An in-depth look at the newest Texas Railroad Commissioner
Seldom are the words “genuine” and “politician” used in the same sentence. Almost as often do you hear of an elected official being described as “energetic,” “innovative” or “passionate.” But in many respects, Texas’ newest Railroad Commissioner, Ryan Sitton, is breaking the traditional mold.
Not only is Sitton the first engineer to serve as a Commissioner in nearly 50 years, at the ripe age of 40 he is among the youngest.
But age is just a number, an adage Sitton is proving to be true. He possesses a level of vitality and enthusiasm that is impressive at any age. Equally as remarkable is the high level of industry expertise and comprehensive knowledge he has acquired in such time.
Sitton has an entrepreneurial drive and a scientific mind. He exudes business savvy, yet he is charismatic and engaging on a personal level. It could be said that the newest face at the Commission is a breath of fresh air for the centuries-old institution.
In speaking with Sitton, I found myself asking very little as he breezed through nearly every potential question unprompted, sharing his story and vision unabashedly. Sitton was forthright and open, eager to impart his knowledge on any given topic, and even more excited to discuss ideas—indicative of how he may help guide one of the oldest state agencies in the country into a new era of transparency, engagement and outreach.
Indeed, the former CEO appears to have big plans for the Railroad Commission of Texas and the industry it regulates. This kind of sea change calls for a fresh perspective and outside-the-box thinking—prerequisites that make Sitton just the man for the job.
Throwing the Book at Convention
On November 4, 2014, Texas voters agreed that Sitton was indeed the right man for the job. Courting those voters was no easy task, however, especially considering that a large number of Texans aren’t even sure what a Railroad Commissioner actually does.
On top of that, before he even made it to the general stage, Sitton faced a steep runoff election after coming in second in the Republican primary to former State Representative Wayne Christian, who took just over 40 percent of the vote.
“In the primary, I was kind of following the normal playbook,” Sitton recalls. “The playbook tells you, in Republican politics, in the primary you go out there and talk about how conservative you are. You try to just talk over and over about how conservative you are.”
“I could prove that I was more qualified pretty easily. That’s what we focused on, and that’s why we won.”
And while he notes that being a conservative is not a bad thing—he considers himself as conservative as anyone—it failed to set him apart as a candidate. On a deeper level, it’s obvious that there is much more to Ryan Sitton than his conservative credentials.
That’s when the candidate chose to scrap the traditional rule book and shake up the game.
“We decided in the runoff, let’s focus on energy,” Sitton explains. “Let’s spend our entire campaign talking about energy.”
Sitton ditched traditional TV ads, opting instead for more personal interactions, town halls, tele-town halls and targeted mail distributions, all highlighting the important energy issues that matter to Texans. Dropping the political smoke and mirrors and getting down to the facts struck a resounding chord statewide and allowed him to heartily overtake his Republican opponent in the runoff — eventually earning him nearly 60 percent of the votes in the general election.
“How do you prove to the world that you’re the most conservative?” Sitton asks. “I don’t know, but I could prove that I was more qualified pretty easily. That’s what we focused on, and that’s why we won.”
This may be the first in what could be many deviations from the traditional norms that we can expect to see from the state’s newest elected Commissioner.
He is unchained to the status quo, unencumbered by convention and undaunted by change.
Getting Down to Business
On January 5, 2015, Ryan Sitton was sworn in as the 49th Railroad Commissioner of Texas.
With the 84th Legislature gaveling in just a week later, a completely new roster of statewide elected officials, tumbling oil prices and a whole host of issues facing the energy industry, the newest Commissioner had his work cut out.
When asked about his top three priorities as Railroad Commissioner, Sitton lays out his vision for the future rather succinctly—starting with changes within the agency. “Building out our outreach capabilities and our expertise so that we have the ability, as an agency, to respond more and more dynamically to the changes in the landscape— whether they are community changes or technical changes,” Sitton says.
He goes on to explain that the Commission must learn to function in a new reality, one filled with streaming news, 24-hour news stations and social media—a reality in which anyone with a smart phone has the power to make headlines.
