WEBVTT 00:00:00.240 --> 00:00:02.358 Chairman Craddick, we're ready to begin when you are. 00:00:02.382 --> 00:00:03.109 Thank 00:00:03.109 --> 00:00:05.469 you, Callie. Good morning, everybody. That's our first 00:00:05.469 --> 00:00:08.070 real business meeting for the new year, so we're glad 00:00:08.070 --> 00:00:11.029 to get going again this year. This is Chairman Craddick. 00:00:11.029 --> 00:00:13.320 This meeting of the Railroad Commission of Texas will 00:00:13.320 --> 00:00:16.780 come to order to consider matters which have been duly 00:00:16.780 --> 00:00:21.649 posted with the Secretary of State for January 6, 2021. 00:00:21.940 --> 00:00:25.339 Under a public participation policy, anyone desiring 00:00:25.339 --> 00:00:29.079 to offer public testimony on any items that are not 00:00:29.079 --> 00:00:32.469 noticed on today's agenda was required to register 00:00:32.469 --> 00:00:36.640 in advance. We did not have anyone register in advance. 00:00:36.659 --> 00:00:39.299 The Commission will consider the items on the agenda 00:00:39.299 --> 00:00:43.729 as posted on the agenda. Item one on today's open 00:00:43.729 --> 00:00:47.530 meeting agenda addresses the ratification of actions 00:00:47.530 --> 00:00:51.460 taken and temporary exceptions approved and issued 00:00:51.469 --> 00:00:57.100 at the Commission's May 5, 2020 open meeting. In March 00:00:57.100 --> 00:01:01.280 2020, the Commission received a petition requesting 00:01:01.280 --> 00:01:04.489 that the Commission prorate statewide production to 00:01:04.489 --> 00:01:08.920 provide relief to the oil and gas industry. The petition 00:01:08.920 --> 00:01:13.180 was docketed as oil and gas docket number 00:01:13.189 --> 00:01:23.030 OG-20-0003167. At the time the petition 00:01:23.030 --> 00:01:26.599 was filed, the oil and gas industry was experiencing 00:01:26.609 --> 00:01:30.439 severe economic hardship due to excess market supply 00:01:30.439 --> 00:01:34.069 conditions. These conditions were worsened by 00:01:34.439 --> 00:01:38.590 reduced demand caused by the COVID-19 pandemic 00:01:38.590 --> 00:01:42.760 response. The petition pointed to these extraordinary 00:01:42.760 --> 00:01:46.159 market conditions and asked the Commission to correct 00:01:46.159 --> 00:01:48.959 the imbalance by prorating production in the state. 00:01:49.540 --> 00:01:53.447 However, the Commission's practice of regularly 00:01:53.459 --> 00:01:57.459 prorating production ended in the early 1970s. To 00:01:57.459 --> 00:02:00.299 address the issue of potential waste, the Commission 00:02:00.299 --> 00:02:03.900 invited public comment on the petition and received 00:02:03.909 --> 00:02:07.219 written and verbal comments from hundreds of interested 00:02:07.219 --> 00:02:10.960 parties. Comments were received both in support of 00:02:10.969 --> 00:02:15.129 and against prorating production. Many commenters 00:02:15.139 --> 00:02:18.159 asked the Commission to consider alternate forms of 00:02:18.159 --> 00:02:22.389 relief as well. Among the parties submitting both written 00:02:22.389 --> 00:02:26.289 and verbal comments was Public Citizen, who participated 00:02:26.289 --> 00:02:29.759 in the April 14 open meeting relating to the petition. 00:02:30.590 --> 00:02:33.740 The Commission held open meetings on April 14, April 00:02:33.740 --> 00:02:39.310 21, and May 5, 2020. After these meetings, the Commission 00:02:39.310 --> 00:02:42.819 did not order the proration of production to correct 00:02:42.889 --> 00:02:47.750 the excess market supply conditions. Instead, the Commission 00:02:47.750 --> 00:02:52.289 approved and issued temporary exceptions to specific 00:02:52.289 --> 00:02:56.680 Commission regulations to reduce the adverse impacts 00:02:56.689 --> 00:02:59.560 of the extraordinary market conditions on the oil and 00:02:59.560 --> 00:03:04.909 gas industry. These temporary exceptions were not exceptions 00:03:04.909 --> 00:03:09.400 to rules regulating public safety, health, or the prevention 00:03:09.400 --> 00:03:14.120 of pollution. After participating in the April 14 00:03:14.120 --> 00:03:16.889 open meeting, Public Citizen filed suit against the 00:03:16.889 --> 00:03:20.270 Commission, alleging among others, that the agenda 00:03:20.270 --> 00:03:24.710 for the May 5, 2020 open meeting was technically deficient 00:03:24.719 --> 00:03:28.349 under the Open Meetings Act. Public Citizen alleged 00:03:28.349 --> 00:03:31.189 that the agenda item did not identify the specific 00:03:31.189 --> 00:03:34.150 rules the Commission was considering for the exceptions. 