embattled Texas Railroad Commission. This pipeline? An interstate project, even the Railroad Commission says it is out of their jurisdiction. The product to be carried? Tarsands, a product mined in Canada, and one of the most toxic and destructive products borne by Mother Earth. Just ask the residents in Kalamazoo and Mayflower what it did to their communities and waterways when it could not be contained. And sadly ask the First Nations in Alberta how is is destroying their lands and lives.

I hear the beeping of heavy equipment being moved, I guess they’re back at it already today, so I’m headed out to watch and take more photos. If you thought I was a mad and motivated landowner before, well, you’re about to see me hit a new gear. Stay tuned.

We’ll keep you updated about her appeal and the work on her land.

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The House Energy Resources Committee is scheduled to hear Representative Dennis Bonnen’s bill, HB 2166, relating to the continuation, functions, and name of the Railroad Commission of Texas; providing for the imposition of fees, the repeal of provisions for the suspension of the collection of fees, and the elimination of a fee.

During the 81st interim session, the Texas Railroad Commission underwent a review by the Texas Sunset Advisory Commission.  During the 82nd Legislative session, the legislature failed to pass a bill reauthorizing the continuation of the Commission and instead added it to the ombudsman bill that extends an agency temporarily when it fails to get sunset legislation passed.  Now that bill is starting to move through the 83rd legislature and the first hearing is scheduled on Wednesday, March 27th starting at 2pm or upon final adjournment or recess of the House in John H. Reagan building on 15th Street between Colorado Street and Congress Avenue in room 120 (JHR 120).

To read the entire bill, click here.

We will keep you posted on this bill as it moves forward.

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UPDATE 10/2/2012 –

The court in Beaumont has given TransCanada the right to begin building portions of the Keystone XL Pipeline through Johnson County.

County Court at Law Judge Tom Rugg Sr. did blocked access to one parcel of disputed land until the company meets legal requirements giving proper notice to all parties.

Earlier, Rugg made clear that he believes Texas law required him to grant a writ of possession to TransCanada to construct parts of the politically controversial pipeline to carry Canadian tar sands to Gulf Coast refineries. He added that technical issues needed to be resolved first that his further ruling determined that TransCanada file two necessary surety bonds required by law of $20,000. He ruled. “As those bonds have two sufficient sureties, the statutory requirements for the issuance of writs of possession are now met.”

In a central matter in the case, Rugg said a different court would need to determine whether TransCanada is a common carrier with the power to seize land under eminent domain law.

UPDATE:  While Judge Rugg expressed regret for the lack of clarity from the higher courts. “I’m left with no guidance from Denbury,” he said.  He, nevertheless promised to rule by Sept. 24th.  We will let you know as soon as we hear about the ruling.

KEYSTONE PIPELINE V. TEXAS RICE FARMERS SET FOR HEARING – Must TransCanada prove common carrier status before trenching begins?  That is the question Polly Hughes of the Texas Energy Report poses in the article reprinted below.

A battle over the right of pipelines to seize private land heads to court again Wednesday when the Texas Rice Land Partners challenge TransCanada’s use of Texas eminent domain law.

TransCanada has begun construction of the southern leg of the controversial Keystone XL Pipeline from Cushing, Okla., to Texas Gulf Coast refineries. The pipeline, which will carry oil sands, also referred to as tar sands, has stirred controversy with environmentalists who say a spill of the heavier diluted bitumen would be far more treacherous for waterways and aquifers than spills of ordinary crude oil.

“The Keystone XL crosses and exposes threats to water resources for the Carrizo- Wilcox Aquifer, which feeds and supplies water, drinking and agricultural resources for up to 10 million Texans,” Chris Wilson, an anti-tar sands activist opposing TransCanada’s pipeline told members of the Texas Railroad Commission Tuesday.

At issue in the Jefferson County Court at Law case in Beaumont is whether TransCanada has a right to take possession and begin trenching on land before the company proves its has eminent domain rights, according to the activist group known as TURF, Texans Uniting for Reform & Freedom.

