Oil industry debate rages while crude dips to $19 per barrel

[Elderberry]

Houston Chronicle by  Sergio Chapa March 21, 2020

A debate over whether Texas regulators should intervene in a historic oil industry downturn continues to intensify while crude prices dipped as low as $19.46 Friday.

The price of West Texas Intermediate settled at $22.43, with some producers are intensifying calls for the Railroad Commission of Texas, the state agency that regulates the industry, to invoke a power that has not been used in nearly 50 years to cut statewide production — potentially raising prices by at least a few dollars.

Parsley Energy CEO Matt Gallagher has found himself as a leader of a small group of producers asking the Railroad Commission to order the production cuts, a power the agency hasn’t used since 1973, while the industry is hammered by a global oil glut and plunging demand.

“We’re firmly in support of free markets but during wartime, such as what we’re experiencing with COVID-19, we have to put all the options on the table,” Gallagher said.

More: https://www.houstonchronicle.com/business/article/Oil-industry-debate-rages-while-crude-dips-to-19-15147070.php

[IsailedawayfromFR]

While no true conservative supports government intervention in the free martketplace, there is the aspect to consider of having a number of companies go bankrupt.

For myself, I vote in favor of no interference.  The oil and gas is not going anywhere, and the industry always has cycles, some extremely painful like this.

If a company goes down, it will just take some time for a new one to pop up and exploit the same resources.

But this works both ways. 

I also condemn the approach we had in the 70s where oil and gas was produced under a ceiling price to benefit those who did not wish to pay more for the product.  Especially when Texans were forced to pay more for natural gas as a result of these restrictions.