Proration Not A Remedy TXOGA Members Want
Proration is not a remedy Texas Oil & Gas Association (TXOGA) members are seeking as it would disadvantage Texas, its producers, mineral owners and taxing entities.
That’s according to TXOGA President Todd Staples, who made the statement in a comment sent to Rigzone late Monday.
“Our industry has proven nimble and innovative during challenging times and we remain confident we can do so now,” Staples said in the statement.
“Recent suggestions that Texas should impose mandatory limits on the production of oil and gas in the state in an effort to stabilize the current market turmoil will likely result in other producers replacing curtailed Texas volumes,” he added.
“While individual members may differ on approaches, TXOGA members remain committed to free market solutions,” Staples continued.
The statement comes after Bloomberg reported that the Texas Railroad Commission (RRC) is weighing whether the state should curb output.
Last Friday, Ryan Sitton, one of RRC’s commissioners, said in a Twitter statement that he had a “great conversation” on global supply and demand with OPEC Secretary General Mohammed Barkindo. Sitton added that he was invited to the next OPEC meeting in June.
Just got off the phone with OPEC SG Moh Barkindo. Great conversation on global supply and demand. We all agree an international deal must get done to ensure economic stability as we recover from COVID-19. He was kind enough to invite me to the next OPEC meeting in June.— Ryan Sitton (@RyanSitton) March 20, 2020
In a statement posted on RRC’s website on Friday, RRC Chairman Wayne Christian said, “while I am open to any and all ideas to protect the Texas Miracle, as a free-market conservative I have a number of reservations about … [the proration] approach".
“If we prorate our oil, there is no guarantee other nations, or even states will follow suit,” Christian added.
“From a practical standpoint, the Railroad Commission has not prorated oil in over forty years; we do not have staff at the agency with experience in this process and our IT capabilities to handle this process are limited at best,” he continued.
TXOGA is a statewide trade association representing every facet of the Texas oil and gas industry, including small independents and major producers, according to TXOGA’s website. The association’s membership produces in excess of 90 percent of Texas’ crude oil and natural gas, operates over 80 percent of the state’s refining capacity and is responsible for the vast majority of the state’s pipelines, TXOGA’s website shows.
The RRC is the oldest regulatory agency in Texas and one of the oldest in the country. It was established in 1891 to regulate the rail industry of the 1800s but has since t been given responsibility for overseeing the activities of many different industries.
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