Texas Governor Vetoes Tougher Penalties for Oil, Gas Theft

by Deon Daugherty, Senior Editor

While folks were still reacting to the aftermath of the so-called “Denton fracking ban bill” passing, Texas Gov. Greg Abbott quietly nullified another piece of oil and gas legislation that had passed both chambers.

House Bill 3291 was designed to increase the penalty for anyone caught tampering with oil and gas equipment. Currently, the punishment is a third-degree felony that carries a two to 10-year jail sentence along with a fine of up to $10,000. Under the legislation, the crime would be classified as a second-degree felony, which means jail time from two to 20 years as well as the optional fine of up to $10,000.

Buying and selling hydrocarbons without proper authority from the Texas Railroad Commission would also become a second-degree felony.

If the party found guilty of these crimes was employed by or in a contractual relationship with the owner of the stolen property, the offense would be classified a first-degree felony – a penalty of life in prison or a sentence of five to 99 years and an optional fine up to $10,000.

The legislation enjoyed widespread support throughout the oil and gas industry. According to a report from the House Research Organization, more than a dozen representatives of industry representatives from the likes of Anadarko Petroleum Corp., BP America, Devon Energy, Shell Oil Co., ConocoPhillips, as well as their special interest groups registered support for the bill.

Supporters of the bill said it would increase public safety and economic security, as well as take a bite out of organized criminal activity. What’s more, they said, the state losses billions of dollars each year to oil and gas theft operations, costing the state tens of millions of dollars in severance tax revenue annually.

An amended version of the bill passed the Texas Senate 30-1. Over on the House side, it passed with 128 in favor; three members said no, and one chose not to vote.

So what happened? Many of those registered in support of this bill were also in support of the “Denton fracking ban bill,” House Bill 40, which sailed through the Legislature and was signed into law.

As it turns out, the governor believed HB 3291 went too far.

In his proclamation, essentially an explanation of why the governor did what he did, Abbott acknowledged that theft of oil and gas is a serious problem.

“Those responsible should be prosecuted to the fullest extent of the law,” he said in the proclamation. “I support increasing the criminal penalties for these crimes. And I support providing prosecutors with new tools targeted at theft of oil and gas.”

And while HB 3291 shares those goals, its overly broad language “created several criminal penalties for conduct that may have nothing to do with theft of oil and gas.”

Bill author, state Rep. Richard Peña Raymond, D-Laredo, wasn’t immediately available for comment, and a representative for the Texas Oil and Gas Association didn’t return a call to Rigzone.

State Sen. Judith Zaffirini, D-Laredo, told Rigzone in an emailed statement that she is disappointed the legislation won’t become law.

“I am glad that the Governor recognizes the seriousness of the oil and gas theft epidemic in our state, but I respectfully disagree with his concern that the bill would result in ‘turning paperwork errors into felonies.’ When similar concerns were raised during the legislative process, law enforcement and oil and gas producers worked with us to ensure that innocent, common activities would not be captured by the bill. We believe the bill was tailored to focus on the bad actors and would not result in the prosecution of innocent activity or persons who simply have the wrong paperwork,” she said.

Z – as the senator is known throughout the Capitol building – said she’d be back with the bill next session and will work closely with the governor to make sure any concerns are addressed before it makes its way to his desk.

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