Justice GUZMAN delivered the opinion of the Court, joined by Justice HECHT, Justice WAINWRIGHT, Justice MEDINA, Justice GREEN, and Justice JOHNSON.
The Texas Water Code requires the Railroad Commission of Texas to weigh the "public interest" in the permitting of proposed oil and gas waste injection wells. In a ruling, the Commission declined to consider traffic-safety factors in its public interest inquiry. We determine whether the Commission's interpretation of "public interest" is entitled to judicial deference. Because we conclude the Commission's construction of the phrase was reasonable and in accord with the plain language of the statute, we hold the court of appeals erred in not deferring to the Commission's interpretation. We therefore reverse the court of appeals' judgment and render judgment for the petitioners in accordance with the trial court's original judgment.
The Barnett Shale is a large, prolific oil and gas field lying beneath several counties, including Wise County, in north Texas. As in other shale formations, wells in the Barnett Shale require fracture stimulation in order to produce. Fracing a well entails pumping large volumes of water and sand into reservoir rock, which then mixes with saline formation water and must be flowed back out of the well before production can begin. A company fracing a well must dispose of the resulting waste. Most companies do so by injecting the waste into subsurface zones which are naturally saline environments, usually in old wells converted to injection wells.
In granting an injection well permit, the Commission is required to make the following findings:
Id. § 27.051(b) (emphasis added). The instant dispute centers on the requisite public interest finding in section 27.051(b)(1).
Pioneer Exploration, Ltd. (Pioneer) applied to the Commission for a permit to convert an existing well into an injection well for the disposal of oil and gas waste. But several Wise County residents living near the well—respondents Texas Citizens for a Safe Future and Clean Water and James Popp (collectively, Texas Citizens)—opposed the proposed injection well, necessitating a contested administrative hearing before Commission hearing examiners. At the hearing, Texas Citizens voiced a variety of concerns about the well's environmental soundness, but also presented arguments and evidence related to traffic-safety issues. Specifically, Texas Citizens argued that large trucks used to haul waste water to the well would damage nearby roads and pose a threat to area residents who use the roads, and thus would not serve the "public interest" under section 27.051(b)(1).
The hearing examiners recommended issuing the permit. In the examiners' findings of fact and conclusions of law, adopted by the Commission in its final order, the examiners found
In the proposal for decision, the examiners additionally concluded the "production of hydrocarbons for use by the people of Texas and industry serves the public interest." In addressing Texas Citizens' traffic-safety evidence, the examiners stated the Commission "does not have jurisdiction
The Commission adopted the examiners' findings of fact and conclusions of law and approved Pioneer's application. Texas Citizens appealed to the trial court, which affirmed the Commission's order. The court of appeals, however, reversed, holding that the Commission abused its discretion in interpreting the "public interest" inquiry too narrowly by solely focusing on the proposed well's effect on the conservation of natural resources.
The parties disagree on the contours of the precise issue in dispute, which is a matter we initially address. The Commission contends this case fundamentally concerns the need for court deference to an agency's interpretation of what it argues is an ambiguous statute. If an agency's construction of an ambiguous statute it is charged with administering is reasonable, the Commission urges, it is improper for a court to overturn that interpretation.
We agree with the Commission that this case turns on a matter of statutory construction—specifically, the definition of the term "public interest"—and therefore the proper level of deference a court must grant the Commission's interpretation of that term. As Texas Citizens asserts, the Commission's order does not expressly define the term "public interest." Rather, the order—by way of adopting the examiners' findings of fact and conclusions of law—states that the well is in the public interest because of its positive effect on increased productivity from wells in the Barnett Shale field. But although the
The Utilities Code generally requires a court to review a decision of the Commission under a substantial evidence standard. See TEX. UTIL. CODE § 105.001(a) ("Any party to a proceeding before the railroad commission is entitled to judicial review under the substantial evidence rule."). This standard requires a court to reverse or remand a case for further proceedings "if substantial rights of the appellant have been prejudiced because the administrative findings, inferences, conclusions, or decisions" are, among other things, not reasonably supported by substantial evidence, or are "characterized by abuse of discretion." TEX. GOV'T CODE § 2001.174(2).
