The industry-friendly Texas Railroad Commission would do abetter job of determining the fees the energy companies pay intothe state’s Oilfield Cleanup Fund — but it needs to beef up itsrole in regulating pipelines — according to a report by the TexasSunset Advisory Commission. Some of the criticisms noted areexpected to be corrected in pending proposals at TRC.
The Sunset commission, which watchdogs all of the state’sadministrative departments and then forwards its findings to theTexas Legislature for action, found that “state regulation ofpipelines does not adequately protect the public,” and that “theRailroad Commission does not have a clear process for determiningwhich pipelines outside its scope of jurisdiction need safetyregulation” The report noted that the Sunset commission’s specialinvestigation of Texas pipelines and gathering lines found 427safety problems, of which 262 were in unregulated lines. Flow linesand rural gathering lines generally are exempt.
Key recommendations include requiring TRC to find a way to bringpipelines outside its jurisdiction under regulation; requiringoperators to submit an assessment or testing plan; and improve itsenforcement.
Texas has 280,000 miles of pipelines transporting natural gas,hazardous liquids and crude oil. Within TRC, 28 inspectors spendnearly 85% of their time inspecting natural gas lines and 15% onhazardous liquids lines, all which are supposed to be inspectedevery “one to three years.” But because “22 persons have died and175 have been injured” because of pipeline accidents, the reportrecommended that TRC use special investigations to determine pipeconditions.
“Other state agencies have developed processes to ensurecompliance and enforcement consistency,” said the report. However,as of November, the TRC’s administrative penalty schedule todetermine fines for violations was only for “guidance” and not setin statute, “potentially resulting in holding some pipelineoperators or owners to a different standard of accountability thanothers.”
Earlier this year, the three TRC commissioners unanimouslyapproved Chairman Michael Williams’ pipeline proposals, which willrequire more integrity management of pipelines, enforcement andspecialized safety audits. The proposals have not yet been enacted.
At the time, Williams said that “safety must be our number onepriority.” He said TRC’s proposal will “raise the bar for pipelinesafety,” with more inspections and more stringent enforcement.
In other findings, the review determined that Texas law does not”effectively ensure the financial assurance of oil and gasoperators and producers, potentially leaving the state liable forpollution and abandoned wells.” Also, TRC is limited in itsability to plug abandoned wells and clean oil field sites. Thereport suggested two things: don’t allow any more abandoned wells,and second, devote more resources to cleaning up the ones alreadythere.
The Sunset staff, comprised of government, industry and academicrepresentatives, had been pressured by citizens groups andlegislators to consider reducing TRC’s power by consolidating ortransferring some of its functions to other departments. While thereport noted that “opportunities exist,” each of the options hasdrawbacks. “As a result, the agency and its programs continue toperform essential functions and should be continued.”
Overall, the report was favorable toward the TRC, recommendingthat it continue for another 12 years in its mission, which is “toprotect the state’s natural resources, the environment and publicsafety through the regulation of the oil and gas industry, pipelinetransporters, natural gas utilities, rail safety and surfacemining.”
Public hearings on the report are scheduled for Dec. 12 and 13in Austin. To access the report or to learn more about the publichearings, visit www.sunset.state.tx.us, or call the Sunset AdvisoryCommission at (512) 463-1300.
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