SHALE Oil & Gas Business Magazine
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In many ways, the story of the Railroad Commission of Texas (RRC) is the story of the last century of America’s oil and gas industry. In part, that’s because 2017 marks the 100th anniversary of the Railroad Commission’s authority to regulate the oil and natural gas industry in the state. But it’s also because the RRC has often led the globe in finding new and innovative approaches to its mission.
On Feb. 20, 1917, the Texas Legislature declared oil and natural gas pipelines to be common carriers and gave the Railroad Commission jurisdiction to regulate them. Two years later, on March 31, 1919, the Legislature passed a new law giving the RRC the authority to enforce a new law requiring the conservation of oil and gas as a precious state resource and forbidding its waste.
Though it was originally created in 1891 to regulate the state’s then-booming railroad industry, the RRC quickly became the most recognized and influential oil and gas regulatory body not just in America, but across the globe. Much of that had to do with the fact that, during the 1920s and 1930s, a high percentage of world oil production came from Texas; but also the Commission led the way in the creation of innovative, often heavy-handed regulatory policies. It also did not hesitate to aggressively intervene in oil markets during times when, in its judgment, the state’s resources were being wasted due to depressed prices.
Because Texas was the world’s largest oil producer, interventions and policies by the RRC had a global impact, and many came to be copied by regulators in other states and countries. For example, when the RRC became the first regulator to implement a system of prorationing and allowables in August 1930, regulators in Oklahoma and other states quickly followed suit.
This phenomenon of Texas leading the way with new, innovative regulatory policies that are soon emulated in other states has carried forward into modern times. Recent examples include rules governing disclosure of chemicals used in hydraulic fracturing operations and revamps of regulations governing well completions and disposal wells. As the industry has executed its shale revolution over the last decade, the RRC has led the way in the implementation of new, modernized regulations that apply to a constantly and rapidly evolving industry.
Since its creation as a regulatory body made up of three elected commissioners who serve staggered six-year terms, the RRC has been led by a constantly evolving set of personalities. The 17 years of the 21st century have seen 11 different people either elected or appointed to serve as members of the RRC. The challenges presented by the introduction of frequent new faces with new priorities and goals have been compounded over the last decade by a reluctance on the part of the Legislature to allocate a significantly higher budget for the RRC, even as the industry has expanded rapidly in the state. As a result, the Commission has found it increasingly difficult to retain high-quality staff, as its salary structure has become increasingly uncompetitive — not just within the industry, but with other state agencies. Due to the lack of funds needed to hire new field inspectors, existing inspectors have had to assume ever-larger areas of responsibility, often driving hundreds of miles in older vehicles to complete their daily work.
Just as important as its personnel challenges, the RRC’s computer systems have also become woefully outdated. All of these funding issues have led to increasing criticism of the Commission from the public and anti-oil and gas activists, as well as allegations that it isn’t properly executing its responsibilities. On top of this, the Commission was up for its Sunset review for the third time in the last seven years during the 2017 session of the Texas Legislature.
It was into this breach that the newest member of the RRC, former state Rep. Wayne Christian, stepped in January. That he did so voluntarily — even gladly and with a smile on his face — might surprise the casual observer. But to those who know him, it was no surprise at all, since Christian has never been a person to shy away from taking on leadership roles in challenging situations.
“When I was a kid, my dad ran an Exxon — it was Enco back then — station [in] Tenaha, Texas, population 1,097, and it’s from that that I started to appreciate what a difference oil, gas and other fossil fuels can make to the lives of the citizens in Texas.” Commissioner Christian has a habit of ticking off the populations of the small East Texas towns in which he has lived and gone to school during his life. It’s the verbal habit of someone who is proud of his background and never wants to forget where he came from. “So, I came from not the top of the industry, but from the bottom of the industry, if you can call it that.”
Christian was born in Center, Texas — or, as he put it in our interview, “Center, Texas, 10 miles from the Louisiana border, population 4,500” — in Shelby County, where his family roots extend back through four generations. His family moved to nearby Tenaha when he was young, when his father purchased that filling station, a move that Christian gives credit for bringing his family closer together: “[That move meant] my dad made a good living, my mom got to go to work there and we as a family got to work there together. I remember my dad, two to three weeks after we got that station, writing checks out for the bills. And he looked up at me and said, ‘Wayne, this is the first time in my life that I can remember being able to pay all these bills.’ So, ultimately, it was because of this industry that I got a college education.”
