AUSTIN, Texas – Speaker Joe Straus, R-San Antonio, earlier this year issued interim charges to every standing committee in the Texas House of Representatives.

The charges highlight some of the issues that the House will study and investigate to prepare for the next legislative session, which will begin in January 2015. The charges are based on requests and suggestions made by House Members. It is interesting to note that many of the charges to the House ask committees to review oil and gas production and/or water – related issues.

Gloria Leal
Gloria Leal

Energy Committee

The House Committee on Energy Resources chaired by State Rep. Jim Keffer, R-Eastland, was tasked with six charges. The first charge asks the committee to study the impact of the expanding oil and gas exploration and production occurring across the state and the effect on the state budget and the Economic Stabilization Fund (aka Rainy Day Fund). Also to be studied is the overall impact of production on the state economy, property values and local taxes, roads and school districts.

A study of the relationship between land owners, royalty owners, and operators is part of the charge. The committee will also study oil and gas activities’ impact on the environment, emissions, injection wells and projected water needs. Housing issues created by the number of workers needed in areas of shale plays will also be studied.

The second charge asks the committee to study the P5 permitting process at the Railroad Commission to determine whether the process is efficient and effective and whether there are actions that can be taken to improve the process. Every operator is required to file the P-5 Organization Report form on an annual basis.

The third charges requires a study and review of appropriations of general revenue dollars allocated to the Railroad Commission of Texas for improvements in its Information Technology (IT) systems to ensure those funds are being utilized to streamline the permitting process and to allow access to information for all parties that conduct business at the Commission.

The fourth charge requires a review of the application of Texas Business & Commerce Code, Section 9.343, to determine the legal rights of unperfected security interests of oil and gas producers with respect to subsequent purchasers, specifically in the context of a bankruptcy proceeding such as Arrow Oil & Gas, Inc. v. SemCrude, L.P. and subsequent cases.

The fifth requires monitoring the implementation of two keys bills to ensure the required rulemaking is completed efficiently and in a timely manner. HB 2982 by Rep. Keffer relates to the power of the Railroad Commission to adopt and enforce and safety standards applicable to the transportation by pipeline of hazardous liquids, carbon dioxide, and natural gas in rural locations. SB 1747 by Sen. Carlos Uresti, D-San Antonio, relates to funding and donations for transportation projects in counties and establishing a mechanism for the establishment of county energy transportation reinvestment zones.

The sixth charge is a general one to all committees that requires a committee to consider new and different ways to make state government and agencies and programs under their jurisdiction more effective, efficient and accountable to taxpayers.

Hearings Planned:

Three hearings are currently planned by the House Energy Resources Committee. A hearing in Austin on Tuesday, August 27, will take testimony on all charges except roads. A hearing on Thursday, September 11, in Cuero will deal exclusively with the charge on roads. A third hearing in Edinburg on Friday September 26, will examine the impact of oil and gas reform in Mexico. Hearings are open to the public and testimony is generally taken from invited speakers and the public.

Legislative Report:

After interim hearings –invited and public testimony – an interim report is produced. The report containing findings and recommendations for legislation is signed by committee members and distributed to all members of the Legislature. South Texas Reps. Terry Canales, D-Edinburg, and J.M. Lozano, R-Kingsville, are members of the Energy Committee.

Gloria Leal is an attorney and government affairs consultant in Austin, Texas. Ms. Leal has a solo practice primarily relating to energy, environmental and healthcare matters. She also represents the Texas Alliance of Energy Producers, a national association of independent producers and service providers. She can be reached at [email protected]