Callie Farrar: Chairman Craddick, we're ready to begin when you are.
Chairman Craddick: Thank
you, Callie. Good morning, everybody. That's our first
real business meeting for the new year, so we're glad
to get going again this year. This is Chairman Craddick.
This meeting of the Railroad Commission of Texas will
come to order to consider matters which have been duly
posted with the Secretary of State for January 6, 2021.
Under a public participation policy, anyone desiring
to offer public testimony on any items that are not
noticed on today's agenda was required to register
in advance. We did not have anyone register in advance.
The Commission will consider the items on the agenda
as posted on the agenda. Item one on today's open
meeting agenda addresses the ratification of actions
taken and temporary exceptions approved and issued
at the Commission's May 5, 2020 open meeting. In March
2020, the Commission received a petition requesting
that the Commission prorate statewide production to
provide relief to the oil and gas industry. The petition
was docketed as oil and gas docket number
OG-20-0003167. At the time the petition
was filed, the oil and gas industry was experiencing
severe economic hardship due to excess market supply
conditions. These conditions were worsened by
reduced demand caused by the COVID-19 pandemic
response. The petition pointed to these extraordinary
market conditions and asked the Commission to correct
the imbalance by prorating production in the state.
However, the Commission's practice of regularly
prorating production ended in the early 1970s. To
address the issue of potential waste, the Commission
invited public comment on the petition and received
written and verbal comments from hundreds of interested
parties. Comments were received both in support of
and against prorating production. Many commenters
asked the Commission to consider alternate forms of
relief as well. Among the parties submitting both written
and verbal comments was Public Citizen, who participated
in the April 14 open meeting relating to the petition.
The Commission held open meetings on April 14, April
21, and May 5, 2020. After these meetings, the Commission
did not order the proration of production to correct
the excess market supply conditions. Instead, the Commission
approved and issued temporary exceptions to specific
Commission regulations to reduce the adverse impacts
of the extraordinary market conditions on the oil and
gas industry. These temporary exceptions were not exceptions
to rules regulating public safety, health, or the prevention
of pollution. After participating in the April 14
open meeting, Public Citizen filed suit against the
Commission, alleging among others, that the agenda
for the May 5, 2020 open meeting was technically deficient
under the Open Meetings Act. Public Citizen alleged
that the agenda item did not identify the specific
rules the Commission was considering for the exceptions.
The Commission does not agree with Public Citizen's
allegations and has defended its action in court. However
in the interest of transparency and good governance
the Commission is reissuing notice of that particular
agenda item on today's agenda as Item one. The reissued
notice includes additional information to ensure that
any alleged notice defect is cured. We will now consider
the point of business under agenda agenda item one
which is the proposal to ratify the temporary exceptions
issued and approved at the May 5, 2020, open meeting
under Item 189 of that meeting's agenda. But first,
I understand, we have to individuals who have preregistered
to speak on this item. Cyrus Reed with the Sierra Club
and Adrienne Shelly with Public Citizen. I'll allow
two minutes for each to speak. So Callie, if you'll please
call them up.
Callie Farrar: Are you able to hear me okay?
Chairman Craddick: Yes, ma'am.
Callie Farrar: Okay. Sorry.
We will start with Cyrus Reed at this time. Cyrus.
Chairman Craddick: Morning, Cyrus.
Cyrus Reed: Good morning, Commissioners. This is
Cyrus Reed. I hope, can you hear me? This is Cyrus
Reed with the Lone Star Chapter of the Sierra Club. I sent
all three of you written statement which you can read
at your leisure, but I'll hit the high points.
First, Chairman Craddick, I'm going to disagree
with you slightly on your point. I agree with the
Public Citizen lawsuit in the sense that although there
was party and I give you guys credit, a lot
of discussion on proration, the particular items
that are before you today, the public was really not
afforded an opportunity to see the actual text of what
you were discussing that day, so I think, sort of
going forward, it's very important, even on, you know,
temporary rule exceptions like you're considering today,
that you do provide the actual text to the public before
the meeting and an opportunity to provide input, just
as you would on rulemaking or informal rulemaking.
And even today, I would suggest that having a link
on the agenda to the actual text would be very helpful
going forward. I think it's good governance, and
I think it's transparency. You know, we were not part
of the lawsuit, but I do believe that transparency
serves everyone. And you guys did a great job on proration.
But on this particular issue, you did not give the
opportunity to the public. So now let me turn to what's
actually before you today. Oh, and also, I wanted to
welcome Commissioner Wright in his new
role. And I'm sure we'll be talking in the future as
we go forward.
Commissioner Wright: Thank you.
Cyrus Reed: Thank you. So what's before
you today? I'm not going to object to everything before
you today. But there are three particular provision
that we are concerned about, and the ones we are most
concerned about is one Statewide Rule 14, and you are
allowing operators to delay the plugging requirements
by one year. And Chairman Craddick, you stated that
you're not considering a pollution issue. We view this
as a pollution issue just because we know delaying
things by a year, if things go wrong, can lead to methane
emissions or God forbid blowouts or accidents at the
site, if you know it's not properly fenced off, etcetera.
So we do view it as a pollution issue. And we
think given the economic problems, given bankruptcies,
it's not a good idea to give operators an extra year.
Callie Farrar: Cyrus, at this time, you've actually reached your allotted
time to speak. Unless Chairman Craddick says otherwise,
please make your closing remarks at this time.
