5 ms·

Why is a Railroad Commission in charge of capping oil wells?

thefourthchime 2y ago
In Texas that's how it works, the Railroad Commission of Texas. The RRC was created in 1891 to regulate railroads, but its role expanded to include oil and gas regulation in the early 20th century.
dredmorbius 2y ago
That's a more interesting question, and history behind the answer, than you might expect. The Texas Railroad Commission was founded in the 1880s during a progressive political movement there against monopolistic businesses, largely railroads. Its remit extended to more general monopoly regulation first to oil pipelines in 1917, perhaps reasonable as another transportation-related activity, then oil and gas production in 1919. It took on natural gas delivery in 1920, bus lines in 1927, and trucking in 1929. In the 1930s, as the East Texas Oil Boom developed, the TRC along with the US Department of Interior effectively became part of the structure which managed US, and by extension, global oil markets until the early 1970s, when the US no longer had surplus oil production. In the 1930s, the TRC and the Texas Rangers literally seized wellhead production by force of arms in order to curtail wildly surplus production which was both tanking (so to speak) oil prices (hitting a low of $0.03 per barrel) and premature oilfield depletion through excessive extraction. (Oilfield extraction at the time largely relied in the inherent gas pressure of the fields, resulting in early drilling producing "gushers" where oil could spout hundreds of feet into the air. Like poking many holes into a balloon or bottle, excessive drilling reduced that pressure, and could often leave much oil unrecovered within formations. Limiting drilling and extraction reduced individual operators' yields but increased the overall field yield. Other countries, particularly those with nationalised oil operations such as Saudi Arabia, Mexico, Brazil, Venezuela, etc., effectively arrived at similar trends.) There are also principles of resource recovery which were either established or enshrined by the TRC, notably "Rule of Capture", a whole 'nother discussion. And the (unrelated) issue of regulatory capture, in which a government regulatory agency overseeing an industry tends to over time answer to rather than govern over that industry. Wikipedia of course has a good general overview: <https://www.youtube.com/watch?v=lzWlrARDVbQ https://www.youtube.com/watch?v=lzWlrARDVbQ> Daniel Yergin's epic history of the oil industry The Prize discusses the TRC in the context of the East Texas Oil Boom in chapter 13, which makes for fascinating reading, not only about the oil industry but about the actual realities rather than the theoretical operations of "free markets" and natural resource extraction. And for those interested in a deep dive, several books, including David Prindle's Petroleum Politics and the Texas Railroad Commission (1984) <https://openlibrary.org/works/OL9371845W/Petroleum_Politics_and_the_Texas_Railroad_Commission?edition=key%3A/books/OL10294015M https://openlibrary.org/works/OL9371845W/Petroleum_Politics_...>, Mark A Miller's Oils & Gas and the Texas Railroad Commission (2015) <https://openlibrary.org/works/OL24732694W/Oil_Gas_and_the_Texas_Railroad_Commission?edition=key%3A/books/OL32834836M https://openlibrary.org/works/OL24732694W/Oil_Gas_and_the_Te...>, and William R. Childs's The Texas Railroad Commission (2005) <https://openlibrary.org/works/OL5476040W/The_Texas_Railroad_Commission?edition=key%3A/books/OL8816911M https://openlibrary.org/works/OL5476040W/The_Texas_Railroad_...>.
- sotix 2y ago
  This is one of the best comments I’ve read on hn recently. Thank you!
  - Sabinus 2y ago
    Comments like that is why I keep coming back here. It's just next level discussion.
    - dredmorbius 2y ago
      Thanks, both of you.
- ZoomerCretin 2y ago
  The question may have been why the TRC and not the company that drilled it.
- racional 2y ago
  That's a more interesting question, and history behind the answer, than you might expect. Indeed. I'm just glad that there exist people whose purpose is to stay on top of subjects like this.
  - dredmorbius 2y ago
    I'd run across the TRC myself some years ago, had much the same question, started investigating that and a few related issues, and ... just kind of kept going. Gordon Rattray Taylor made the observation most often presented as "the most exciting phrase to hear in science , the one that heralds new discoveries, is not 'Eureka!' (I found it!), but 'That's funny ...'". (Often attributed to Isaac Asimov, see: <https://quoteinvestigator.com/2015/03/02/eureka-funny/ https://quoteinvestigator.com/2015/03/02/eureka-funny/>. The same relationship holds strongly elsewhere. "Why the hell is the Texas Railroad Commission in charge of oil production?" was pretty much what started me on this rabbit hole. Yergin's chapter off-handedly mentions the "Rule of Capture" (which originates with British Common law and the legality or illegality of hunting wild game on one's own, others', or public (Crown) lands, and through a Texas Supreme Court case (Houston & Texas Central Railroad Co. v. East (1904), of which I would still like to find the court's opinion) came to be applied to groundwater, and by later extension, oil and other "mobile" minerals.[1] To the extent I have found the court's opinion, it is, roughly (the reference isn't immediately available): the behaviour of subsurface water is unknown and unknowable and hence the Rule of Capture applies. This was untrue at the time and has been further strongly refuted by subsequent geological and hydrological science. Law, however, is precendential rather than scientific, and poorly-founded rulings may remain in effect for a very long time. There are a few related ... mysteries and/or inconsistencies in the law and economics of mineral extraction, including Hotelling's Rule, which purports to explain the pricing of mineral resources (including coal and oil), but ... based on an extremely reliable and detailed pricing history of oil, absolutely fails in that. Hotelling cites numerous sources, including himself and earlier economic works (Gray, 1914, and Ricardo, 1909[2]), but no geological or scientific works outside the domain of economics, which strikes me as ... a peculiar oversight. Back on Google+ I was asked in a discussion whether or not there was some relationship between the oil industry and climate denialism, much of it based on "Young Earth" creationism. That lead me to Lyman Stewart, founder of Union Oil of California, as well as Biola University, and a set of publications entitled "The Fundamentals".[3] "Biola" is an initialism for "Bible Institute of Los Angeles", and the movement known as religious fundamentalism takes its name from the latter. Both Biola and Fundamentalists have had a long association with young-earth creationism and many forms of climate and other denialism.[4][5] Stewart is only one of many profoundly religious early oil magnates, with another notable exemplar being John D. Rockefeller (and even more so his wife Laura). Extractive industries generally seem to attract and/or cultivate highly religious types, and even the field of geology is markedly more religious than other sciences based on various citations I've seen. I'm not attributing any particular conspiracy here so much as a tendency for such behaviours, ideologies, and thought patterns to be mutually reinforcing, though in what I see as highly pernicious ways. ________________________________ Notes: 1. See "History and Evolution of the Rule of Capture" <https://www.twdb.texas.gov/publications/reports/numbered_reports/doc/R361/1%20CH%20Potter.pdf https://www.twdb.texas.gov/publications/reports/numbered_rep...> (PDF) 2. The "Law of Rent". 3. <https://en.wikipedia.org/wiki/Lyman_Stewart https://en.wikipedia.org/wiki/Lyman_Stewart> 4. <https://en.wikipedia.org/wiki/Biola_University https://en.wikipedia.org/wiki/Biola_University> 5. <https://en.wikipedia.org/wiki/The_Fundamentals https://en.wikipedia.org/wiki/The_Fundamentals>
deleted 2y ago
[deleted]

