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Reports detail Texas Railroad Commissioners’ ties to oil and gas industry

A series of reports from an advocacy group has made broad allegations that all three elected members of the Texas Railroad Commission are too closely tied to the oil and gas industry that they regulate.

The nonprofit group Commission Shift in a series of reports undertaken with Texans for Public Justice alleges that the Railroad Commission is a “captured” agency — one that has become so entwined with the industry it regulates that it can no longer effectively oversee it.

Among its many findings, Commission Shift found that all three commissioners received more than 60% of their campaign donations from companies or individuals with direct or indirect ties to the oil and gas industry.

It also found that some members did not recuse themselves from votes involving companies they had personal or indirect connections with through their business or investment holdings.

Commission Shift is calling for stricter rules on commissioners recusing from votes, more specific financial disclosures and campaign contribution rules barring companies with pending matters before the board from donating to candidates or commissioners. It also proposed Texas adopt similar rules to Oklahoma, which requires members of its oil and gas regulatory board to divest from the industry.

“Bottom line, I think it is time to reform conflict of interest policies at the Railroad Commission,” said Virginia Palacios, Commission Shift’s executive director.

The series of three reports highlights that all three commissioners have ties to the oil and gas industry. The oddly named Railroad Commission has little to do with trains and is Texas’ chief regulator of the state’s massive oil and natural gas industry.

Unlike many of Texas’ other regulatory boards, its members are elected in statewide elections. Many view the Railroad Commission as a stepping stone to higher office.

In a series of three reports released in recent months, Commission Shift detailed the personal finances of each railroad commissioner, examining their personal finance reports that elected officials are required to file with the Texas Ethics Commission.

All three commissioners responded to questions from the Dallas Morning News about Commission Shift’s findings and their ties to the oil and gas industry. All three either did not respond to Commission Shift’s criticism of their ability to regulate an industry they have stake in or said it did not make a difference in their judgment.

Some commissioners have called the reports biased and one commissioner, Jim Wright, questioned the motivations behind the groups funding Commission Shift’s research.

The Laredo-based organization was founded about nine months ago. Its chief donors, the Funder Collaborative on Oil and Gas, are nonprofit foundations affiliated with organizations that focus on environmentalism and conservation. Its fiscal sponsor is the Rockefeller Family Foundation, which also does environmental charity work.

Palacios told The Dallas Morning News that its conclusions are all founded on public documents that it has published on its website.

In combing through the reports, Commission Shift found deep ties between Commissioner Christi Craddick and the oil and gas industry. That is no surprise given the family name.

Craddick is the daughter of the Texas House’s longest serving member, Rep. Tom Craddick, a former speaker. The Midland family has ties to several oil and gas companies, and Christi Craddick’s financial statements showed numerous oil leases and stakes in fossil fuel companies.

Commission Shift estimated Craddick has at least $1.5 million of stake in the oil and gas industry, though that number could be much higher due to rules on financial disclosures not requiring exact dollar amounts.

“In accordance with the Texas Ethics Commission, my personal financial statements are fully disclosed to the letter of the law and publicly accessible,” Craddick said in a statement. “Texas Ethics Commission laws ensure transparency of our public officials and maintain the public’s trust in our ability to appropriately govern, and I take these laws seriously.”

The reports also detail Wright’s stakes in oil and gas waste disposal companies, an industry the commission also regulates. Additionally, it highlighted his attempts to promote the use of recycled oil byproducts in road maintenance with the Texas Department of Public Safety.

Wright called some of Commission Shift’s accusations “false and deliberately misleading” and that conclusions about his connections with promoting the recycling of oil waste for road construction “absurd.”

“As a candidate for office and now as the newest member of the Railroad Commission, I base my decisions on what I believe is best for the state and our citizens. Period,” Wright said. “Upholding the public’s trust, not to mention my own personal integrity, is important to me, and I am committed to following all rules and regulations set forth under state law and administered by the Texas Ethics Commission.”

Railroad Commission Chairman Wayne Christian had the least exposure to the oil and gas industry, with connections much smaller and more indirect than Wright’s or Craddick’s.

“My entire investment portfolio consists of mutual funds and other similar accounts controlled without my input by a third-party manager registered with the U.S. Securities and Exchange Commission,” Christian said. “My personal financial statement (the citation used by Commission Shift) is a snapshot in time and could be different on any given day.”

Commission Shift and Texans for Public Justice examined the campaign finance reports of current and one former railroad commissioner, examining donations they received from 2015 through 2020. They found that 67% of those commissioners’ donations came from the oil and gas industry.

As a comparison, the oil and gas industry made up about 21% of donations to Gov. Greg Abbott’s campaign from 2017 to 2020, according to Texans for Public Justice.

“I think it’s a big red flag for Texans, especially for folks who are impacted by oil and gas development,” said Palacios, head of Commission Shift.

The series of reports comes as the Railroad Commission is facing the most scrutiny it has seen in recent memory. So far, commissioners have weathered withering criticism in the wake of the deadly February freeze event that killed at least 210 Texans.

The event led to the termination of every member of the Public Utility Commission as well as the head of the operator of Texas’s electric grid, the Electric Reliability Council of Texas. But as elected officials, railroad commissioners have managed to escape the post-freeze guillotine so far. Christian, the chairman of the Railroad Commission, is up for election next year and faces at least one challenger in the Republican primary as well as a Democrat, should he make it to the general election.

The larger gas industry also managed to avoid much of the blame. New regulations enacted during the freeze focused more on electric providers and grid operations. Natural gas producers were given wide latitude on weatherization standards, and even as winter approaches, the Railroad Commission has yet to take any substantial steps to shore up the reliability of Texas’ vast natural gas infrastructure.

The commission is expected to finalize new weatherization regulations on Nov. 30. One includes a loophole that would allow natural gas producers to skip weatherizing solely by filling out a one-page exemption request and paying a $150 fee that lawmakers have described as the “the Achilles heel” of grid reform.

Read More: Reports detail Texas Railroad Commissioners’ ties to oil and gas industry

2021-11-28 00:24:43

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