Railroad Commission of Texas decided this week that it will not require cutbacks in crude oil production by Texas operators to address depressed prices during global oil oversupply. Chairman Wayne Christian and commissioner Christi Craddick voted to dismiss earlier proposals to allow prorationing by Pioneer Natural Resources and Parsley Energy and commissioner Ryan Sitton. “This problem is 90 percent demand,” Christian said. “It’s not going to be solved until people are on the roads and in the skies again.”
Cye Wagner, chairman of the Texas Alliance of Energy Producers, told the Dallas Morning News, “The market forces are stronger than the threat of proration ever was. It would be more harmful to the industry than the market-driven response that’s coming.” Agencies regulating the industry in New Mexico, North Dakota and Oklahoma also are considering prorationing. Frank Macchiarola of American Petroleum Institute added, “We commend the comission’s recognition that market-driven policies are best suited to balance supply with demand.”