In Texas that's how it works, the Railroad Commission of Texas. The RRC was created in 1891 to regulate railroads, but its role expanded to include oil and gas regulation in the early 20th century.

dredmorbius 2y ago

That's a more interesting question, and history behind the answer, than you might expect. The Texas Railroad Commission was founded in the 1880s during a progressive political movement there against monopolistic businesses, largely railroads. Its remit extended to more general monopoly regulation first to oil pipelines in 1917, perhaps reasonable as another transportation-related activity, then oil and gas production in 1919. It took on natural gas delivery in 1920, bus lines in 1927, and trucking in 1929. In the 1930s, as the East Texas Oil Boom developed, the TRC along with the US Department of Interior effectively became part of the structure which managed US, and by extension, global oil markets until the early 1970s, when the US no longer had surplus oil production. In the 1930s, the TRC and the Texas Rangers literally seized wellhead production by force of arms in order to curtail wildly surplus production which was both tanking (so to speak) oil prices (hitting a low of $0.03 per barrel) and premature oilfield depletion through excessive extraction. (Oilfield extraction at the time largely relied in the inherent gas pressure of the fields, resulting in early drilling producing "gushers" where oil could spout hundreds of feet into the air. Like poking many holes into a balloon or bottle, excessive drilling reduced that pressure, and could often leave much oil unrecovered within formations. Limiting drilling and extraction reduced individual operators' yields but increased the overall field yield. Other countries, particularly those with nationalised oil operations such as Saudi Arabia, Mexico, Brazil, Venezuela, etc., effectively arrived at similar trends.) There are also principles of resource recovery which were either established or enshrined by the TRC, notably "Rule of Capture", a whole 'nother discussion. And the (unrelated) issue of regulatory capture, in which a government regulatory agency overseeing an industry tends to over time answer to rather than govern over that industry. Wikipedia of course has a good general overview: <https://www.youtube.com/watch?v=lzWlrARDVbQ https://www.youtube.com/watch?v=lzWlrARDVbQ> Daniel Yergin's epic history of the oil industry The Prize discusses the TRC in the context of the East Texas Oil Boom in chapter 13, which makes for fascinating reading, not only about the oil industry but about the actual realities rather than the theoretical operations of "free markets" and natural resource extraction. And for those interested in a deep dive, several books, including David Prindle's Petroleum Politics and the Texas Railroad Commission (1984) <https://openlibrary.org/works/OL9371845W/Petroleum_Politics_and_the_Texas_Railroad_Commission?edition=key%3A/books/OL10294015M https://openlibrary.org/works/OL9371845W/Petroleum_Politics_...>, Mark A Miller's Oils & Gas and the Texas Railroad Commission (2015) <https://openlibrary.org/works/OL24732694W/Oil_Gas_and_the_Texas_Railroad_Commission?edition=key%3A/books/OL32834836M https://openlibrary.org/works/OL24732694W/Oil_Gas_and_the_Te...>, and William R. Childs's The Texas Railroad Commission (2005) <https://openlibrary.org/works/OL5476040W/The_Texas_Railroad_Commission?edition=key%3A/books/OL8816911M https://openlibrary.org/works/OL5476040W/The_Texas_Railroad_...>.

