Oklahoma regulators decide prorationing is “not necessary”

 

Oklahoma Corporation Commissioners on Wednesday decided the request made by an oil producers group for statewide prorationing of crude oil production would not be approved due to increased prices and was no longer necessary.

Instead, the Commissioners, meeting in person at the agency’s headquarters voted 3-0 in a move in which they declared the “requested relief is not necessary” and said the vote was on a “final order.”

The request had been made in early April by the Oklahoma Energy Producers Alliance whose chairman David Little had said earlier this week his organization was still pushing for a declaration by the commission that production of crude oil was a “waste” because of the low prices.

But prices this week settled above the $40 mark and at Wednesday’s meeting, Commissioner Dana Murphy introduced an order which stated the “Commission declined to issue an order granting the relief that was requested by the applicant.”

She said it would basically close out this particular case “given that the LPD order has been issued’ and that “the requested relief is not necessary now for multiple reasons, the conditions of the pricing….”

The LPD order was one approved earlier in June for a Tulsa energy company that wanted to shut-in its producing wells due to the low prices at the time.  The OCC order allowed LPD to declare the production “waste” and perhaps shut-in the wells.

The order was seen as one that would allow other operators to do the same should they want to do so.

When asked for a comment, David Little, Chairman of the OEPA gave a terse reply.

“This is what we expected them to do.”

He offered no further comment.