Well, that plus a lot of hard work and study. The fact that Christian graduated from Tenaha High as the valedictorian of his senior class is obviously a big reason why he was able to get into Stephen F. Austin State University in nearby Nacogdoches, ultimately graduating with a bachelor’s degree in business administration and a minor in marketing.
The Commissioner remains close to his alma mater and spent some time talking with us about an oil and gas-related joint venture between Stephen F. Austin and Panola College in Center that he’d recently become aware of. “When I got home right after being sworn in as Railroad Commissioner, I talked to a friend of mine who teaches at a local community college. He introduced me to a program that I did not know existed, a petroleum school there in Center.
“Out there, the only industry before oil and gas came in had been growing trees and chickens. So there were not a lot of jobs for people. But I found out that this two-year petroleum school was graduating 200 students each year, and 92 percent were being employed in the industry at an average starting salary of $80,000 per year. But the graduates of this two-year program found they could not expand into the executive branches of these companies, because they didn’t have a four-year diploma. So, Panola College worked out an agreement with Stephen F. Austin under which SFA accepts all the hours from that petroleum school and will even let them take the remaining hours needed for a four-year diploma online, allowing these students to move up in the ranks in different companies.
“That is a tremendous pilot program to encourage in our community colleges all over the state of Texas, because when you stop and look at what’s happening now, we’re about to enter an expansion at a time when we’ve also lost a lot of our senior members in the industry. We’ve lost a lot of our experienced workers, and we’re going to have to train individuals in the next few years to fill these positions. And that excites me. That’s something I’m excited to work for, expanding and training those jobs for young people.”
It does indeed appear that the industry, at least in Texas, is entering into a new boom time, with a rising rig count, increasing number of permit filings, and all the job creation and economic development that will represent for the state. When we talked with the Commissioner, the Texas legislative session had just ended. The Sunset process produced a reauthorization of the RRC for another 12-year period, and the Legislature had come through with a very significant budget increase.
We asked Christian about the importance of making it through the Sunset process with a new 12-year mission, and with the Commission’s historic name intact: “Well, first and foremost I want to commend the Legislature, especially Chairman Larry Gonzales who led the Sunset Committee, because they were wise enough to keep that [name change] argument out of the Sunset bill. That was an argument that I think would not have been appropriate there.
“But of course, I come from a part of the state where we like to say, ‘If it works, don’t fix it.’ If there needs to be a marketing program done to help acquaint the citizens of Texas that the Railroad Commission provides for the regulation of oil and gas, well then, I’m all for getting that idea out there. But with the limited resources that we have, I’d rather see it going to salaries, to regulations, to helping expedite permitting processes. Frankly, there’s a lot of places that I want to see the dollars go right now, versus replacing signs by the thousands out across the state of Texas and signs on buildings, etc., which would be required for changing the name of an organization that is already well-known and respected worldwide.”
Speaking of money, we asked the Commissioner if he was happy with the way the budget process had come out, and if he believes the new budget authorization for fiscal year 2018–19 will be adequate to meet the Commission’s need during what looks to be a new boom time in the industry: “Yes, this new money will go toward stabilizing income, hiring more inspectors, more people that do the work, more processors, computer and equipment upgrades. So that we can meet the needs of a growing industry.”
Looking ahead at the prospective landscape in the Texas industry for the next two years, it may not in fact be enough. The national rig count has doubled in just nine months, and half of those active rigs are running in Texas. More than half of all U.S. oil and gas industry jobs are located in Texas. In addition to all the drilling, there are now approved plans for building two new refineries, three new LNG export facilities and a wide array of new pipeline capacity in the coming months, all of which the Railroad Commission must monitor, inspect and regulate.
The Commissioner seemed undaunted, in fact, excited by the prospect. “That will be the challenge, but it always has been. And, quite frankly, I think it will be amplified, thank goodness, by the fact that the good Lord has given us the ability to find more oil and gas.
“Then you have the pipelines that will be constructed. The international markets now being opened up by the ability to export liquefied natural gas, with three new ports in Texas. Plus, you have Magellan building a processing facility down in the port of Houston. It’s almost unbelievable the expansion, and I just call it — well, we don’t say ‘explosion’ in the oil and gas business — but it’s a tremendous expansion of the business that we’re seeing in the state of Texas. That’s going to require more work from the Railroad Commission, and that’s what we convinced the Legislature that we needed the additional funds for; and I just assure you that the three commissioners, our executive director and our staff will be continuously policing that we are efficient with those dollars. Because we want to help this industry create jobs.”
