Wayne Christian Discusses Proration

And Establishment of Task Force

April 21, 2020

AUSTIN – Today, the Railroad Commission of Texas (RRC) continued discussion on the issue of proration, ongoing relief initiatives of the agency, and the formation of a Blue Ribbon Task Force for oil economic recovery.

Chairman Christian kicked off the discussion by inviting RRC Executive Director Wei Wang to discuss the various relief and flexibility initiatives that the agency has provided to our state's oil and gas operators, including deadline extensions for certain requirements/filings, online processing and electronic submissions, and enforcement discretions and waiver considerations. You can view the discussion here (34:30-40:03). A full list of our notice to operators can be found here.

Next Chairman Christian announced the formation of the Blue Ribbon Task Force for Oil Economic Recovery. This task force is being led by the leadership of our state's major trade associations including the Texas Oil and Gas Association, The Texas Alliance of Energy Producers, Texas Independent Producers and Royalty Owners Association, The Permian Basin Petroleum Association, The Panhandle Producers and Royalty Owners Association, and the Texas Pipeline Association. If you would like to join and offer your input, please reach out to: toberbeck@txoga.org.

“I want to challenge the task force to look at every aspect on what can be done at the state level to assist operators and save jobs as we endure these historic circumstances — operations, permitting, timelines, tax policy and deadlines, storage capacity expansion, pipeline capacity, market access barriers, and anything else the task force can think of that will aid the industry in managing through difficulty,” said Chairman Christian. “The goal is to save as many jobs, enable operators to survive and return to a robust level as quickly as possible.”

Before closing out the open meeting, the commissioners revisited the issue of proration. Commissioner Sitton discussed a potential motion to put in place proration contingent on a number of factors, including the actions of other states.

“I agree with Commissioner Sitton that if we are going to take action, time is of the essence,” said Chairman Christian. “But I also agree with Commissioner Craddick that if we are going to go down this road, it is imperative that our motion be done in a way that is lawful and does not open us up to months of litigation. Neither of these positions are mutually exclusive.”

As I stated in WorldOil, I have reservations that must be answered before I would consider voting to take Texas down this road," continued Christian. "With Commissioner Sitton's goal of a June 1st implementation, I think waiting to vote on the matter until May 5th gives the Commissioners two weeks to get the answers we need, see how other states act, and continue to work on other options in earnest with the federal government."

Through his role as the Texas Representative to the Interstate Oil and Gas Compact Commission, Chairman Christian has been working closely with other states to get a feel for where they are headed on the issue of proration. Prior to the meeting this morning, he spoke with The North Dakota Director of the Department of Mineral Resources, Lynn Helms about the direction their state was going. In the last week, he has also spoken with members of the Texas Congressional delegation and representatives from the Department of Energy and the State Department.

About the Railroad Commission:
Our mission is to serve Texas by our stewardship of natural resources and the environment, our concern for personal and community safety, and our support of enhanced development and economic vitality for the benefit of Texans. The Commission has a long and proud history of service to both Texas and to the nation, including almost 100 years regulating the oil and gas industry. The Commission also has jurisdiction over alternative fuels safety, natural gas utilities, surface mining and intrastate pipelines. Established in 1891, the Railroad Commission of Texas is the oldest regulatory agency in the state. To learn more, please visit https://www.rrc.texas.gov/about-us/.