Railroad Commission of Texas canceled its meeting scheduled Tuesday, March 31, because of the coronavirus outbreak as the commission receives calls to limit crude production. The commission has the authority to determine how much oil a lease can produce, according to Houston Chronicle, but it hasn’t used that power since 1973. The Chronicle said, “With Russia and Saudi Arabia flooding global markets as the coronavirus pandemic strangles demand, some producers have asked commissioners to use that authority to help ease the glut.”
“A couple of Texas producers have inquired into the feasibility of the Railroad Commission prorating production,” commissioner Wayne Christian said. “No formal change in policy has been proposed. Staff is looking into what that change in policy would entail from a practical standpoint at the agency.” Commissioner Ryan Sitton added, “I’ve heard from operators on both sides for and against it. But I want an open dialogue. I want to hear from various groups on this issue.”
The Chronicle said the soonest the RRC can meet in public to discuss the issue is April 21. Ed Longanecker, president of the Texas Independent Producers and Royalty Owners Association, said the group does not have an official position. The potential move was first reported by Wall Street Journal.