Craddick opposes prorationing plans, Commissioner says RRC can use other methods

Published 8:49 pm CDT, Monday, May 4, 2020

After weeks of considering whether to implement statewide oil production cuts for the first time in 50 years, the Railroad Commission appears poised to vote “no” on the issue at Tuesday's public meeting.

Commission Chair Wayne Christian wrote last week in an op-ed that he would vote against plans to implement prorationing. And Monday, Commissioner Christi Craddick told the Reporter-Telegram in a phone interview she, too, will vote against those plans.

“I believe prorationing isn’t the thing we should do,” she said.

“It seems most of the time government agencies move slower than the market. The market seems to be correcting itself.”

What the agency should do is provide regulatory certainty and, in such economic times, as much flexibility as possible to give companies time to comply with filings, or paying royalties or taxes, giving them more opportunity to stay in business. Craddick said.

That will be just one of two parts of Tuesday’s docket, Craddick said. While the prorationing question will be first and foremost issue to be discussed, she said other items will address ways the agency can work with operators.

“It was important that we have these hearings” on prorationing, she said. “There was lots of testimony, a lot of talk, a lot of conversations. We heard from over 1,000 companies giving comments.”

She also appreciated receiving input from the Texas Attorney General’s Office, as well as guidance from the commission’s general counsel on what could and couldn’t be done in prorationing.

No one could have ever anticipated oil prices turning negative as they did on April 20, Craddick said.

“Everyone who has a job in the industry is going to affected,” as will those with jobs not directly tied to the industry, she said.

“The challenging part is how we have a robust industry and jobs. (The commission) has good rules in place that offer guidance and certainty. I know innovation has kept the industry robust.”