For many years, Commissioner Christian has owned his own financial planning business located in his hometown of Center. Like so many who serve in government office in Texas, he faces the challenge of keeping his business going while carrying out his official duties in Austin. To do this, he had to put a business continuity plan in place. Lucky for the Commissioner, he and his wife, Lisa, had raised his own business continuity plan from birth.
“I’ve been very fortunate. Independent businesspeople, as I’ve been all my life, have to have what we call a business continuity program. Many times in the particular industry that I’m in, people who wish to serve in public office like the Railroad Commission have to sell their business to somebody else, or a part of it. I’m one of the very fortunate ones, because my business continuation program is my daughter Liza,” he says with a laugh.
“And Liza is more than competent; in fact, Liza went and got her certified financial planner designation, and all of a sudden after 35 years in the business myself, Liza is way smarter than I’ve ever been. I go to the office regularly when I’m not at work here in Austin or out across the state of Texas visiting with different groups and folks that might have some questions about the Railroad Commission. But really, Liza is leading that charge, and I’m honored to have her as my business continuity plan.”
Another daunting task Christian faced when deciding to run for his Commission seat? Running for office in a state so geographically large, with half a dozen major media markets. Of course, Christian was no stranger to political campaigning: He represented his home district in the Texas Legislature from 1997–2005, and again from 2007–2013. He also ran for the GOP nomination for the RRC seat that was up in 2014, ultimately losing in the GOP primary to his fellow current Commissioner, Ryan Sitton.
We asked Christian to compare the challenges of running for a house district to running a statewide campaign: “Undeniably, the distance geographically you have to reach in a state to talk to as many people as you want to talk to is virtually impossible. Many of us don’t realize and understand how big our state is. So, a lot of the hard decisions are, ‘Do you go here today or do you go there today?’ because you have multiple invitations in different places.
“And we had to do it with a limited budget. You try to do as much as you can, and I had [a] young man that basically drove me from place to place as much as we could, because the airfare starts to get very expensive. What was interesting about where I live, trying to run a statewide election, is that Houston is the largest major airport where we could get on a flight. That’s a two-and-a-half-hour drive just to get to the airport.
“Because of that, a lot of times it was more economical in cost and time to just drive to wherever we were trying to go. So, it was maybe a little bit harder for a rural person that distance from a major airport to do that campaign.
“In the legislative district where I’d been for the previous 14 years, you have a limited geographic area. Mine was about 180 miles tall. Mostly along Toledo Bend right along the border of the state of Texas. So, while that was a lot of travel, it still was nothing compared to the statewide race. We could cover the legislative district, even go to neighborhoods and knock on doors and meet individuals — but you can’t just knock on every door in the state of Texas.
“And of course, the press plays a much larger part in a statewide race. In a legislative district, most of the press over time know you and know your reputation, so you have that, good or bad, going for you. When you run statewide it seems that some folks play what we call negative politics that are different, and maybe there’s some incorrect information out there but there’s no way to counter that unless you have the money to battle that. It takes a lot of dollars to counter false information or inaccurate information that may be put out by your opponents.”
He takes a moment to reflect. “But I’m glad I did it. Getting to meet the people of Texas really encourages you at the end, because it’s mostly good folks and you feel really honored that you get the opportunity to represent them.”
Few readers will know that, before he was an investment advisor, and long before he decided to get into politics, Wayne Christian was the lead singer of a very successful gospel band. He always had a talent for music and a desire to perform. In fact, it was at a summer music camp in Waxahachie that he met his future wife, Lisa Ruth Lemoine.
“Lisa and I met when she was a piano player for a small rural church in East Texas. I had a love of gospel music, and we both went to an event at Waxahachie called the Stamps-Blackwood music school. It was a two-week school, and it’s where I met Lisa. Even though she lived 25 miles from me growing up, I’d never met her. Sure was glad to meet her there, and long story short we’ve been together for 40 years now. We have three beautiful daughters, three beautiful grandkids and two good sons-in-law right now. So, I’m a blessed man.”
That love of gospel music and his participation in the Stamps-Blackwood school led in short order to Christian joining his father and two cousins to form a gospel band, which they named, appropriately enough, The Singing Christians.
“At that school, we met The Stamps Quartet and the Blackwood Brothers, who were some of the greats in the business back in the ’70s. I took training with them, and also got to meet a lot of young people from all over the state and the nation who were there. It was a national school for people all over the nation. We eventually got together a group of guys who had all the talent.
