Railroad Commission of Texas, Oil and Gas Division:

An Inventory of Miscellaneous Records at the Texas State Archives, 1932-1933, 1940, 1947

Agency History

The Railroad Commission of Texas had its origin in the demands of the shipping public in the late 1880s which insisted that railroads be subject to regulation based on public interest. An advocate for governmental regulation, Attorney General James Stephen Hogg ran for Governor in 1890 with the issue of railroad regulation as the focal point of the campaign. Hogg was elected Governor in the general election and the voters also approved an amendment to Article X, Section 2 of the Texas Constitution that empowered the Legislature to enact statutes creating regulatory agencies. These elections paved the way for the Legislature to enact on April 3, 1891 "An Act to Establish a Railroad Commission of the State of Texas," that later was placed in the Texas Revised Civil Statutes under article 6444 et seq. (House Bills 1, 3, and 58, 22nd Legislature, Regular Session).

The Commission originally consisted of three members appointed by the Governor for three-year terms. Governor Hogg appointed the first three Commissioners in 1891, including John H. Reagan, who resigned as U.S. Senator from Texas to serve as the first Chairman. The Texas Constitution, Article XIX, Section 30 was amended in 1894 to provide for elective six-year overlapping terms for the Commissioners. That same year John H. Reagan was elected and served until his retirement in 1903.

The Texas Railroad Commission was the first regulatory agency created in the State of Texas and originally had jurisdiction over the rates and operations of railroads, terminals, wharves and express companies. The legal focus was on intrastate passenger and freight activities. Interstate jurisdiction fell under the U.S. Interstate Commerce Commission. For the first twenty-five years of its existence, the Railroad Commission was largely concerned with regulating railroads, setting rates, receiving complaints, and making investigations. As other controversies arose where the Legislature deemed that the public interest could best be served by regulation, additional duties were assigned to the Railroad Commission.

The Railroad Commission's authority was broadened beginning in 1917 with the passage of the Pipeline Petroleum Law, Senate Bill 68, 35th Legislature, Regular Session, that declared pipelines to be common carriers like railroads and placed them under the Commission's jurisdiction. This was the first act to designate the Railroad Commission as the agency to administer conservation laws relating to oil and gas.

The Commission's regulatory and enforcement powers in oil and gas were increased by Senate Bill 350 of the 36th Legislature, Regular Session, the Oil and Gas Conservation Law, effective June 18, 1919. This act gave the Railroad Commission jurisdiction to regulate the production of oil and gas. Acting upon this legislation, the Commission adopted in 1919 the first statewide rules regulating the oil and gas industry to promote conservation and safety, including Rule 37. This rule requires minimum distances between wells at drilling sites in order to protect field pressure and correlative rights.

The Gas Utilities Act of 1920, House Bill 11, 36th Legislature, 3rd Called Session, gave the Commission regulatory and rate authority over individuals and businesses producing, transporting, or distributing natural gas in Texas. In 1937, following a large natural gas explosion in a school in New London, Texas, the 45th Legislature passed legislation giving the Railroad Commission the authority to adopt rules and regulations pertaining to the odorization of natural gas or liquefied petroleum gases (House Bill 1017, Regular Session). The passage of the Public Regulatory Act of 1975 (PURA), House Bill 819, 64th Legislature, Regular Session, required certain state regulatory agencies, including the Commission, to set the overall revenues of a utility based on its "cost of service."

Regulation of liquefied petroleum was added to the Commission's responsibilities in 1939 by House Bill 792, 46th Legislature, Regular Session. The legislation authorized the Commission to adopt and enforce safety rules and standards in the storage, handling, transportation, and odorization of butane or LP-gases. Regulation of compressed natural gas was added to the Railroad Commission's responsibilities in 1983 (Senate Bill 617, 68th Legislature, Regular Session).

The Motor Bus Law of 1927, House Bill 50, 40th Legislature, Regular Session, and the Motor Carrier Law of 1929, House Bill 654, 41st Legislature, Regular Session, extended the Commission's regulatory powers to commercial transportation of persons and property on state highways. Motor transportation activities were handled by the Motor Transportation Division. In 1995, following federal deregulation of motor carriers, the 74th Legislature eliminated the Commission's authority to regulate commercial carriers involved in intrastate transport and transferred the remaining responsibilities related to commercial carriers (motor carrier registration, insurance verification, and safety) to the Texas Department of Transportation (Senate Bill 971, Regular Session), and the Department of Public Safety (Senate Bill 3, Regular Session).

The Texas Surface Mining and Reclamation Act of 1975, Senate Bill 55, 64th Legislature, Regular Session, authorized the Commission to regulate the exploration for and surface mining of coal, lignite, and uranium within the state and to oversee the reclamation of lands disturbed by surface mining operations. In 1991, the 72nd Legislature, Regular Session, passed House Bill 451, the Texas Aggregate Quarry and Pit Safety Act, that authorized the Commission to regulate quarry and pit operations.

