Texas Legislature Shows Railroad Commission Support with Budget for Upcoming Fiscal Year

AUSTIN – Texas owes much to its abundance of energy resources, which the Railroad Commission oversees.

The oil and gas industry accounts for roughly 30% of the state’s economy, including $16.3 billion in royalties and taxes paid in 2019, according to the Texas Independent Producers and Royalty Owners Association.

The Texas Legislature, recognizing the importance of these resources to the state, showed continued support for the RRC by approving most of the Commission’s requests during its recent session, which ended on May 31.

The RRC’s budget for the upcoming fiscal year, which begins on Sept. 1, was approved at $144.4 million, which enables the agency to continue to fulfill its most critical mission of protecting public safety and the environment.

The agency regulates the broad spectrum of the state’s vital energy industry, including oil and gas; surface mining of coal and uranium; the alternative fuels of LNG, CNG, and LPG; intrastate pipelines and natural gas utilities. The Legislature’s funding allows the RRC to continue its important work in permitting, compliance and enforcement. The RRC will also be working on weatherization regulations to secure critical gas infrastructure.

RRC’s track record of meeting legislative targets speaks for itself with the agency, despite the pandemic, having already exceeded or on track to exceed legislative goals for the current fiscal year, which ends August 31. Examples of goals already exceeded include:

• Number of oil and gas well and facility inspections performed: exceeded the 189,367 goal four months ahead of schedule in April.
• Number of accident and special pipeline investigations: exceeded the 1,200 target in April.

In recent years, the RRC has been working to modernize its computing systems and move away from its reliance on its aging mainframe system. In its last session, the Legislature provided $21.5 million in House Bill 2 for RRC’s Mainframe Transformation Phase 2. That project will move several permitting processes off the current mainframe system into a more robust cloud-based platform, which further improve efficiencies at the agency and make more data readily available to the public.

Challenges still lie ahead. Despite the price of oil being above $70 per barrel, there has been a slow recovery in drilling permit activity, which has not yet reached pre-pandemic levels. But the agency is keeping a watch on various points of data to track rebounds in the industry.