Texas Railroad Commission Keeps Lone Star State Pipelines on Track

The Texas Railroad Commission, which given its name seems more likely to have more in common with Amtrak than fracking, uniquely plays a key role with jurisdiction over the Lone Star State's oil and gas pipelines.

The state’s oldest regulatory agency, the Railroad Commission of Texas is celebrating 130 years in 2021.

“Created in April 1891, the Railroad Commission of Texas is one of the most important regulatory bodies in the United States,” says the commission’s official history. “It formed in the days before Texas became synonymous with the oil and gas industry and has adapted to modern technology that now connects people from anywhere in the world.”

Texas Railroad Commission No Longer Regulates Its Namesake

While the government agency started with jurisdiction over the rates and operations of railroads, terminals, wharves, and express companies, the Railroad Commission of Texas now no longer overseas any authority over railroads but has primary regulatory jurisdiction over the:

• Oil and gas industry
• Pipeline transporters
• Natural gas and hazardous liquid pipeline industry
• Natural gas utilities
• LP-gas industry
• Coal and uranium surface mining operations.

“The Commission exists under provisions of the Texas Constitution and exercises its statutory responsibilities under state and federal laws for regulation and enforcement of the state’s energy industries,” says the Texas Railroad Commission.

The Railroad Commission of Texas has regulatory and enforcement responsibilities under federal law including the:

• Surface Coal Mining Control and Reclamation Act
• Safe Drinking Water Act
• Pipeline Safety Acts
• Resource Conservation Recovery Act
• Clean Water Act.

History of the Railroad Commission of Texas

The genesis of the Railroad Commission of Texas started as a plank in the gubernatorial campaign of James S. Hogg in 1890. When Hogg was elected, the Texas Legislature passed a bill that constitutionally created the commission on April 3, 1891.

The first Railroad Commission of Texas featured chairman John H. Reagan, along with commissioners Judge William Pinckney McLean and Lafayette L. Foster, all three appointed by Hogg.

In 1894, the Texas Legislature made the agency elective with the three commissioners serving overlapping six-year terms.

Railroad Commission of Texas Transition to Energy

In 1917, with oil and gas pipelines considered common carriers like railroads, the Texas Legislature first assigned energy duties to the Railroad Commission of Texas with the passage of the Pipeline Petroleum Law.

The commission’s energy regulatory scope increased two years later when the 1919 Oil and Gas Conservation Law assigned jurisdiction to regulate the production of oil and gas to the agency.

“The Railroad Commission adopted the first statewide rules regulating the oil and gas industry to promote conservation and safety, including Rule 37 which requires minimum distances between wells at drilling sites to protect field pressure and correlative rights,” says the agency.

Agency Expands Regulatory Scope in 1920s, 1930s

The agency’s oil and gas regulatory duties continued to expand during the 1920s and 1930s:

• The Gas Utilities Act of 1920 gave the commission regulatory and rate authority over individuals and businesses producing, transporting, or distributing natural gas in Texas.
• In the early 1930s the commission began to set the rate at which every oil well in Texas might produce, a process known as proration. By limiting production in East Texas, and elsewhere, the agency succeeded in supporting oil prices and in conserving the state’s resources.
• After a 1937 natural gas explosion in a school in New London, Texas, the State Legislature gave the agency the authority to adopt rules and regulations pertaining to the odorization of natural gas or liquefied petroleum gases.
• In 1939 regulation of liquefied petroleum was added to the commission’s responsibilities with legislation that authorized the commission to adopt and enforce safety rules and standards in the storage, handling, transportation, and odorization of butane or LP-gases.

Commission Evolves Along with Oil and Gas Practices

The Railroad Commission of Texas has continued to evolve with the State Legislature continuing to define its role, especially in the oil and gas sector.

Additional jurisdiction now includes:

• In 1983 regulation of compressed natural gas (CNG) was added to the Railroad Commission of Texas responsibilities.
• In 2012, Texas became one of the first states to address fracking issues when the Railroad Commission implemented the Hydraulic Fracturing Disclosure Rule which requires disclosure of chemical ingredients used in hydraulic fracturing fluids.
• In 2014 the Railroad Commission adopted disposal well rule amendments to address disposal well operations in areas of historical or future seismic activity.
• In 2016 the agency announced permitting requirements for recycling treated domestic wastewater and mobile drinking wastewater treatment systems at oil and gas drill sites.

So, despite its name, the agency continues to play a key role in inspections of oil and gas wells, pipeline infrastructure, alternative facilities, and coal surface mining sites.