The Texan Podcast - Texas Railroad Commissioner Jim Wright on Oil and Gas, Permian Basin Reliability Plan

Episode Date: September 8, 2026

Texas Railroad Commissioner Jim Wright joined The Texan's Reporter Isaiah Mitchell to discuss the history of the state's oil and gas industry and its oldest regulatory agency, energy infrastructure and the Permian Basin Reliability Plan, and more.

Howdy everybody, hope you're doing well. This is Isaiah Mitchell with the Texan. I'm joined today by Railroad Commissioner Jim Wright. Jim is at the head of the state agency that oversees the oil and gas industry in Texas, which if you look at the numbers is really the oil and gas industry of the country. Texas accounts for about half of all of our nation's oil supply. So it's a very important agency. And we're going to talk today a little bit about the Permian Basin Reliability Plan.

A lot of people have seen headlines about it. that really focus on the plan to construct 765 kilovolte transmission lines across the state. And there's a lot of facets to the project, a lot of facets to the opposition. And so we're just going to talk a little bit about the history of it and about the railroad commission and about what might come next. So, Jim, how are you doing today? I'm good. How are you doing, Isaiah? I'm doing great. Thank you for me on.

Thank you again for having me on. And, you know, it's always a pleasure to talk to people at the Texan. Thank you. I agree. So just to start with, maybe you could explain the whole authority and history of the Railroad Commission because there's a lot of Texans who don't really understand the agency and how it came to be. So maybe you could start there. Yeah, you know, today, I'll just tell you what our authority is today.

We're the state agency with a primary regulatory jurisdiction over the oil and gas. oil and natural gas industry. Pipeline transportation, natural gas and hazardous liquid pipeline industry, natural gas utilities, the LP gas industry, critical natural gas infrastructure and coal and uranium surface mining

along the geothermal and hydrogen, which has been added to us, and now CCUS authority for carbon capture and secretation. So we have a lot of responsibility, but we started in 1891. We're actually the oldest agency in the state. And we started regulating railroads because railroads were creating more of a monopoly. So we were asked to regulate what those rates look like and exactly where those railroads were being placed throughout the state. And that being a commodity caller, when we discovered oil, oil had to be moved.

And it was moved as a commodity to market where it was needed. So that's how we re-became the people that would start overseeing the oil and gas industry. And we all know the history in Texas about oil and gas. We discovered it in 1901. We grew pretty strong until the 70s and 80s. And then we got another breath of air and discovered the shell. And we're back out of it again. And so in 2005, I think it was, the legislature decided that it had become such a major job that we needed some relief and that railroads had pretty much become pretty stable.

And the way that they were being managed and decided that that would be better placed under the Texas Department of Transportation. and let's take that took that out of our responsibilities, but our name never change. So it's kind of misleading for just the public on what the railroad commission actually is and how important it really is to this state. Our impact for this state is about one-third of our economy, and it's very important.

And I think, and I've said this since I've come into office, I think we need to a better job of educating people throughout the state of exactly what the Royal Commission does and what it does for the benefits of all Texans. You know, if you look at the mission statement that we have here at the agency, it's pretty simple. You know, we're responsible for the safety of those industries that we regulate and we're responsible for the environmental impacts of those industries that we regulate. who are also responsible for the economic vitality of those industries.

So when you combine those three things and think about what I just said, that's a big job. Absolutely it is. And before we started recording, we talked a little bit about what made you want to come to the agency in the first place. So I'd love to hear from you about, in your opinion, what are the biggest, the most enduring, most problematic issues that the commission has had attack on the last few years. and then what you expect the commission will have to really address in the next few years. I'm talking about our history with your first question earlier. You're too young to know this, but a lot of people that may be listening know that in the 70s and 80s, we were limited to drive down the highway at 55 miles per hour because we thought,

not only Texas, but the nation that we were depleting our oil and natural gas sources. So, you know, we became very reliant on other sources of oil until the discovery of what we refer to as a shell. And what that means is we had technology that had advanced that allowed us to start drilling horizontally into tighter formations. And when we made that discovery and that technology was available, we now are seeing the boom and the result of that. But there are, there's, there's problems that come along with that, that I don't think were clearly anticipated, which were, you know, environmentally related. And me being an environmental business all my life,

I had actually started a task force to try to help with rewriting some of the environmental rules here at the agency. And we didn't get very far with that, but that task force that I had formed, the members, knowing that we weren't making a lot of headway with that, looked at me and said, hey, you started this, and we think we were passionate about getting, you know, getting this changed where we can keep up with how the industry is changing. You need to run for railroad commissioner. And, of course, I told them, that was in San Antonio, and I told them, I said, I'm not the highest bridge here, but I think, oh, you guys need to jump off of it.

but you know they they really kept after it and and it was vitally important you know for us and and myself and that's what led me to to run for it. Of course when I got here you, you know, that was upmost and forefront on my mind and I'm proud to announce that we did make changes to that rule and that rule had been in place for some 48 years. So it was a heavy lift. We did it and we've got that done. It took me three years of being here to get that done.

