Texas and Oklahoma weigh production quotas for oil

Will Englund | Washington Post

Now that Saudi Arabia and Russia have agreed to cut oil production, dragging the other countries belonging to the so-called OPEC Plus group along with them to some extent, Texas and Oklahoma will have to decide whether to follow suit.

President Trump hailed Sunday’s agreement to halt the Saudi-Russian price war, declaring Monday that the cuts worldwide will amount to much more than the advertised 10 million barrels a day, even as many analysts expect them to be considerably less.

Trump has said American oil production also will decline because of market forces let loose by the coronavirus pandemic and that the U.S. government will not impose quotas on producers — an act it doesn’t normally have the power to do anyway.

That’s not true for the states.

The Texas Railroad Commission regulated the quantity of oil production from the early 1930s to 1972, and on Tuesday it will consider a petition brought by two Texas producers to “prorate” oil production in the state once again. A similar appeal was filed with the Oklahoma Corporation Commission on Friday. Last month, North Dakota, another major oil-producing state, suspended a regulation that limited the amount of time wells could be inactive, in hopes production would fall without imposing quotas.