American Oil and Gas Reporter - October 2016 - 93

ConventionSection: Permian Basin Petroleum Association

Association Champions
Simple Sunset Bill
By Danny Boyd
Special Correspondent
AUSTIN, TX.-Members of the Permian Basin Petroleum Association gather
for their annual meeting Oct. 26-27 in
Midland hopeful that the Texas Legislature
will pass a simple, single bill reauthorizing
the Railroad Commission of Texas for
12 years under the state's sunset review
process.
The need for a strong regulatory agency
is imperative, PBPA President Ben Shepperd told members in an update on the
work of the Sunset Advisory Commission,
a 12-member panel of lawmakers and
citizens expected to forward draft legislation to lawmakers in November.
"PBPA believes the need to reauthorize
the Railroad Commission is clear, and
we hope the committee will consider
leaving the more controversial provisions
out of the sunset bill itself and allow
those recommendations to be brought
forward as separate legislation or not at
all," Shepperd reports.
Recounting public testimony before
the Sunset Commission at an Aug. 22
hearing, Shepperd says he stressed that
the Railroad Commission was in a different
place than it was in three previous sessions
when RRC reauthorization was considered
and postponed.
"Today, the commission is a strong
and effective regulatory entity," he says.
"In our view, the leadership and staff are
totally committed to fulfilling their responsibilities to the people of Texas."
In previous sessions, legislators took
out their frustrations with individual commissioners on the agency, Shepperd suggests. But this year, frustrations voiced
at the August hearing were directed largely
at the Sunset Commission staff and not
railroad commissioners, he says, adding
several members of the Sunset Commission took issue with the staff recommendations and asked tough questions in the
hearing.
PBPA Executive Vice President Stephen
Robertson says the association believes
the RRC's sunset review process has
gone on long enough. "Issues that may

include differences of opinion can be
dealt with in separate legislation," he
maintains. "They absolutely should be
discussed, but shouldn't be allowed to
again prevent the process from moving
forward.
"I think everybody can agree that we
need a strong body in the state to regulate
oil and gas. We in the PBPA believe that
agency is the Railroad Commission, and
it does a good job," Robertson continues.
"We need for the commission and its
staff to know they are trusted to do that
job, and to focus their time and energy
on that job rather than a sunset review
every two years."
PBPA Positions
Two-thirds of Texas' annual oil production comes from the Permian Basin,
Shepperd pointed out in a May 13 letter
to the Sunset Review Commission, reinforcing the RRC's importance to the nation's premier oil-producing region.
"The PBPA strongly supports the continuation of the Railroad Commission,"
Shepperd told state Representative Larry
Gonzales, R-Round Rock, who chairs
the Sunset Advisory Commission, and
Senator Van Taylor, R-Plano, the vice
chairman.
"The commission has regulated the
oil and gas industry effectively for approximately 100 years, while adapting to
changing industry conditions and protecting the environment," Shepperd wrote.
Shepperd said PBPA did not support
an agency name change, but if the issue
was considered a priority, it should be
taken up separately with other issues.
In subsequent written comments on
Sunset Advisory Commission staff proposals, PBPA also stated opposition to
transferring contested natural gas utility
cases to the State Office of Administrative
Hearings, and expressed opposition to a
proposal for contested case hearings to
be transferred to the SOAH.
"PBPA believes the RRC has an effective, well-established hearings process
that ensures fairness to all parties," the
association states.
The association also opposes trans-

ferring gas utility regulation from the
Railroad Commission to the Texas Public
Utility Commission.
Despite a sunset review staff proposal
to require the Railroad Commission to
develop a strategic plan for the Oil &
Gas Division that tracks and measures
the effectiveness of monitoring and enforcement, PBPA says it believes the
commission already has processes in
place to track and measure its enforcement
efforts. However, PBPA encourages efforts
to improve the process.
The association opposes a requirement
for the RRC to develop in rule a process
for issuing expedited penalties for minor
violations. It comments, "PBPA believes
the commission's process for tracking
and resolving minor violations is working
appropriately. Most of these violations
are resolved in an expedited manner."
PBPA also opposes a recommendation
for the RRC to track and report the
number of oil and gas violations quarterly
and annually, which it notes the commission does already. The association has
no qualms with a proposal to systematically track major violations. PBPA also
states that it does not oppose a suggestion
the RRC develop a definition of repeat
violations in rule and report the number
of repeat violations on its website.
"Efforts to improve the current system
would be welcomed, specifically, identifying the differences between minor administrative violations and more significant
violations with safety or environmental
consequences," PBPA writes.
The association supports a call for the
RRC to audit a sample of oil and natural
gas production and transportation reports,
and supports proposals for the agency to
require production reports be filed electronically and expand the RRC risk matrix
for oil and gas inspections.
No Bonding Changes
However, PBPA opposes the recommendation to amend blanket bond requirements in statute. In support of increasing financial assurance requirements,
the Sunset Advisory Commission staff
report states that bond funds collected
OCTOBER 2016 93



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American Oil and Gas Reporter - October 2016 - Contents
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