An Introduction to the

Railroad
Commission
of Texas

The Railroad Commission of Texas (RRC), with its misleading name, has long been a source of mystery to everyday Texans. Here we provide brief summaries of basic aspects of the commission, and some of the common critiques of the commission’s structures and policies that have not been resolved, even after multiple investigations by the state legislature.
The Railroad Commission needs several major reforms:
1
Change the name of the Railroad Commission to reflect the agency’s modern duties.
2
Manage the transition occurring in the energy sector by better preparing for declining revenue and ensuring that operators meet their asset retirement obligations.
3
Increase the number of inspectors and the number of wells inspected per year.
4
Increase penalties to an amount that is higher than the cost of compliance and develop a process to speed the issuance of penalties.
5
Collect real-time production data to better monitor if operators are complying with seal and severance orders.
6
Improve customer service with people filing complaints with the commission and provide an online searchable database of complaints like the Texas Commission on Environmental Quality.
7
Expand language access for complaint reporting and public participation.
8
Adopt a review process for determining “common carrier” status for pipelines and offer affected parties an authentic opportunity to weigh in on routing issues and environmental and safety concerns.
9
Improve financial disclosure, conflict of interest, campaign contribution, and recusal policies to eliminate the possibility of commissioners making decisions on issues in which they may have a financial stake.
10
Transfer contested cases to the State Office of Administrative Hearings rather than the in-house administrative law judge, and transfer authority over gas utility cases to the Public Utility Commission of Texas.

The History and Structure of the Commission

Origin

In the 1800s, railroads served as a centerpiece of Texas life. By shuttling goods and services from one side of the state to the other, railroad companies offered something a horse and buggy could not--a quick and efficient way to get people and things across long distances.

As the railroad industry grew, Texans quickly realized that it wielded an inordinate amount of power. The railroad monopoly, which would later become a talking point in history books across the U.S., became the focus of public outrage, so much so that Texas lawmakers began to be concerned. In 1891, the Texas Legislature established the Railroad Commission of Texas, endowing the agency with the power to regulate one of Texas’ most critical resources--the railroads.

The Railroad Commission of Texas still exists 130 years later, but with the rise of the automobile, the agency’s jurisdiction has changed. As fossil-fueled transportation gained ground in the early 1900s, the Legislature looked to the Railroad Commission to resolve an issue that the agency was already quite familiar with--the potential for a transporter (in this case, petroleum-pipeline operators) to refuse to transport, thereby allowing for monopolies.

The commission already had expertise in regulating monopoly markets, so in 1917 the Texas Legislature decided to broaden the commission’s authority, passing the Pipeline Petroleum Law (Senate Bill 68, 35th Legislature, Regular Session), which declared oil pipelines as “common carriers.” This meant the pipelines were required to provide service to any company--not just private entities under contract--and placed them under the commission's jurisdiction.

This was the first act to designate the Railroad Commission as the agency to administer conservation laws relating to oil and gas. It laid the groundwork for the Railroad Commission to become what we know today: an agency that no longer oversees railroads but instead regulates the Texas oil and gas industry.
The oil boomtown Burkburnett, Texas, in 1919. LIBRARY OF CONGRESS

Misleading Name

A remnant of Texas’ early days, the Railroad Commission of Texas, which now oversees the state’s oil and gas industry, has changed significantly over the years. The commission has changed in function, composition, and even jurisdiction but never in name.

While other states call their oil and gas agencies things like the “New Mexico Oil Conservation Division” and the “Arkansas Oil & Gas Commission,” the name of the Texas regulator, the Railroad Commission of Texas, has remained unchanged.

For many Texans, the name continues to be a source of confusion. Railroad commissioners have reported that only 1 in 10 Texans knows the commission’s main function. State investigations show that members of the public frequently call the Railroad Commission with complaints about trains, over which the commission has no jurisdiction. Some pundits have even predicted that a general lack of knowledge about the agency has swayed the results of statewide elections for seats on the commission.
PHOTO CREDIT: SPECTRUM LOCAL NEWS
“Members of the public also continue to mistakenly call the Railroad Commission with complaints regarding rail noise and safety” - Sunset Advisory Commission, 83rd Legislature

“Confusion about the agency’s name challenges the notion that voters effectively endorse or ratify the policy positions of elected railroad commissioners” - Sunset Advisory Commission, 85th Legislature

With rising concerns about transparency and accountability at the commission, state lawmakers, advocates, and even railroad commissioners themselves have made many attempts to change the commission’s name. As the 2017 Sunset Review Board put it, “the name of an agency for which the public is electing statewide commissioners should not be so clearly misleading.” But each attempt to change the agency’s name has been met with stark resistance. The oil and gas industry largely funds the resistance to changing the name, and likely benefits from the lack of public awareness of the commission’s true functions.

