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Texas Firms Warned About False Oil Regulator Inspectors

The Railroad Commission of Texas and oil producers’ associations are warning oil firms in the state that people have been visiting oil sites claiming, falsely, to be inspectors of the Railroad Commission, the oil regulatory body in Texas.   

“Nefarious activity in the oil patch is on the rise, including an increase in oil and equipment theft,” Ed Lonanecker, president of the Texas Independent Producers & Royalty Owners Association (TIPRO), told Houston Chronicle’s Sergio Chapa.

TIPRO, the Railroad Commission, and the Texas Oil & Gas Association have all issued warnings to oil firms to beware of people claiming to be inspectors—a felony under Texas law which carries a jail sentence of six months to two years plus a fine of US$10,000.

According to TIPRO, there was at least one case in which a person falsely claiming to be an inspector told an oil firm in the Permian to immediately halt operations until further notice.

“We aren’t speculating about who is impersonating an inspector but this is illegal activity and we wanted to make sure our members were aware,” TXOGA Communications manager Haley Emerson told Houston Chronicle.

Earlier this week, the Railroad Commission of Texas voted against the idea of pro-rationing production in Texas, after Ryan Sitton, the Commissioner who first floated the idea failed to convince his two co-commissioners of the need for mandatory cuts.

On Tuesday, Commission chairman Wayne Christian voted against the pro-ration, as he had said he would do. Christian presented a motion to dismiss Pioneer and Parsley Energy’s verified complaint to determine reasonable market demand for oil in the State of Texas. The motion passed 2-1.

“This motion ensures Texas companies, rather than the government, can decide for themselves what level of production cuts make sense for them to make while they weather the storm of market instability,” Christian said.

Todd Staples, president of the Texas Oil & Gas Association, welcomed the decision, saying: “We are pleased that the Railroad Commission will not be pursuing proration because that approach would have made matters worse.”  

By Tsvetana Paraskova for Oilprice.com

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