What The Heck Is The Railroad Commission Of Texas?

Jan 23, 2018

In the brutal final scene from the 2007 movie There Will Be Blood, sociopathic oilman Daniel Plainview meets his rival for the last time. If oil fields are like milkshakes, he says, it pays to have a straw that reaches all the way across the room “and starts to drink your milkshake.”

“I. Drink. Your. Milkshake,” Plainview screams maniacally. “I DRINK IT UP!”

What does that have to do with the Railroad Commission of Texas? More than you might think. That’s because the commission regulates oil and gas in Texas. Ironically, it has nothing to do with railroads.

“The commission acts like a court,” says Charles Matthews, who served on the three-member commission from 1995 to 2005 before stepping down to become chancellor of Texas State University.

Charles Matthews, who served on the Railroad Commission from 1995 to 2005, says he worried about pipeline leaks and explosions all the time.
Credit Mose Buchele / KUT

That three-person “court” decides on disputes between oil and gas drillers to make sure nobody drinks anyone else’s milkshake.

“The oil business is a lot about ‘close-ology,’” Matthews says. “The closer you can get, the better chance you have of hitting a well.” One of the commission's job is to decide whether a driller is getting too close to someone else's well.

Much More Than Milkshakes

Settling disputes between drillers is just one of the commission's functions; it also regulates huge swaths of the Texas oil, gas and mining industries.  

“You know the thing that just terrified me the most [about being on the commission] were the pipelines,” Matthews says.

There were 260,000 miles of pipeline in the state when he served, he says, and he worried about leaks or explosions all the time.

“You’ve got inspectors out there," Matthews says, "but there’s not any way in the world that anybody can monitor every day, all of the time, 260,000 miles of pipe that's underground.”

Forget About The Railroads

By regulating Texas oil and gas, the commission also has authority over one of the country’s most powerful economic engines. Of course, there are things the Railroad Commission does not control – like railroads. The name is an artifact from the early days of the agency, one that lawmakers can’t seem to change.

“You know, the Legislature has tried to change it,” Matthews says, “but the industry just raised Cain. They like the fact that a name is so unique. It’s special to Texas. Texas is just a different place. They don’t want to change it.”

Many observers point to a reason beyond “tradition” for keeping a name so unrelated to the agency's functions.

“People who get their livelihood from oil and gas would just assume not have the name changed,” says David Prindle, a professor of political science at UT-Austin. One reason is because it confuses the public about the agency's true function, he says, "and that’s not necessarily a bad thing if you want to influence the commission.”

In a book he wrote in the early '80s, Petroleum, Politics and the Texas Railroad Commission, Prindle looks at the relationship between oil and gas companies (“producers”) and the commission that regulates them.

“What I discovered was that because the homegrown producers finance Railroad Commission elections through campaign contributions, essentially they are the constituency of commissioners,” he says.

And what was true in the '80s remains true today: In fact, most people who serve on or run for the commission are pretty up-front about their view that the oil and gas business is not just an industry to be regulated, but a constituency to be served.

“There’s not any question that you know the industry,” Matthews says. “I mean, you’re talking to the industry all the time. They’re the only people that are interested in what you have to say.”

But that’s starting to change.

A New Interest In The Commission

As oil and gas drilling impact the daily lives of more people with no direct link to oil and gas drilling, more everyday Texans are starting to take notice of the Railroad Commission.

For example, residents in a U.S.-Mexico border town who were concerned about mining operations lobbied the commission to deny the mining company permits. (Those permits were granted.) Homeowners in North Texas, worried about the surge in earthquakes that has accompanied drilling activities, have also gone to the commission looking for answers.

Such petitioners often leave disappointed.

“In history, when protecting the environment has been in the interest of Texas producers, they protect the environment,” Prindle says. “But when the interest of the Texas producers has run contrary to protecting the environment, commissioners are much more likely to pursue the interests of their constituency as opposed to the environment.”

The commission is also responsible for processing the legally required paperwork of pipeline companies that take land through eminent domain, earning it a lot of attention from landowner groups.

One final reason you should pay attention to who is running for the commission? When you’re voting for commissioner, you may be voting for a future candidate for governor, lieutenant governor or attorney general. Commissioners often seek higher office later in their careers.

“When you are a commissioner, you make a wide variety of acquaintances among rich people, from millionaires to billionaires,” Prindle says. “Therefore, you can count on a certain amount of money if you run for governor or lieutenant governor or something else.”

But that financing doesn’t always translate into victory. Barry Smitherman, a past chairman of the Railroad Commission, lost his bid to become attorney general in 2014. Elizabeth Ames Jones, another former chairman, ran for state Senate in 2012 but never made it past the primary. Former Commissioner Michael Williams ran for Congress that same year and lost, placing fifth in the Republican primary.

“We already knew that money could get you a lot, but not everything,” Prindle says.

This story originally ran in 2014.


Update: The original version of this story contained the assertion that the Railroad Commission "grants" companies the ability to use eminent domain. Representatives from the Railroad Commission's Media Affairs Office have objected to this characterization, referring KUT to a page on the commission's website that says "the Commission performs a clerical rather than judicial-type act" when it grants permits used in the process by which pipelines claim eminent domain powers.

It is worth noting that a different page on the commission's website pertaining to pipeline rules contains this quote from Chairman David Porter: "The Commission has a duty to determine the proper classification of a pipeline and use that information to apply appropriate rules and regulations. These rule amendments improve our ability to determine which regulatory classification applies to a pipeline.”

 Click the following links to learn how the agency deals with permits used to assert eminent domain, how the agency has worked to overhaul that process, and how the agency has played a central role in public debates and legal battles over issues of property rights and eminent domain.