Legislature tackles revamping of Texas energy regulator

At least one thing was clear after a contentious four-hour meeting of the Energy Resources Committee this week: Passing a bill to reauthorize the Texas Railroad Commission won’t be easy.

The House committee held its initial hearing on a key bill, filed by Sunset Advisory Commission Chairman Dennis Bonnen, R-Angleton, which addresses many of the issues raised during the Sunset review of the Railroad Commission.

A similar bill stalled two years ago, although some changes were approved separately and the commission implemented others on its own.

But major issues — including renaming the commission to better reflect its mission, setting limits on when and from whom the elected commissioners can raise campaign contributions and a proposal to abolish a $20 million cap on the Oil and Gas Regulation and Cleanup Fund — remain unresolved.

There was no agreement on what the new name should be, or even whether it should be changed. Nor did the committee, Bonnen or incumbent commissioners agree on whether the name should be changed by legislative action — preferred by Bonnen and Sunset staff — or by constitutional amendment, as all three commissioners prefer.

“It’s a pretty good bill, with a couple of things we’d like to continue working on,” Commissioner Christi Craddick said.

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That’s guaranteed. Before the meeting ended late Wednesday evening, Energy Resources Chairman Jim Keffer, R-Eastland, announced the group would “start working with (Sunset) Chairman Bonnen intently next week.”

The Railroad Commission regulates oil and gas drilling and production, as well as coal and uranium mining and pipeline safety. Its authority over the railroads ended in 2005.

Bonnen and Sunset staff suggested renaming it the Texas Energy Resources Commission. All three commissioners prefer the Texas Energy Commission.

Rep. Myra Crownover, R-Denton and vice-chair of the Energy Resources Committee, said she wants to keep the original name.

“It has a great history,” she said. “I would hate to see that name go away. … It’s much ado about nothing here.”

But the evening’s most contentious issues centered around whether to restrict Railroad Commissioners’ political fundraising and electoral activities more than other non-judicial statewide officeholders and whether to require any changes be approved by amending the state constitution.

Bonnen said two previous attorney general opinions have found that the change could be made by legislative action. But several legislators worried that such a move would allow later legislatures to change the governing structure of the commission.

Rep. Lon Burnam, D-Fort Worth, said he didn’t think a constitutional amendment is necessary but that it would be a “cleaner” way to make the change.

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The bill would require commissioners to resign before running for another office and would limit when, and from whom, they can collect campaign contributions. Bonnen said that’s because they draw contributions so heavily from one sector, the oil and gas industry.

The three commissioners disagree that the change is needed.

The provision drew support from some witnesses, including Tom “Smitty” Smith, director of Public Citizen Texas and Cyrus Reed of the Lone Star chapter of the Sierra Club.

The current commissioners and several legislators said it is too onerous.

“We wanted to be treated like every other statewide official,” Commission Chairman Barry Smitherman said.

He and Commissioner David Porter said they use campaign contributions for travel expenses not covered by the state; Smitherman said he also uses campaign money to boost pay for one staff member.

Joseph Reed, project manager for the Sunset Advisory Commission, said the recommendation to limit campaign contributions is an attempt “to get at the conflict between the commissioners and the industry they regulate.”

A large part of the commissioners’ duties involves hearing contested regulatory cases, Reed said.

Other state agencies use the State Office of Administrative Hearings to settle contested cases, but the Railroad Commission does not.

“The one distinction between the Railroad Commission and other statewide officials is its regulatory role,” Reed said. “Its sole purpose is to regulate the most important industry in Texas, the oil and gas industry.”