RRC Chairman Wayne Christian Comments on Oil Markets, Proration, and Filling SPR

From Russell Cohen, AAPL Governmental Affairs

So who thinks we should cut a deal with OPEC and Russia to curtail production? My hand is raised. Can we really be surprised that Russia and OPEC finally retaliated against the US continually taking market share from them? The current price levels are unsustainable, and we will run out of storage soon. I know the market is the most efficient way to force production cuts, but we have a long history in this country of smoothing out volatile markets in agriculture with government programs. Oil and gas is as essential to life as food. I don’t think putting some production controls, if a deal can be made with Russia and OPEC, outweighs the harm of systemic long term damage to our producers.

Stepping off soapbox now.

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The problem is a little different for us. The Kingdom owns their own and can turn it on or off. Not sure about Russia…but I’m also guessing that the state owns the oil. Here in US it’s owned by thousands or millions. I’m not sure I want the state to determine when I can turn off or on my spigot. Is there someone like the governor or the RRC commissioner who has a clearer crystal ball than you or I? Low oil prices has consequences for them too and they might not be a civil or as orderly as what happens here.

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Agreed, loud and clear. I always wondered why the Saudi’s did not start overproducing sooner. To let the Americans have this much success for so long a time was stupid. They have had enough, We do have companies that have been prudent and kept their balance sheets in check. Those who have over leveraged and continue to do so, I have no sympathy for them. - Those companies seem to make the same mistakes over and over again. Let’s just hope the politicians don’t bring back the windfall profits tax if the wrong party is elected. That never has worked. And I apologize for even mentioning it. First - we have to survive the process.