The Railroad Commission of Texas, which regulates the oil and gas industry in America’s largest oil-producing state, has declined to force producers to curtail oil output in response to plummeting oil prices.
The commission held its meeting on Tuesday to hear testimony about potentially curtailing statewide oil production after US oil prices plunged 300 percent to settle at -$37 a barrel on Monday.
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Some oil producers had asked the commission to prorate 20 percent of the state’s oil supply, while the opponents of the plan urged the three-member commission to allow the free market to run its course.
At last week’s hearing, Pioneer Natural Resources and Parsley Energy were pushing for the first proration of oil production in Texas since the 1970s. Meanwhile, major companies such as ExxonMobil and pipeline operators asked the regulators to let the free market dictate the production in the state.
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During the meeting, chairman Wayne Christian announced the formation of a blue ribbon task force to work on ways to strategize on economic success for the oil industry.
“The goal is to save as many jobs, enable operators to survive. returned to a robust level as quickly as possible,” he said.
Commissioner Ryan Sitton said he was ready to vote to prorate 20 percent of oil production starting June 1 contingent on 4 million bpd reduction by other states, Canada or OPEC allies.
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He said inaction by the commission would not be acceptable, but said action would need to be contingent on other states or countries also taking similar measures.
Chairman Christian said he was hesitant to act, wanting more information from how other states and the federal government were approaching the situation.
The commission will meet again on May 5, when Sitton said he and his staff planned to propose a formal order that would be ready for a vote.
Texas regulators decline to force oil cuts after historic oil price crash