But, you know, I remember in February, just 30 days after I've been here, winterstorm muri gets. So, you know, we had some challenges with winterization and some issues with that. The next thing we had is I've got a call that we had earthquakes that were occurring in the Permian Basin and the Delaware. And so we've had issues and we're dealing with those. And, you know, with all that, we've had some challenges with the water. You know, not only is the state west of the 98th and some of the worst drought conditions I've ever seen in my lifetime, but we have a lot of water that we're generating in the Permian Basin that there's really becoming a problem for us,

because, as I said before, that water is derived from that heavy, tight shell formation, but I can act from the place it was derived from. So I'm having to put it into other formations, and it becomes a challenge because it's like trying to stick 20 ounces in a 12-ounce model. It's just almost sometimes in hospital. So we're doing a lot of work, have been doing a lot of work, about having the technology and availability to clean it up and use it for recycled product in irrigation, aquifer recharge,

and surfaces recharge. And that's moving forward. I think we're making great headway with it. And then, of course, we've all seen over the, I guess it's been almost a year now, the market in general throughout the world for all natural gas is changing because of what's going on in the Middle East. And so, you know, I've spent a lot of time talking to foreign, foreign countries and to some of our neighboring countries about what can we do to better get positioned but take it down. of what God's handed us today and expanding our products to the world. So it's a lot.

I mean, those are probably my top things, but if I had to prioritize what I've been working on and what I hope to continue to work on with what I have left with my term, is to get this water issue over the finish line and open up more doors for us to get our products to eat throughout the world. Absolutely. Absolutely. And that's especially on people's minds this year, what with the price of gas, fuel, really, everything, you know, taking center stage in the election. You know, every candidate's talking about how to lower prices. So it's on everybody's mind. Well, you know, consistent market brings consistency and relevancy to what people pay for products.

But when you have inconsistencies that we've seen in all in gas industry and its history, just that, you know, we're a real estate. repeating history over and over again. It's time that we start to recognize. How do we stop that from occurring? And to put that in a more layman's terms, if I'm paying $5 a gallon for gas, then it needs to be relevant to what I'm being paid for the work I'm doing so that I can afford that.

Today, that's out of balance. And you get that back into balance, I think that we've got to create certainty. We've got to create a level market where we don't have those huge fluctuations. and design that in such a way where whatever happens throughout the world, Russia, Ukraine, what's going on in the Middle East, it doesn't impact that. You know, I often say publicly when I give public speeches that I think they have the opportunity

Texas does to become the next OPEC. And I think that's a very true statement. Well, I'd like to talk a little bit more directly about the Permian-based Reliability Plan. and your fellow commissioner, Wayne Christian, has been very outspoken about it. I'm curious if you have an opinion on it in general that you'd like to share. If you're asking if I have an opinion about Mr.

Christian's opinion, that answer is no. If you're asking if I have an opinion on increasing our transmission capabilities in the Sunni and Basin, yes, I have thoughts on that. You know, I believe that the need for additional power for oil and gas,

operations has been an issue for many years. The Permian region has been vital to most of our economic success here in the state, but it's one of those regions that just kind of gets neglected. It's very arid, and, you know, it's not a place that I think people wake up in the morning and say, man, I aspire to move out there. So, you know, but I will say this. When you're talking about those lines and what legislation has done in the implementation plan of that,

people have to recognize that without infrastructure, we don't grow. And Texas today seems to be the biggest state in the nation that people are looking at not only to move to, but to build their businesses in. We've had record-breaking numbers over the past few years of businesses and people moving to the state. You've got to accommodate that,

and it takes infrastructure. to do that. I'll give you one example. If people really want to see what all that means is drive out to Midland and Odessa. And look at the history of Midland and Odessa because industry is what makes towns grow, makes things good for people. I mean, I never thought in my life that I'd drive out in Midland, Texas, and see a Home Depot. But there's Home Depot out there now.

