Community Perspective | Commissioner Christi Craddick on the importance of Texas energy and the Commission’s role

Written by: Christi Craddick, Texas Railroad Commissioner 

One of the state’s most important government agencies is the Railroad Commission of Texas. In 1890, Texas voters amended the Texas Constitution to require the Legislature to form a state agency to prevent discrimination by the railroads and to set reasonable tariffs for the movement of freight and passengers.

In 1919 the Legislature passed into law regulatory powers that required the Railroad Commission to adopt rules and enforce the conservation of oil and gas and the forbidding of waste. That quickly became the Commission’s primary mission upon the discovery of some of the largest fields in the world in East and West Texas that would soon become vital to the American war effort in World War II.

For 100 years, the Railroad Commission has been at the forefront of safe, responsible energy production and has made Texas a global leader in oil and gas. The Commission has been replicated a number of times by national and international regulatory bodies, most famously by the Organization of the Petroleum Exporting Countries, more commonly known as OPEC.

Following deregulation of the railroads in the 1980’s, the duties of setting railroad tariffs went away but by then the name had worked for nearly 90 years and was here to stay.

Today, Texas leads the nation in energy production and plays a critical role in energy independence by producing on average a third of the nation’s oil and a quarter of the nation’s natural gas. That translates to a record 1.54 billion barrels of oil produced in 2018, beating the previous production record set in 1973 of 1.28 billion barrels of oil.

If Texas was a country, we would be the third-largest producer in the world. With this growth, our nation is poised to surpass Saudi Arabia in energy exports.

Regulating over 400,000 active and inactive wells in this state is a full time job for the 775 employees at the Railroad Commission who are spread over 9 district offices and a headquarters in Austin. On a daily basis, 160 trained inspectors are in the field monitoring oil and gas exploration, production activities, as well as the movement of that product through pipelines. The Railroad Commission also permits and regulates the production of lignite coal
and uranium.

One might ask, why is this important to me? Setting aside the fuel used to heat your home, provide electricity generation or to transport you to and from, oil and gas has become a necessity in our modern day lives. Oil and gas products can be found in agriculture implements and fertilizers, all plastics, medicine, chemicals and the manufacturing process. That leads to the incredible economic impact the oil and gas sector has on our state’s economy.

Texas leads the nation in oil and gas sector jobs with 352,371 employed directly in the industry. That’s over 11,757 unique Texas businesses with an average salary across the industry of $130,706. Combined the Texas oil and gas payroll exceeds $46 billion. In February 2019, the Texas Oil and Gas Association reported that the Texas oil and natural gas industry paid more than $14 Billion in taxes and royalties in 2018, up nearly 27% from 2017. Broken down, that is approximately $38 million a day to fund our schools, roads, universities and first responders.

Our state’s oil and gas industry also benefits tremendously from Mexico which is Texas’ number one trading partner responsible for over $20 billion in cross-border trade in oil and gas alone in 2017.

Crude oil and refined product remain the top export and import commodities to and from Mexico. Our Gulf Coast also leads the nation with the Port of Corpus Christi as the nation’s largest energy-only port and the Port of Houston as the largest energy importer/exporter in the nation.

Our state and nation are better because of the men and women of the Texas oil and gas industry who strive to produce, refine and deliver the fuels for our modern economy. It is a legacy for which all Texans should be proud of.