Advocates feel it’s time to ensure Texans understand exactly what this agency does. Our state produces 41% of the nation’s oil. Many advocates feel that Texas voters should be knowledgeable and engaged in these elections, not standing at the ballot box thinking that they’re voting on Amtrak. As former Commissioner Ryan Sitton once said, changing the commission’s name is “about transparency, good government, and keeping people informed about what we’re doing.”

Other states have agency names that more clearly reflect the agency’s role:
New Mexico Oil Conservation Division
Arkansas Oil & Gas Commission
Colorado Oil and Gas Conservation Commission
Wyoming Oil and Gas Conservation Commission
North Dakota Department of Mineral Resources


Mission and Responsibilities

The Railroad Commission holds primary regulatory jurisdiction over much of the Texas oil and gas industry, overseeing everything from pipeline construction and safety to well-permitting and inspections, as well as gas utilities, hazardous waste and well-plugging, hydrocarbon storage, and coal and uranium surface mining. Formed under provisions of the Texas Constitution, the commission derives its authority and responsibilities from state and federal laws for “enforcement of the state’s energy industries” such as the Surface Coal Mining Control and Reclamation Act, the Safe Drinking Water Act, the Pipeline Safety Acts, and others.

The mission of the Railroad Commission of Texas is to serve Texas through stewardship of the state’s natural resources and environment, concern for personal and community safety, and support of enhanced development and economic vitality for the benefit of Texans.

The Legislature tasked the commission with overseeing the oil and natural gas industry, including pipeline transporters, the natural gas and hazardous liquid-pipeline industry, natural gas utilities, and the liquefied petroleum-gas industry, as well coal and uranium surface-mining operations. The commission has often encountered criticism for failing to adhere to its stated mission, particularly its stewardship of the state’s natural resources and environment.

For example, plaintiffs in recent lawsuits against the commission have alleged that the agency violated its statutory obligations to prevent the waste of Texas’ natural resources and provide adequate rulemaking notice to the public.

Commission trouble spots include leaving thousands of abandoned and polluting wells on farms and ranches across the state and having overly restrictive policies on public participation in open meetings and failing to give proper notice about important rulemakings.

Elected 
Commissioners

Three elected decision-makers known as railroad commissioners lead the commission. These three leaders run the commission, deciding everything from what rules to make or repeal to what directives staff at the agency should follow and prioritize.

While the Governor originally appointed railroad commissioners, an amendment to the Texas Constitution in 1894 established the commission seats as the result of statewide elections.

Like U.S. senators, railroad commissioners serve six-year staggered terms, with one commissioner seat appearing on the ballot every two years. There is no limit to the number of terms a commissioner may serve. Elections for a seat on the commission are statewide and often include a candidate from each party. Texans have consistently elected Republican candidates for Railroad Commission since 1994. In order to run for the office, candidates must be qualified voters and at least 25 years of age.

• Appendix: List of Past Railroad Commissioners


These commissioners take on various roles. While all three of them can vote on agency matters and submit items or proposals for consideration, only one of the commissioners, the chairperson, traditionally brings those items up for a vote. The commission chairperson is elected by the commissioners themselves.

In the case of a vacancy on the commission, the Governor appoints a replacement commissioner to fill the seat until the next general election. At that time, an election is held to either fill the remainder of the unexpired term or to select the next full-term commissioner for the seat.

Agency Funding

The Railroad Commission of Texas is primarily funded through fees, taxes, and surcharges paid by the oil and gas industry to the commission. The agency also regularly receives funding from both the federal government and Texas’ General Revenue Fund.

Oil and gas permitting fees and production taxes comprise the bulk of the commission’s revenue. Therefore, declines in industry activity also result in less funding for the agency to do its job. When the price of oil falls, so too does the number of wells drilled, meaning the commission receives less revenue from fees and surcharges operators pay for various permits. This presents a challenge for the commission, as it requires the agency to either make up the difference by requesting exceptionally large amounts of funding from the state or cutting back on regulatory activity, exposing more Texans to the hazards of an unregulated oil and gas industry.
“Commission funding cannot quickly respond to dynamic changes in the industry” - Sunset Advisory Commission, 82nd Legislature
Concerns regarding the commission’s ability to cover its own costs without extracting additional funds from General Revenue (taxpayer money) arose in all three Sunset reviews conducted on the agency between 2010 and 2017. While most other state regulatory agencies are required to self-support, that is, bring in enough revenue to cover the cost of operations, the RRC regularly requests state funds to cover the costs of the agency’s oil and gas program.

