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Texas Was The Model For OPEC, But It's 'Not Likely' To Limit
release:2020-05-28 16:51 source:杰利阳 read:
       In Texas, a proposal to cut the amount of crude that oil companies are allowed to pump from the ground appears dead. The regulator who proposed it — Texas Railroad Commissioner Ryan Sitton — says commissioners "still are not ready to act" on the plan, which would have cut production 20% to try and stabilize prices amid a historic oil glut. Regulators had been expected to vote on the plan Tuesday.
      Oklahoma and North Dakota have also been debating production limits. In Alaska, the private company that runs the Trans-Alaska pipeline has already imposed a ten percent cut in oil production from the state's North Slope.
      In Texas, the idea of a state intervention would have been unimaginable to most people just a few months ago, even though it's not without precedent. Somewhat confusingly, the Texas Railroad Commission oversees fossil fuel extraction, and has the power to limit crude production under a law dating back to the 1930's. It hasn't done so since 1972.
But even if such a vote does not happen, the fact that the three member commission considered the proposal reveals just how serious the challenges facing the U.S. oil and gas industry are.
An industry divided
      At a hearing last month, Scott Scheffield, head of Pioneer Natural Resources, said it was time for the commission to mandate cuts again. He argued that his industry — which has enjoyed unprecedented expansion in recent years — couldn't be trusted to cut enough on its own.
      "Our industry has created so much economic waste that nobody will buy our stocks or own ours stocks," Scheffield said in a live-streamed meeting. "If the Texas Railroad Commission doesn't regulate long-term, we will disappear like the coal industry."
But companies and regulators are divided over imposing production limits. Opponents say companies are making needed cuts on their own. They don't want to open the door for government control of industry.
      "It is government intervention itself that would cause haphazard curtailment of production and cause waste," argued Todd Staples, head of the Texas Oil and Gas Association. "Texans fundamentally believe that the government should not be in the business of picking winners and losers."Owen Anderson is an oil and gas law professor at the University of Texas at Austin. He says large oil companies, so-called supermajors, that not only produce oil but also transport it and refine it, are better positioned to weather this historic bust. They tend to oppose the intervention.
      "They're probably looking at this downturn as a buying opportunity," says Anderson, "because they have some capital assets that they could devote to buying up companies and properties, probably for bargain basement prices."
      Smaller, so-called independent oil producers, were struggling with debt even before prices crashed. They don't have the same access to pipelines and refineries and believe that if everyone is forced to cut a little, it may allow them to keep producing some oil. If the state doesn't act, they say, this is an oil bust they might not survive.
      "And they've got good reason to be concerned," says Anderson, "probably more reason now than they have in the past."
      As it turns out, this division between big oil companies and small "independents" is exactly what drove Texas to first regulate oil production during the Great Depression.

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