The gravamen of this dispute, however, is a governmental agency's construction of a statute it is charged with administering. The construction of a statute is a question of law we review de novo. First Am. Title Ins. Co. v. Combs, 258 S.W.3d 627, 631 (Tex.2008); F.F.P. Operating Partners, L.P. v. Duenez, 237 S.W.3d 680, 683 (Tex.2007). We have long held that an agency's interpretation of a statute it is charged with enforcing is entitled to "serious consideration," so long as the construction is reasonable and does not conflict with the statute's language. We have stated this principle in differing ways, but our opinions consistently state that we should grant an administrative agency's interpretation of a statute it is charged with enforcing some deference.
We have never expressly adopted the Chevron or Skidmore doctrines for our consideration of a state agency's construction of a statute, but we agree with the Commission that the analysis in which we engage is similar. In our "serious consideration" inquiry, we will generally uphold an agency's interpretation of a statute it is charged by the Legislature with enforcing, "`so long as the construction is reasonable and does not contradict the plain language of the statute.'" First Am. Title Ins. Co., 258 S.W.3d at 632 (quoting Tarrant Appraisal Dist. v. Moore, 845 S.W.2d 820, 823 (Tex.1993)). As we observed in Fiess, this deference is tempered by several considerations:
Fiess v. State Farm Lloyds, 202 S.W.3d 744, 747-48 (Tex.2006).
Here, the examiners' opinion, and the Commission's final order, were formally adopted after an adjudication. Accordingly, we will review the Commission's interpretation of "public interest" and uphold it if it is reasonable and in accord with the plain language of the statute. See First Am. Title Ins. Co., 258 S.W.3d at 632.
In 1961, the Legislature enacted the Injection Well Act (the Act), which governs the permitting process for all injection wells in the state.
The distinction between the jurisdictions of these two agencies is important because the statute governing the issuance of permits differs as to factors each agency must consider in granting a permit. Both statutes require the agencies to determine "that the use or installation of the injection well is in the public interest," id. § 27.051(a)(1), (b)(1), but the TCEQ is additionally required to find that an applicant for a hazardous waste well not located in an industrial area has made reasonable effort to ensure that any burden of the proposed injection well on public roadways will be minimized or mitigated, id. § 27.051(a)(6).
The Act further requires the TCEQ to consider specific criteria—including the compliance history of the applicant, whether an alternative to the well is reasonably available, and, in some circumstances,
The Act declares a purpose of protecting freshwater supplies in this state, as provided in its statement of policy and purpose:
Id. § 27.003.
Beyond this statement of purpose, the Act, as a whole, details procedures related to the protection of natural resources, as well as the technical processes involved, in the permitting of an injection well. The chapter prescribes no requirements for the Commission to engage in any sort of process or deliberation involving matters that do not involve oil and gas production and the protection of natural resources.
With this statutory framework in mind, we turn to the Commission's construction of "public interest" to determine if it is reasonable and in harmony with the language of the statute.
Texas Citizens argues, and the court of appeals held, that "public interest" is a broad term, intended by the Legislature to encompass any number of subsidiary issues that might impact the public interest. Texas Citizens asserts two primary arguments in favor of its interpretation: (1) the term is inherently an amorphous, unlimited term, encompassing all possible factors that might affect the public; and (2) since other factors in section 27.051(b) require the Commission to consider matters pertaining to the production of oil and gas and the prevention of fresh water pollution, it must follow that the "public interest" factor is intended to encompass something else.
It is precisely when a statutory term is subject to multiple understandings that we should defer to an agency's reasonable interpretation. See Fiess, 202 S.W.3d at 747-48. Because we only require an agency's interpretation of a statute it is charged with administering to be reasonable and in accord with the statute's plain language, we need not consider whether the Commission's construction is the only—or the best—interpretation in order to warrant our deference. In determining whether the Commission's interpretation is reasonable, we begin with the language in the statute itself.
The term "public interest" in section 27.051(b)(1) is undefined. We ordinarily construe a statute so as to give effect to the Legislature's intent as expressed in its plain language. Duenez, 237 S.W.3d 680 at 683. "`If the statute is clear and unambiguous, we must apply its words according to their common meaning.'" First Am. Title Ins. Co., 258 S.W.3d at 631 (quoting State v. Shumake, 199 S.W.3d 279, 284 (Tex.2006)).