The defendants in the case, James and David C. Holland and the Mike Latta Family, make up the Texas Rice Land Partners who sued the Denbury Green Pipeline Co. over its right to seize land under eminent domain law and won at the Texas Supreme Court. The courtunanimously ruled that before the company could seize private property and claim eminent domain rights, it needed to prove it was a common carrier serving a legitimate public use. Merely self-declaring common carrier status by checking a box on a one-page administrative form at the Railroad Commission was not enough.

Debra Medina, a former Republican gubernatorial candidate who has taken up the eminent domain battle with parties opposing TransCanada, said the defendants will ask the court to require the company to prove its common carrier status and right to use eminent domain before it grants a writ of possession allowing trenching to begin.

She said 60 pipelines cross the Holland Family’s land, but only two – Denbury Green and TransCanada – have resorted to using eminent domain law rather than reach a mutually satisfactory financial agreement with the family.

“This landowner wants a fair price,” she said, adding that she thinks the Texas Supreme Court’s ruling means the burden of proof is on TransCanada and not the landowner.

Ramrodded by veteran reporter Polly Hughes, the Texas Energy Report’s Energy Buzz specializes in what is happening on the ground in Texas energy ranging from dedicated coverage of the Texas regulatory agencies to battles in the Legislature that affect the future of the industry.

Copyright September 11, 2012, Harvey Kronberg, www.texasenergyreport.com, All rights are reserved.  Reposted by TexasVox.org with permission of the Texas Energy Report.

We will report on the outcome of this court case when it becomes available.

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Wednesday evening, Lamar County Court at Law Judge Bill Harris sent an email from his iPhone (complete with new internet slang – MSJ and NEMSJ) ruling in favor of the controversial Keystone XL pipeline, allowing them to act as common carrier and giving them the right to condemn land for use by a pipeline.

Dear Counsel,
My rulings as follows:
Transcanada’s MSJ is GRANTED (that’s internet slang for Motion for Summary Judgment)
Transcanada’s NEMSJ is GRANTED (I don’t know what NEMSJ is)
Crawford’s Plea to the Jurisdiction is DENIED

“The Texas Supreme Court has ruled that taking private property for the private use by a pipeline company requires proof that it will serve some common good – and that can’t be accomplished by merely filling out a form. We believe the judge made a number of mistakes and we will appeal. The supreme court has said that if there is any doubt that a pipeline is a common carrier, the judge has to rule against the pipeline company and he failed to do that,” said Wendi Hammond, the attorney for the landowner.

I guess what this particular judge is trying to tell us is what’s good for oil and gas is good for Texas – period.

“We may have lost this battle here in Paris, Texas, but we are far from done,” said Julia Trigg Crawford, landowner. “I will continue to proudly stand up for my own personal rights, the property rights of my family and those of other Texans fighting to protect their land. The Crawfords, and those who bravely stand with us, have plenty of courage to continue this fight, no matter what it takes.”

Read Julia’s impassioned statement below:

Anyone following this case knows my family and I were in it to win, so of course we are incredibly disappointed in today’s ruling….Disappointed that Judge Harris wholly dismissed our entire case with a 15 word ruling sent from his iPhone…  Disheartened that Texas landowners must still challenge oil corporations in court on what should be State-level permitting issues….and Disturbed that a foreign corporation like TransCanada is allowed to hide behind the skirt of the Texas Railroad Commission and its Common Carrier rubber stamp.

It is absolutely unbelievable to me eminent domain abuse continues in Texas given the revelations made during our court case.   With every turn we found black holes of responsibility, endless loops of (non)accountability, and the cart miles in front of the horse.  The Texas Railroad Commission says they have no power over eminent domain, yet turns a blind eye when pipelines under their jurisdiction state they indeed get the power from the Commission.  The Texas Supreme Court ruled in Denbury Green that “once a landowner challenges…., the burden falls upon the pipeline company to establish its common-carrier bona fides if it wishes to exercise the power of eminent domain”.  So we asked TransCanada to produce their tariff rate schedule, a requirement of all Common Carriers and therefore part of proving the right of eminent domain. TransCanada’s attorney refused to provide anything, responding in court that tariffs will be provided “about the time it gets ready to transport product on the line”.  That means they can’t even produce this proof they qualify as a Common Carrier until after the land is seized and the pipeline built.  Furthermore, the Writ of Possession was granted by the Court and served on us before the ruling was even made on whether TransCanada can legally take our land. There is no question the process is riddled with loopholes and flaws, and Big Oil certainly wants to keep it this way.

