(YourBasin) – The Texas Railroad Commission voted 2-1 today in rejected cuts to oil production statewide.
Chairman Wayne Christian and Commissioner Christi Craddick voted to reject a further hearing of cutting oil production while Commissioner Ryan Sitton voted to keep discussions going on this matter.
“The reason I make this motion is to put certainty back into the market so the producers, the companies can know what the heck the future holds. Secondly, that markets can know that the Railroad Commission is definite in this issue for an immediate time is behind us,” says Chairman Wayne Christian.
An issue the commissioners are no longer dealing with but haven’t fully closed the door on proration just yet.
“Commissioner Christian wanted to settle it once and for all that they are not considering prorationing. So, letting the industry know with certainty what the plan is,” says Trinidad Energy President Kyle McGraw.
A decision that was expected to be made in today’s meeting.
“Prorate is something the commission has not done since the 70s,” says PBPA Executive Vice President Stephen Robertson.
Now here in the Permian Basin, we are faced to watch oil prices and dealing with the over supply of crude oil on the world wide market.
Robertson stating that here in the Basin we are just a ‘microcosm’ of what the nation, if not, the world is dealing with itself.
“You see a lot of different companies in different industries struggling right now,” says Robertson, “it’s a really big impact not just to folks in the industry but some many around the state of Texas.”
Even with these unprecedented times, there are market factors that have businesses cutting back production on their own terms. With companies already looking at making their own cuts, Robertson says a decision from the commissioners wasn’t necessary.
“We’ll just watch and be prices takers like we continue to be,” says McGraw.
As many watch, they are also brainstorming ideas to face down challenges and be ready for when the world needs crude oil.
“That’s where are industry is going forward is we are continuing to look for opportunities, ideas, to help kind of face down these challenges that we are facing so that we can make it out the other end and be ready when the economy of the world really does kick back up and they need crude oil again,” says Robertson.