The commission spends substantial money on duplicate in-house administrative hearings, which the Sunset Commission argued could be better housed under a different state agency. The commission also funds cleanup efforts at orphaned well sites without adequately enforcing rules that prevent insolvent well operators from leaving behind orphaned wells in the first place.
Senate Bill 1, 87th Legislature

Top 10 Reforms

The Railroad Commission needs several major reforms:
1
Change the name of the Railroad Commission to reflect the agency’s modern duties.
2
Manage the transition occurring in the energy sector by better preparing for declining revenue and ensuring that operators meet their asset retirement obligations.
3
Increase the number of inspectors and the number of wells inspected per year.
4
Increase penalties to an amount that is higher than the cost of compliance and develop a process to speed the issuance of penalties.
5
Collect real-time production data to better monitor if operators are complying with seal and severance orders.
6
Improve customer service with people filing complaints with the commission and provide an online searchable database of complaints like the Texas Commission on Environmental Quality.
7
Expand language access for complaint reporting and public participation.
8
Adopt a review process for determining “common carrier” status for pipelines and offer affected parties an authentic opportunity to weigh in on routing issues and environmental and safety concerns.
9
Improve financial disclosure, conflict of interest, campaign contribution, and recusal policies to eliminate the possibility of commissioners making decisions on issues in which they may have a financial stake.
10
Transfer contested cases to the State Office of Administrative Hearings rather than the in-house administrative law judge, and transfer authority over gas utility cases to the Public Utility Commission of Texas.

Common Concerns

Sunset Review

Like other state agencies in Texas, the Railroad Commission is subject to Sunset Review every 12 years, or it risks abolishment by the Legislature. The Sunset Advisory Commission’s review process, which is conducted by independent reviewers, provides an opportunity for Texas to examine the commission’s mission, priorities, and performance. The Sunset Advisory Commission has conducted several reviews of the Railroad Commission over the past decade, often leading to failing reviews for the agency, which has still been reauthorized by the legislature.

The Railroad Commission was up for its 12-year Sunset Review in 2011-2012 for the 82nd Legislative Session. At that time, the hydraulic fracturing boom was taking over Texas. The Sunset Commission noted that “advancements in the oil and gas industry put the Commission face-to-face with a new set of regulatory challenges and new public demands.” Despite the Sunset Commission making several recommendations to improve the RRC’s structure, lawmakers failed to pass a bill that would require the RRC to fulfill the Sunset recommendations, and instead allowed the Sunset Commission to re-examine the agency and make recommendations in the 83rd Legislative Session. One Sunset recommendation did pass in another bill and required the RRC to reduce reliance on General Revenue Funds used to support the Oil and Gas program.

In the 83rd Legislative Session (2012-2013), with Texas’ oil and gas boom in full force, the legislature again failed to pass a bill that would enact the Sunset Advisory Commission’s recommendations in spite of the Sunset Commission’s observation that “having a more transparent and objective regulator was more important than ever.” Instead, lawmakers passed a bill allowing the RRC to continue for another four years, undergoing another Sunset Review in 2017, with the RRC paying all costs of the review. A few other bills passed incorporating some of the Sunset recommendations on issues including ethics, funding the Oil and Gas Regulation and Cleanup Fund, and public participation. The Governor vetoed one bill that passed the legislature that would have required the automatic resignation of a commissioner running for another elected office.

In the 2017 85th Legislative Session, lawmakers passed a bill to continue the Railroad Commission for another 12 years, and implemented several Sunset Advisory Commission recommendations, along with some modifications to those recommendations. The next Sunset Review of the RRC will be in 2027.

The Sunset Review process is an important part of the checks and balances that ensure the legislature holds state agencies accountable for certain standards of performance. The legislature, however, has been unwilling to address major structural weaknesses in the Railroad Commission despite the same issues arising repeatedly.