“We have to recognize the fact that the general public is going to be inundated with information that has no checks or balances,” Sitton explains. “Because of that, we’re going to have to do more outreach than we had to do in the past.”
Fortunately, he is full of ideas on how to achieve this goal: targeted regional newsletters; consistently engaging in public forums, such as town hall meetings; speaking with local chamber of commerce groups; and a broader social media presence, just to name a few.
While the concept of increasing public outreach may not be a new or revolutionary one, the critical need for such communication has reached new heights, as Sitton points out, in light of changes in the local landscape. This is especially true with communities placing tighter regulations on drilling activities in their areas.
On November 4, 2014, 59 percent of voters in Denton approved a local ordinance banning hydraulic fracturing within city limits. While the Denton ban is currently being challenged in court, and at this time no other municipality has implemented an outright ban, it’s still a matter that has warranted serious discussion and concern at the local, state and federal levels.
Relations between the oil and gas industry and North Texas residents has long been tumultuous. Drilling activity in the urban communities skyrocketed in the 2000s following the advent of drilling techniques that allowed operators to unlock natural gas reserves contained in the underlying Barnett Shale.
Residents began expressing concern and discontent with some of the byproducts of shale production, such as noise, lights, unfamiliar odors and heavy truck traffic coming to and from drill sites. Some blame the industry for the frosty relationship, some point to a missed opportunity by the Railroad Commission to mitigate tension and educate the public on what’s actually going on in their backyards and others blame the wave of national environmental activists who swarmed the area and organized opposition groups further escalating the situation.
By 2014, tensions had reached a fever pitch. A petition to ban hydraulic fracturing was presented to the Denton City Council, placed on the November ballot and eventually won voter approval.
Sitton calls the series of events disappointing and points out that the bulk of residents’ concerns are not tied directly to hydraulic fracturing, which is a completion technique, but rather the actions associated with drilling in general, for which there are potential remedies. Additionally, local taxpayers may be left holding the bill for litigation fees, and, if upheld, the rule could negatively impact funding for local services, such as schools and first responders.
“This is a good example of how political confusion is not only driving bad policy, it’s not serving the citizens,” Sitton says.
Following the vote, Railroad Commissioner David Porter immediately issued a statement, saying “Bans based on misinformation — instead of science and fact — potentially threaten [the Texas] energy renaissance and as a result, the well-being of all Texans.” Commission Chairman Christi Craddick has been outspoken on her position, maintaining such regulation is under the exclusive jurisdiction of the Railroad Commission. As such, the Commission would continue to issue drilling permits in the county.
The Texas General Land Office and the Texas Oil & Gas Association responded by immediately filing suits questioning the constitutional legitimacy of such ordinances. Now the matter is up for formal debate in the courts and at the state’s Capitol.
Sitton believes this issue is the most urgent one facing the industry today: “How can we manage this from both a relationships perspective with communities and also from a legislative perspective, making it clear where the lines are drawn so that people understand this is what the Railroad Commission does … so that we all know where to go with those concerns and manage them effectively?” Sitton posits.
Sitton advocated for his own legislative concept, encapsulated in House Bill 3217 filed by Representative Tony Dale, that includes the creation of formal channels of communication for political subdivisions to better engage with and have their concerns addressed at the Railroad Commission, rather than letting tension compound and potentially allowing a slew of similar ordinances and lawsuits, further wasting taxpayers’ dollars and putting the energy industry in a crippling state of flux.
But he stands with his colleagues in maintaining the Commission’s exclusive authority and ability to regulate the state’s oil and gas industry.
“We’ve got a 750-person agency that specializes in this; this is what we do,” Sitton explains. “When it comes to protecting mineral owners, landowners, surface rights and correlative rights, when it comes to producing effectively and making sure that we are protecting groundwater, no one is going to be as well-suited as the Railroad Commission.”
Further increasing public awareness and encouraging engagement is Sitton’s support of changing the name of the historic agency, which no longer has any purview over railroads. In fact, in 2005 the Texas Legislature removed all remaining oversight of the rail industry from the Railroad Commission, which had already been regulating the oil and gas industry since the 1910s—a fact that is unknown to an overwhelming majority of Texans.