As discussed above, the phrase "public interest" is anything but clear and unambiguous. There are several factors, however, lending support to the Commission's determination that its consideration of the public interest is intended to be a narrow one precluding consideration of traffic-safety concerns.
First, the Legislature's addition of a traffic-related inquiry to the TCEQ's required findings—amended more than twenty-five years after the Act was initially enacted—weighs in favor of the Commission's interpretation. We generally avoid construing individual provisions of a statute in isolation from the statute as a whole. See City of San Antonio v. City of Boerne, 111 S.W.3d 22, 25 (Tex.2003). We therefore "`read the statute as a whole and interpret it to give effect to every part.'" Id. (quoting Jones v. Fowler, 969 S.W.2d 429, 432 (Tex.1998) (per curiam)). When the Legislature uses a word or phrase in one portion of a statute but excludes it from another, the term should not be implied where it has been excluded. Laidlaw Waste Sys. (Dallas), Inc. v. City of Wilmer, 904 S.W.2d 656, 659 (Tex. 1995).
Second, under the principle of ejusdem generis, we have warned against expansively interpreting broad language where it is immediately preceded by narrow and specific terms. Marks v. St. Luke's Episcopal Hosp., 319 S.W.3d 658, 663 (Tex.2010). "[W]hen words of a general nature are used in connection with the designation of particular objects or classes of persons or things, the meaning of the general words will be restricted to the particular designation." Hilco Elec. Coop. v. Midlothian Butane Gas Co., 111 S.W.3d 75, 81 (Tex.2003). Given that the surrounding statutory scheme—including the other three factors the Commission is specifically required to consider in evaluating a permit application—exclusively concern matters related to the production of oil and gas, it is reasonable for the Commission to decline to consider the completely unrelated inquiry of traffic safety in weighing the public interest.
Third, the Act's statement of purpose expressly declares the purpose of the Act is to "maintain the quality of fresh water in the state to the extent consistent with the public health and welfare and the operation of existing industries." TEX. WATER CODE § 27.003. This narrow policy statement declines to promote a purpose of protecting public safety except where natural resources are concerned.
Finally, in the portions of the Act where the Legislature intends for the TCEQ or the Commission to evaluate a particular factor in considering the public interest, it says so. The Legislature requires the TCEQ to examine specific factors in its public interest inquiry. See id. § 27.051(d). Texas Citizens argues that section 27.051(d) does not limit the TCEQ's consideration of these factors in its public interest investigation. See id. (providing that the TCEQ "shall not be limited to the consideration of" the enumerated public interest factors). But the Legislature does not require the TCEQ to consider any particular additional factor either. Id. In contrast, there is no statutory directive for the Commission to consider matters related to traffic safety or any other specific factor in its public interest evaluation.
When, as here, a statutory scheme is subject to multiple interpretations, we must uphold the enforcing agency's construction if it is reasonable and in harmony with the statute. See First Am. Title Ins. Co., 258 S.W.3d at 632. As the Supreme Court has explained, governmental agencies have a "unique understanding" of the statutes they administer. Wyeth v. Levine, 555 U.S. 555, 129 S.Ct. 1187, 1201, 173 L.Ed.2d 51 (2009) (citing Hines v. Davidowitz, 312 U.S. 52, 67, 61 S.Ct. 399, 85 L.Ed. 581 (1941)). In a complex regulatory scheme like the Act and with a phrase
Texas Citizens argues that we should afford no deference to an agency's interpretation of a statute that does not lie within its administrative expertise or pertain to a nontechnical issue of law. See Rylander v. Fisher Controls Int'l, Inc., 45 S.W.3d 291, 302 (Tex.App.-Austin 2001, no pet.). Texas Citizens further contends that requiring the Commission to consider traffic-safety evidence in its public interest evaluation does not impose on it a duty to "regulate truck traffic" or otherwise evaluate matters beyond its expertise, but rather to simply consider whether traffic-safety concerns might cut against the propriety of the proposed well. The Commission could, Texas Citizens argues, limit the amount of waste the injection well can accept or regulate hours of operation, thus curtailing potential truck traffic, without having to regulate or make policy decisions impacting the state's roads. The Commission counters that its statutory directive is to regulate matters related to oil and gas production, not traffic concerns, and that it does not have the expertise or jurisdiction to consider these sorts of public-safety issues.
