An Audit Report on Inspection and Enforcement Activities in the Field Operations Section of the Railroad Commission
August 2007
Report Number 07-046
Overall Conclusion
The Railroad Commission (Commission) is a significant presence in the state's oil and gas industry. In the five fiscal years ended August 31, 2006, the Commission reports that it conducted 566,062 on-site inspections of the oil and gas facilities it regulates, which is an average of more than 113,000 inspections per year. The Commission also reports that it conducted at least one inspection on 90,724 (53.4 percent) of the 169,770 oil and gas leases that were active as of October 31, 2006. Leases can have as many as 100 or more wells each, which may necessitate multiple inspections by Commission employees on one lease.
The Commission prioritizes the complaints and notices it receives from the industry and the public regarding possible incidents of pollution and public endangerment to ensure that the highest risk incidents receive the quickest response, and it follows up to determine whether most violations are remediated by operators. The Commission has several opportunities for enhancing its processes for selecting, conducting, and documenting inspections and pursuing violators to ensure that it makes the best use of its resources to minimize pollution associated with oil and gas activities.
The Commission's enforcement process ensures that most violations referred to it by districts inspectors are corrected, and the Commission consistently assesses penalties in accordance with state rules and laws. In addition, the Commission has developed a clearly defined schedule of penalties, which its Enforcement Section consistently follows. The Commission can strengthen its enforcement process by monitoring the amounts of uncollected penalties and ensuring all cases are properly documented.
Auditors also identified less significant issues that were communicated separately to Commission management.
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