“When you think about how huge energy is in this state, the fact that only 3 percent of the population knows that there is a state agency that regulates oil and gas and is looking out for the interests of the state and the operators—that is amiss,” Sitton states.
Sitton concedes that some prestige associated with the name may be compromised—the Railroad Commission is renowned in energy circles around the world—but he believes the positive benefit of informing and educating Texas citizens outweighs any potential negatives.
Re-tagging the Railroad Commission is not the only name change Sitton is instituting at the agency. “I try not to let anybody here call me Commissioner,” he asserts, adding that he prefers to be on a first-name basis with staff. “We all have a job to do; we’re all on the same team.”
Sitton likens it to being on a football team, where no one would refer to their teammate, for example, as “Quarterback Manning,” instead calling him Peyton (or Eli, depending on the team, of course).
“Forget the hierarchy; that’s a waste of time,” Sitton says sensibly.
Educating the Masses
Second on his list of priorities as Commissioner, yet very much in line with the goal of increasing public outreach, is education. “I would like to see, over the next six years, that we educate 250,000 Texans on energy. That’s our target.”
Many of the challenges the industry is facing today—from negative public perceptions to preparing a future workforce to meet its growing needs—would be greatly alleviated by an increase in general knowledge of the industry and its methods of producing the natural resources on which Texans depend.
“Did you know it was possible for a child to be born in Texas and to go through public education from kindergarten all the way through college and have never had one hour of energy education?” Sitton asks.
After all, the state’s cultural heritage and economy have deep roots in the oil field. Last year, the industry supported more than 40 percent of Texas’ economy and provided direct employment to 418,000 Texans.
Sitton believes the Railroad Commission and the state have the opportunity to play a huge role in this education process. He envisions an arrangement in which the state agency works with others to create and implement some kind of program or curriculum, whether it is rolled into a science class lesson or offered in a special practicum setting. Sitton firmly believes every child should have at least eight hours of basic oil and gas education. He even compares not educating Texas children on the science and facts behind energy production to giving someone a car with no instructions or lessons on how to drive it.
“Imagine how much stronger our ability to advocate for good public policy would be if everyone had even just an hour of energy education.”
World Domination? At Least in Terms of Energy …
Zooming out to a much broader scope, Sitton’s third priority is “Texas really leading the United States to be this global energy powerhouse that we should be.”
Texas already leads the nation in energy production. The Lone Star State contains nearly a third of total U.S. crude oil reserves, with production topping 3 million barrels a day in 2014. It is also the nation’s top natural gas producer and accounts for nearly 30 percent of its natural gas reserves.
Overregulation from the federal government, however, is a constant threat. The shifting geopolitical landscape abroad also threatens U.S. energy success, although Sitton believes the real vulnerability in this case is poorly advised domestic policy.
“We have shown over the past 20 years a propensity to knee-jerk reactions, politically, to what’s happening in energy,” Sitton remarks. “We have been tempted too often to set energy policy based off a short-term perceived need or popularity versus a long-term strategy.”
Sitton maintains that it all goes back to making sure our elected officials and the public at large are fully educated on the basic fundamentals of energy production. He also points out that not since President Jimmy Carter has a U.S. commander in chief laid out a comprehensive, long-term energy plan—something he would like to see happen.
“I have this vision that … 30 to 40 years from now, people will look back and they will say it was in the 1970s that the U.S. lost control of global energy prices, but it was in 2020 that they got it back,” Sitton says.
The Commissioner sees the U.S. solidifying its top spot as the world’s leading energy provider, with the most substantial opportunities in natural gas markets abroad. There, the product is selling for north of three times as much as it fetches at home. He is also in favor of lifting the federal export ban on crude oil.
“If we could develop the infrastructure, you could see a world not that far away where the U.S. has become a global energy supplier, and because we do it better than everybody else … all of a sudden, we’re the only game in town,” Sitton predicts. “Imagine the ramifications that would have globally.”