Cyrus Reed: I'll
make the other two points very, very quickly, Chairman
Craddick. Second thing we object to is the fees going
down because we do believe that's a fiscal impact to
the state. And we think operators should pay their
full fees. And third very strongly object to Statewide
Rule 107 penalties. You guys already have
the authority to do exceptions to penalties. We don't
think we want the administrators, you know, doing away
with minimum penalties. That sends the wrong message
to industry. We should have a good deterrence, so industry
doesn't violate the law. And with that, I'll close
and thank you for the opportunity to to speak this
morning.
Chairman Craddick: Thank you, Cyrus. Thanks for being here.
Callie, call up our next person.
Callie Farrar: Yes, thank you.
Next, we have Adrian Shelly with Public Citizen. Adrian?
Adrian Shelly: Yes? Can you hear me?
Chairman Craddick: Yes. Good morning. Thank you
for being here.
Adrian Shelly: Thank you. I appreciate the opportunity
to deliver comments today. Chairman Craddick, wanna
thank you for the background there. And Commissioner
Wright. Welcome. Also want to thank Cyrus for his comments.
You know, we agree that the actions taken were generally
not in the public interest. But I do want to
talk today about the action and the context of our lawsuit.
Our original contention was that the May 5th action
was taken illegally in violation of both the Open Meetings
Act and the Administrative Procedure Act. We do not
think that today's attempt to correct those errors
will succeed. This current action still doesn't
conform to the Administrative Procedure Act. You haven't
adequately describe the proposed changes, haven't given
notice and a 30-day comment period for the public.
There's been no fiscal analysis. There has been
no emergency, as described, that would justify any deviation
from statutory requirements. There also hasn't
been unemployment analysis. We disagree that it is
possible to take an action like this retroactively.
Today's actually would claim to ratify, approve, and
confirm the May action. There's just no precedent in
law for taking an action like that. We also fear that,
you know, today's action might extend the fees, suspensions
into 2021, might extend the other rules suspensions
beyond May 5th. We would encourage you not to do that.
We maintain our contentions in the lawsuit. That the
Open Meetings Act and the Administrative Procedure
Act were violated. We think that the Commission's been
operating for the last eight months with illegal rule
suspensions, and we urge you to correct that. We
also, Chairman Craddick, you pointed out the economic
emergency conditions that existed in May. We disagree
with that justification for the action, but it's undisputed
that those emergency conditions don't exist anymore.
West Texas Intermediate is trading at $50 a barrel
today. Even if that economic crisis was a justification
back in May, it doesn't exist today. We do have
to recognize that the Railraod Commission has taken some
steps to remediate orphaned, abandoned wells on our member
Molly Rooks land. She's one of the plaintiffs in the
lawsuit. She's tried for decades to get the Railroad
Commission to address those wells on her property,
and once she files a lawsuit, the Commission is able
to go out onto her land and clean that up. Obviously
she's happy with that. But, you know, not everybody
has. Sure, I'm almost done. Can I wrap up?
Callie Farrar: Yes, if you will please
make your closing remarks at this time. Thank you.
Adrian Shelly: So we urge you to act in good faith here to take
a step back to take a look at what was recommended
in May by, you know, Public Citizen, Sierra Club
and others. And when you take actions that are rulemakings,
do so in compliance with the Texas Open Meetings Act
and the Administrative Procedure Act. That's going
to include 30-day notice and comment, fiscal analysis,
employment analysis and if there's a deviation from
statutory requirements, there needs to be an emergency
justification for that. Until that happens, we're going
to continue to seek remedy with the court's so thank
you for the opportunity to speak today. We really appreciate
it.
Callie Farrar: Commissioners, I also want to make sure you know
that Sarah Faris is also on the call as well. I'm not
sure if she wants to take a moment to speak or not
but she is unmuted. Sarah, if you would like a moment
to speak.
Sarah Faris: Yes. Thank you, Madam Chairman. We obviously disagree
with the positions taken by Public Citizen in court.
We do not believe that this is a rulemaking action
in violation of the Administrative Procedure Act, that
was set forth in our (mumbled) jurisdiction which
is pending before the court to dismiss the case
because we don't believe there has been a violation.
And we believe that today's actions are justified.
Gratification is a remedy for a an insufficient
notice. We agree with your statement that notice was
not insufficient. But this is a response
to the call for more transparency. And we applaud
you, Commission, for taking this action today. It is
within your authority to do so. And I believe your
actions will resolve any Open Meetings Act claim that
the Public Citizen has.
Chairman Craddick: Thank you, Sarah. And just
for the record, Sarah is with the Attorney General's
Office and is our lawyer in this particular
issue. So thank you, Sarah. Thank you for Mr Reid,
Mr Shelley, for participating today. I appreciate it.
That concludes the public comment on this item.
And so Commissioners, I move, we ratify, approve and
confirm the temporary exceptions approved and issued
at the Commission's May 5, 2020, open meeting in accordance
with their terms. Is there a second?
Commissioner Christian: I'll second.
Chairman Craddick: Second by Commissioner
Christian. We have a motion and a second. All in favor
say aye. Aye. The motion is approved. The Commission
hereby ratifies, appproves, and confirms the temporary
exceptions approved and issued at the Commission's
May 5 2020 open meeting in accordance with their
terms. I direct staff to prepare a record of the actions
taken at this meeting. And let's go to item number two.
item number two is our public participation item. And
no one is registered indicating they wish to speak
on any non-posted items. Are there any other duly posted
matters to be brought before the Commission at this
time? If not, this meeting of the Railroad Commission
is adjourned. Thank you all very much. We will see
in a few weeks. Happy New Year.