Self-Evaluation Report

SELF-EVALUATION REPORT SUBMITTED TO THE SUNSET COMMISSION SEPTEMBER 2011 DAVID PORTER ELIZABETH AMES JONES BARRY T. S MITHERMAN COMMISSIONER CHAIRMAN COMMISSIONER RAILROAD COMMISSION OF TEXAS SELF EVALUATION REPORT TABLE OF CONTENTS I. Agency Contact Information ..................................................................................................................................................5 II. Key Functions and Performance ..........................................................................................................................................7 III. HIstory and Major Events ................................................................................................................................................. 21 IV. Policymaking Structure ..................................................................................................................................................... 29 V. Funding ................................................................................................................................................................................ 35 VI. Organization ........................................................................................................................................................................47 VII. Guide to Agency Programs 1. Energy Resource Development ....................................................................................................... 51 2. Gas Utilities Rates and Compliance ................................................................................................ 61 3. Alternative Fuels Research and Education ....................................................................................... 69 4. Pipeline and LPG/CNG/LNG Safety .............................................................................................. 77 5. Monitoring and Inspections ............................................................................................................ 87 6. Surface Mining Regulation .......................................................................................................... 103 7. Oil and Gas Remediation ............................................................................................................ 115 8. Oil and Gas Well Plugging .......................................................................................................... 123 9. Abandoned Mine Lands .............................................................................................................. 131 10. Geographic Information Systems and Well Mapping ................................................................... 137 11. Public Information and Services ................................................................................................. 143 VIII. Statutory Authority and Recent Legislation ............................................................................................................... 149 IX. Policy Issues .................................................................................................................................................................... 171 X. Other Contacts ................................................................................................................................................................. 173 XI. Additional Information .................................................................................................................................................... 181 XII. Agency Comments ......................................................................................................................................................... 187 List Of Attachments .............................................................................................................................................................. 189 Biographies Chairman Elizabeth Ames Jones ...................................................................................................... 193 Commissioner David Porter ............................................................................................................. 194 Commissioner Barry T. Smitherman .................................................................................................. 195 Regional Map ........................................................................................................................................................................ 197 TABLE OF CONTENTS - 3 RAILROAD COMMISSION OF TEXAS SELF EVALUATION REPORT 4 - TABLE OF CONTENTS RAILROAD COMMISSION OF TEXAS SELF EVALUATION REPORT I. AGENCY CONTACT INFORMATION Railroad Commission of Texas Exhibit 1: Agency Contacts Name Address Telephone & Fax E-Mail Address Numbers Agency Head Elizabeth Ames Jones, Chairman David Porter, Commissioner Barry T. Smitherman, 1701 N. Congress Commissioner Ave. John Tintera, Executive P.O. Box 12967 512 463 7068 [email protected]. Director tx.us Austin, TX 78711-2967 512 463 7000 Agency’s Sunset Stacie Fowler, Director, 512 463 7086 [email protected]. Liaisons Intergovernmental tx.us Relations 512 463 7000 Colleen Forrest, Policy 512 463 2645 [email protected]. and Performance tx.us Coordinator 512 463 7000 I. AGENCY CONTACT INFORMATION - 5 RAILROAD COMMISSION OF TEXAS SELF EVALUATION REPORT 6 - I. AGENCY CONTACT INFORMATION RAILROAD COMMISSION OF TEXAS SELF EVALUATION REPORT II. KEY FUNCTIONS AND PERFORMANCE A. Provide an overview of your agency’s mission, objectives, and key functions. The Railroad Commission of Texas (RRC) is the oldest regulatory agency in Texas and one of the oldest in the United States. It was established in 1891 to regulate the rail industry with jurisdiction over rates and operations of railroads, terminals, wharves, and express companies. The RRC’s oversight responsibility has changed and expanded over its 118 year history to encompass many different industries, particularly the oil, natural gas, and coal mining industries. Presently the RRC is the state agency with primary regulatory jurisdiction over the oil and natural gas industry, pipeline transporters, the natural gas and hazardous liquid pipeline industry, natural gas utilities, the LP-gas industry, alternative fuels, coal surface mining, and uranium exploration operations. In its regulatory role, the RRC has environmental and safety responsibilities related to oil and gas production. An overarching agency goal is to encourage the responsible development of natural resources while protecting the environment. Our mission is to serve Texas by our stewardship of natural resources and the environment, our concern for personal and community safety, and our support of enhanced development and economic vitality for the benefi t of Texans. We support the development, management, and use of Texas’ oil and gas energy resources to protect correlative rights, provide equal and fair energy access to all entities, ensure reasonable gas utility rates, and promote research and education on use of alternative fuels. We advance safety in the delivery and use of Texas petroleum products through training, monitoring and enforcement. We help assure that Texas fossil fuel energy production, storage, restoration of lignite mining areas, and delivery is conducted in a manner that minimizes harmful effects on the state’s environment and preserves natural resources. We strive to maximize electronic government and to minimize paper transactions by developing technological enhancements that promote effi cient regulatory programs and preserve and increase access to public information. II. KEY FUNCTIONS AND PERFORMANCE - 7 RAILROAD COMMISSION OF TEXAS SELF EVALUATION REPORT B. Do each of your key functions continue to serve a clear and ongoing objective? Explain why each of these functions is still needed. What harm would come from no longer performing these functions? The RRC has four key functions that provide necessary regulation of the state’s energy industries, without which Texas would not have a vital pillar of its vibrant economy. Energy Resources: The RRC is responsible for ensuring effective use of the state’s energy resources through the regulation of almost all phases of the oil and gas exploration and production industry, by ensuring fair gas utility rates, and by promoting research and education on the use of alternative fuels. From initial permitting to drill a well to its fi nal plugging, each oil and gas well in the state is monitored and regulated by the RRC. Currently, the Texas oil and gas industry encompasses approximately 10,718 business enterprises operating over 285,937 active producing oil and gas wells as of May 28, 2011. Through its regulation, the RRC protects both adjacent mineral interest owners’ interests, and reservoirs by regulating the spacing and density of wells, determining fi nancial assurance, mapping wells for future reference, and evaluating potential impacts to underground fresh water access and ensuring that such activities do not negatively affect surface and subsurface water quality. More than 4.5 million residential and business customers rely on the RRC to ensure the availability and reliability of natural gas from the consumer who uses natural gas for essential home heating needs to the farmer who relies on natural gas for feedstock or the major manufacturer who uses natural gas as a process fuel. Further, during peak demand periods over half of the electricity generated in Texas is fueled by

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