Railroad Commissioner Ryan Sitton Q&A

Friendswood resident and statewide elected official shares his insights

By Nora Olabi
Community Impact News
Jan. 17, 2017

The Railroad Commission of Texas oversees the lifeblood of the state economy—the energy industry. The agency regulates the oil, gas and mining industries, and a three-member commission serves at the head. Each commissioner is elected in a statewide race and serves a full-time, six-year term.

Friendswood resident Ryan Sitton was elected during the 2014 gubernatorial election and is the first engineer to serve on the commission in 50 years. Sitton was the CEO of Pinnacle ART, which he founded in 2006, before stepping down to make his first foray into politics. He has nearly 20 years of oil and gas experience, previously working for companies such as Marathon Oil and Occidental Petroleum. He is a Texas A&M University graduate. Sitton’s term expires in 2020.

What’s the role of a commissioner?

I’ll explain the three main things we spend time on.

One, we have to run the agency, so we’re like a three-member very active board of directors. The three of us really provide the strategic direction, policy decisions and all those sort of things around the agency.

Job two is we’re like judges. When someone wants to drill a well or build a disposal facility and they ask for a permit, and then somebody else protests that permit, that is a contested case. Those contested cases get heard by our hearings division ,and eventually all of those cases get heard by us. So we’re like a three-judge appellate court panel.

Our third job is to communicate with the public. So when we’re playing this judge role or paneling the policies and the business issues of the commission, we spend a lot of time out talking to people in the public through the media or going out and speaking to chambers of commerce, to a Lions Club, speaking to a business group or a community event and talking about oil and gas, which is so important to our state that a lot of people are willing to listen.

How has your experience as an engineer in the oil and gas industry helped you as a first-term commissioner entering the political stage?

The Railroad Commission is a true executive branch job. You have to run the agency, which is an 800-person agency at full staff. There, your leadership and executive experience comes into play very well in terms of how to do that. In addition, the Railroad Commission, which is entirely the oil, gas and coal mining regulator, deals with a lot of technical issues, from wellbore integrity to the cost of service in ratemaking cases to seismic analysis and rule changes; it’s all very technical. And here I am the first engineer in 50 years to serve as a railroad commissioner, and all of that technical background I’ve used almost every day.

Is the commission different than you imagined it to be from an industry professional’s perspective on the outside looking in?

There’s an interesting answer to that question. In one sense, the [commission] is very much what I was expecting it to be. I knew what the commission did. I had a picture in my head having worked with regulatory agencies on the private sector side.

But I also understood that this is a political job. Being a railroad commissioner, you’re a statewide elected official, so you’re going to be under media scrutiny, and you’re not going to get a fair shake all the time from different news outlets, and as you try to go out there to solve problems that are confusing to people, there are going to be a range of opinions. All that stuff I knew, so from that perspective, it wasn’t surprising.

But from another perspective, though, I had a sense that all government agencies were like the [Texas Department of Motor Vehicles]. Everybody has that image in their head of an awful government job. The commission is nothing like that at all. I would say about 99 percent of the employees I’ve met at the commission really like working there. They’re committed to serving the state; they’re committed to doing the right thing; and they share a value for making a positive impact on our community and our state. I didn’t expect that, and that’s been a really neat thing to be a part of.

The railroad commission is a bit of a misnomer. Although the Texas Sunset Commission’s push last year to rename the agency failed, are there any internal talks to do so?

So I do support changing the name. I think it’s a good idea. When we polled, we found out something like 90 percent of people in Texas don’t know that the railroad commission’s primary job is oil and gas. So I’d like to see a change in name. However, I can’t change the name. Only the Legislature—our state reps and state senators—can change the name. I don’t have any more power to change anything than you do. All I can do is ask my state representative to file a bill. So we’ll see what they decide to do.

As someone who has a big-picture view of the industry, are we—as in the economy and the industry—finally ticking back up? Are we finally over this hump?

I think we have seen the worst part of this downturn for the short term. I believe from an oil price perspective, we’ll stay around the $60 a barrel range for most of 2017. There may be a possibility that it may extend to future years, but it remains to be seen how well people comply. If the recent Organization of the [Petroleum] Exporting Countries—known as OPEC—deal that was struck in November, if they maintain compliance, then I think we can maintain that $60 a barrel range for a while, maybe even three years.

The commission has a lot of regulatory tentacles in the oil and gas industry. How does the agency interact with the industry from the oil field to the corner office?

Let me give you a condensed version. If you want to drill a well in Texas onshore or you want to build a pipeline or you want to build some sort of disposal facility, you have to come to the railroad commission to get a permit to do that. Without a permit, you’ve violated the law, and you can actually face criminal charges. When you come to get that permit, even after you get that permit, you have to follow the rules for how you do those things. We work with operators to evaluate their proposal requests and grant them permits, and then we work with them to make sure they’re following the rules they have. Those rules are generated by our technical staff that we call our oil and gas division or our surface mining division. Eventually, all rules are voted on and approved by commissioners. And then finally, we inspect wells and pipelines. I think we have something like 150-200 inspectors all total that go out and review the things that are out there.

How will the commission be involved this legislative session?

This legislative session is going to be an interesting one. Our revenues are down a bit with the oil and gas prices being lower over the last few years. The Legislature is going to be focused on how to trim spending to stay within the constitutional spending limits that our state has. There won’t be a whole lot of bills that will affect oil and gas directly, so there won’t be a whole lot for us to weigh in on.

Two areas that we will be affected by or interact with the Legislature on, one is on the sunset commission. Another way we’d be involved in the legislative session is we have to get our budget approved. We have to ask for the money we need to do our job. We ask not only to be able to spend that money, but we also ask for the ways in which we can spend that money.