Railroad Commission of Texas, Oil and Gas Division:

An Inventory of Special Permits and Rule 37 Case Files at the Texas State Archives, 1926-2000 (bulk 1926-1936)

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.

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

Types of materials present include permits for drilling, applications to drill, correspondence, memos, telegrams, transcripts from hearings and other legal documents, plats, maps, charts, graphs, and photographs. Dates covered are 1926-2000, the bulk dating 1926-1936. These are special permits issued by the Oil and Gas Division of the Railroad Commission of Texas as exceptions to the Division's drilling rules. The permits were intended usually for individual wells rather than an entire field or reservoir. Examples include drilling with compressed air and drilling to offset drainage by neighboring wells.

The majority of the records are hearing files concerning Rule 37, a rule that requires minimum distances between wells at drilling sites in order to protect field pressure and correlative rights. Rule 37 hearings are not regular hearings and they have their own unique docketing system. The files are individual applications by fee owners, leaseholders, and oil and gas companies for permits to drill on parcels of land too small to meet Rule 37's minimum distance requirements. An application to drill includes the following types of data - date, name of company or operator, name of lease, location of lease, field name, number of acres in lease, distance to nearest lease, depth of well, spacing pattern, density pattern, etc. The application to drill also notes if Rule 37 is involved, and if so, then the names and addresses of all offsetting operators or unleased mineral interest owners of each adjacent tract are provided, along with a plat. The correspondence is from the applicant to the RRC explaining why the exception should be granted. There can be waivers from adjacent property/lease holders of oil, gas or mineral rights, letters of objection from oil and gas companies, neighbors, etc. When there are serious objections, a hearing is held. Hearing transcripts may be present, along with permits to drill issued by the Railroad Commission.

Records include a numerical list to the special permits and Rule 37 case files, produced by the Railroad Commission for cases # 1 to #8,999, listing the applicant, case number, well number, lease, county, and disposition of the request. Also present is an index on microfiche to the microfilmed Rule 37 cases or dockets, giving the docket number, microfilm reel, and frame on the reel where the docket appears. The first entry is case or docket # 8163, through # 247,949, with a few scattered cases listed after that.

In addition to the special permit and Rule 37 case files for 1926-1936 (file numbers 2980-16,348), the Archives also holds the oversize exhibits from the Rule 37 hearings, which include maps, photographs, graphs, charts, etc., dating 1935-2000 (file numbers 8163-223,980). Most of the Rule 37 case files, from 1921 until about 2000 are on microfilm at the Railroad Commission. Cases from 2000 onward are still in their original paper format at the Railroad Commission. The Rule 37 oversize exhibits were not filmed. Not all of the Rule 37 cases or dockets had oversize exhibits, so files are not present for all case numbers.

Hearing schedules are posted on the RRC site, see http://www.rrc.state.tx.us/divisions/support-divisions/gc/hearschd/hearschd.html

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.

To prepare this inventory, the described materials were cursorily reviewed to delineate series, to confirm the accuracy of contents lists, to provide an estimate of dates covered, and to determine record types.

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Restrictions

Restrictions on Access

The oversize exhibits for the Rule 37 case files are stored at the State Records Center. Records requested before 10:00 a.m. will usually be available by 4:00 p.m. the same day. Records requested after 10:00 a.m. and before 3:00 p.m will usually be available by noon the next day.

Restrictions on Use

Many of the materials in the Rule 37 exhibit files are oversize maps and other large format records and cannot be photocopied.

Researchers are required to wear gloves provided by the Archives when reviewing photographic materials.

Technical Requirements

An index on microfiche to the Rule 37 case files is available. A microfiche reader is available in Room 300 of the State Library to read the fiche.

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Related Material

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Administrative Information

Preferred Citation

(Identify the item), Special permits and Rule 37 case files, Records, Oil and Gas Division, Railroad Commission of Texas. Archives and Information Services Division, Texas State Library and Archives Commission.

Accession Information

Accession number: 1982/328, 1982/358, 1983/055, 1983/108, 2002/008

These records were transferred to the Archives and Information Services Division of the Texas State Library and Archives Commission by the Railroad Commission of Texas on June 23, August 9, and November 17, 1982; February 17, 1983; and September 18, 2001.

Processing Information

Paul Beck, April 1987

Laura K. Saegert, September 2003

Other Formats for the Records

Microfilm of the special permit and Rule 37 case files exists at the Railroad Commission, including film for some years of original papers records held by the Archives.

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Detailed Description of the Records

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