Oklahoma regulators take no action after oil output hearing
Liz Hampton | Reuters
Oklahoma’s energy regulators on Monday took no action on applications from oil and gas producers seeking to win state-support for measures they said would help stabilize oil prices.
The Oklahoma Corporation Commission, which regulates the state’s oil and gas industry, heard proposals seeking to declare some oil production in the state waste, and a plan submitted by trade group Oklahoma Energy Producers Alliance (OEPA) that included mandated output cuts.
After a five-hour meeting, the commission took the two under advisement and did not set a date or timeline for any decisions.
U.S. oil futures CLc1 this year have fallen about 60% to $24.14 a barrel as coronavirus-related lockdowns have crushed demand for fuel. The price collapse has companies in major oil-producing states pushing for regulatory action to stave off further declines.
Oklahoma last month adopted an emergency order that said some oil production could be considered economic waste. That allowed operators to opt to shut wells without losing valuable leases.
One commissioner last week submitted a dissent to the emergency order, saying it was “replete with fatal errors” and said he was not satisfied that the “basic requirements of due process had been met with respect to notice of the hearing.”
Last week, Texas regulators struck down a proposal to mandate output cuts.
“We’re floating out there in dangerous waters,” said Lee Levinson, owner of LPD Energy Company LLC, which submitted the order requesting some output be considered waste and was granted the emergency order.
Darlene Wallace, a member of the OEPA, said she has shut-in most of her wells and has had purchasers say they may not take her oil because of lack of storage.
“I cannot stay in business if I continue to lose money,” she said in support of the proposals.