Jon Clark, Clark Energy Consulting, gives his thoughts and comments after the Texas Railroad Commission meeting on April 14, 2020.
In Texas, an economic powerhouse, the outbreak and oil shock have created huge risks for the states’ historically strong energy economy, but nothing the state hasn’t managed before.
“Established by the Texas Legislature in 1891, the Texas Railroad Commission is the state’s oldest regulatory agency and began as part of the Efficiency Movement of the Progressive Era. From the 1930s to the 1960s it largely set world oil prices, but was displaced by OPEC (Organization of Petroleum Exporting Countries) after 1973.
In 1984, the federal government took over transportation regulation for railroads, trucking and buses, but the Railroad Commission kept its name” according to Wikipedia. The three-member commission was initially appointed by the governor, but an amendment to the state’s constitution in 1894 established the commissioners as elected officials who serve overlapping six-year terms, like the sequence in the U.S. Senate, elected statewide.
No specific seat is designated as chairman; the commissioners choose the chairman from among themselves. Normally the commissioner who faces reelection is the chairman for the preceding two years. The current commissioners (from left to right in photo below) are Christi Craddick since December 17, 2012, Chairman Wayne Christian since January 9, 2017, and Ryan Sitton since January 5, 2015.
When the Railroad Commission was given oversight of the energy industry in March 1919, Texas was awash in wildcatters, speculators and roughnecks drilling oil and gas wells under virtually no regulation. The Commissioners and staff set to work literally writing the book on safe, responsible energy production. Today, our rules reflect a century of regulatory expertise and experience, from well spacing and groundwater protection requirements to seismicity rules to water recycling guidelines.
It has been fifty years since The Texas Railroad Commission has considered market intervention…typically in the form of “pro-rationing.”
But yesterday, in a historic meeting the state took center stage as the three RRC commissioners took testimony from 58 different parties, ranging from oil companies, mineral owners, economists, university professors, industry groups, think tanks, and investors.
It was a day-long-affair. You can imagine how many different viewpoints were expressed.
Clark said he was amazed at how much debate there was around statewide pro-rationing; highlighting various dynamics facing the more than 9,000 independent producers of America.
Click here for Jon Clark’s latest OGBRIEF
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