Texas lawmakers weighing proposed reform of Railroad Commission

A name change may be appropriate for the Texas Railroad Commission, as it has not regulated railroads since 2005.

The Railroad Commission of Texas was established in 1891 under a state law that explicitly gave it the authority to regulate the "rates and operations of railroads, terminals, wharves and express companies." During the previous year, the state constitution had been amended to allow the action.

The first three commissioners were appointed by then-Governor James Hogg, although a subsequent constitutional amendment provided for the Railroad Commission's members to be directly elected in 1894.

It would not be long before major oil discoveries sparked the growth of a major new industry in the state. With oil and gas wells proliferating quickly and a compelling need to ensure that energy production was being handled safely, the legislature gave jurisdiction over the sector to the Railroad Commission.

Initially, the regulatory body used its authority to limit the pace of oil and gas production in line with market demand. However, during the 1930s, the state legislature passed laws explicitly forbidding this practice, with the goal of unleashing the sector's economic potential. The ban was later repealed, although the commission was prohibited from restricting the exploration of unproven territories.

As the years passed, the commission was granted new responsibilities, such as the regulation of commercial buses and trucks. Over time, the panel's name became increasingly inaccurate as areas of authority were shifted between different agencies. In 2005 state lawmakers transferred the last of the commission's responsibility for regulating railroads to the Texas Department of Transportation.

Since then, the Railroad Commission has focused solely on the energy sector, with the responsibility for overseeing all wells, pipelines and parts of the production process.

Proposed name would reflect Railroad Commission's modern role

Earlier this month, the Texas Senate passed a bill that would change the commission's name to the Texas Energy Resources Commission. The legislation, which was introduced by State Senator Robert Nicholas, would also place new restrictions on those who serve as commissioners.

The main limitations would be on commissioners' ability to accept campaign contributions.  They would be forbidden from accepting money from parties involved in contested case hearings and their fundraising would be limited to the 17 months before an election and the 30 days after.

Commissioners would also be required to resign from their position in order to be eligible to run for a different office more than 18 months before their term is scheduled to end. Senator Nicholas said that this is necessary because there is a perception among the state's politicians that the Railroad Commission is a "stepping stone" on the path to higher office.

Several commissioners expressed reservations about the campaign finance reforms and although no one argued against the name change, several alternative options were proposed. Commissioner Christi Craddick suggested the Texas Energy Commission, while State Senator Glen Hagar said he preferred the Texas Department of Oil and Gas. However, Hagar conceded that one of his primary reasons for supporting that option is because the acronym would be "TDOG," which "sounds cool."

In the end, the Senate kept the name "Texas Energy Resources Commission" in the bill. The House is currently considering the proposal, although with relatively little time left in the current legislative session and a competing proposal already on the floor in the House, its chances of becoming law in the near future may be slim.