As an initial matter, the breadth of the term "public interest" is a question of law that implicates the Commission's very technical decision of whether to grant an injection well permit. But, more importantly, we disagree with Texas Citizens that the Commission's public interest inquiry is unrelated to its administrative expertise: to the contrary, the Commission interpreted the public interest finding in such a way as to ensure that it will only consider matters within its expertise. As we concluded above, the Commission's determination that "public interest" does not include traffic-safety matters is reasonable under the Act's statutory scheme. We further conclude it is reasonable given the Commission's unique competence as the state's agency overseeing oil and gas production.
The Commission has long been the agency charged with regulating matters related to oil and gas production, and is given broad discretion in its administration of oil and gas laws. See TEX. NAT. RES. CODE § 85.202(b) (requiring the Commission to "do all things necessary for the conservation of oil and gas and prevention of waste of oil and gas"); R.R. Comm'n of Tex. v. Lone Star Gas Co., 844 S.W.2d 679, 686 (Tex.1992) (acknowledging the Legislature's grant of "broad discretion to the Commission in administering the laws regulating oil and natural gas"); Stewart v. Humble Oil & Ref. Co., 377 S.W.2d 830, 834 (Tex.1964) ("[T]he courts have consistently recognized that the Commission must be given discretion in administering the oil and gas statutes."). Among other matters related to oil and gas production, the Legislature charges the Commission with making and enforcing "rules and orders for the conservation of oil and gas and prevention of waste of oil and gas." TEX. NAT. RES.CODE § 85.201.
Here, Texas Citizens raised arguments concerning the impact of large trucks on dirt roads, inadequate road width to handle truck traffic, and safety concerns related to the truck traffic. Given the Commission's institutional focus on matters concerning oil and gas production, it is reasonable for the Commission to decline to consider matters beyond its administrative expertise. This is especially the case given the limitless number of factors the Commission may need to consider in evaluating an injection well permit if the Commission is required to study any potential subsidiary matter bearing on the public interest, such as truck traffic in this case. As Texas Citizens conceded at oral argument, it does not merely want for the Commission to examine matters related to truck traffic, but rather any factor that might conceivably touch on a broad definition of "public interest." In opposition to an injection well, a creative opponent could assert any number of concerns impacting the public interest entirely unrelated to the Commission's express legislative directives. Under Texas Citizens and the court of appeals' approach, the Commission would have to consider and weigh a limitless number of factors beyond the Commission's institutional competence.
The Commission's purpose is to "do all things necessary for the conservation of oil and gas and prevention of waste of oil and gas." TEX. NAT. RES. CODE § 85.202(b). As the agency charged with administering the state's oil and gas laws, it is reasonable for
The Commission finally argues that in the half-century since the Legislature first promulgated the requirement that it weigh the public interest in evaluating an injection well permit, it has never considered traffic-safety concerns. The Commission urges that its long-standing construction of the term "public interest" is especially entitled to judicial deference. Citing an Amarillo Court of Appeals' opinion, Texas Citizens counters that, at least on one occasion, the Commission did, in fact, consider traffic-safety evidence. The Amarillo Court of Appeals' decision, however, does not support Texas Citizens' assertion. In that case, as in the instant dispute, property owners protested a proposed injection well in a contested hearing before the Commission, arguing that the well would not comport with the public interest because of public-safety concerns. Berkley v. R.R. Comm'n of Tex., 282 S.W.3d 240, 244 (Tex.App.-Amarillo 2009, no pet.). Following the Austin Court of Appeals' holding in the instant case, the Amarillo Court of Appeals explained that safety concerns "are indicia that should be considered by the Commission when assessing public interests." Id. In Berkley, however, there is no indication the Commission considered traffic-safety evidence in its decision; instead, the Commission found the proposed injection well would serve the public interest for similar reasons as those articulated in the order here. Id.
