Tunnell, Byron, Railroad Commission of Texas, Austin, Texas

Introduction

The title seems incomplete. "Texas Looks Ahead". How?…happily? boldly?…optimistically?…with uncertainty?…with dread?…with confidence? If I addressed myself to such speculation, I would be trespassing on the field of the economists or the horoscope experts. At the Railroad Commission, we are equipped with neither. We are equipped with a set of statutes that through the years has been given us by the Legislature, we have a number of basic regulations that have been implemented to discharge the responsibilities set forth in the law. We have about 150 people, excluding clerical help, to supervise the regulation of some 194,000 oil wells and 24,000 gas wells in the production, storage, and transportation of about 3.4 million bbl of oil and some 23 Bcf of gas daily. Our policies are subject to the ratification of the people of Texas every 2 years (when one of the Commissioners must run for re-election) and the Texas Legislature, and the whole judicial system from justice of the peace through the U.S. Supreme Court. And, of course, we are subject to the advice of some 5,424 oil and gas operators, their lawyers and their engineers. In this framework - or I should say - goldfish bowl, we must make decisions every day that permit response to changing international conditions, changing economic conditions affecting the demand for energy and changing concepts affecting our environment. Under these conditions, I would say that as far as the Commission is concerned, Texas looks ahead - carefully.

ROLE OF THE RAILROAD COMMISSION

There are some policy trends of the Commission that I think you might discern. The Commission pursues a policy of producing all the oil and gas that can be produced without waste. We are looking for new regulatory methods that will encourage new discoveries. We encourage operators to install equipment and methods that will increase recovery. We are extremely active in the field of pollution abatement. It was a little surprised to learn from our most recent Activity Survey from our district offices that over 80 percent of the total man-hours of our field personnel is devoted to pollution abatement and related activities. You can rest assured that the aroused awareness to environmental conditions will not be placated by words. Action will be the only acceptable solution. placated by words. Action will be the only acceptable solution.

CRITICISM OF THE RAILROAD COMMISSION

Yet, in spite of the progressive policies which we pursue - all aimed at providing the U.S. consumer with the maximum amount of oil and gas that providing the U.S. consumer with the maximum amount of oil and gas that Texas fields and the Texas industry can produce - there seems to be a deliberate effort by some in Washington to malign the State of Texas and intimidate the Commission that is responsible for enforcing the Texas laws. The Economic Report of the President prepared by the Council of Economic Advisors and submitted to Congress last month, at one point state, "….to communicate Council viewpoints concerning current economic conditions and necessary policy decisions, Council Members and the Special Assistant to the Chairman made a substantial number of speeches throughout the year and participated in frequent interviews with representatives of all types of participated in frequent interviews with representatives of all types of news media."The Railroad Commission of Texas was mentioned prominently in a number of those speeches, those frequent interviews with the news media, and in the report. Thus, I am borrowing their procedure to communicate some of our viewpoints. In his economic report last month, the President misinterprets our market demand law as being something separate from conservation. He said, and by he, I mean his report stated: "The state prorationing agencies have held back domestic production, and this, together with strict national security limitations on imports, has maintained relatively high U.S. oil prices." We are accused of going "beyond conservation (to) limit total production to the market demand for crude oil in the state at prevailing prices." This simply is not true. This garble, poorly written section of the report sounds more like a sleepy sophomore's paper than one prepared by the high-level economic staff of the President of the U.S.

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