The interim order issued by Oklahoma Corporation Commissioners this week allowing oil producers to voluntarily shut in producing wells because of low prices will last until early August.
The move came in a 2-1 vote with Commissioners Todd Hiett and Dana Murphy in support while Commissioner Bob Anthony opposed the effort.
The order, approved on a request by LPD Energy of Tulsa will remain effective until August 10, 2020. The Corporation Commission could revisit the issue. It largely depends on level of crude oil prices and whether some in the oil and gas industry want to continue with such an order and the desires of the commissioners.
While the Corporation Commission has made no statement giving any legal liability to producers who turn off their wells, some well operators believe the “waste” declaration made by the regulators gives them some legal protection. However, in opposing the original LPD Energy request for an emergency order in April, Commissioner Bob Anthony predicted such shut-ins of wells could lead to a large amount of litigation.
Prices have been slowly rebounding since LPD Energy and the Oklahoma Energy Producers Alliance made their original push for regulators to issue a “waste” declaration regarding crude oil. On Wednesday when the Commission approved the interim order, prices rose another 8 cents and finished the day at $36.89 a barrel.
The OEPA and LPD Energy leaders have argued the continued production of oil at such low prices is a “waste” of the resource.