Somehow, someway, things must change.  If the courts will not address the problem, we will use our voices and votes to bring about change, and we will champion the cause with those who create the laws. Fortunately the dialogue in Austin has already begun, and we are deeply involved.  As our more enlightened State leaders address the issues with open minds, they admit there are still problems with the eminent domain process.  Thankfully they have begun the steps to shepherd change.

We may have lost this one battle here in Paris, Texas, but we are far from done.  I will continue to proudly stand up for my own personal rights, the property rights of my family, and those of other Texans fighting to protect their land. Winston Churchill once said “Success is not final, failure is not fatal: it is the courage to continue that counts”.  The Crawfords, and those who bravely stand with us, have plenty of courage to continue this fight, no matter what it takes.

Julia Trigg Crawford
Farm Manager, Red’Arc Farm
Direct, Texas

Tea Party leaders and environmentalists alike, but for different reasons, share the Crawfords’ disappointment with this ruling.

“Judge’s Harris disappointing decision today further highlights the vulnerable and precarious position that Texas landowners are in,” said Debra Medina, former Republican candidate for Governor. “These cases are often argued in county courts that are poorly equipped to assess such weighty legal questions.  These courts lack the resources to properly consider the complex and voluminous evidence assembled by multibillion dollar corporations.”

“These are pipelines carrying poisons, not for oil independence in our country, but for export, from a foreign land, through our pipelines, to a port that’s going to ship them to foreign lands. These aren’t common carriers for the common good of Texans — this is a pipeline designed to speed oil through Texas. There are no on or off ramps to this pipeline in Texas and as a result it should not have been permitted, implying they had the use of eminent domain to condemn Texans’ lands,” said Tom “Smitty” Smith of Public Citizen.

“The Texas Supreme Court was clear in the Denbury ruling that private companies have to prove their project qualifies as a true ‘public use’ before it can exercise eminent domain. We’re disappointed in the Judge’s decision, but we’re confident that the Crawford family farm will eventually prevail. This decision puts the onus on the Texas legislature to remedy the outrageous eminent domain abuse taking place in our state,” said Terri Hall, Director of Texans Uniting for Reform and Freedom. “The time for talk is over. Texans are losing their land because of poor oversight and the legislature’s refusal to address the heart of the problem. Texans aren’t going to accept the crumbs we’ve been handed, cloaked as eminent domain reform. It’s time to get serious before irreparable harm is needlessly inflicted upon Texans.”

Recently, the Texas House Land and Resource Management Committee met at the Capitol to hear invited testimony from Crawford and other interested parties regarding the dilemma of industries self-proclaiming they are common carriers with no review from any state agency as to whether a company is truly a common carrier or not. The House Energy Management Committee has also held hearing on pipeline safety issues.

Linda Curtis, director of Independent Texans, noted, “Ms. Crawford’s case is emblematic of the continuing struggle of Texas landowners being tread upon by a private company taking land for private use, and foreign profit.  TransCanada has yet to provide any evidence that they have the legal authority to seize property in Texas.”

“TransCanada used the Commission’s T-4 permit as an authorization to take Texans’ land for a private for-profit, foreign pipeline project.  There was no vetting or review by the Commission of a pipeline company’s self-designation as a common carrier and the commission says that it has no control over eminent domain.  The legislature needs to fix this mess and assure that landowners’ rights and the environment are protected,” said Chris Wynnyk Wilson of the Stop Tar Sands Oil Pipelines (STOP).

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Earlier this week, a new statewide coalition of groups and advocates for private property rights announced its support for landowners along the path of the Keystone XL pipeline in Texas. The groups charge that TransCanada, the company proposing to build the pipeline, has used eminent domain to bully landowners and condemn private property.

