KARNES CITY, Texas — In January 2011, with air quality worsening in Texas’ booming oil and gas fields and the federal government beginning to take notice, state environmental regulators adopted rules to reduce harmful emissions.
The industry rebelled. So did the state legislature.
A few months later, the legislature overwhelmingly approved SB1134, a bill that effectively prevented the new regulations from being applied in the Eagle Ford Shale region of South Texas, the fastest-growing oil shale play in the nation and maybe the world. Since then, more than 2,400 air emissions permits have been issued in the Eagle Ford without additional safeguards that would have reduced the amounts of benzene, hydrogen sulfide, formaldehyde and other toxic chemicals that drift into the air breathed by 1.1 million people.
The Texas legislature’s rush to protect the oil and gas industry reflects a culture in which politics and business are almost inseparable.
State Rep. Tom Craddick, who championed the House version of SB1134, owns stock in nine oil companies, five of which are active in the Eagle Ford. At the end of 2013, the stock was worth as much as $1.5 million. That year Craddick, and the partnerships and corporations he controls, received royalties of as much as $885,000 for mineral rights. For decades he had a lucrative partnership with Mustang Mud, an oilfield supply company.
Corporations, along with unions, are banned from giving directly to state candidates in Texas, but since 2000, industry employees and related political action committees have contributed more than $800,000 to Craddick’s campaigns, according to an analysis of data from the National Institute on Money in State Politics.
The industry has also invested more than $600,000 to help Craddick’s daughter, Christi, win a seat on the Texas Railroad Commission in 2012. The Railroad Commission, which issues drilling permits, has been criticized for years for allowing its three commissioners to accept campaign contributions from the industry they regulate. But with support from the House Energy Resources Committee, of which Tom Craddick is a member, it has beaten back attempts at reform.
Other members of the Texas legislature also benefit from the oil and gas industry’s largesse.
Forty-two of the body’s 181 members or their spouses own stock or receive royalties from companies active in the Eagle Ford, according to a Center for Public Integrity review of thousands of pages of financial disclosure records. Their holdings are worth as much as $9.6 million, according to a conservative estimate based on the 2012 data.
Gov. Rick Perry, who signed SB1134 soon after it landed on his desk, has collected more than $11.5 million in campaign contributions from those in the industry since the 2000 election cycle. Attorney General Greg Abbott, the favorite to win the Republican nomination for governor, has raked in more than $4 million. Since he has been in office, Abbott has sued the U.S. Environmental Protection Agency 18 times for interfering in Texas affairs.
Supporters say the oil and gas industry has been good to Texas, and they are right. The industry employed 315,000 people and paid $8.5 billion in taxes in 2010. It has been particularly important to counties in the Eagle Ford. The tax base in Karnes County, at the epicenter of the drilling, exploded from $489 million in 2008 to $6.6 billion last year, a 1,200 percent increase.
The downside of this surge in prosperity is the introduction of industrial-type air pollution to a rural area where people of limited means rarely share in the bounty and have little defense against an industry as iconic in Texas as longhorn steers.
Rep. Tim Kleinschmidt, a Republican who represents Karnes County in the state legislature, is no stranger to that industry. He has leased some of his own land to oil companies in the past, and the law firm where he practices specializes in negotiating oil and gas agreements. While his focus is now on commercial real estate, his first work for the firm was on those leases.
“I’ve practiced in an oil field my whole life,” he said.
He acknowledges that the boom had created environmental and infrastructure challenges. On tours of the region he hears complaints about both. But he says he hears just as often about fortunes made overnight by residents who’ve leased their land.
Kleinschmidt said the industry is proactively addressing people’s concerns.
“I can’t say too much in support of our oil and gas industry in Texas,” he said. “Our oil and gas industry is very environmentally concerned.”
That’s not how Sister Elizabeth Riebschlaeger sees it.
The 77-year-old nun-turned-activist speeds through the Eagle Ford in her white Honda Civic, intent on exposing the ills she believes have been forced on residents by the oil and gas industry.
“They do not like to complain,” she said. “They don’t want to make trouble. They don’t know they’re being taken advantage of.”
Most of the Eagle Ford’s residents live in small towns or on farms and have scant influence on lawmakers. About 23 percent have incomes below the federal poverty line, compared to 17 percent statewide and 15 percent nationally.
“Let’s be blunt. That is not really a body of voters that the power structure in Austin [the state capital] has any real concern about,” said Larry Soward, a former member of the Texas Commission on Environmental Quality. Soward is now president of the board of Air Alliance Houston, an organization dedicated to reducing air pollution.
While the situation in Texas may be extreme, it’s not unusual for politicians to be seduced by the industry, said Michael Nelson, a professor of environmental ethics and philosophy at Oregon State University.
“What’s going on is the masking of a moral decision in a utilitarian kind of debate that puts more weight on what can be seen, in this case the financial benefit, [than on] what can’t be as readily measured: the risks,” Nelson said. “Those risks to health and environment aren’t as perceptible as the financial benefit, so the cost benefit equation is tipped out of balance.”