00:03:34.740 --> 00:03:38.300 The Commission does not agree with Public Citizen's 00:03:38.300 --> 00:03:43.250 allegations and has defended its action in court. However 00:03:43.259 --> 00:03:46.780 in the interest of transparency and good governance 00:03:46.789 --> 00:03:50.250 the Commission is reissuing notice of that particular 00:03:50.250 --> 00:03:54.889 agenda item on today's agenda as Item one. The reissued 00:03:54.889 --> 00:03:58.759 notice includes additional information to ensure that 00:03:58.770 --> 00:04:04.469 any alleged notice defect is cured. We will now consider 00:04:04.469 --> 00:04:07.960 the point of business under agenda agenda item one 00:04:07.969 --> 00:04:11.729 which is the proposal to ratify the temporary exceptions 00:04:11.740 --> 00:04:15.949 issued and approved at the May 5, 2020, open meeting 00:04:15.960 --> 00:04:20.709 under Item 189 of that meeting's agenda. But first, 00:04:20.709 --> 00:04:23.420 I understand, we have to individuals who have preregistered 00:04:23.420 --> 00:04:27.120 to speak on this item. Cyrus Reed with the Sierra Club 00:04:27.129 --> 00:04:30.350 and Adrienne Shelly with Public Citizen. I'll allow 00:04:30.350 --> 00:04:33.079 two minutes for each to speak. So Callie, if you'll please 00:04:33.079 --> 00:04:35.639 call them up. 00:04:39.240 --> 00:04:40.311 Are you able to hear me okay? 00:04:40.335 --> 00:04:41.714 Yes, ma'am. 00:04:41.738 --> 00:04:42.920 Okay. Sorry. 00:04:42.930 --> 00:04:47.889 We will start with Cyrus Reed at this time. Cyrus. 00:04:48.230 --> 00:04:49.375 Morning, Cyrus. 00:04:49.399 --> 00:04:51.970 Good morning, Commissioners. This is 00:04:51.970 --> 00:04:56.180 Cyrus Reed. I hope, can you hear me? This is Cyrus 00:04:56.180 --> 00:04:59.819 Reed with the Lone Star Chapter of the Sierra Club. I sent 00:04:59.829 --> 00:05:03.040 all three of you written statement which you can read 00:05:03.040 --> 00:05:06.029 at your leisure, but I'll hit the high points. 00:05:06.040 --> 00:05:10.339 First, Chairman Craddick, I'm going to disagree 00:05:10.339 --> 00:05:13.899 with you slightly on your point. I agree with the 00:05:13.899 --> 00:05:17.180 Public Citizen lawsuit in the sense that although there 00:05:17.180 --> 00:05:21.579 was party and I give you guys credit, a lot 00:05:21.579 --> 00:05:26.519 of discussion on proration, the particular items 00:05:26.519 --> 00:05:29.600 that are before you today, the public was really not 00:05:29.600 --> 00:05:33.370 afforded an opportunity to see the actual text of what 00:05:33.370 --> 00:05:37.550 you were discussing that day, so I think, sort of 00:05:37.550 --> 00:05:41.069 going forward, it's very important, even on, you know, 00:05:41.069 --> 00:05:44.600 temporary rule exceptions like you're considering today, 00:05:44.610 --> 00:05:47.519 that you do provide the actual text to the public before 00:05:47.519 --> 00:05:50.589 the meeting and an opportunity to provide input, just 00:05:50.589 --> 00:05:54.029 as you would on rulemaking or informal rulemaking. 00:05:54.040 --> 00:05:58.670 And even today, I would suggest that having a link 00:05:58.680 --> 00:06:01.850 on the agenda to the actual text would be very helpful 00:06:01.850 --> 00:06:04.089 going forward. I think it's good governance, and 00:06:04.089 --> 00:06:07.160 I think it's transparency. You know, we were not part 00:06:07.160 --> 00:06:11.420 of the lawsuit, but I do believe that transparency 00:06:11.420 --> 00:06:14.670 serves everyone. And you guys did a great job on proration. 