Christian Votes No on Proration

Provides Regulatory Relief to Industry

AUSTIN – Today, the Railroad Commission of Texas (RRC) hosted a virtual open meeting where the commissioners discussed common carrier pipeline and refinery storage capacity, the report produced by the Blue Ribbon Task Force for Oil Economic Recovery, and proration.

In response to Chairman Christian’s request at the April 21st Open Meeting, the RRC received reports from 19 refineries and 70 common carrier pipelines regarding their unfilled storage capacity figures. The refineries reported having 18,414,733 barrels capacity remaining and the pipelines reported having 52,770,925 barrels of capacity remaining.

Next, the Blue Ribbon Task Force for Oil Economic Recovery presented their report outlining steps the Railroad Commission of Texas and other government entities could take to provide industry relief during the current oil and gas downturn. The Task Force focused on operations, permitting, timelines, tax policy and deadlines, storage capacity, and pipeline capacity, among other issues, and assembled the attached recommendations for the Commission’s consideration.

You can read the report here.

“I want to thank the task force for their long hours identifying solutions in such a short period of time,” said Christian. “This is what makes me proud of Texas: The business community working together to solve problems by developing solutions.”

In response to the report and staff recommendations, Chairman Christian offered and passed two orders suspending certain fees and creating an exception to Rule 95 to allow underground oil storage in alternative formations. You can read the orders here.

Prior to the meeting, Christian sent letters to the various agencies and legislative bodies mentioned in the report, encouraging them to review it and determine whether or not they can implement any of the relief outlined.

In an editorial in the Houston Chronicle last week (read that here), Chairman Christian announced he would not vote in favor of government mandated cuts to oil production. During the meeting, he presented a motion to dismiss Pioneer and Parsley Energy’s verified complaint to determine reasonable market demand for oil in the State of Texas. The motion passed 2-1.

“Over the past few weeks it has become increasingly obvious to me that we need to restore regulatory certainty to the oil and gas industry and move past the discussion on proration,” said Christian. “This motion ensures Texas companies, rather than the government, can decide for themselves what level of production cuts make sense for them to make while they weather the storm of market instability.”