FINAL REPORT – 85th Legislative Session
If not dramatic or earthshattering, though often raw and contentious, the 85th Texas Legislative Session must be considered a solid victory for the oil & gas industry and the Texas Alliance of Energy Producers and its members. Bills are now signed by the Governor, vetoed or will become law with-out signature.
We had three goals going into the Session, and it looks as though all three have been accomplished:
- Avoid major setbacks to the industry – No harm has come to the Texas oil and gas industry this Session. No loss of tax incentives, no major regulatory constraints and no new issue movements that curtail industry growth.
- Pass a ‘clean’ RRC Sunset bill – After 3 attempts in 8 years, HB 1818 by Gonzales has been passed and signed by the Governor. Though there are a few extra ornaments, the bill does continue the Agency for 12 more years with very little additional or new constraint on the RRC or Industry.
- Pass a Budget that adequately funds the RRC – Though there is always push and pull between the industry and its regulator, it is important that there is a strong and appropriately funded RRC. After changes to the Budget formula away from General Revenue to fees and surcharges, the RRC has operated at a 23% deficit during periods of the industry activity downturn. This Budget will restore the RRC to its needed level of funding for now, allow the RRC to regain lost manpower, add pipeline inspectors and provide approximately $40 million to plug orphaned wells. This has been accomplished without any new funds in fees or taxes from the Industry.
The passage of SCR 26 must be considered as major success for the Industry and the Alliance FRED Committee efforts to bring delegation of Federal jurisdictions home to Texas and the states. The Texas House and the Senate are agreeing with you that Texas agencies and leaders are more qualified to administer many of the programs which the EPA, DOI, DOE and other federal agencies now administer. The Alliance and members of its FRED committee will use this endorsement, along with many more, in Austin and Washington D C to move toward a cooperative Federalism which recognizes and encourages State regulatory leadership.
On May 24th, Senate Concurrent Resolution (SCR) 26 received approval by the Texas House of Representatives and, having already received passage by the Senate, officially headed to the Governor’s desk for signature. Governor Abbott signed the resolution on June 15.
The resolution, authored by Senate Natural Resources Chairman Craig Estes and sponsored by House Energy Resources Chairman Drew Darby, urges the federal government to work with Texas in unraveling the overreaching regulations that have been implemented over the past eight years, which were largely aimed at negatively impacting the oil and gas industry. SCR 26 is a critical component in a larger overall effort to seek delegation over energy regulations from the federal government and return power to the hands of the state, an initiative spearheaded by the Alliance in conjunction with other oil and gas industry associations through the Federal Regulatory Energy Delegation (FRED) committee.
SCR 26 begins with:
“WHEREAS, The Texas Legislature recognizes that this period in our nation ’s history represents an opportunity for Texas to work with the leadership of the federal government to transcend partisan politics and correct misuses of federal regulatory power that have threatened the Texas oil and gas industry, the jobs it creates, and the economy of the state; and…..
And ends with:
the United States to work in conjunction with the State of Texas to identify federal regulations promulgated during the last eight years, especially those promulgated under the authority of the United States Environmental Protection Agency, the United States Department of the Interior, and the United States Department of Energy, and determine whether they should be revised, delegated to state agencies, or eliminated in order to ease the overly burdensome regulatory patchwork on the oil and gas industry in Texas;
The full text of the resolution is available online here.