History as Our Guide
While Sitton’s ideas and goals for the future are certainly promising, even inspiring, perhaps we should look to the past to glean some important information about the man with a plan.
A native Texan, Sitton was born in Arlington and raised in nearby Irving, just outside Dallas. The importance he places on education and his future engineering career may be derived from his upbringing. Both Sitton’s parents were science teachers—his mother taught chemistry and his father was a physics instructor.
He attended private school where his mother taught in Irving and went on to study engineering at Texas A&M University, where he met his wife, Jennifer, while enrolled in an engineering class together. After graduating with a degree in mechanical engineering, Sitton worked for a handful of years as a production and a reliability engineer for various oil and gas companies, focused on ensuring all equipment was dependable and functioning properly.
Sitton opts for more personal interactions, town halls, tele-town halls and targeted mail distributions all highlighting the important energy issues that matter to Texans
In 2001, Sitton changed course and accepted a job with a small consulting company, Berwanger, after being offered an engineering position on a project in Australia. Although it was the opportunity to travel abroad that initially intrigued him, Sitton stayed on with the company for several more years managing projects.
Two years into his tenure, Sitton approached the owner of Berwanger with a proposal to develop a new unit within the business, the Mechanical Integrity Division. In less than three years, he was able to grow the division from just him to about 25 employees.
However, it was not long before Berwanger was bought out by a larger company, Siemens, and Sitton was left without a place at the table, an experience he describes as “crushing.”
“I had really sunk my whole heart and soul into building this division of the company,” Sitton explains. “But it turned out to be one of the biggest blessings, because in early 2006, I decided I was going to start my own company.”
That year, Sitton and Jennifer started Pinnacle Asset Integrity Services (AIS), an engineering consulting company specializing in the implementation and maintenance of asset integrity management systems for the oil and gas, chemical, mining, pharmaceutical, wastewater and electric power industries.
Sitton credits his experience of building the Mechanical Integrity Division at Berwanger for giving him the confidence and know-how needed to build a company from the ground up.
Today, Pinnacle AIS is the largest company in the world focused on reliability services. In December, Pinnacle successfully completed its first merger by acquiring Advanced Reliability Technologies and further expanded its comprehensive yet specialized reliability services.
Called to Serve
It was 2009 and Pinnacle was already experiencing notable success in terms of growth. On the national stage, George W. Bush had just stepped down from the presidency and a new commander in chief, Barack Obama, was making waves in Washington, D.C. The Great Recession was gaining intensity, and the Troubled Asset Relief Program (TARP) bailout was grabbing headlines.
Sitton recalls sitting down to write yet another six-figure corporate tax payment to the federal government as President Obama was on TV espousing the need for the rich to pay more in taxes, calling it fair.
In the first several months of Pinnacle’s founding, the Sittons did not draw a single dime from the company as profit, instead relying on money judicially saved away until the company was financially viable. Even in the depths of the recession, Pinnacle was creating jobs, adding between 20 and 50 new employees each year. “And yet I’ve got this president saying you need to pay more, and it was just really frustrating,” Sitton laments. “That was probably the first time I became hyper-politically aware—I mean I had voted and stuff like that, but really starting [to get] involved.”
Sitton began researching and meeting with elected officials as well as candidates, a move that only drew him deeper into politics. He was not overly impressed by some lawmakers’ knowledge or real-world application of issues impacting Texas businesses, in particular the energy business.
“It was around 2011 that I realized that the problem is people who actually do know about those things never run for office, because we’re off running our businesses,” Sitton recalls.
He remembers numerous conversations with fellow chief executives, colleagues and friends coalescing around the need for more business people in politics. Yet there was always the typical laundry list of reasons to not get involved—from kids’ sports games and church activities to simply wanting vacation time. The conversations continued, and it was not long before Sitton felt the call to serve.
“In a more general sense, I always wanted to put my knowledge and my expertise in running a business in the energy industry to work,” Sitton remarks. “I knew what the Railroad Commission was and I thought maybe someday I could engage in that, but I didn’t know anything about politics or running for office, so I decided to run for the local House seat.”
