Get An Instant Quote on Texas Railroad Commission Bond Now
| Texas Railroad Commission – Disposal Bond |  |
| Texas Railroad Commission – Facility Closure Bond | |
| Texas Railroad Commission – P-5 Operator Performance Bond | |
Introduction
The Texas Railroad Commission (RRC) is the state agency responsible for regulating the oil and gas industry, pipeline safety, natural gas utilities, and surface mining in Texas. Established in 1891, it is one of the oldest regulatory agencies in the United States. Despite its name, the Commission no longer regulates railroads. Its primary mission is to ensure the safe, responsible development of Texas’s energy resources while protecting public safety and the environment.
Explanation: Texas Railroad Commission Bond
The Texas Railroad Commission Bond is a surety bond required by the Railroad Commission of Texas (RRC) for individuals or companies engaged in activities regulated under Texas energy laws—particularly in the oil, gas, pipeline, and alternative fuels sectors.
Main types of RRC bonds:
1. Texas Railroad Commission – Disposal Bond
What It Is:
A Disposal Bond is required by the RRC for operators who manage commercial oil and gas waste disposal facilities, including saltwater disposal wells and surface waste management units.
Purpose:
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Ensures the operator properly operates and maintains the disposal facility in accordance with RRC rules
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Guarantees remediation and cleanup if contamination occurs
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Provides funds for the plugging or decommissioning of disposal wells if the operator fails to do so
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2. Texas Railroad Commission – Facility Closure Bond
What It Is:
A Facility Closure Bond is required for the financial assurance of closure and cleanup of certain facilities regulated by the RRC, including LPG (liquefied petroleum gas), natural gas storage, and compressed natural gas (CNG) facilities.
Purpose:
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Ensures that when a facility is closed, the operator performs site remediation and equipment removal
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Protects the public and environment from abandoned hazardous equipment or contamination
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May be required in lieu of or in addition to a letter of credit or escrow account
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3. Texas Railroad Commission – P-5 Operator Performance Bond
What It Is:
The P-5 Operator Performance Bond is the most common bond filed with the RRC and is required with Form P-5, the Organization Report used to register oil and gas operators in Texas.
Purpose:
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Guarantees compliance with all oil and gas statutes and rules, including:
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Proper well plugging
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Site remediation
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Timely payment of fees and penalties
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Protects the state from having to fund cleanup or abandonment costs
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See our Town of Anthony, TX – Blanket Building Contractor Bond.
Process of Getting a Texas Railroad Commission Bond
1. Determine the Required Bond Type and Amount
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Disposal Bond: Required for oil & gas waste disposal operations (e.g., saltwater disposal wells).
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Facility Closure Bond: Required for LPG, CNG, LNG, and underground storage facilities to cover closure/remediation costs.
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P-5 Operator Performance Bond: Required when submitting Form P-5 for oil & gas operators who do not meet net worth exemptions.
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2. Choose a Licensed Surety Bond Provider
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Select a surety company authorized to issue bonds in Texas.
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Use providers experienced with RRC bonding (e.g., Swiftbonds).
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3. Submit a Bond Application
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Provide details such as:
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Legal business name
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RRC Operator Number or Facility Information
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Type of operations and facility
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Required bond amount
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Ownership or financial disclosures (for underwriting)
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For P-5 Operator Bonds, you’ll also need to fill out and submit Form P-5.
4. Undergo Surety Review and Credit Check
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The surety evaluates credit history, financials, and risk level.
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Premiums typically range from 1–5% of the bond amount annually.
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5. Receive and Execute the Bond
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Once approved, the surety issues the bond using the official RRC bond form.
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Sign and notarize as required.
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6. File the Bond with the Texas Railroad Commission
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Mail or deliver the original signed bond to: Texas Railroad Commission
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Conclusion
The Texas Railroad Commission Bond is a critical compliance tool for operators in the state’s energy and utility sectors. Whether for oil and gas production (P-5 Operator Bond), waste disposal, or facility closure, these bonds ensure regulatory compliance, environmental protection, and financial accountability. Securing the proper bond is essential for obtaining and maintaining operational authority under the RRC’s jurisdiction.
Read our Brazoria County, Texas – Heavy Loads Permit Bond.
Frequently Asked Questions (FAQs)
Is the bond required annually?
Yes. Bonds must be maintained continuously and are usually renewed annually with the operator’s registration (e.g., Form P-5).
How is the bond amount determined?
The bond amount depends on:
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Number of wells
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Depth and type of each well
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Type and volume of waste handled
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Facility type and environmental risk
What happens if I don’t file the bond?
Failure to file or maintain the required bond can result in:
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Rejection or suspension of your RRC registration
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Fines or enforcement actions
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Prohibition from conducting operations in Texas
Can the Railroad Commission file a claim against my bond?
Yes. If an operator fails to comply with regulations, abandons wells, causes environmental damage, or fails to pay fines, the RRC may file a claim to recover costs. The surety pays valid claims, but the operator must reimburse the surety.
Can I use one bond for multiple well sites or operations?
Yes. A blanket bond (e.g., for P-5 operators) can cover multiple wells under one organization. Individual well bonds are also an option for operators managing only a few wells.
How long does it take to get the bond issued?
Most sureties can issue a bond within 1–3 business days, depending on underwriting requirements. Urgent processing may be available if needed.
Get our Wichita Falls, Texas Contractor Code Compliance Bond.