Monitoring and Enforcement

Monitoring oil and gas facilities for compliance with state laws is a critical piece of the commission’s job. Texas is a big place, and without staff members inspecting oil and gas facilities while levying adequate penalties in cases of non-compliance, there’s little incentive for oil and gas well operators to follow the rules. This could be why, for five years, 114 well operators repeatedly ranked among the top 100 pollution-rule violators in the state, accounting for 3% of the wells in Texas but 22% of the pollution-rule violations.
PHOTO CREDIT: ARBY REED
In a state with hundreds of thousands of oil and gas wells spread out over 268,000 square miles, the commission only has a ratio of one inspector for every 2,600 wells. The Railroad Commission has a policy of inspecting every oil and gas well at least once every five years. When large-scale, continuous monitoring is both difficult and costly, the “efficient and fair use of penalties plays a key role in deterring and punishing violators, and thus increases compliance.”

The Railroad Commission often fails to levy financial penalties to bring companies into compliance with the law. In Fiscal Year 2020, for example, the RRC issued over 18,000 notices for rule violations but reported letting more than 60% of those violators--11,331 of them--off the hook without financial penalty. If the commission hopes to maintain compliance with the law, companies need to understand that their bottom line might be at risk. A system that allows operators to resolve violations without financial penalty seems to encourage companies to abuse it.
“If operators are able to repeatedly commit the same offense and avoid a penalty by coming into compliance, the threat of a penalty loses its deterrent effect.” - Sunset Advisory Commission, 82nd Legislature
Lease severance, where the RRC breaks a lease in order to prevent a well operator from producing or transporting oil or gas, is arguably the agency’s best line of defense against companies that violate the law. Unfortunately, according to the Sunset Commission’s latest review of the agency conducted in 2017, the “Railroad Commission’s main enforcement tool, lease severances, may be an empty threat for operators.” The review found that in just one year (FY 2015), well operators ignored about one-fifth, or 20%, of the agency’s lease severance orders, continuing to produce and transport fossil fuels despite the law.
“The Railroad Commission does not have the resources to inspect every lease under severance to ensure the operator ceases production as required…” - Sunset Advisory Commission, 85th Legislature

“The Railroad Commission’s system only catches operators producing on a severed lease if the operators effectively turn themselves in...” - Sunset Advisory Commission, 85th Legislature

In recent years, several Sunset Commission recommendations were adopted as administrative directives rather than being codified in statute:

• Audit a sample of oil and natural gas production reports and transportation reports to ensure compliance with lease severance orders.
Status: Unclear - While the Railroad Commission does track lease severance orders, it is not clear whether they are following up to ensure compliance.
• Develop a definition of repeat violations in rule and report the number of repeat violations on the RRC website.
Status: Partially Complete - The Railroad Commission did create a policy to define repeat major violations but crafted it only to count cases where major violations were found at the same lease site. This gives the public no information regarding an operator repeating the same major violation across multiple leases, which was the reason for the recommendation by the Sunset Commission.
• Develop a policy to require production reports to be filed electronically.
Status: Incomplete - While the Railroad Commission does have an electronic filing system for production reports, the agency’s FAQ page clearly indicates that operators are not required to use the electronic filing system and may instead file on paper.


One Sunset recommendation was adopted into statute--requiring the RRC to develop a strategic plan for the Oil and Gas Division that tracks and measures the effectiveness of monitoring and enforcement. The annual plan includes tracking and reporting the number of oil and gas violations annually.

Complaints and Public Participation

As oil and gas development expands across the state, Texas residents increasingly wonder what they can do to protect themselves from problems like pollution. Drilling is a dangerous business; when a company breaks the rules in a community, it’s important to know who can hold them accountable.

Unfortunately, filing complaints with Texas’ regulatory agencies can be tough, especially for those that find themselves having to deal with the Railroad Commission of Texas. The commission’s website reflects the agency’s long-outdated information system; visitors often describe trouble locating basic information such as how to contest permits or what steps they should take when impacted by chemicals and fumes from drilling.
PHOTO CREDIT: PXFUEL
While the commission recently updated their website to reflect some of these concerns, there remains an immense need for additional public engagement efforts, including:
• Clear public notification about upcoming meetings, anticipated rulemakings, and hearing reports
• Guidelines for Texans to understand and navigate the permitting process, including how land and mineral owners can contest or dispute a permit
• A comprehensive database allowing citizens to submit and track complaints, including information regarding facilities of concern, the nature of each complaint, and the eventual resolution of the complaint.
• Additional resources regarding the complaint process such as guidelines about what information to include when filing a complaint
• A clear public-input process when levying penalties against companies that violate the law


In addition to filing complaints, Texas residents may also provide comments to commissioners during the Railroad Commission’s monthly meetings. The RRC holds scheduled open meetings on Tuesdays at 9:30 a.m. CT each month, unless otherwise noted on the commission’s open meetings webpage. To testify at a commission meeting, you must register in advance to provide comment by calling the commission at 512-463-7865 or emailing RRCconference@rrc.texas.gov. Instructions for providing comment during a commission meeting are available on the agency’s open meeting agendas, and the commission’s policy on public participation is also available online.