“My job was pretty much to be the business, promotion and marketing guy, since I had my marketing degree from SFA. So basically, my job was to sell the whole idea, and I became quite enchanted and interested in that. We were very successful for a group of guys from a little place in nowhere USA. We played Disney World several times, the World Fair up in Canada, some great experiences. Then we did the National American College Show Buyers Convention up in Chicago, Illinois, one year. After that, we were then contracted by a group out of Dallas called Bill Fegan Attractions. They did all the community concert series all across the United States.
“That was exciting, because we were able to do recording sessions at that time with literally the greatest musicians in Nashville. We’d have Loretta Lynn go in the session before us, the Gatlin Brothers be the session after us. These names might not be familiar to you, but we got to work with great studio musicians like Sonny Garrish on the steel guitar, Charlie McCoy on the harmonica, Johnny Gimble on the fiddle.
“It was just the greats of the industry, and they could make anybody sound good. They just literally could. To this day, when I listen to records, because I’ve been in the business, I’m not listening as much to the singer as I am to the accompaniment that’s filling in and making that singer sound as good as they sing. There are a lot of good singers, but there are some folks who can’t sing all that well, but they’ve got some great stories that they tell through songs and some tremendous musicians that make them sound good.”
After a few years, The Singing Christians band name was changed to the Mercy River Boys. Under this name, the band continued to experience success, at one point being nominated for a Grammy Award. “We were The Singing Christians as a family group when it started, but at some point, it was suggested by the record company that we might change our name because it sounded a little bit too Southern ‘gospel-ly’ for marketing purposes. So, they said we should find another name.
Larry Gatlin had written a song called ‘Mercy River,’ and being the good Texas boy that he is, he let us use the song and we ended up taking that name. I remember when we first did it was during a time when I didn’t want us to have a contemporary name. So, I said, ‘Well, that sounds a little bit contemporary,’ and thinking of The Oak Ridge Boys, I said, ‘Let’s add the word “boys” to it.’ So, we made it ‘Mercy River Boys’ to keep it kind of country sounding.
“But we had a blast, and it’s still my love. It’s still my hobby; it’s something I enjoy doing on the side. My best time of the week more than anything there is, is to sit back and listen to the Grand Ole Opry on Friday nights and Saturday nights.” It’s easy to see why.
Whether it be in the Legislature, executive branch agencies or statewide-elective level, all those who serve in state government in Texas make sacrifices and trade-offs. The hours can be long, budgets are always tight, and the pay is at best non-competitive with the private sector and at worst virtually nonexistent. On top of all of that, elected officials in particular find themselves subjected to an almost unending stream of criticism regardless of the actions they take, with only sporadic interruptions of thanks and even more rarely praise.
We asked Commissioner Christian to reflect on his two decades of public service in Austin and any advice he might have for others: “Well, first, that’s where you have to give the credit to my wife. Lisa has been a tremendous mother to my children and covered for a dad that many times wasn’t there.
“And this is where I wish people would stop and thank their elected officials, their public officials, especially in the Texas Legislature where the pay is $600 a month. I can remember very clearly during my time in the Legislature, sitting there late one night during a debate on some issue that Lord only knows what it was about, and getting a call from Liza. I guess it must have been about 10 o’clock at night, and she said, ‘Daddy, I hit my first home run tonight,’ in a T-ball game. And I remember feeling what a jerk of a father I was that night. I can remember that to this day how that just pained me to miss something that important.
“So, I think people need to maybe stop and reflect: You get mad at your elected officials a lot of times, but I always tell people that there are jerks in the Legislature and there are good guys and gals in the Legislature. Just like there’s jerks in the church house. There’s jerks in my family, and I may be one of them according to a lot of my relatives. But most of all, the folks in public service are dedicated folks that try to do their best and have a reason for being there. After 14 years in the Legislature, I really have a respect and appreciation for all of that. And I’m just very thankful for them and to our employees here at the Railroad Commission, for their dedication to doing what’s best for Texas.” That’s good advice for everyone.
About the author: David Blackmon is Associate Editor for Oil and Gas for SHALE Magazine. He previously spent 37 years in the oil and natural gas industry in a variety of roles, the last 22 years engaged in public policy issues at the state and national levels. Contact David Blackmon at email@example.com.
Photo by Michael Giordano
Photos courtesy of Wayne Christian
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