TRC Seeks Legislative Relief for Producers
Seeking emergency relief for Texas oil and gas producers
suffering from low commodity prices, the three-member Texas
Railroad Commission (TRC) last week voted to propose state
legislation to suspend severance tax payments when the price for
oil and gas drops below $15/barrel of oil or $1.50/Mcf of natural
gas as determined by the Comptroller of Public Accounts.
In addition, the Commission voted to suspend for six months all
new regulations relating to oil and gas exploration and production
to ease the regulatory burden, except when necessary or when
regulation may be needed to protect the environment or public
Commissioner Tony Garza said, "this is about survival," and
noted that severe losses of revenue, production, oil reserves and
jobs are hurting the industry. "Texas oil producers are being
devastated by oil prices that are in most cases substantially below
the cost of finding and producing crude," he said. "Today, with the
price per barrel where it is, there is simply no way the domestic
energy industry, in particular the independents in our state, can
stay competitive with foreign oil."
Currently, the severance tax on oil is 4.6% of value received at
the wellhead, and the severance tax on natural gas is 7.5% of the
In other TRC news, the current Texas legislative session will
see another attempt to merge the Texas Public Utility Commission
and the Railroad Commission to create a single agency regulating
natural gas, electricity, oil production, as well as
telecommunications utilities. The same was attempted in the last
legislative session. This time around it's Rep. Bill Siebert, R-San
Antonio, promoting the idea.
Any move to merge the two agencies would lack the support of
Gov. George W. Bush, according to his office. The three TRC
commissioners are elected while PUC commissioners are appointed. It
is claimed by Siebert and others that elected commissioners are
more responsive to their constituencies and a merged agency would
be more efficient.
Joe Fisher, Houston
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