Despite a presidential permit denied to TransCanada for the Keystone XL project just weeks ago, the company continues to bully and pressure landowners along the Texas pipeline route.

The controversial Keystone XL pipeline would carry tar sands crude more than 1900 miles through six states including Montana, South Dakota, Nebraska, Kansas, Oklahoma and Texas.  In Texas, the pipeline crosses eighteen counties, from Paris to Pt. Arthur.  Groups with landowners near the cities of Paris, Winnsboro, and Wells joined in press events held in Dallas, Austin, San Antonio, and Houston to ask for support from agencies and officials on the continuing plight of landowners who would be impacted by the pipeline.

“Texas, we have an eminent domain problem,” said Terri Hall, director of Texans Uniting for Reform and Freedom (TURF). “There is absolutely zero oversight for pipeline companies that want to take private property from Texans – all you have to do is check the right box on a form and declare yourself a common carrier, no questions asked.”

The form Hall refers to is a T4 permit application filed with the Texas Railroad Commission. In a recent Texas Supreme Court case, Texas Rice Land Partners, Ltd. and Mike Latta vs. Denbury Green Pipeline-Texas LLC , the court effectively revoked the eminent domain authority of the pipeline builder, holding that “Private property cannot be imperiled… by checking a certain box on a one-page government form.”  In order to be a common carrier, a company needs to satisfy the question if it is purposed for public use.  The pipeline company in this case did not meet the criteria of “common carrier” , as it was merely a private company transporting product to one of its own subsidiaries, therefore, not meeting the criteria of operating for public use or the public good.  There is a real question as to whether the private entity TransCanada Keystone XL meets those same criteria.

The ruling has been hailed as a major victory for private property rights in Texas. Advocates like Hall and former Republican gubernatorial candidate Debra Medina say that conservative politicians have campaigned on the issue but have done too little for property owners.

“Texas politicians talk tough on eminent domain, but with Keystone we have a private pipeline company acting as a ‘common carrier’ and bludgeoning private property owners with eminent domain while many of our Republican leaders cheer from the sidelines,” said Medina who is also director of We Texans.

“Despite the fact that this permit has been denied and there technically is no permit for TransCanada, the company continues to bully and pressure Texas landowners,” Medina noted.  “And we would all like to ask, by what authority does this company have to continue insisting that landowners settle with them when there is no permit?”

Linda Curtis of Independent Texans, who helped coordinate groups in 2006 supporting Carole Strayhorn’s independent gubernatorial bid and the anti-Trans-Texas Corridor efforts said, “A similar statewide grassroots movement is waiting in the wings on this issue because the problems are way too familiar to east Texans who fought to stop the land grab for the TTC.”

Medina and Hall held press events in Houston and San Antonio respectively, standing with landowners who say they’ve been bullied by TransCanada. Former DISH, TX mayor Calvin Tillman hosted a similar event in Dallas, and in Austin, Independent Texans director Linda Curtis and Jessica Ellison of Texans for Accountable Government spoke.

Landowners attending the events have property condemned or are being pushed into negotiated settlements and claim their story has not been told. Landowners say theirs are among more than 80 cases in Texas where TransCanada, a private foreign pipeline company, condemned private property belonging to Texans.

“At this moment my property is condemned and legally TransCanada can lay that pipeline and pump undisclosed chemicals through it, even though we’ve never seen a judge,” said Julia Trigg Crawford of Lamar County. “I think most Texans would be stunned to find out that there is no process for challenging eminent domain use
in a pipeline case until after your land has already been condemned.”

Crawford is challenging TransCanada’s right to common carrier and eminent domain in her case.  TransCanada’s representatives indicate they want to settle with the Crawfords out of court.  However, they insist on retaining the right to begin construction/trenching as soon as March 1, 2012.

“We need our officials to stand up and help these landowners,” commented Calvin Tillman, former Mayor of Dish.  “Currently the Railroad Commission and other state agencies are passing the buck, claiming they have no authority over Keystone wanting to build a segment from Cushing to the Texas coast.  Where are our legislators?  Where are the authorities to protect Texas landowners from private companies like TransCanada?”

