The election of the next chairman of the Texas Railroad Commission, the office charged with regulating the state oil and gas industry, will test whether more endorsements and experience can help one candidate overcome an even bigger handicap — the ‘D’ next to his name.
The race between Democrat Jeff Weems, a lawyer from Houston, and Republican David Porter, an accountant from Giddings, takes on added significance as the commission approaches review in the next legislative session by the Sunset Advisory Commission, which can make recommendations to overhaul or abolish ineffective state agency bodies. Hearings on the railroad commission end in November.
Since 1994, Republicans have been charge of regulating the Texas oil and gas industry, but after incumbent Victor Carrillo was upset in the Republican primary by the little-known Porter, Democrats began to view the seat as a statewide office that could potentially change hands. A UT/Texas Tribune poll released Monday shows Porter leading Weems 50 percent to 34 percent. In the poll, undecided voters were pressed to choose a candidate.
Low natural gas prices in the current economy could mean a slow down in drilling activity, said Justin Furnace, president of the Texas Independent Producers and Royalty Owners Association.
“Leadership is needed during the slowdown to fix issues at the railroad commission and find ways to encourage operators to invest in Texas,” Furnace said.
The UT System owns 2 million acres of oil and gas-rich land, about half of which are leased to companies for oil and gas exploration. Oil and gas prices affect the value of those lands to UT. Jim Benson, director of University Lands, said the UT System is in tune with the daily operations of the commission, which oversees drilling, pipeline leaks and other environmental issues.
“We work in concert with the railroad commission. We also have people looking after UT System institutions’ interest in the Permanent University Fund lands,” Benson said. “The railroad commission is a tremendous tool that we utilize.”
Small-percentage payouts from the Permanent University Fund pay for certain academic programs and other critical items at UT Austin and 16 other institutions in the UT and Texas A&M systems. According to the UT System’s quarterly prediction, recovering oil prices will greatly increase UT’s payout.
Weems, who received six major newspaper endorsements, said commissioners should fight for continued support of the agency so that it has the manpower to enforce environmental regulations. He said Republican commissioners brag about cutting their budget to the point that the body can’t do its job, which led to lax regulation and increasingly ignored safety issues in locations such as the Barnett Shale in North Texas.
“The field people could fix [environmental issues in the Barnett Shale] quickly, but instead the EPA and the TCEQ will come in, stumble around and do things that don’t fix the problem and screw up the job-creating aspect of the industry,” Weems said.
Weems has received $38,000 from lawyers and lobbyists. Porter has received $12,500 from the energy and natural resources sector. Carillo had received $168,000 from the energy and natural resources sector.
Porter said in the state’s present budget crisis, the commission will have to do more with less to maintain the regulatory functions of the commission and keep families near drilling activities safe. Porter said he looks at regulations from the point of view of people who have to comply with them.
“If they can’t comply with them, it doesn’t matter what it’s supposed to achieve,” he said. “Compliance is what’s going to achieve the safety goals that [the regulation] has got in mind.”
But Andrew Wheat, research director for Texans for Public Justice, said the railroad commission is a textbook example of a “captured agency,” a state agency beholden to the interests of the industry it is supposed to regulate. Current railroad commissioners have received 40 to 45 percent of their campaign donations from the oil industry, which he said is a “huge conflict” of interest. Donations from lawyers and lobbyists with interests in matters that the commission regulates is also a potential conflict of interest, Wheat said.