Oklahoma regulators mull over increased gas production rates


Oklahoma regulators delayed a decision Monday whether to increase the state’s long-term allowable natural gas production proration rate but will meet Tuesday to consider extending the emergency rate of 100% approved during the winter storm.

Oklahoma Corporation Commissioners listened to testimony by a Commission specialist who had recommended increasing the national gas production rate from the 50% rate to 75%. Some oil and gas firms supported the increase while others opposed it.

The proposed rate increase for non allocated gas wells would take effect April 1, 2021 while commissioners will also meet Tuesday to consider extending the emergency production rate of 100% for another 14 days.

“We recommended the 75% rate to foster and friendly oil and gas environment,” explained Duncan Woodliff, a Senior Oil and Gas Specialist with the Commission.

In an early-February memo, he pointed out the state’s natural gas supply fell even more than demand and gas prices rose since April 2020.

Commissioner Bob Anthony, a critic of the existing 50% rate and a supporter of the free market, again told his fellow commissioners, “I favor free markets, free enterprise and less government regulation.”

After listening to several industry officials offer their views, some of which supported 100% and others who didn’t, the commissioners delayed a decision.

Commissioner Dana Murphy said she was not inclined to support the 75% and 3,000 Mcf daily production limit but more like 65%.

Commission Chairman Todd Hiett said he supported a 2,000 Mcf production limit but had not decided whether he might support a 65% or 75% limit.

Commissioners decided to take the issue under advisement, knowing they will meet Tuesday afternoon to consider extending the 100% emergency rate for another 14 days. The 100% rate was set as the winter storm resulted in rolling blackouts, freeze offs of some natural gas pipelines and the lack of wind power production.

It is still in effect.