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Railroad Commissioner Talks About International O&G Business Prospects at Dallas Symposium

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In remarks emphasizing the importance of international business opportunities for the Texas oil and gas sector, Railroad Commissioner of Texas Ryan Sitton recently discussed attractive prospects related to Mexico’s new energy policy changes and overseas energy markets at the 28th Annual Texas Energy Council Symposium that was held at the George W. Bush Institute in Dallas. His presentation, which was titled “The Energy Race,” also spanned a number of other important topics impacting the Texas energy industry.

Sitton, a Republican, won his seat on the Railroad Commission of Texas in November 2014 and currently is serving a six-year term with the agency. With almost 20 years of experience in the oil, gas and petrochemical industry, Sitton, a mechanical engineer, has served on the board of several energy trade associations as an expert in both regulatory and civil court cases and currently is serving on the board of the Texas A&M Energy Institute.

International Business Opportunities

“If Texas was a country it would have the 12th largest economy between Canada and Australia. And 40 percent of our domestic product is energy related,” Sitton said.

According to Sitton, two years ago Mexico implemented its new policy of private investment in minerals.

“In my opinion, this new initiative implemented by Mexico is the largest change in national policy in recent times.” He said. “We need to determine how this change benefits Texas and what kind of opportunities it offers to Texas businesses. We in Texas can sell our services to Mexico.”

Sitton said that Mexico has not yet built its regulatory structure related to its energy sector. He stated that he has already traveled to Mexico and met with officials from six or seven Mexican governmental agencies. He said, “I was struck how everybody I talked to there seemed to be reading from the same playbook.”

In addition, Sitton forecasted an increase in selling opportunities for Texas oil and gas products in other foreign countries in the coming years.

“Ten years down the road, the demand for oil and gas products outside the United States will go up,” Sitton said. “The opportunities will result from U.S. producers increasing oil and gas production and the leveraging of Gulf refineries.”

He explained that countries like Pakistan will probably find it easier just to buy oil and gas products rather than building expensive refineries and other infrastructure.

Making Safety a Priority

Sitton also focused on the importance of the Railroad Commission promoting safety in connection with the Texas oil and gas industry. He emphasized that his agency has to be good at enforcement. He said that “My job is to make sure that the approximately 28 million folks in Texas are confident in how the oil and gas industry is working.”

According to Sitton, “Nothing in our industry damages our reputation like bad operators. Fortunately, only a small percentage of operators are bad. My job is to take them out.”

Sitton acknowledged that the agency could make some improvements in how it regulates particular activities in the Texas oil and gas sector. “There is room to improve how we permit natural gas when it is being flared. It is also important that we track the amount of flaring,” Sitton said.

According to Sitton, “The Railroad Commission doesn’t engage with the EPA regarding the integrity testing of pipelines. We deal with PHMSA [the U.S. Department of Transportation Pipeline and Hazardous Materials Safety Administration].”

“I’m in the executive branch and my job is to enforce policies that the Legislature has charged us with. I don’t create policies,” Sitton said.

Sitton contrasted his agency with the U.S. Environmental Protection Agency. “The EPA is very political and carves through the balance of power. It acts unilaterally.”

Sunset Review in 2017

Sitton explained that Texas state government has a sunset review process “in which the idea is to make sure that we still need that agency.”

“In 2017, the Railroad Commission is up for sunset review,” Sitton said. “During the last legislative session in 2015, the agency was not successful in convincing the Legislature that it is where it needs to be.”

Sitton was optimistic in his predictions about how the Railroad Commission would fare in the upcoming sunset review. According to Sitton, “Today we have a strong platform. We will come out of the sunset review strong.”

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