00:06:14.839 --> 00:06:17.060 But on this particular issue, you did not give the 00:06:17.060 --> 00:06:19.879 opportunity to the public. So now let me turn to what's 00:06:19.879 --> 00:06:22.240 actually before you today. Oh, and also, I wanted to 00:06:22.240 --> 00:06:26.899 welcome Commissioner Wright in his new 00:06:26.899 --> 00:06:29.699 role. And I'm sure we'll be talking in the future as 00:06:29.699 --> 00:06:30.709 we go forward. 00:06:30.733 --> 00:06:31.813 Thank you. 00:06:31.837 --> 00:06:33.610 Thank you. So what's before 00:06:33.610 --> 00:06:36.100 you today? I'm not going to object to everything before 00:06:36.100 --> 00:06:39.970 you today. But there are three particular provision 00:06:39.970 --> 00:06:43.139 that we are concerned about, and the ones we are most 00:06:43.139 --> 00:06:48.470 concerned about is one Statewide Rule 14, and you are 00:06:48.480 --> 00:06:52.860 allowing operators to delay the plugging requirements 00:06:52.860 --> 00:06:57.699 by one year. And Chairman Craddick, you stated that 00:06:57.709 --> 00:07:00.079 you're not considering a pollution issue. We view this 00:07:00.079 --> 00:07:03.189 as a pollution issue just because we know delaying 00:07:03.189 --> 00:07:07.410 things by a year, if things go wrong, can lead to methane 00:07:07.410 --> 00:07:11.990 emissions or God forbid blowouts or accidents at the 00:07:11.990 --> 00:07:14.860 site, if you know it's not properly fenced off, etcetera. 00:07:15.139 --> 00:07:18.850 So we do view it as a pollution issue. And we 00:07:18.850 --> 00:07:22.779 think given the economic problems, given bankruptcies, 00:07:22.790 --> 00:07:26.389 it's not a good idea to give operators an extra year. 00:07:26.399 --> 00:07:30.279 Cyrus, at this time, you've actually reached your allotted 00:07:30.279 --> 00:07:33.750 time to speak. Unless Chairman Craddick says otherwise, 00:07:33.750 --> 00:07:35.738 please make your closing remarks at this time. 00:07:35.762 --> 00:07:36.189 I'll 00:07:36.189 --> 00:07:38.920 make the other two points very, very quickly, Chairman 00:07:38.920 --> 00:07:44.639 Craddick. Second thing we object to is the fees going 00:07:44.639 --> 00:07:47.310 down because we do believe that's a fiscal impact to 00:07:47.310 --> 00:07:49.290 the state. And we think operators should pay their 00:07:49.290 --> 00:07:53.420 full fees. And third very strongly object to Statewide 00:07:53.420 --> 00:07:56.069 Rule 107 penalties. You guys already have 00:07:56.069 --> 00:07:59.350 the authority to do exceptions to penalties. We don't 00:07:59.350 --> 00:08:03.360 think we want the administrators, you know, doing away 00:08:03.360 --> 00:08:05.939 with minimum penalties. That sends the wrong message 00:08:05.939 --> 00:08:09.360 to industry. We should have a good deterrence, so industry 00:08:09.360 --> 00:08:11.430 doesn't violate the law. And with that, I'll close 00:08:11.430 --> 00:08:13.500 and thank you for the opportunity to to speak this 00:08:13.500 --> 00:08:14.247 morning. 00:08:14.271 --> 00:08:16.930 Thank you, Cyrus. Thanks for being here. 00:08:16.939 --> 00:08:19.383 Callie, call up our next person. 00:08:19.407 --> 00:08:20.850 Yes, thank you. 00:08:20.860 --> 00:08:24.160 Next, we have Adrian Shelly with Public Citizen. Adrian? 00:08:24.639 --> 00:08:26.015 Yes? Can you hear me? 00:08:26.039 --> 00:08:27.250 Yes. Good morning. Thank you 00:08:27.250 --> 00:08:27.854 for being here. 00:08:27.878 --> 00:08:30.509 Thank you. I appreciate the opportunity 00:08:30.509 --> 00:08:32.759 to deliver comments today. Chairman Craddick, wanna 00:08:32.759 --> 00:08:35.950 thank you for the background there. And Commissioner 00:08:35.950 --> 00:08:41.080 Wright. Welcome. Also want to thank Cyrus for his comments. 00:08:41.090 --> 00:08:45.389 You know, we agree that the actions taken were generally 00:08:45.399 --> 00:08:48.850 not in the public interest. But I do want to 00:08:48.850 --> 00:08:52.860 talk today about the action and the context of our lawsuit. 