Texas Senate addresses fuel crime with new oversight bill on border operations

The Senate Committee on Border Security convened on April 10, 2025, to address pressing issues related to fuel depots along the Texas-Mexico border. The meeting focused on the alarming rise in motor fuel-related crimes since 2021, including crude oil theft, falsified transport documentation, and the use of overweight fuel tanks. These illegal activities have been linked to organized crime networks exploiting gaps in state oversight, posing significant risks to public safety, the environment, and state commerce.

The committee discussed the emergence of unregulated fuel depots and illegal transloading operations, which facilitate the consolidation of fuel loads into overweight vehicles. This practice is often employed to avoid cartel extortion at ports of entry. The discussions highlighted the broader criminal fuel schemes in Mexico, known as Hachiko and Hachicol, which involve theft and smuggling of fuel without proper declaration to tax authorities. Texas has become a critical staging ground for these operations, with criminal groups using falsified documentation to transport fuel illegally.

The impact of these crimes has been severe, disrupting lawful trade and causing significant financial losses for U.S. energy companies operating in or trading with Mexico. Many companies have reduced or withdrawn operations in high-risk areas due to ongoing security concerns. Investigations by the Department of Public Safety (DPS) revealed that both trucking firms and organized crime groups engage in unregulated fuel staging and transport, often using unsuitable vehicles, which has led to public safety hazards and infrastructure damage.

To combat these issues, the committee introduced Bill 29496, aimed at enhancing public safety in fuel transportation and ensuring compliance with tax regulations. Key provisions of the bill include expanded shipping documentation requirements, licensing for fuel transporters, and stricter reporting of fuel exports. It also authorizes law enforcement to impound vehicles suspected of fuel tax fraud and strengthens penalties for illegal fuel transport.

Senator Henahosa presented a committee substitute for the bill, which modified certain requirements for motor fuel transporters. The substitute removed the mandate for all transporters to obtain a license, instead requiring them to ensure that all drivers possess adequate credentials for hazardous material transportation. It also introduced civil penalties for non-compliance and defined fuel depots, prohibiting their operation within five miles of international borders or ports of entry, designated as risk zones.

The committee's discussions underscored the urgent need for enhanced oversight and regulation of fuel transport to protect public safety and ensure fair market practices. The proposed legislation aims to close existing loopholes and strengthen enforcement mechanisms to address the growing threat of fuel-related crimes along the Texas-Mexico border.