The group also pointed out that the company misled landowners in other situations, telling property owners the pipeline had all necessary permits and repeatedly telling individual landowners that they were the last holdouts, making the pipeline seem inevitable and securing more favorable terms for the company.

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Chronic violators of Texas Railroad Commission safety rules may be looking at steeper fines if they don’t clean up their acts.

In response to the agency’s Sunset review last session, the commissioners who regulate the state’s booming oil and gas industry are expected to approve penalty hikes in six major categories, taking special aim at repeat offenders. The proposed penalty hikes – the first since 2004– will then undergo a 30-day public comment period before new rules are finalized. Repeat offenders will see their penalties enhanced.

If approved, penalties will increase for an array of safety violations in six major divisions: 1) oil and gas 2) pipeline safety 3) propane safety 4) compressed natural gas 5) liquid natural gas and 6) underground pipeline damage prevention (rules requiring such things as calling before digging).

No estimate has been made available on how much extra revenue the tougher penalties will raise, but all proceeds will be funneled into the state budget’s General Revenue Fund.

While details are not yet available on exact increases across the board, according to the Texas Energy Report, a few examples make clear that the commission means business. Take the current $2,000 penalty for failing to plug a well in a timely fashion. Once the new fees kick in, violators will pay that amount plus $1 per foot of the well’s depth. So a driller of a 6,000-foot well who fails to plug the well will pay four times as much – $8,000.

Violators of safety rules for waste pits at oil and gas sites will see their fines increasing more than double under the proposed rules. If they use the pit for the wrong type of fluid, fail to get a permit for the pit or run amok of other rules, fines are set to more than double – from $1,000 now to $2,500.

Until now, penalties at the commission have always been in the form of staff guidelines, but the new penalty guidelines will be plaed into rules. State law caps all penalties at a maximum of $10,000 per day, and commissioners will retain their power to adjust fines.

While the Railroad Commission is going above and beyond the recommendations of the Sunset Commission, environmental groups believe penalties should be above the economic benefit to the company to be effective in detering repeat offenders.

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Is a proposed rule change by the Texas Railroad Commission (RRC) going to allow state sanctioned theft of property owners mineral rights? 

Sen. Wendy Davis (D Fort Worth) is asking the Texas Railroad Commission to hold two town hall meetings, including one in Fort Worth, to discuss her concerns that owners of mineral rights in the 24-county Barnett Shale are getting short shrift in proposed rule changes dealing with forced pooling as well as a proliferation of related exceptions the RRC has been granting to two provisions – Rule 37 and the No Perforation Zone permits — both of which were intended to protect property owners from having their mineral rights drained without their permission.

Davis wrote a letter to Commissioners Elizabeth Ames Jones, Michael Williams and David Porter on March 22nd stating, “Very few Texas citizens are aware of these issues or their potential impacts . . . I believe it is your duty to educate the public on these issues and to extend the comment period to adequately include input from the public on these critical issues.”

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SB 655 by Hegar, or the Texas Railroad Commission Sunset Bill, suffered a setback in the Senate today. (more…)

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The long-awaited Sunset Bill of the Railroad Commission was released late yesterday, and it’s mostly what we’d expected, but not everything we’d hoped for.


  • The Railroad Commission will be renamed the Texas Oil and Gas Commission
  • It will be headed by one commissioner  (down from 3) who will be elected every four years on the same cycle as Governor, Comptrollerm, Ag Commissioner, etc.
  • Campaign finance reform: Commissioners and candidates for the commission can only raise money one year before an election and 30 days after.
  • Moving contested hearings to the State Office of Administrative Hearings (SOAH).

