RRC Facing Budget Challenges

  Texas Railroad Commission

Texas Railroad Commission

The Texas Railroad Commission is facing a budget crunch as oil and gas prices continue to lag.

Related: Texas Oilfield Relief Initiative Takes Shape

RRC Chairman Christi Craddick is hoping the Texas Legislature will move to fully fund the agency during its current session, according to Midland Reporter-Telegram.  The agency is funded mostly by oil and gas activity, which has suffered severe declines since prices crashed two years ago.

Craddick is looking for ways to augment the falling revenue, which has taken a toll on the agency’s personnel department. She said the agency’s number of employees drop from 1500 in the 1990’s to 690 today.  The jobs shortage presents a huge challenge for the agency, because the work still has to be done.

One alternate source of revenue could potentially come from a natural gas utility tax, which could be diverted directly to the Railroad Commission.

In August, Craddick revealed details this week on the Texas Oilfield Relief Initiative, a new project designed to make the state’s energy regulatory body more efficient and effective. The initiative is designed to ensure public and environmental protections while also reducing the regulatory administrative burden on industry.

Our idea is, make it easier for more people to continue to produce. Make it easier for them to have more people out on the ground drilling, and have less paperwork. And what does that do long-term for the state? Job creation is important to this state. Oil and gas provides about 30% of the jobs in Texas.
— Railroad Commission Chairman, Christi Craddick.

Some details of the Texas Oilfield Relief Initiative that will reduce administrative burdens include:

  • Identify agency reports and filings that can be reduced or eliminated
  • Amend rules to modify gas well deliverability reporting requirements
  • Reduce the need for G-10  filings except for surface commingled production
  • Allow a calculated well shut-in pressure to be provided when filing Form G-10 for gas wells
  • Amend production requirements for marginal and stripper wells
  • Revise “Active Oil Well” definition from ten barrels of oil (BO) per month for 3 consecutive months to five BO per month for 3 consecutive months or any reported production in each month for a consecutive 12 month period (SWR 15)
  • Revise “Active Gas Well” definition from 100 mcfg per month to 50 mcfg per month or any reported production in each month for a consecutive 12 month period (SWR 15)
  • Implement a revised internal inspection priority system
  • Identify counties in which the usable quality water protection depth is constant
  • Issue guidance for implementation of the Texas Environmental, Health & Safety Audit Privilege Act
  • Eliminate forms no longer useful to the Commission’s regulatory functions to reduce regulatory administrative burden on staff and industry
  • Simplify the complete duplication of a drilling permit application with a sworn statement of no changes to the original application

In the following video, Commissioner Craddick talks about the Oilfield Initiative.