They have just grown astronomical, and that causes things to be better for the lifestyles out there. So, you know, if you were to say looking at it 15 years ago to move out to Midland or Odessa, I don't think that was a top priority for anybody. But today, you know, it has grown in such a way that you have every amenity that you ever did. Well, that's all done because of what industry,

to those communities. Those industries can't grow and those communities can't do that without being, without infrastructure being in place. So, you know, I think it's vitally important, you know, that we stay connected and have the ability to transport power distances and you remember that power goes both ways. They're not one-way lines and have the ability to distribute that power

throughout the entire state of Texas because Texas is unique. We're kind of on an island, but I don't think we want to create a bunch of little islands within our island. I think we're going to need that power when we need it, and we need the ability to get it where we need it.

So I'm not an expert on electricity by any means. That's not under my authority, but common sense, it really kind of needs to be. thought about here in utilizing that because, again, without that, it's really hard to have a lifestyle that most people have become accustomed to. Well, like you say, a lot of this has taken place, a lot of this debate has taken place in the PUC Public Utility Commission, which has more direct authority over electricity and the grid. And so I want to focus on oil and gas because what we see a lot from the PUC from other reports is that

much of the demand that's projected to increase in the Permian Basin comes from industrial activity that includes oil and gas. So I was wondering if you'd like to comment on that. And the Texas Oil and Gas Association has, I think, in general, said that these producers need the electrical infrastructure that these high-voltage transmissions lines will provide. So I'd just love to hear your thoughts on that and how that kind of demand. You know, you get a great example of where we were when I came in the office in 2021. We were producing about 2 million barrels of crude oil a day. Today we're producing over in excess of 6 million barrels of crude oil a day, which is like I think you and I had spoke about this earlier.

That's almost 50% of our nation's capacity right there in oil production, which is huge not only for the state of Texas, but for the United States in general, especially when it comes to national security. So the Permian Basin is what's the majority of that. And that's the vital and important role that that region plays, not just for Texas, but for our nation. But people have to recognize that the oil and gas industry is not a warehouse.

It's not a one-and-done. You don't build. it and it stays there forever and you can build that infrastructure to support it. No one gas industry has to move to keep those numbers and that production up. Because the wells that we drill, they're not infinite. They have a lifespan. So when you look at the hesitancy and why hasn't that grown alongside, it's because we move and that infrastructure has to move with it.

So that's been some of the neglect that we're seeing out there. But I think over the past 15 years, we know there's oil there. We keep drilling for that oil. There's a lot of prediction of a long-term play there. So that's why this has become an issue today that we've got to have the power to do that. And we've got to have a source of kilowatts that can be connected to in order for us to continue that growth. And that's kind of been the debate. and that's been the issue.

Whereas before, it was, okay, how long is this really going to last? Do we really want to invest in all that infrastructure? Well, that's been proven. And we certainly have the technology and geological surveys to say that we got plenty of oil and gas left out there, and it's going to be a very long-term play. So that's what brought all this up, Isaiah. And again, in general, we've seen it before, and we kind of, sometimes I feel like we've play Russian roulette because one thing that we're we're catering on is not having enough

electricity. So, you know, if we want to continue the, the luxuries that we've had been seeing in Texas today, we've got to put more focus on infrastructure. I mean, that's, that people are, people are going to have to recognize that. And again, go back to the example that I gave you with Midland and Odessa. I wouldn't have moved out there 15 years ago that, man, today they've got everything that a major city's got out there because of, the growth. And you can't do that without infrastructure. One prevailing critique I've heard of the plan is that it overlooks the possibility of generating

that electricity right there in the area through geothermal energy, for example. I'm curious to hear your thoughts about that. You know, geothermal is, there's a lot of detail to that. And we have one right now that we permitted that that's just coming on. online and operating. The problem with geothermal is you have to have consistency in how hot that water is. And that's that's that's not always the case, you know, to really do that. So that's a very intense and methodical thing that you've got to shrink through.

I think it's, I think it's a great thing for our state, you know, but I don't think that we have the geological conditions in West Texas. that are real conducive to doing a lot of geo-clomo out there. I tell you what we do have in West Texas, we have a lot of natural gas, and the closer I can get to natural gas with natural gas-fired electrical plants, the least cost or operating cost it takes to make that electricity, which, again, should equate two savings for the people in the state of Texas.