Pipelines and Eminent Domain

Eminent domain is the power of a government or private entity to take private property for public use–the power to condemn land. In Texas, when a pipeline company declares themselves a “common carrier,” they may use the power of eminent domain. Common carrier status applies to an entity that transports oil, natural gas or other products for hire, or that have been purchased by others, versus their own products.

Pipeline companies are required to file a form with the RRC to construct and operate a pipeline in Texas. On this form, the pipeline company can declare themselves a common carrier simply by checking a box. The Railroad Commission conducts no review or investigation to prove common carrier status or to formally approve the exercise of eminent domain.

In addition, there is no review or public process at the RRC to consider the siting and routing of pipelines. Electric transmission lines on the other hand are permitted through the Public Utility Commission (PUC) where affected parties have an opportunity to weigh in on routing issues and environmental and safety concerns.

Campaign Finance and 
Conflicts of Interest

Railroad commissioners may solicit and accept large campaign contributions from the very industry that they are supposed to regulate, raising concerns about the integrity of the commission’s decisions. In 2016, for example, a report found that Texas’ three sitting railroad commissioners raised more than $11 million in campaign contributions from the oil and gas industry, 60% of their total fundraising income.

While railroad commissioners are subject to the rules of the Texas Ethics Commission, the rules do not currently forbid this practice--even for companies with cases pending before the RRC. Over the years, commissioners have received tens of thousands of dollars from energy interests with cases pending before their agency, including from companies accused of triggering earthquakes and taking advantage of gas utility customers. Notably, the commission ultimately ruled in these companies’ favor, funneling Texans’ money into the pockets of utility CEOs and contradicting the findings of the state’s leading seismologists.

Recognizing the issues present in allowing a sitting commissioner to regulate companies that they are personally associated with, states such as Oklahoma (§17-179), have explicit laws and regulations that forbid members of the commission from owning interest or associating themselves with firms under the agency’s jurisdiction.
“As elected officials, railroad commissioners receive campaign contributions from the industry that they regulate, raising inevitable concerns about the potential influence on decision making” - Sunset Advisory Commission, 2016 - 2017 Review
In 2013, the Sunset Advisory Commission recommended laws to require the RRC to adopt a recusal policy, limit railroad commission candidate fundraising to an 18-month period during each commissioner’s six-year term, and prohibit parties with upcoming contested case hearings from making financial contributions to commissioners’ campaigns. The Texas Legislature failed to write any of these recommendations into law, and instead simply requested that the commission adopt a recusal policy on its own.

While the commission ultimately adopted a generic recusal policy, there is still no requirement that commissioners recuse themselves from matters affecting oil and gas interests that contributed tens of thousands of dollars to their campaigns.

Texas state laws and rules governing potential conflicts posed by the personal finances of the commissioners promise far more than they deliver. The RRC says it relies on Administrative Code language that says a “commissioner with a personal or private interest in a measure, proposal or decision pending before the commission shall publicly disclose the fact to the commission in an open meeting” and “may not vote or otherwise participate in the decision.”

A subsequent qualifier then weakens this plain language by redefining “a personal or private interest” into “a substantial interest” as defined by the state (Government Code 572.001). The result of this narrow wording is that commissioners only need to recuse themselves from a decision involving a company they are affiliated with if they control more than 10% of the company’s profits, proceeds or capital gains, control more than 10% of its voting interests, sit on its governing board, are employed by the company or own more than $25,000 of it.

To this day, neither the Texas Legislature nor the RRC have adopted additional rules to ensure a sitting commissioner cannot accept campaign contributions from an entity that may soon have, or recently had, a contested case before the commission.

“... a number of state agencies have adopted recusal policies for use in administrative law proceedings, including the Public Utility Commission, State Board of Public Accountancy, and Credit Union Commission.” - Sunset Advisory Commission, 83rd Legislature

Orphan Wells Management

As investment moves away from oil and gas companies in favor of businesses with a better return, the state of Texas faces a significant economic threat. As demand for oil and gas declines, the state faces a surge in oil and gas company bankruptcies and declining revenue from fees it collects from the industry. The Railroad Commission of Texas has the most important role to play in ensuring oil and gas well operators follow through with their obligations to properly clean up sites and plug inactive wells.