The Commission's authority over railroads diminished over the latter half of the twentieth century. The Federal Railroad Safety Act of 1970 vested rail safety responsibilities in the Federal Railroad Administration. In 1980, the Federal Staggers Rail Act largely eliminated the Commission's responsibility for setting rates for intrastate railroads. By 1984, the Commission ceased its role in the economic regulation of the Texas rail industry. Regulatory powers over rail safety were granted in 1985 when the 69th Legislature authorized the Commission to implement a rail safety program in conjunction with the Federal Railroad Administration Act of 1970 (Senate Bill 444, 69th Legislature, Regular Session).

The Railroad Commission regulates the oil and gas industry to prevent the waste of resources and to protect property rights and the environment. It oversees hazardous materials pipelines and natural gas pipelines and distribution systems as well as propane, butane, compressed natural gas, and liquefied natural gas. The Commission licenses and conducts seminars for oil and gas dealers and their employees. It also oversees railroad safety and rail planning; surface mining for coal, uranium, and iron ore gravel; and land reclamation when mining is complete.

The Oil and Gas Division works to prevent the waste of oil, gas, and geothermal resources and to prevent the pollution of fresh water from oil and gas operations. The division holds statewide hearings on market demand and provides for equitable production among operators by establishing monthly production allowables. It issues drilling permits, reviews and approves oil and gas well completions, collects data on oil and gas operations, and promotes public safety. It also protects underground drinking water through regulation of the underground injection of fluids in oil field operations, a program approved by the U.S. Environmental Protection Agency under the Federal Safe Drinking Water Act. It oversees well plugging operations, site remediation, underground hydrocarbon storage, hazardous waste management, and maintains a large amount of data on wells - their location, production, etc. The division also investigates complaints and conducts other investigations. This division maintains 10 district offices where field enforcement and support personnel monitor oil and gas operations. The commission does not have the authority to set oil and gas prices at the wellhead. The departments within the Oil and Gas Division are: Administration, Permitting/Production Services, Information Management Services, Environmental Services, Compliance, and the Oil Field Cleanup Operations Unit, which includes Site Remediation and Special Response, and Well Plugging.

Railroad Commission support divisions include the Public Information Office, Personnel, Finance and Administration, Information Technology Services, Intergovernmental Affairs, and the Office of Internal Audit. Three elected Commissioners direct the operations of the agency.

In 1999, the agency had approximately 848 FTE (full-time equivalent) employees. Legal authority for the Railroad Commission is the Texas Constitution, Art. X, Sec. 2 and Art. XVI, Sec. 30; and the Natural Resources Code, Chapter 81.

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Scope and Contents of the Records

These records consist of oil production statistics compiled by the Oil Accounting and Statistical Department in 1932 and 1933 for the East Texas field and in April 1940 for the entire state; testimony from a 1947 hearing on salt water disposal in the East Texas field; and, a 1947 speech by the chairman of the Interstate Oil Compact Commission on its history and functions. This series forms part of the records of the Oil and Gas Division of the Railroad Commission of Texas.

The oil production statistics were compiled by the Oil Accounting and Statistical Department of the Oil and Gas Division. The Railroad Commission set an allowable amount of production for each oil well in the state and the compilation of production figures was necessary to enforce the allowables. Each month, oil well operators reported their production, disposition, and storage of oil. In this series are the April 1940 monthly reports for the entire state. Also present in this series are four quarterly statements prepared by the Oil and Gas Division for the East Texas oil well operators, 1932-1933, that list each operator's lease, survey, number of wells, inventory, production, allowable, pipeline company, deliveries, and balance. These quarterly statements then summarize the individual data to give total figures for inventory, production, allowable, deliveries, and oil in storage for the East Texas area.

Next in this series are two statements on disposal of salt water produced by oil field operations in East Texas. The statements were given by officers of the East Texas Salt Water Disposal Company at a Railroad Commission hearing on April 17, 1947. The statements report the history of salt water production in the East Texas field, the problem of disposal, the organization of the East Texas Salt Water Disposal Company, its operations, and the technical aspects of the return of salt water underground. The two statements are typed and include charts and photographs.

Last in this series is a speech given by Hiram M. Dow, Chairman of the Interstate Oil Compact Commission, at the annual meeting of the Panhandle Producers and Royalty Association in Amarillo on June 18, 1947. Mr. Dow spoke on the history and future of the American oil industry and the history and function of the Interstate Oil Compact Commission. The Commission is an organization composed of oil producing states whose primany goals are to conserve and protect oil resources and prevent waste.

This finding aid describes one series of the Railroad Commission of Texas records. See Railroad Commission of Texas: An Overview of Records for more records series.

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Restrictions

Restrictions on Access

None

Restrictions on Use

Researchers are required to wear gloves provided by the Archives when viewing photographs.

Technical Requirements

None.

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Related Material

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Administrative Information

Preferred Citation

(Identify the item), Miscellaneous records, Oil and Gas Division, Records, Railroad Commission of Texas. Archives and Information Services Division, Texas State Library and Archives Commission.

Accession Information

Accession number: unknown

These records were probably transferred to the Archives and Information Services Division of the Texas State Library and Archives Commission by the Railroad Commission of Texas with other Railroad Commission records, but the date of transfer is unknown.

Processing Information

Described by Paul B. Beck, March 1987

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Detailed Description of the Records

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