“Chairman Christi Craddick has a proven history of taking principled votes that consider fact and merit alone,” Craddick spokesperson Mia Hutchens Ha
“Chairman Christi Craddick has a proven history of taking principled votes that consider fact and merit alone,” Craddick spokesperson Mia Hutchens Hale said in a statement responding to POLITICO’s questions about the chair’s industry ties. “These votes have led to increased safety, protected our state’s natural resources and our environment, all while maintaining a regulatory climate that promotes energy independence and security and supports hundreds of thousands of jobs in communities across the state.”
Craddick did not provide direct answers to questions about whether she has recused herself from decisions involving companies that have donated to her campaigns or which she owns shares in, or whether financial connections with the industry have influenced the commission’s actions.
An industry regulator, and an ally
Despite its name, the Texas Railroad Commission has no authority over railroads — the state moved that power elsewhere in 2005. Instead, the commission and its nearly 1,000 employees oversee a Texas oil and gas industry whose production has soared since the start of the fracking boom more than 15 years ago.
The commission is also siding with many in the industry in opposing a proposed Environmental Protection Agency rule that would require oil companies to measure how much methane leaks from their operations, instead of relying on formulas that critics say underestimate the amount. The EPA would offer money to help pay for the new equipment, but would also fine companies for leaks exceeding the legal limit.
“The EPA’s overreaching methane rules and unrealistic timeline are yet another example of the Biden administration’s attempt to shut down the oil and gas industry in Texas,” Craddick said in a news release in February.
The EPA defended its proposal in response to questions from POLITICO, calling it “well-grounded” under both the Clean Air Act and the agency’s past research.
The administration is also drawing up regulations to impose a fee on methane emissions from the oil and gas sector, as laid out in last year’s climate law. That law offers the companies money to help them upgrade their pipelines, storage tanks and other infrastructure to cut the pollution.
While those fights play out, Texas’ regulators are making the immediate decisions about methane releases in the nation’s top oil- and gas-producing state.
In 2022, the commission approved 95 percent of companies’ applications for permission to burn their excess gas, a process known as flaring, according to agency spokesperson R.J. DeSilva. At a meeting on March 28, the commissioners approved 11 flaring applications as part of a unanimous vote that drew no discussion. The agency grants permits under a state law allowing companies to flare gas to relieve pressure on their systems or if no pipelines are available to transport it elsewhere.
Flaring is considered less harmful to the environment than letting the gas escape unburned, but it still contributes to climate change by creating carbon dioxide. Critics of the practice say companies should either store the gas or send it to market. Companies have argued they have to flare because there aren’t enough pipelines to carry the gas away.
About 91 percent of methane sent to the flares is burned, while the rest escapes to the atmosphere, according to one study.
The railroad commission argues that it has helped drive down greenhouse gas emissions by requiring companies to “more thoroughly document the circumstances surrounding the need to flare gas.”
“Flaring in Texas has dropped drastically in recent years as a direct result of the Commission’s action in revising rules and procedures for flaring exceptions,” DeSilva, the commission spokesperson, said in an email reply to questions. He said the percentage of gas produced in Texas that is flared has dropped 63 percent since June 2019.
Texas oil and natural gas producers vented or flared more than 7 billion cubic feet of gas in March, according to the most recent monthly production report that companies submitted to the commission. Texas accounted for nearly half the U.S. oil and gas industry’s methane flaring and venting in 2019, even though the state accounts for only a quarter of the country’s natural gas production and about 40 percent of its oil production, according to the U.S. Energy Information Administration. By December 2021, Texas’ venting and flaring of methane had dropped to about 37 percent of the national total, according to EIA figures.
Critics have questioned whether the commission deserves any credit for the reduction in flaring.
BP, Exxon Mobil and other companies have cut their flaring under pressure from investors and green groups. But some smaller, privately held companies still flare as much as half the gas coming out of their oil wells, said Colin Leyden, Texas political director of the Environmental Defense Fund, a nonprofit that monitors oil field flaring and works with companies to cut their emissions.
