Issue Area 1:The Oil and Gas Inspector's Examining Board has no
meeting records, did not file annual reports and
inspectors testing could be performed by the Division of
The Oil and Gas Inspectors' Examining Board is a five member board created by West Virginia Code §22C-7-3. There are two ex-officio members of the board. These are the Chief of the Office of Oil and Gas of the Division of Environmental Protection, who serves as chair of the board; and the Chief of the Office of Water Resources of the Division of Environmental Protection. The remaining three members of the Board include: a representative of the public who is knowledgeable about the subject of oil and gas production, and who has no financial interest that exceeds an average of $600 per year; a member to represent the viewpoint of independent oil and gas operators; and a member to represent the major oil and gas operators.
The main responsibility of the Oil and Gas Inspectors' Examining Board is to provide an annual examination to test individuals for employment as oil and gas inspectors with the Office of Oil and Gas. This examination process includes a written and an oral examination. The board then maintains a list of qualified candidates to be employed as oil and gas inspectors when a position is vacated. The most recent list of potential candidates - dated August 5, 1998 - consists of 10 qualified applicants. Currently there are fourteen oil and gas inspectors throughout the state who are responsible for inspecting all active oil and gas well work for which there is a permit required for the site. In addition, inspectors are also responsible for inspecting underground injection control wells, and locating orphan wells so they can be mapped for further study. All management and supervision of the inspectors is conducted by the Office of Oil and Gas, not the examining board.
In addition, the board is responsible for: 1) adopting and promulgating rules and regulations relating to the examination, qualification and certification of candidates for appointment. 2) hearing and determining proceedings for the removal of inspectors. 3) hearing and determining appeals of suspension orders made by the director of the DEP against the inspectors or the supervising inspector. 4) making an annual report to the Governor concerning the administration of oil and gas inspection personnel in the state service, and making recommendations; and, 5) rendering advice and assistance to the director of DEP.
PERD could not obtain the minutes of the Board's actions for the past three years.
According to the current officials of the Office of Oil and Gas, no minutes of board meetings were
available because "they were not evidently kept and recorded." PERD contacted the prior Chief of
Oil and Gas for assistance in determining the activity of the Board. He indicated that minutes of
meetings were kept and should be in the Board's files at the Office of Oil and Gas. He also
indicated that the Board met at least once a year and possibly twice a year.
Our review of the travel records from the State Auditor's Office for the three citizen members indicated that one member had received per diem reimbursement for one meeting, another received per diem reimbursement for five meetings, and the other citizen member received per diem reimbursement for two meetings. Based on this information it seems that someone from the Board administered the inspector's examination each year. The following table indicates the years of reimbursement for each citizen member.
Schedule of Citizen Members Per Diem Reimbursement for Meeting Attendance
|Citizen Member||Fiscal Year 1999||Fiscal Year 1998||Fiscal Year 1997||Fiscal Year 1996|
The Office of Oil and Gas informed PERD that "no annual reports were prepared for each of the past three years..." Annual reports are required by West Virginia Code §22C-7-3, which states as one of the duties of the board:
make an annual report to the governor concerning the administration of oil and gas inspection personnel in the state service.
The main duty of the board, which is to test individuals and provide a list of potential candidates to the Office of Oil and Gas, is a duplication of the duties of the Division of Personnel. Currently, Oil and Gas Inspectors, which are classified as Environmental Inspectors and subject to the same pay grade as Environmental Inspectors in other state agencies, are exempt from civil service. The Legislative Auditor concludes that the Examining Board could be eliminated and the functions of the board transferred to the Division of Personnel (DOP) since the duties of the board duplicate services provided by DOP. Moreover, the Division of Environmental Protection pays DOP fees for personnel services for the inspectors. The personnel fees paid annually to the Division of Personnel is $2,325.
Interstate Oil And Gas Compact Commission
The Legislative Auditor concurs with the recommendations in a December of 1993 report released by the Interstate Oil and Gas Compact Commission entitled "West Virginia State Review." This review was performed by an independent six-person team appointed by the Interstate Oil and Gas Compact Commission and coordinated with the United States Environmental Protection Agency. The main purpose of the review was to identify strengths and recommend improvements for West Virginia's exploration and production of crude oil and natural gas. The report recommended that the board should be abolished. One of the findings of the report was as follows:
The Oil and Gas Inspectors' Examiners Board is an undesirable layer of bureaucracy that duplicates functions of other agencies and that obscures lines of authority for inspector selection and discipline, and it has the potential to adversely affect inspector behavior.
In 1993, the question was raised by the chairman of the House Government Organization Committee about placing the responsibilities and functions of the board within the Division of Personnel. According to a letter from the chairman to DOP, "members of the board, and members of the committee (Joint Committee on Government Operations) indicated that it may be in the best interest of the state to place the responsibilities and functions of that particular board within the Division of Personnel." The Director of the division replied with the following information dated October 28, 1993:
"..the terms and conditions of employment (including protections) for Oil and Gas Inspectors are very similar to those of classified (i.e. civil service) employees. In addition, the statutorily specified process of competitive examination, creation of a register of successful applicants and selection from among the highest scoring applicants closely parallels the process we use for classified employment. .."
"Based on our review we have concluded that if we took on the responsibilities of the Oil and Gas Inspectors' Examining Board there would be very little additional fiscal or performance effect on this Division since we already have systems and processes in place for this type of work. It appears that the assignment of this responsibility to the Division of Personnel could be accomplished by the elimination of West Virginia Code §22-13-1 et seq. And the addition of statutory language placing Oil and Gas Inspectors in the classified service."
While sunsetting the Oil and Gas Inspectors' Examining Board will only result in a minimal cost savings, which would be the per diem expenses paid to members, the Legislative Auditor feels that the current arrangement is inefficient. All duties of the board could be transferred to the Division of Personnel for a minimal fiscal and performance cost as stated by the director of that division. Thus, the Legislative Auditor feels that the Oil and Gas Inspectors' Examining Board should be terminated under West Virginia Code §4-10-5 as amended.
The Oil and Gas Inspectors' Examining Board is responsible for providing a test to potential applicants for state employment as oil and gas inspectors with the Office of Oil and Gas within the Division of Environmental Protection. The Board then provides the office with a list of qualified individuals from which the office can hire oil and gas inspectors. In the past five years, only one individual has been hired from this list. While the test has been given as required, there are no records of meeting minutes, appeals hearings, or annual reports to show the performance of the board, which shows that the board has not been very active in its duties.
An independent oil and gas study by the Interstate Oil and Gas Compact Commission identified this as a potential problem in December of 1993. The commission report also found that the Board is also an "undesirable layer of bureaucracy that duplicates functions of other agencies." The Legislative Auditor feels that these functions were basically duties that are performed for other state agencies including the Office of Oil and Gas by the Division of Personnel. The testing of inspectors could be provided by DOP and the oral examination could be done by the Office of Oil and Gas. DOP could assist in any grievance issues or disciplinary actions, which is a function of the Division of Personnel, and that the Office of Oil and Gas is in essence already paying for since they are paying personnel fees to DOP. According to the director of the Division of Personnel, the duties of the board could be absorbed by DOP with very little performance or fiscal cost, thus eliminating the need for the Oil and Gas Inspectors' Examining Board.