Texas Railroad Commission program draws fire at industry hearing

The Texas Railroad Commission's newly approved risk-based program for dealing with spills and other oil field mishaps drew fire from several industry representatives at the annual State of the Oil and Gas Industry meeting Wednesday in Austin.


Sam Fletcher
OGJ Online

HOUSTON, July 25 -- The Texas Railroad Commission's newly approved risk-based program for dealing with spills and other oil field mishaps drew fire from several industry representatives at the annual State of the Oil and Gas Industry meeting Wednesday in Austin.

"RBCA (pronounced Rebecca) is a dirty lady," said Clayton Williams, head of Clayton Williams Energy Inc. of Midland, Tex., and one-time Republican candidate for governor, using an acronym for the program's earlier designation as Risk-Based Corrective Action.

However, state officials said that title was changed "because it implies that corrective action will take place." The program is now designated as Risk-Based Decision Making (RBDM), although industry representatives and Commission Chairman Michael L. Williams repeatedly referred to it as RBCA at Wednesday's hearing.

Commissioners earlier reported that the program is the first of its kind in the US to use a "range land" designation that requires less cleanup in remote areas where there's less risk of human contact.

In a statement issued last week, Commissioner Tony Garza said the three-man commission that regulates oil and gas operations in Texas recently voted 2-1 to "move forward" with the program aimed at protecting the public and environment. "RBDM will no doubt become the standard in our state for dealing with crude oil and condensate spills in environmentally sensitive areas," he said.

However, Williams said Wednesday, "The last thing most independents need is more regulation." He claimed the new 250-page regulatory program requires producers to fill out "16-36 new forms."

That means "more lawyers, more accountants, more overhead, more trouble, with less results," said Williams. "I'd rather hire more petroleum engineers instead of more accountants," he told commissioners. "If it ain't broke, don't fix it."

Williams and other critics claimed that program and more stringent requirements for plugging and abandoning idle wells represent a move away from the previous level of successful cooperation between the Railroad Commission and the industry to a more adversarial attitude.

Industry witnesses at the hearing complained that independent producers were completely cut out of earlier conferences when the program was being formulated, while input was provided by other state agencies that, unlike the Texas Railroad Commission, have no regulatory authority over the oil and gas commission.

An executive of the Texas Alliance of Energy Producers called on commissioners to "rescind RBCA and come back to the drawing board with all of the industry represented."

The three commissioners did not respond immediately to critics at the daylong hearing. However, in his earlier statement, Garza said the program was developed "with significant input from the Texas Oil and Gas Association, Gas Research Institute, and American Petroleum Institute."

He said, "Initially, a representative of the Texas Independent Producers & Royalty Owners Association attended these meetings and, while their attendance waned, TIPRO has agreed to assist in our upcoming workshops on the RBDM proposal." The first workshop was scheduled Tuesday in Austin. The remaining workshops are slated Aug. 8 in Wichita Falls, Aug. 15 in Midland, and Aug. 22 in Houston.

A TIPRO representative gave some support to RBDM Wednesday, claiming that just because it's complicated doesn't necessarily mean it's a bad method for addressing growing public concern over environmental safety. However, he said commissioners must give the industry time to analyze all aspects of the program.

At the start of Wednesday's meeting, the three commissioners presented their annual Pioneer Award to Frank Pitts, 90, of Pitts Oil Co., Fort Worth, who has operated as an independent producer in Texas for more than 58 years.

In accepting that award, Pitts noted that Texas' total oil production last year was 200 million bbl less than in 1943 "when I drilled my first Texas well."

"There has been a serious decline in our business in Texas," he said. "I would encourage the Railroad Commission to seek industry input, particularly from the independents, before imposing regulation. We can't afford to be overburdened with more complex regulation."

Contact Sam Fletcher at samf@ogjonline.com

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