sotix 2y ago
This is one of the best comments I’ve read on hn recently. Thank you!
- Sabinus 2y ago
  Comments like that is why I keep coming back here. It's just next level discussion.
  - dredmorbius 2y ago
    Thanks, both of you.
ZoomerCretin 2y ago
The question may have been why the TRC and not the company that drilled it.
racional 2y ago
That's a more interesting question, and history behind the answer, than you might expect. Indeed. I'm just glad that there exist people whose purpose is to stay on top of subjects like this.
- dredmorbius 2y ago
  I'd run across the TRC myself some years ago, had much the same question, started investigating that and a few related issues, and ... just kind of kept going. Gordon Rattray Taylor made the observation most often presented as "the most exciting phrase to hear in science , the one that heralds new discoveries, is not 'Eureka!' (I found it!), but 'That's funny ...'". (Often attributed to Isaac Asimov, see: <https://quoteinvestigator.com/2015/03/02/eureka-funny/ https://quoteinvestigator.com/2015/03/02/eureka-funny/>. The same relationship holds strongly elsewhere. "Why the hell is the Texas Railroad Commission in charge of oil production?" was pretty much what started me on this rabbit hole. Yergin's chapter off-handedly mentions the "Rule of Capture" (which originates with British Common law and the legality or illegality of hunting wild game on one's own, others', or public (Crown) lands, and through a Texas Supreme Court case (Houston & Texas Central Railroad Co. v. East (1904), of which I would still like to find the court's opinion) came to be applied to groundwater, and by later extension, oil and other "mobile" minerals.[1] To the extent I have found the court's opinion, it is, roughly (the reference isn't immediately available): the behaviour of subsurface water is unknown and unknowable and hence the Rule of Capture applies. This was untrue at the time and has been further strongly refuted by subsequent geological and hydrological science. Law, however, is precendential rather than scientific, and poorly-founded rulings may remain in effect for a very long time. There are a few related ... mysteries and/or inconsistencies in the law and economics of mineral extraction, including Hotelling's Rule, which purports to explain the pricing of mineral resources (including coal and oil), but ... based on an extremely reliable and detailed pricing history of oil, absolutely fails in that. Hotelling cites numerous sources, including himself and earlier economic works (Gray, 1914, and Ricardo, 1909[2]), but no geological or scientific works outside the domain of economics, which strikes me as ... a peculiar oversight. Back on Google+ I was asked in a discussion whether or not there was some relationship between the oil industry and climate denialism, much of it based on "Young Earth" creationism. That lead me to Lyman Stewart, founder of Union Oil of California, as well as Biola University, and a set of publications entitled "The Fundamentals".[3] "Biola" is an initialism for "Bible Institute of Los Angeles", and the movement known as religious fundamentalism takes its name from the latter. Both Biola and Fundamentalists have had a long association with young-earth creationism and many forms of climate and other denialism.[4][5] Stewart is only one of many profoundly religious early oil magnates, with another notable exemplar being John D. Rockefeller (and even more so his wife Laura). Extractive industries generally seem to attract and/or cultivate highly religious types, and even the field of geology is markedly more religious than other sciences based on various citations I've seen. I'm not attributing any particular conspiracy here so much as a tendency for such behaviours, ideologies, and thought patterns to be mutually reinforcing, though in what I see as highly pernicious ways. ________________________________ Notes: 1. See "History and Evolution of the Rule of Capture" <https://www.twdb.texas.gov/publications/reports/numbered_reports/doc/R361/1%20CH%20Potter.pdf https://www.twdb.texas.gov/publications/reports/numbered_rep...> (PDF) 2. The "Law of Rent". 3. <https://en.wikipedia.org/wiki/Lyman_Stewart https://en.wikipedia.org/wiki/Lyman_Stewart> 4. <https://en.wikipedia.org/wiki/Biola_University https://en.wikipedia.org/wiki/Biola_University> 5. <https://en.wikipedia.org/wiki/The_Fundamentals https://en.wikipedia.org/wiki/The_Fundamentals>

deleted 2y ago

[deleted]