Railroad Commission delays vote on oil production cuts
The Texas Railroad Commission met Tuesday to discuss cutting the state’s oil production, one day after the price of crude fell to an all-time low.
Chairman Wayne Christian began the meeting by saying that over the last five weeks, the state’s rig count is down 33 percent, and the number of frack jobs has dropped by 50 percent.
To address the industry issues, Christian then announced the creation of a “Blue Ribbon Task Force.”
“The goal is to save as many jobs and enable operators to survive and return to a robust level as quickly as possible,” Christian said. “The heads of our state’s many trade associations have graciously volunteered to lead this effort.”
The Permian Basin Petroleum Association is among those on the task force.
On the matter of proration, or cutting the state’s oil production, Commissioner Ryan Sitton was ready to vote Tuesday morning.
“I don’t believe that inaction on our part is acceptable,” Sitton said. “Because in the end we don’t work for the energy industry. We work for 28 million Texans, and I believe it is in their interest for our energy economy to be strong.”
Sitton’s plan for proration would go into effect on June 1, and would be dependent on the rest of the world’s producers also agreeing to cut production.
However his fellow commissioners were not ready to vote.
“I’m not sure, by law, that some of what you’re proposing is legal or not,” Commissioner Christi Craddick said in response to Sitton’s plans. “I think we need to clarify some of that. I would hope that staff comes back with a broad based understanding with what we need to do going down the road with proration.
Chairman Christian agreed with Commissioner Craddick that they should delay the vote while gathering more advice from legal counsel and the new task force.
It is expected that the Railroad Commission will vote on proration on May 5.