These are needed reforms and the problems they attempt to correct are huge. For instance, the large influence campaign money has in the election of the Railroad Commission historically, as detailed in our report Drilling for Dollars. Among our findings was that nearly half of all campaign donations were being solicited and received in non-election years. Creating this fund-raising window will help keep at least the appearance of impropriety away from the new Oil and Gas Commissioner for at least 3 out of every 4 years, though we’re fairly certain the money will gush in all the same. This is why we proposed public financing for this important new office, but barring that, at least better disclosure of who is giving the money (specifically the occupation and employer of donors) and putting a cap on how much someone can give.

Unfortunately, this bill also does not offer any new guidance on regulation of fracking and natural gas drilling. Currently fracking regulation is in somewhat of a no man’s land, as Railroad Commission says they do not enforce our environmental laws, but TCEQ says they don’t regulate the operations of drillers. While it’s possible some of these reforms will come from the TCEQ sunset or from separate legislation, the bottom line is that we cannot allow our agencies to play hot potato with this issue.

So, what does this mean that we would get one new oil and gas commissioner from three current railroad commissioners? If passed in its current form, the railroad commission would be abolished- the railroad commissioners would be out of a job. Not a big deal for those like Michael Williams, who has said he will resign next month in order to pursue a run for Senate. Elizabeth Ames Jones has hinted she would do the same.  Upon creation of the new Oil and Gas Commission, the first commissioner would be appointed by Governor Perry, but s/he would only serve until 2012, when the first Oil and Gas Commissioner race in the history of Texas would take place. Whoever wins that race would serve for only two years, then be up for re-election in 2014, and then elections would take place every four years after that.

This is many steps forward from where we began, and we’re grateful that both the Sunset Commission staff and Committee members listened to our (the environmental and good government community’s) thoughtful proposals and adopted some of them into this reform package. It’s a testament to the power of people showing up and making their voices heard. But this is the beginning, not the end. So in the spirit of making our voices heard, please remember to join us Tuesday for ACT Lobby Day. This will be an opportunity for you and us to ask for even more needed reforms both at RRC and TCEQ.


By promoting cleaner energy, cleaner government, and cleaner air for all Texans, we hope to provide for a healthy place to live and prosper. We are Public Citizen Texas.


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Senator Glenn Hegar (R-Katy)

Senator Glenn Hegar (R-Katy) filed a bill (SB 655) to abolish the Texas Railroad Commission and eliminate the three statewide elected positions that govern it and rename the agency the Texas Oil and Gas Commission to be run by a single elected officer who would serve a four-year term.

The bill has been referred to the Senate Government Organization Committee.

The Railroad Commission, a 121-year-old agency whose mission has changed dramatically over its lifespan, and which many have said has grown unwieldly and ineffective, has three elected commissioners who, with their separate staffs, often stumble over one another.  Still, whether a single commissioner would be preferable to three is likely to be the most contentious piece of energy-related Sunset legislation that lawmakers take up this session and even the three sitting commissioners are split on how the agency should be structured.

Hegar’s bill also contains language that would have the newly restructured agency adopt the model of the State Office of Hearing Examiners (SOAH) on rulemaking dispute-resolution matters. It also calls for establishing a $20 million oilfield cleanup fund to be financed by fees from various industry activities.

To see the Railroad Commission Sunset bill, click here.

Senator Joan Huffman (R-Southside Place)

Representative Wayne Smith (R-Baytown)

Meanwhile, Senator Joan Huffman (R-Southside Place/Houston) co-filed the Sunset bill (SB 657) to reauthorize the Texas Commission on Environmental Quality with Senator Glenn Hegar (R-Katy).  A companion bill was filed in the house (HB 2694) by Representative Wayne Smith (R-Baytown).

All of these legislators are from areas of Texas whose air quality is highly impacted by the decisions of the TCEQ and dominated by the oil and gas industry. 

To see the TCEQ bill SB 657, click here.  If you also want to follow the House companion bill HB 2694, click here.

Senator Robert Nichols (R-Jacksonville) said he plans to introduce the legislation affecting the Public Utility Commission and related agencies before the bill-filing deadline.

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Texas Barnett Shale gas drilling rig

Texas Barnett Shale gas drilling rig -Wikipedia

According to hearing examiners for the Texas Railroad Commission, Range Resources was not responsible for contaminating two residential drinking water wells in Parker County.