Although Sitton ultimately did not win the seat in House District 24, he took the disappointment in stride and instead used the experience to propel him to bigger things. In the wise words of Winston Churchill, “Success consists of going from failure to failure without loss of enthusiasm.”
If Sitton suffered any loss of enthusiasm, he certainly hides it well. However, he is open about his faith and remembers feeling slightly misguided at the time. “It makes you think, Lord, maybe I didn’t hear You right,” he admits. “I really felt like I was supposed to do this.”
Less than two years later, Railroad Commission Chairman Barry Smitherman announced he would not be seeking reelection, and Sitton’s true path was revealed.
“If I had not run for that seat, I wouldn’t have had the confidence to run for this one,” Sitton says. “And if I had run for that seat and won, I probably wouldn’t have run for this one because I would have spent by then a whole lot more time serving in office and not felt like I could take the time to run for this.
“I think that it was all part of a master plan,” Sitton adds thoughtfully.
Service Is Not Without Sacrifice
Although Sitton has fully embraced the call to serve the state, it does not come without some sacrifice.
Last April, while still on the campaign trail, he announced that if elected he would step down as CEO of Pinnacle and place his assets in a blind trust to “avoid even the appearance of conflict.” In doing so, he publicly stated at the time, he was “going beyond what is required by the statutes.”
Sitton had intended to continue his involvement with Pinnacle in a limited capacity, but acquiesced after garnering criticism over the move, even though the company has no regulatory interaction or direct business with the Railroad Commission. The new Commissioner officially left his post at the company at the beginning of January.
In a press release issued in December, Sitton stated: “These steps will make sure that the citizens of the State of Texas are confident as I go to work for them. My time, energy and passion will be focused on utilizing my energy experience to help the Railroad Commission be as efficient and effective as it can be, and in turn, make all Texans confident in how our state’s energy industry is operating.”
“We all have a job to do; we’re all on the same team.”
In addition to leaving the company he built, Sitton spends significant time serving the state away from his family. “I spend three days plus a week in Austin, I’ll spend another day or two out around the state, so I spend less time at home,” he explains, noting their decision to not yet uproot the family from their home in Friendswood, just outside Houston. He also credits his wife for her support in this endeavor. “I think we’ve found a good balance, and it is a sacrifice but it is one that I think everyone is really happy with and it suits our family really well.”
With three small children at home—Sarah, 11, Luke, 9, and Lance, 6—I couldn’t help but wonder what they thought of their dad as a Railroad Commissioner, or if they even grasped the concept. “We do talk a lot in our family about public service, and they see this as just like being active in your church,” Sitton explains. “It’s time you put in to try to do something to serve the community. This is a little bigger community than our church serves, but I think they view it that way.”
Mixing Work With Play
As the perpetual entrepreneur begins to unveil his latest business venture, which is inspired by paling around with his kids, it’s no wonder public office hasn’t phased how his children view him. “I own a company called Extreme Tricycles,” Sitton divulges. “We’re going to build adult versions of big wheels for guys like me to play on with our kids.”
If the visual of a Railroad Commissioner—or any elected official for that matter—cruising down his neighborhood block on an oversized adult tricycle doesn’t strike you as a far cry from stuffy political stereotypes, maybe nothing will.
These big-boy toys should be available on the market in the next six months to a year.
Aside from work and play, the Sittons are devoted members of St. Andrew’s Episcopal Church and active members of their community.
Sitton serves on the board of directors for multiple organizations, including the Pasadena Chamber of Commerce, the Pasadena Conservative Citizens Club and the Associated Republicans of Texas. Additionally, he proudly serves his alma mater as a Board Member on Texas A&M University’s Mechanical Engineering Advisory Council. He is also a member of several industry groups, such as the Texas Alliance of Energy Producers, the American Society of Mechanical Engineers and the American Petroleum Institute.
In February, Texas Gov. Greg Abbott appointed Sitton to serve as his official representative on the Interstate Mining Compact Commission.
For more information: To learn more about the Texas Railroad Commission and the commissioners, visit www.rrc.state.tx.us.Click here for reuse options!
Copyright 2015 SHALE Oil & Gas Business Magazine