"If I have just a couple of wells to look at, it's kind of easy to identify the good actors from the bad actors," said David Sterling, chair of the University of North Texas Health Science Center. But that becomes much harder when thousands of wells are being drilled. "As much as I would like to believe that industry can police itself, history has shown that that has not worked without sufficient oversight."
The number of employees in the TCEQ's Office of Compliance and Enforcement, which conducts investigations and performs air monitoring and other health-related duties, has fallen 13 percent since 2010, when drilling in the Eagle Ford began picking up. Over the same period, the agency's overall budget dropped 34 percent.
"State agencies don't have the resources—and in a lot of cases they don't have the political will—to implement regulations, monitoring and enforcement to keep pace with what's going on in the field," Subra said. "Yet they continue to grant [drilling] permits."
Indeed, the Texas Railroad Commission rarely denies a drilling permit. From January 2003 through September 2013, it issued nearly 200,000 statewide. Only 650—or 0.3 percent—were rejected.
The Railroad Commission's enforcement record, like the TCEQ's, has come under criticism. In fiscal year 2012, it referred for enforcement action only 2 percent of the 55,000 violations its field staff found statewide, according to the state Sunset Advisory Commission, whose mission is to eliminate "waste, duplication, and inefficiency in government agencies." Of the 217 fines levied, the average was less than $9,000.
Railroad Commissioner David Porter said fines don’t tell the whole story. "We're more concerned about bringing people into compliance than we are in punishment after the fact," he said in an interview. One way to do this, he said, is through a process called severance: The commission can order companies to halt production if they don't adhere to the rules; production can resume only after the problems have been fixed.
The commission has sent out about a quarter-million severance notices over the past 10 years. In 62 percent of the cases, the mere threat of a crippled well was enough to prod the operator into compliance, spokeswoman Ramona Nye wrote in an email. Another 32 percent were resolved after a severance order was issued. The rest required fines or closure.
Asked how many wells were closed by the commission last year, Nye wrote that such information was "not readily available."
On Their Honor
Texas' regulatory efforts are also hamstrung by a law that allows thousands of oil and gas facilities—including wells, storage tanks and compressor stations—to operate on an honor system, without reporting their emissions to the state.
Operators can take advantage of this privilege—called a permit by rule, or PBR—if their facilities emit no more than 25 tons of VOCs per year and handle natural gas that is low in hydrogen sulfide. Two employees in the TCEQ's air permits office—Anne Inman and John Gott—estimate these PBRs could account for at least half of the hundreds of thousands of air permits the agency has issued for new or modified oil and gas facilities since the 1970s.
"It's probably not even fair to call them permits," said Ilan Levin, an Austin-based lawyer with the Environmental Integrity Project, a research and advocacy organization. "The regulators don't have a clue as to what's really coming out of some of these facilities. They're just ever-so-gently regulated; that's exactly what the state of Texas has intended."
Operators with this type of permit aren't required to file paperwork backing up their self-determined status, so the TCEQ has no record of most of the facilities' locations or emissions. A chart generated in 2011 by the office of then-TCEQ executive director Zak Covar says the permits "Cannot be proven to be protective. Unclear requirements for records to demonstrate compliance with rules."
Levin said there's some justification for PBRs—"it would overwhelm the [TCEQ] if you had every mom-and-pop oil and gas operator out there filling out applications that had to be reviewed by regulators."
But Levin said the system is open to abuse.
Big operators sometimes get a PBR for each component of a facility. Each might be under the 25-ton-per-year threshold that would require a more rigorous permit, but the facility as a whole could emit more than that.
The TCEQ refers to the practice as the "stacking of multiple authorizations," and the memo from Covar's office said its use "means that protectiveness and compliance with the rules cannot be demonstrated."
The TCEQ also has trouble dealing with "emission events"—unplanned releases above and beyond what operators are allowed to discharge during standard maintenance, startup and shutdown activities. Emission events are usually caused by human error or faulty equipment.
The number of emission events associated with oil and gas development doubled between fiscal years 2009 and 2013, from 1,012 to 2,023. The amount of air pollutants released into the Texas air during these events increased 39 percent.