The number of Railroad Commission inspectors has fluctuated over the paste two decades, from a high of 117 inspectors in 1993. That year, 115,000 oil and gas facility inspections took place.
As seen in the table above, by 2003, the number of inspectors had been cut to 81.5 full-time equivalents; throughout the mid-2000s there were approximately 87 inspectors; and in 2011, there were 97 full-time inspectors (and other RRC employees conducted inspections on a part-time basis.)
This chart shows that the overall drop in RRC inspection staff since 1993 has coincided with an increase in oil and gas activity in the state. Between 1993 and 2011 the number of wells producing oil and gas in Texas increased from 237,000 to 261,000. In other words, in 2011 RRC was trying to provide oversight for 24,000 more wells than it had two decades before – but was doing so with 20 fewer inspectors. As a result, in 2011 each inspector was responsible for inspecting close to 2,700 wells, versus 2,000 wells in 1993. In 2011, each inspector visited an average of 1,184 wells.
Surprisingly, the addition of ten or more inspectors in 2011 is not expected to result in an increase in the number of inspections carried out in the state anytime soon. In 2010, when there were 88 inspectors, the RRC conducted 121,000 oil and gas inspections. In 2011, despite the additional inspector capacity, the RRC performed just 115,000 inspections. According to the 2012-2013 General Appropriations Act, the RRC has a goal of conducting 113,400 and 116,100 in 2012 and 2013, respectively.
In the first three quarters of Fiscal Year 2012, the RRC conducted a total of 85,417 inspections. If inspections continue at this pace, the agency is on track to conduct approximately 113,889 inspections in 2012, which is 1,000 fewer inspections than the agency conducted in 2011. The decline in inspections does not appear to be linked to a decline in oil and gas activity in the state. Between January and May of 2012 there were 2,671 more well completions than during the same period in 2011.
The fact that there are more inspectors and fewer inspections may mean that inspections are being conducted in a more thorough manner. As seen in the table above, in 2010, each RRC inspector performed, on average, 1,376 inspections, and in 2011, each inspector conducted an average of 1,184 inspections. While 1,184 is an improvement from the previous year, it is approximately four times the number of inspections conducted by inspectors in Pennsylvania and Ohio, and 300 more inspections than Colorado oil and gas inspectors, which raises the question of whether Texas inspectors can possibly be doing as thorough a job as their counterparts in some other states.
Quality concerns aside, a decline in inspections means that more wells are operating without RRC oversight. As seen in this chart, since 2009 the number of inspections has been decreasing, while the number of producing wells in the state has been on an upward trajectory: between 2007 and 2011 the number of wells that produced oil and gas increased by approximately 20,000, from 241,534 to 261,476.(See table above for data) During that same time period, more than 82,000 new wells were drilled in the state.
Several state oil and gas agencies suggest that wells be inspected at least once during the drilling stage, and that active wells be inspected at least once per year. Texas is nowhere near that bar. If RRC followed that suggested inspection frequency, in 2011 the agency would have conducted 261,476 inspections of producing wells and at least 8,391 inspections of well that were being drilled. As mentioned previously, in 2011 RRC conducted just 115,000 inspections.
The RRC does not currently maintain a publicly accessible database of inspections, so it is not clear how many individual well sites were or were not inspected in 2011. According to the Railroad Commission, during the five-year span ending in October 2006, approximately 70,000 (47%) of the 170,000 active oil and gas leases were not inspected. The RRC has not published similar statistics for the period 2006 to 2011.
If it is assumed that each inspection conducted by an RRC inspector took place at a different well site, in 2010 RRC failed to inspect approximately 139,000 wells (53 % of the producing wells in the state). If it assumed that each inspection occurred at a different oil and gas facility (which includes active wells, inactive wells, injection facilities, hydrocarbon storage wells, etc.), then in 2010 RRC failed to inspect approximately 288,000 or 71% of oil and gas facilities.
The Railroad Commission is reportedly in the process of making its field inspection data more publicly accessible via the agency’s web site. According to the agency, the online data should be available in the 2013 Fiscal Year. This should help the public and the agency determine which well sites have been neglected, and help to focus attention on how much additional capacity is needed to address the gap in oversight.
In 2007, the State Auditor of Texas reported that not only were large numbers of wells not being inspected, RRC district offices were also unable to consistently perform timely follow-up inspections to determine whether operators had resolved violations. RRC responded to the State Auditor that while notices of violation all have scheduled follow-up inspection dates, the ability to meet this follow-up deadline will be impacted by staff resources, weather, and other job priorities. . .To the extent resources become available in future legislative sessions, the Commission could witness more activities.”
In 2010, the RRC reiterated the message that its capacity to inspect oil and gas facilities is far exceeded, and that its task continues to grow. A 2010 internal RRC memo on job priorities states that, “in light of increased responsibility and industry activity, demands on the districts have increased significantly over the last several years. . .Until staffing levels are increased to reflect the magnitude of our vast responsibilities our function in the field will continue to be governed by ‘reactive’ activities as opposed to proactive activities.”
The RRC memo outlines a priority system for inspections with emergency incidents (spills, blowouts, accidents) and pollution and safety related complaints being highest priority. Well plugging, casing, mechanical integrity tests, waste disposal and non-emergency complaints were second priority, lease inspections in non-sensitive areas were the third priority, while enforcement actions were considered the fourth or lowest priority.
Given that the number of inspections is decreased from 2010 to 2011, it is highly likely that a reactive approach to inspections is still occurring, and that lower priority inspections are falling to the wayside.
In 2010, the RRC released its strategic plan for 2011 to 2015. In the plan, the RRC highlighted an issue that is likely to increase the workload for its inspectors in coming years: the rise of marginal oil-producing wells.
Although Texas’ oil production rate is declining, the Railroad Commission’s responsibilities may actually increase because it takes just as much effort to perform an inspection. . .for a well producing one barrel of oil per day as it does for a well producing 100 barrels of oil per day. As production from wells become even more marginal, the likelihood of operators abandoning wells for the Commission to plug could increase during periods of low oil and gas prices.
There is a need for additional increases in RRC inspection capacity, both to increase the number of inspections conducted annually, and to allow inspectors to spend more time at each site to ensure that they are able to carry out thorough inspections. Until capacity is increased, RRC should limit the number of permits for new oil and gas wells.