The Texas Railroad Commission (TRRC) did not vote on the issue of proration at its latest meeting on Tuesday.
In the meeting, one of the three TRRC commissioners, Ryan Sitton, outlined a framework for proration and revealed that he was ready to vote on the topic but his colleagues signaled that they were not.
“I agree with commissioner Sitton that if we are going to take action, time is of the essence,” TRRC Chairman Wayne Christian said in an organization statement.
“But I also agree with commissioner Craddick that if we are going to go down this road, it is imperative that our motion be done in a way that is lawful and does not open us up to months of litigation. Neither of these positions are mutually exclusive,” he added.
“I have reservations that must be answered before I would consider voting to take Texas down this road," Christian continued.
A new date of May 5 has been put forward to vote on proration, which is a topic that has generated mixed views from the oil and gas community in Texas.
"With commissioner Sitton's goal of a June 1 implementation, I think waiting to vote on the matter until May 5 gives the commissioners two weeks to get the answers we need, see how other states act, and continue to work on other options in earnest with the federal government,” Christian said in an organization statement.
Following the latest TRRC meeting, Todd Staples, the president of the Texas Oil and Gas Association (TXOGA), which describes itself as the oldest and largest trade association in the state representing every facet of the Texas oil and natural gas industry, welcomed the decision to not vote on proration.
“The Railroad Commission made the right decision to not vote on government-mandated oil production cuts,” Staples stated.
“We appreciate the commission’s interest to support producers, but proration would make matters worse, not better. Producers are acting to reduce production, and the state and federal governments are exploring additional options to assist,” he added.
“We applaud the commissioners for maintaining regulatory certainty, which is essential to economic recovery, and encourage them to focus on recovery not on creating a cartel,” Staples continued.
To contact the author, email andreas.exarheas@rigzone.com
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