Proration: Railroad Commission Should Consider Flaring, Waste if Allocating Permian Production Cuts

(AUSTIN, TX) As the Texas Railroad Commission contemplates whether and how to limit production in the Permian Basin in response to collapsing oil prices, Environmental Defense Fund urges that waste from excessive flaring be used as a metric for allocating production (a process called proration).

“Any method the Railroad Commission might choose to reduce production will require a fair way to allocate cuts. The RRC has a legal duty to prorate in a way that prevents waste, protects mineral rights, and considers the environmental implications of its actions. One way to do this is to look at which companies have demonstrated they can produce oil without wasting gas.

“The RRC should limit allocation in fields in which operators are routinely flaring associated gas. Flaring is a longstanding problem in the Permian, and it’s an issue the commission, industry, and the public agree must be addressed.”

• Colin Leyden, Senior Manager, Regulatory and Legislative Affairs