So I think building power plants out there is good, but if you build a power plant, it doesn't mean that you've solved the electrical problem. You've got to be able to transport that electricity where it's needed. And the closer you can get to the fuel source of those plants, the cheaper it is to actually make that product, which then is cheaper for the people of State of Texas. But as far as GMOGELTermal's concerned,

I think it's a great thing. It's a very cheap source. It's just you don't, You have to be really methodical about having consistency in what the heat of that water is and making sure that's delivered day in and day out to put that top of investment in. Well, I'd also be curious to hear your thoughts on subsidies for renewable energy. Do you think that they've distorted the energy market? And if so, do you think that could be affecting this plan or no? Oh, yeah.

I can tell you for certain. That's distorted the plan, and I'll give some simplicity. about with the subsidies that wind and solar are receiving today, technically, they, they could, they can go in and bid into our grid for nothing, just and survive on the subsidies itself. The problem with women and solar is they're not consistent. They're not reliable.

I'm in Austin today. I'm looking out my window. The moon's not blowing and the sun's not shining. So I hate to think that I had to rely on winning solar today. But in saying that, can you imagine selling a reliable product against an unreliable product that is subsidized? It's very hard for people to make that huge investment in reliable sources such as nuclear or natural gas or geothermal or any of those. If you don't know when you can sell your product into the market at the right price that you can make a profit in doing it. that's been the problem with our grid and that's that's what we've been faced with.

You know, I remember Darren Winnerstall-Murie, there was a bill that was created, look at the bill's number, came out of the Senate. That said that the on-gas industry needed to be to embrace and start putting up winterization efforts. And, you know, I thought about that and why they'd want to do that. It's a good thing to do, but, you know, when does our products sell at the highest? highest price, especially natural gas. They sell whenever the product is needed. And the product is needed whenever we have these really cold spells.

So winterizing those assets is not something that the industry said, oh, we're not going to do. Trust them, they want to sell their products, especially when the prices are higher. So, you know, I had kind of come up with an idea that, you know, we have an unlevel playing field in the market of electricity. how can we get that to where that's more of a level of playing field? So, you know, I had thought and talked and nothing has moved on it, but I thought, you know, instead of winterizing those assets from the natural gas side of things,

why don't we ask those natural gas producers to take that gas and put it into maybe some type of state-managed storage system where that gas would be available whenever we need those gas, like the incidence we had with Winterstar Muri, and put that at today's trading price where the producer's not losing money, it's a net zero effect for the state, and then it allows them to be more consistent

about what that product, what that fuel is going to cost them to compete in the market with the other sources that are subsidized. I still think that's probably going to be part of the answer coming in the future, but, you know, they did, make a great step at the legislation. I think it was two legislative, three legislative sessions ago.

They made cheap loans available and encouraged people to go out and build reliable electrical generation sources, such as utilizing natural gas or geothermal or any of those. And the problem has been is the market's a little bit distorted because of those subsidies. And we don't have the power lines to carry that power. for them to sell it into the market. That's the things that are impeding that today. Do you think that subsidizing natural gas power plants in West Texas could contribute to leveling the playing field,

or do you not favor that idea? You know, I've never been a big, huge fans of subsidies of any kind. I think that, you want to free market work its way through. I'm not sure that, and this is just my, own personal opinion, Isaiah, I'm not sure if we made the right decision when we deregulated the electrical market, because if you think about if it was regulated today, and people had a chunk of the state that they knew consistently when they were going to be selling power, you would see probably everybody that's selling electricity, have every source of generation that could get, wind, solar,

or it doesn't matter. And that wouldn't have to be subsidized. But we didn't. We made the decision to allow the free market to do that. But, you know, the federal government felt like, you know, with the concerns on green gas emissions, that they needed to subsidize those, well, this is the result of what we didn't see. It was all great intentions, but now we're living the reality.

So I think your question, going back to it, we've got to figure out how do we level the playing field to keep all sources of energy. available for our growth demands and for the demands we have today. I don't know what that answer is. I'm not that smart, but I think building a state strategic type of reserve where gas has got a price that's posted that we can rely on, not an inflated price because of demand,

is it kind of a step in the right direction. Well, thank you so much for making the time, Jim. I really appreciate it. Thank you. And, you know, it's always a pleasure to be on the Texan, and I will always do my best to make myself available to answer questions. And thank you guys for giving me the exposure that we have over the years. Thank you. All right. You have a good day, sir. All right. Thanks, Isaiah.