00:08:52.940 --> 00:08:56.320 Our original contention was that the May 5th action 00:08:56.330 --> 00:08:59.200 was taken illegally in violation of both the Open Meetings 00:08:59.200 --> 00:09:02.549 Act and the Administrative Procedure Act. We do not 00:09:02.549 --> 00:09:06.539 think that today's attempt to correct those errors 00:09:06.539 --> 00:09:10.850 will succeed. This current action still doesn't 00:09:10.940 --> 00:09:13.649 conform to the Administrative Procedure Act. You haven't 00:09:13.649 --> 00:09:16.850 adequately describe the proposed changes, haven't given 00:09:16.850 --> 00:09:20.210 notice and a 30-day comment period for the public. 00:09:20.220 --> 00:09:24.159 There's been no fiscal analysis. There has been 00:09:24.169 --> 00:09:27.669 no emergency, as described, that would justify any deviation 00:09:27.669 --> 00:09:30.269 from statutory requirements. There also hasn't 00:09:30.269 --> 00:09:34.250 been unemployment analysis. We disagree that it is 00:09:34.250 --> 00:09:38.399 possible to take an action like this retroactively. 00:09:38.409 --> 00:09:42.009 Today's actually would claim to ratify, approve, and 00:09:42.009 --> 00:09:45.679 confirm the May action. There's just no precedent in 00:09:45.679 --> 00:09:50.440 law for taking an action like that. We also fear that, 00:09:50.450 --> 00:09:53.019 you know, today's action might extend the fees, suspensions 00:09:53.019 --> 00:09:56.159 into 2021, might extend the other rules suspensions 00:09:56.159 --> 00:09:59.539 beyond May 5th. We would encourage you not to do that. 00:09:59.549 --> 00:10:02.929 We maintain our contentions in the lawsuit. That the 00:10:02.929 --> 00:10:04.610 Open Meetings Act and the Administrative Procedure 00:10:04.610 --> 00:10:07.470 Act were violated. We think that the Commission's been 00:10:07.470 --> 00:10:10.820 operating for the last eight months with illegal rule 00:10:10.820 --> 00:10:15.129 suspensions, and we urge you to correct that. We 00:10:15.129 --> 00:10:17.669 also, Chairman Craddick, you pointed out the economic 00:10:17.669 --> 00:10:21.590 emergency conditions that existed in May. We disagree 00:10:21.600 --> 00:10:24.429 with that justification for the action, but it's undisputed 00:10:24.429 --> 00:10:26.909 that those emergency conditions don't exist anymore. 00:10:26.919 --> 00:10:29.889 West Texas Intermediate is trading at $50 a barrel 00:10:29.889 --> 00:10:33.480 today. Even if that economic crisis was a justification 00:10:33.480 --> 00:10:37.519 back in May, it doesn't exist today. We do have 00:10:37.519 --> 00:10:39.710 to recognize that the Railraod Commission has taken some 00:10:39.710 --> 00:10:43.159 steps to remediate orphaned, abandoned wells on our member 00:10:43.159 --> 00:10:45.409 Molly Rooks land. She's one of the plaintiffs in the 00:10:45.409 --> 00:10:48.830 lawsuit. She's tried for decades to get the Railroad 00:10:48.830 --> 00:10:50.980 Commission to address those wells on her property, 00:10:50.990 --> 00:10:54.649 and once she files a lawsuit, the Commission is able 00:10:54.649 --> 00:10:57.549 to go out onto her land and clean that up. Obviously 00:10:57.549 --> 00:10:59.639 she's happy with that. But, you know, not everybody 00:10:59.649 --> 00:11:02.695 has. Sure, I'm almost done. Can I wrap up? 00:11:02.719 --> 00:11:04.809 Yes, if you will please 00:11:04.820 --> 00:11:07.980 make your closing remarks at this time. Thank you. 00:11:07.990 --> 00:11:12.909 So we urge you to act in good faith here to take 00:11:12.909 --> 00:11:17.110 a step back to take a look at what was recommended 00:11:17.110 --> 00:11:21.309 in May by, you know, Public Citizen, Sierra Club 00:11:21.309 --> 00:11:24.110 and others. And when you take actions that are rulemakings, 00:11:24.110 --> 00:11:26.750 do so in compliance with the Texas Open Meetings Act 00:11:26.840 --> 00:11:28.889 and the Administrative Procedure Act. That's going 00:11:28.889 --> 00:11:31.899 to include 30-day notice and comment, fiscal analysis, 00:11:31.899 --> 00:11:34.960 employment analysis