Craddick says 2018 brings a lot of work for RRC

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Despite the importance of the oil and gas industry to Texas’ economy, the state agency that regulates it remains relatively unknown in the halls of the capitol. That proved problematic for the Railroad Commission as it struggled over the past eight years to pass sunset review.

This past session, however, saw the Railroad Commission make it through the review process.

“I think the challenge that we’ve had — and continue to have, frankly, from the agency and industry perspectives — is that there aren’t a lot of people in the Legislature who are in the oil and gas business and necessarily understand how important this industry is or will continue to be,” Chairman Christi Craddick said.

Craddick recently spoke with the Reporter-Telegram about the major milestones for the agency, and after five years as a commissioner, she’s glad sunset is behind her.

“I think it was a cooperative effort,” she said. “We made some changes that the Legislature felt we needed to make as far as how we are set up with our hearings divisions versus general counsel and enforcement, as well as some specific items they were concerned about for several years. Part of our job was to be more responsive, as an agency, to the Legislature. I think we accomplished that and are moving forward for the next 12 years.”

Not only does the agency get to stay, but it also received more money. The RRC is funded largely by fees paid by the industry. A downturn in oil and gas doesn’t mean work slows at the agency.

“At this time last year, the dollars we were bringing in were off by 23 percent, and we hadn’t been hiring people, we quit buying trucks, quit doing IT upgrades and quit running the agency like a business,” Craddick said.

“We went into session 23 percent down and came out 45 percent up; $22 million of that is the gas utility rate dollars we collect (that previously were diverted to the general fund), and we’ll probably ask for access to those dollars again as we go through the next cycle,” she said.

The funding will allow the agency to stabilize its salaries to be in line with other agencies.

“We’re also using that money to plug up to 3,000 orphaned and abandoned wells,” Craddick said. “We have roughly 5,000 on our books. Our stated goal is to plug 2,000; we have a stretch goal of 3,000, and we think we can get there.”

Plus, the RRC has been able to start replacing its fleet of pickups, which take inspectors to sites often far away from civilization.

“We have roughly 250 vehicles in our fleet, and we drive them a minimum of 150,000 miles each; we’re past that on quite a few, and frankly didn’t buy but 20 trucks in less than a two-year period,” Craddick said. “It takes time to make sure you have trucks that are safe and work; otherwise, you can’t get people out to an inspection site. That was becoming part of our challenge. Historically, we replace about a fourth of our truck fleet every year.”

Craddick is now on the National Petroleum Council, which helps give the RRC a national role in the oil and gas industry conversation.

The chairman is also running for re-election. The last railroad commissioner to successfully win a second term at the agency was Michael Williams of Midland, who was re-elected for a second term in 2008.

In her five years as a commissioner, Craddick said she has seen the industry change quite a bit. When she started, oil was $100 per barrel. In the years since, it had fallen to nearly $26 per barrel, a swing that challenged the industry and the agency. Plus, there is plenty of work left to be done.

“It’s important to have someone at this agency who knows the industry,” the former oil and gas lawyer and Midland native said. “We need to hire people, continue to improve IT, continue to educate people about how important the industry is. We also need to continue to create relationships nationally and internationally.”