The Fort Worth company was accused by the U.S. Environmental Protection Agency in December of allowing methane and other substances from its Barnett Shale hydraulic fracking operations into the wells.  But the hearing examiners findings are saying that the more likely sources of the contamination was the much shallower Strawn geological formation, which also contains natural gas deposits.

The full Railroad Commission will act on the hearing examiners’ findings at its March 22 public hearing.  If you would like to watch the hearing click here to access the streaming video live, or watched the archived video a few days later.

Public concern has been high and it is unknown yet, how the citizens of Parker, Hood and surrounding counties are responding to these findings.

To see the hearing examiners’ findings and supporting material, click here.

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State Rep. Warren Chisum, a Republican from Pampa, Texas plans to seek a place on the Texas Railroad Commission (RRC), either by gubernatorial appointment once Michael Williams resigns in April or by running for the seat expected to be vacated next year when Elizabeth Ames Jones declines to seek re-election because of her aspirations to the U.S. Senate.

The 72-year-old lawmaker has served in the House since 1989 and is an oil and natural gas producer and rancher who began his career on oil drilling rigs and in truck yards.  A key lieutenant of former Speaker Thomas Russell “Tom” Craddick, Sr., and an active candidate in the ill-fated attempt to unseat Speaker Joe Straus at the beginning of the current session, Chisum has not had a committee chairmanship since Tom Craddick was toppled in 2009.

Recent recommendations from the Sunset Advisory Commission call for changing the name of the agency to the Texas Oil and Gas Commission and restructuring it to be governed by a single statewide elected official who would serve a four-year term concurrent with the governor and the other major statewides.  Chisum disagrees with the move to change the RRC from a three member elected commission to a single elected commissioner.

If he does enter next year’s Railroad Commission primary, Chisum starts with a heavy “war chest.”   His current report on file with the Texas Ethics Commission shows him with more than $632,000 cash on hand.

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The Texas Railroad Commission added an emergency item to their agenda today so it could hear from the Texas Energy Reliability Council about natural gas service’s impact on the rolling blackouts that swept the state.  They told the Commission that Texas was never in danger of a natural gas shortage during last week’s statewide deep freeze and no electric generating company with an “uninterruptible” contract for gas had to do without.

Of course, one could also read that as gas supplies could have been interupted at generating facilities that chose to purchase their fuel under contracts offered at a lower price, but with the risk that delivery cannot be absolutely guaranteed in all circumstances.  That is, in fact what happened, so if those plants had been able to get delivery of natural gas, it is possible that the state might have been in danger of a natural gas shortage.

During the prolonged winter storm, gas production in the Barnett Shale was shut down as well as some others around the state. But that short-term gap in supply was filled by tapping reserves warehoused in underground salt domes, at least for those power plants that had uninteruptable contracts.

But be forwarned,  the Electric Reliability Council of Texas (ERCOT) warns that more blackouts might be needed as state braces for Arctic Blast Round 2 and  issued another plea for conservation, especially during the peak-use hours of 6 a.m. to 9 a.m. and 4 p.m. to 8 p.m., saying the grid is still down some 2,700 megawatts of capacity and that rolling blackouts might return with the next round of sub-freezing weather.

ERCOT said tomorrow’s peak demand is projected to exceed 54,000 megawatts between 8 p.m. and 9 p.m. , and then top 58,000 megawatts between 7 and 8 Thursday morning. That would surpass the current winter peak demand record of 56,334 megawatts, which occurred Feb. 2.

Today’s hearing at the Railroad Commission was the first public review of the circumstances surrounding the rolling blackouts. It focused solely on natural gas supplies and production.

A more comprehensive hearing will occur Feb. 15 when the Senate Business and Commerce Committee meets jointly with the Natural Resources Committee to review issues surrounding the outages.

If you want to watch today’s hearing, you can catch it online at www.texasadmin.com.


By promoting cleaner energy, cleaner government, and cleaner air for all Texans, we hope to provide for a healthy place to live and prosper. We are Public Citizen Texas

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