and if there's a deviation from 00:11:34.960 --> 00:11:37.350 statutory requirements, there needs to be an emergency 00:11:37.350 --> 00:11:40.490 justification for that. Until that happens, we're going 00:11:40.490 --> 00:11:43.250 to continue to seek remedy with the court's so thank 00:11:43.250 --> 00:11:45.190 you for the opportunity to speak today. We really appreciate 00:11:45.190 --> 00:11:45.706 it. 00:11:45.730 --> 00:11:48.539 Commissioners, I also want to make sure you know 00:11:48.539 --> 00:11:52.730 that Sarah Faris is also on the call as well. I'm not 00:11:52.730 --> 00:11:55.289 sure if she wants to take a moment to speak or not 00:11:55.299 --> 00:11:58.850 but she is unmuted. Sarah, if you would like a moment 00:11:58.850 --> 00:12:01.539 to speak. 00:12:01.539 --> 00:12:07.720 Yes. Thank you, Madam Chairman. We obviously disagree 00:12:07.720 --> 00:12:11.879 with the positions taken by Public Citizen in court. 00:12:11.889 --> 00:12:14.440 We do not believe that this is a rulemaking action 00:12:14.440 --> 00:12:18.179 in violation of the Administrative Procedure Act, that 00:12:18.179 --> 00:12:20.970 was set forth in our (mumbled) jurisdiction which 00:12:20.970 --> 00:12:24.360 is pending before the court to dismiss the case 00:12:24.360 --> 00:12:27.559 because we don't believe there has been a violation. 00:12:28.039 --> 00:12:31.370 And we believe that today's actions are justified. 00:12:31.379 --> 00:12:38.509 Gratification is a remedy for a an insufficient 00:12:38.519 --> 00:12:41.389 notice. We agree with your statement that notice was 00:12:41.399 --> 00:12:47.190 not insufficient. But this is a response 00:12:47.929 --> 00:12:52.629 to the call for more transparency. And we applaud 00:12:52.639 --> 00:12:56.250 you, Commission, for taking this action today. It is 00:12:56.250 --> 00:12:58.710 within your authority to do so. And I believe your 00:12:58.710 --> 00:13:03.490 actions will resolve any Open Meetings Act claim that 00:13:03.500 --> 00:13:04.697 the Public Citizen has. 00:13:04.721 --> 00:13:07.409 Thank you, Sarah. And just 00:13:07.409 --> 00:13:09.779 for the record, Sarah is with the Attorney General's 00:13:09.779 --> 00:13:13.070 Office and is our lawyer in this particular 00:13:13.070 --> 00:13:16.309 issue. So thank you, Sarah. Thank you for Mr Reid, 00:13:16.309 --> 00:13:19.279 Mr Shelley, for participating today. I appreciate it. 00:13:19.289 --> 00:13:22.750 That concludes the public comment on this item. 00:13:23.039 --> 00:13:27.149 And so Commissioners, I move, we ratify, approve and 00:13:27.149 --> 00:13:30.970 confirm the temporary exceptions approved and issued 00:13:30.970 --> 00:13:35.029 at the Commission's May 5, 2020, open meeting in accordance 00:13:35.029 --> 00:13:37.786 with their terms. Is there a second? 00:13:37.810 --> 00:13:38.537 I'll second. 00:13:38.561 --> 00:13:40.029 Second by Commissioner 00:13:40.029 --> 00:13:43.309 Christian. We have a motion and a second. All in favor 00:13:43.309 --> 00:13:48.559 say aye. Aye. The motion is approved. The Commission 00:13:48.559 --> 00:13:51.620 hereby ratifies, appproves, and confirms the temporary 00:13:51.620 --> 00:13:54.340 exceptions approved and issued at the Commission's 00:13:54.340 --> 00:13:57.649 May 5 2020 open meeting in accordance with their 00:13:57.649 --> 00:14:01.750 terms. I direct staff to prepare a record of the actions 00:14:01.750 --> 00:14:05.159 taken at this meeting. And let's go to item number two. 00:14:05.539 --> 00:14:08.429 item number two is our public participation item. And 00:14:08.429 --> 00:14:11.039 no one is registered indicating they wish to speak 00:14:11.039 --> 00:14:14.710 on any non-posted items. Are there any other duly posted 00:14:14.710 --> 00:14:16.620 matters to be brought before the Commission at this 00:14:16.620 --> 00:14:20.320 time? If not, this meeting of the Railroad Commission 00:14:20.320 --> 00:14:22.779 is adjourned. Thank you all very much. We will see 00:14:22.779 --> 00:14:25.860 in a few weeks. Happy New Year.