Railroad Commission Approves Draft Rules to Increase Penalties for Safety Violations

01/24/2012

AUSTIN - The Texas Railroad Commission (RRC) today approved draft rules to implement new or amended penalty matrixes to be used as guidelines to be considered by the Commission in determining the amount of penalties for safety violations in six categories: oil and gas regulations, pipeline safety regulations, Liquefied Petroleum (LP)-gas safety rules, Compressed Natural Gas (CNG) safety rules, Liquefied Natural Gas (LNG) safety rules and requirements relating to underground pipeline damage prevention.

The proposed rules include numerous new penalties, as well as increases in existing penalties and enhancements in penalties for repeat offenders.  Penalty guidelines at the RRC have not been updated since 2004, and they have never been adopted as official RRC rules, with the exception of rules for pipeline safety violations.  The first penalty guideline schedule was drafted in 1986.

While the proposed rules are only guidelines – final penalties, up to and including the maximum of $10,000 per day, remain at the discretion of the Commissioners – putting these guidelines into rule will aid in transparency and communication to industry and the public regarding RRC penalties.

“It is due time that the Railroad Commission adopt formal rules strengthening enforcement penalties,” said Railroad Commissioner David Porter. “I am especially pleased to see the proposals to increase penalties on repeat offenders. The energy industry overall has a solid record at the Commission, and we shouldn’t let these few bad actors tarnish the state’s reputation as the gold standard.”

All three Commissioners voted to approve the draft rules, which will now be posted in the Texas Register for a 30-day public comment period.  The proposed rules, including the proposed penalty guidelines, will be posted to the Commission website tomorrow and can be viewed tomorrow here: http://www.rrc.texas.gov/legal/rules/proposed-rules/

Upon conclusion of the 30-day comment period, RRC staff will review the comments submitted and subsequently bring the proposed rules back to the Commissioners for final review and passage.

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David J. Porter was elected to the Texas Railroad Commission on November 2, 2010. A Certified Public Accountant and successful small business owner, Commissioner Porter has worked with oil and gas producers for nearly three decades providing strategic financial advice and tax counsel. He has a long record of pro-business, free market, conservative credentials.