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Relating to the express preemption of regulation of oil and gas operations and the express preemption of regulation of oil and gas.
SB 1165, if passed, would amend the Natural Resources Code (Chapter 81) by granting express preemption of regulation of the oil and gas industry to the state of Texas. The preemption which would be re-iterated in SB 1165 has a number of components.
More specifically, the ability of municipalities, or other political subdivisions to claim the authority to regulate oil or natural gas operations (defined below) is limited unless certain criteria are met. Municipalities and other political units may enact regulations only if they affect surface activity which is incidental to an oil and gas operation, is commercially reasonable, does not effectively prohibit oil and gas operations, and does not otherwise come into conflict with state or federal law.
(Oil and gas operations are defined in this bill as any activity associated with the exploration, development, production, processing, or transportation of oil and gas. A list of specific activities is also mentioned under section 2.)
The bill closes with an affirmation that regulation of oil and gas operations is in fact subject to the exclusive jurisdiction of the state of Texas.
SB 1165 is a very reasonable bill which re-affirms the proper relationship between the various levels of government in Texas. In fact, SB 1165 essentially clarifies an area of the legal regime which is effectively settled given that the state in general, and the Railroad Commission in particular, does in fact already have exclusive control in this area.
It is worth noting that SB 1165, though primarily intended to re-assert the rights of the state, is not entirely one-sided. Municipal devices such as ordinances are still permitted, and incidental restrictions on oil and gas operations, such as light and sound abatement, are likely to remain. The inclusion of the term “commercially reasonable” in the bill accentuates this fact as it is a technical term used in other regulatory regimes and implies that local concerns are not to be absolutely ignored.
Aside from re-affirming the current regulatory regime, SB 1165 is a good bill in that it protects the rights of property owners. If state preemption were ignored or diminished, local property owners could potentially be denied access to utilizing their mineral holdings as they see fit. As such, on the grounds of maintaining a proper role of government, maintaining property rights, promoting the liberty of property owners, and respecting free markets, we strongly support SB 1165.