“The Railroad Commission has benefited from the large companies and the change in capital markets, but they’re still allowing laggards to flare half of the gas that they produce,” Leyden said. “That’s a regulatory failure right there.”
The commission’s flaring data also combines wells focused on natural gas production, where flaring occurs infrequently, with oil wells, where natural gas is often an unwanted byproduct and more likely to be vented or burned, Leyden said. That makes the problem at many wells seem smaller than it is, he said.
The amount of methane that oil companies emit has been vastly underestimated, University of Michigan researchers concluded, because the towers that burn the gas often malfunction or simply don’t work. An Environmental Defense Fund study found in helicopter flyovers that 10 percent of the flare towers in West Texas’ oil fields were not lit.
Still, the oil industry says it has taken steps to reduce flaring in the state, including via industry-led projects such as the Texas Flaring and Methane Coalition and Environmental Partnership. The Texas Oil & Gas Association, a trade group, pointed to World Bank data showing a drop in the amount of flaring companies do compared to how much oil and gas they produced.
“Texas’ oil and natural gas industry is committed to achieving environmental progress, has taken significant steps to reduce methane emissions, and is on course to make even more gains,” Todd Staples, president of the Texas Oil & Gas Association, said in a prepared statement.
Millions in financial ties
Craddick, a lawyer and the daughter of former Republican Texas House speaker Tom Craddick, has been the commission’s chair since 2013. Her social media feeds are a mix of updates on meetings with state lawmakers and criticisms of the Biden administration’s immigration policies and energy regulations.
She pulled in $1.5 million in campaign donations in 2022, nearly all of it from oil industry executives, lawyers and drilling service companies, according to a POLITICO review of campaign finance documents.
Her family has also received $10 million in royalties from oil pumped out of land they hold, according to a Texas Monthly investigation.
Craddick’s campaign donors include NGL Water Solutions Permian, a Midland-based company that handles petroleum and wastewater, and which found itself the target of a complaint filed before the commission in April 2020. The company’s competitors accused it of unduly delaying their permit applications with the commission by filing groundless protests.
In October 2021, Craddick, Christian and Wright voted in favor of NGL Water Solutions.
In the meantime, NGL Water Solutions’ donations to Craddick’s campaign fund — $22,500 in all of 2019 — expanded during the year the complaint hit the commission. The company contributed $77,500 to her campaign in 2020 and another $75,000 in the first 10 months of the following year as the commission deliberated.
NGL Water Solutions also gave $22,500 to Christian’s campaign at the end of 2019, and another $50,000 the following year.
The company later gave Craddick’s campaign $150,000, Christian’s $60,000 and Wright’s $125,000 from Dec. 1, 2021, to the end of last year, according to campaign finance records.
NGL Energy, the parent company of NGL Water Solutions Permian, did not respond to an email and phone call requesting comment.
Besides giving cash, the industry has made in-kind contributions to Craddick’s campaign. A Washington, D.C.-based political action committee controlled by Occidental Petroleum, one of the largest U.S. oil companies, hosted a campaign event for Craddick in September, according to her campaign finance forms. Oilfield equipment manufacturer RJ Machine provided more than $12,000 in round-trip flights taking Craddick hundreds of miles from Austin to El Paso and Midland, key hubs in the giant oil fields of West Texas.
Occidental Petroleum and RJ Machine declined to comment.
Craddick also owns shares in some of the biggest companies working the Texas oil and gas fields, according to her personal finance disclosures, including Chevron, Pioneer Natural Resources, Chesapeake Operating and fuel maker Phillips 66. In addition, she owns shares in pipeline companies Kinder Morgan, Enterprise Products Partners and DCP Midstream, the personal finance data showed.
Christian raised $288,500 in campaign money from the oil industry in 2022, including $100,000 from Javaid Anwar, CEO of the oil company Midland Energy.
In a prepared statement sent by Ryan Anwar, the CEO’s son, Midland Energy said its internal targets on cutting its emissions were “well below” any set by EPA or the Texas Commission on Environmental Quality, “henceforth we have no concern over our carbon emissions.”
www.politico.com