We agree with the Commission that an agency's long-standing construction of a statute, especially in light of subsequent legislative amendments, is particularly worthy of our deference. See Stanford v. Butler, 142 Tex. 692, 181 S.W.2d 269, 273 (1944) (explaining that an agency's construction of a statute it is charged with enforcing is "worthy of serious consideration as an aid to interpretation, particularly where such construction has been sanctioned by long acquiescence") (citations omitted); see also Pub. Util. Comm'n of Tex. v. City Pub. Serv. Bd. of San Antonio, 53 S.W.3d 310, 324 (Tex.2001).
The court of appeals failed to grant deference to the Commission's interpretation of "public interest" in section 27.051(b)(1) of the Water Code and instead held the Commission abused its discretion in its construction of the statute. Because we conclude the Commission's interpretation of the phrase "public interest" is reasonable and in accord with the plain meaning of the statute, we hold the court of appeals erred in refusing to defer to the Commission's construction of the term.
Accordingly, we reverse the court of appeals' judgment and render judgment for the Commission and Pioneer in accordance with the trial court's original judgment.
Chief Justice JEFFERSON delivered an opinion concurring in the judgment, joined by Justice WILLETT and Justice LEHRMANN.
Chief Justice JEFFERSON, joined by Justice WILLETT and Justice LEHRMANN, concurring.
I concur in the Court's judgment, but I write separately because the statute at issue in this case unambiguously precludes the Railroad Commission ("Commission") from considering traffic safety factors as part of its public interest inquiry in the permitting of oil and gas waste injection wells.
As the Court and the parties attest, 336 S.W.3d at 627, "public interest" is a broad term, the scope of which is difficult to determine with precision. But the fact that a term may admit of different meanings, and may be ambiguous as to some conceivable set of facts, does not mean that it is ambiguous as to every proposed reading. The potential breadth of a statutory term does not prevent us from holding that a party's proposed construction is unambiguously precluded. See 2A NORMAN J. SINGER & J.D. SHAMBIE SINGER, SUTHERLAND ON STATUTES AND STATUTORY CONSTRUCTION § 45:1 (7th ed.2007) (noting that the object of statutory interpretation is to determine a statute's "correct application in a particular situation" (emphasis added)).
The Commission relies principally on Chevron U.S.A. Inc. v. Natural Resources Defense Council, Inc., 467 U.S. 837, 104 S.Ct. 2778, 81 L.Ed.2d 694 (1984), in urging us to defer to its interpretation of the statute. While we frequently defer to administrative agencies' statutory interpretations, we do so principally when the relevant statute is ambiguous. See Fiess v. State Farm Lloyds, 202 S.W.3d 744, 747 (Tex.2006) (noting that "the language at issue must be ambiguous" before we grant the agency's interpretation deference). Here, I believe the statute unambiguously makes clear that, in this context, "public interest" cannot include traffic safety factors.
Chapter 27 of the Water Code regulates the permitting of injection wells. The Commission is charged with permitting injection wells for the disposal of oil and gas waste, while the Texas Commission on Environmental Quality ("TCEQ") is charged with permitting injection wells for the disposal of industrial or municipal waste. TEX. WATER CODE § 27.011 (granting TCEQ the power to regulate injection wells for the disposal of industrial and municipal waste); id. § 27.031 (granting the Commission the power to regulate injection wells for the disposal of oil and gas waste). The Code mandates consideration by the agencies of a number of factors in deciding whether to grant a permit application. Most relevantly, both must consider whether the proposed well "is in the public interest." Id. § 27.051(a)(1); id. § 27.051(b)(1). The Commission is directed to consider a number of other factors, all of which have to do with the protection
We do not defer to agency interpretations of unambiguous statutes. Although I agree with the Commission that it need not consider traffic safety when permitting injection wells, I do so because chapter 27 of the Water Code so requires. The principle behind the Court's holding would require deference to a future Commission's decision that denied a permit based on the consideration of such traffic safety factors as the presence of trucks hauling saltwater on narrow neighborhood roads. I believe, to the contrary, that the statute's language and context preclude such an interpretation as a matter of law. Because there is no legitimate role for deference here, and because the statute prohibits consideration of traffic safety in the Commission's decision to issue injection permits, I concur in the Court's judgment.
Id. § 27.051(a).
Id.