November 21, 2011 at 9:34 AM
Ames Jones & Porter: Preserve the model that has served Texas well

Published April 1, 2011 by the Austin American Statesman

Today, the Railroad Commission of Texas, the oldest regulatory agency in our great state, will celebrate its 120th birthday. While we no longer regulate the rail industry and our name may seem a bit confusing, we remain the gold standard of regulatory bodies in America.

As our name implies, the commission was originally established to oversee railroads, but over the last 100 years the state and federal transportation commissions have taken over that role, and the mission of the Railroad Commission has transformed into overseeing subsurface extraction and mining of Texas's bountiful natural resources below the ground's surface. We are charged with protecting against the waste of mineral resources in the many different industries involved in that arena, including the oil and natural gas businesses. It is our successful track record in regulating the energy sector that has caused the rest of the country and other nations to look to Texas for a template for their energy regulatory agencies.

From 1901 when the Spindletop gusher began a new era for Texas and the nation, to the early 1930s when the East Texas oil field was discovered and now as the Barnett Shale in North Texas has shown the world how to unlock the oil and gas in shale formations scattered across the globe, Texas and the Railroad Commission of Texas have played a leading role in oil and gas policy statewide, nationally and internationally. Even the Allied victory during World War II has been attributed to Texas oil as it has commonly been stated that the "Allies floated to victory on a sea of oil." It is well known that the oil came from the East Texas oil field.

That tradition continues today as we embark on a new generation of energy discoveries. Based on the successful model developed by the Railroad Commission in the Barnett Shale, Texas looks to continue to play a vital role in bringing natural gas to market through the development of the Eagle Ford Shale in South and East Texas and other shale plays around the state.

As an example of the economic upside of a well-regulated industry, the Barnett Shale currently employs approximately 100,000 people, and the Eagle Ford is already supporting over 13,000 full time jobs. Even the most modest projections show that by 2020 the Eagle Ford will support approximately 68,000 full time jobs. Furthermore, energy production statewide employs approximately 315,000 Texans and contributed $8.5 billion to state and local taxes, royalties, and the rainy day fund last year.

As drastic changes to the Railroad Commission are being debated by the Legislature through the Sunset process, we urge careful consideration of changes to a system that has served Texas, the United States of America and their respective citizens well since 1891. As we Texans tell our colleagues in Washington, D.C., businesses need the consistency and clarity that sensible regulation provides. Now is not the time for major restructuring of a governmental model that is envied and imitated around the world. With the increasing importance of domestic natural gas and oil, we ought to keep the model that has served Texans well for so long through good times and bad.