Once a well stops producing oil or gas, operators are required to plug them within 12 months. Many operators request plugging extensions, however, and the RRC regularly grants these requests. As the wellbore deteriorates, it can leach oil, gas, and residual drilling fluids into groundwater supplies. Unplugged and abandoned wells also can release methane, a powerful greenhouse gas, into the atmosphere, and open pits for collecting wastewater or other byproducts of the drilling process can leak and pose threats to groundwater as well.

When some of these operators go bankrupt, they end up leaving behind “orphan” wells that become the state’s responsibility to plug. The RRC spends tens of millions of dollars each year plugging orphan wells and cleaning up sites. One source of funding for this program is bonds that operators pay to assure the state that financial resources will be available to plug the wells, but the bonds cover only a fraction of the cost of plugging and cleanup.

In 2017, the Sunset Commission found that insufficient and inequitable statutory bonding requirements contribute to the large backlog of abandoned wells. However, the Sunset Commission’s recommendation to amend blanket bonding requirements was not adopted.

The Railroad Commission has had opportunities to confront the transition occurring in the energy business and better prepare for the declining revenue and rising environmental risks it poses. So far, however, it has failed to do so. Read more in the report Unplugged and Abandoned: The growing orphan well crisis facing the Railroad Commission of Texas.

Gas Utility Cases

Much like the days of Texas railroads, today’s utility companies, which provide gas and electric services to Texas residents, are easily monopolized. Because investor-owned utilities privately own the necessary infrastructure to distribute energy to and from people’s homes, and because that infrastructure is costly to install and nonsensical to duplicate, utility companies often exist in a market without true competition. This means that to a large extent, these privately owned companies determine the amount that Texans must pay in rates for their energy--a troubling reality in that they do so with little competition.

Without adequate regulation, utility companies can create consumer-exploiting monopolies, which is why the Texas Legislature charges the RRC with ensuring fair and equitable gas rates.

In most other states, public utility commissions have jurisdiction over gas utility rate-setting, a highly technical process requiring expertise and detailed review. Texas is unusual in that the state oil and gas agency, the RRC, has authority over gas utility rate-setting in areas outside of municipalities, while rate-setting within municipality boundaries is left to the municipalities themselves. Municipalities may request advice or assistance from the RRC, but the legislature limits the commission’s resources for this use of the agency’s time.

The Texas Sunset Advisory Board has consistently found that the RRC’s current process for resolving disputes about gas utility rates is costly and highly susceptible to corruption and conflicts of interest, and that the agency remains unable to demonstrate that the current hearing process is effective in resolving consumer-utility rate cases.

Hearings Division

The Railroad Commission’s Hearings Division manages administrative law dockets and
hearings on issues under the RRC’s jurisdiction, including oil and gas, natural gas utilities, pipeline safety, alternative fuels safety and surface mining, and reclamation dockets
. This includes what are known as contested case hearings, in which, like a civil trial in a state district court, a judge works to determine the legal rights, duties or privileges of a party.

Because the RRC conducts its administrative law hearings in-house--that is, by using judges, hearing examiners, and personnel who are all directly employed by the agency itself--its hearings process for resolving gas utility rate cases remains highly susceptible to bias. As RRC employees, any staff members who engage in these contested case hearings--from judges to hearing examiners to other agency personnel--have a built-in pre-existing incentive to rule in the way their employer wishes; after all, the same railroad commissioners who accept campaign-contributions from the parties who participate in these hearings also approve employee hiring decisions and pay raises.

While other state agencies have phased out in-house hearings divisions, the RRC has held on, raising concerns regarding the impartiality of the judges’ decisions. Not only can railroad commissioners exercise undue influence over in-house judges who decide these cases, they can also modify a judge’s final decision without notifying the public (a practice that differs from that of other state agencies).
“The commission gives no written explanation for its changes to a judge’s proposed decision, reducing the clarity of the agency’s record on appeal.” - Sunset Advisory Commission, 85th Legislature Report
In 2017, the Sunset Advisory Commission recommended transferring the Railroad Commission’s gas utility regulation to the Public Utility Commission of Texas, and requiring the use of the State Office of Administrative Hearings for contested gas utility rate cases. Those changes never happened.

We recommend state leaders adopt our top 10 major reforms to make the Railroad Commission more effective, transparent and accountable.