A third state is looking into requiring oil and natural gas production cuts: North Dakota.
It would join Texas and Oklahoma that are both considering similar proposals.
North Dakota, the No. 2 oil production state in the United States, have set a May 20 hearing on whether or not the current production of oil and natural gas at low prices is a waste of energy, Kallansh Energy reports.
That hearing by the North Dakota Industrial Commission could potentially lead to output restrictions.
The commission has asked oil and natural gas producers to weigh in on a wide array of oil market issued and the challenges of cutting or shutting in production from North Dakota’s oil-rich wells in the Bakken Shale.
Written comments are due to the commission by May 15.
North Dakota producers face shrinking oil storage capacity.
State officials estimated that 175,000 barrels per day of production was shut in during March at 3,500 wells in North Dakota.
Another 1,000 wells were shut in as of mid-April, raising shut-in production to about 260,000 barrels per day.
Last month, North Dakota adopted a waiver program that allowed O&G producers to keep wells in non-completed or inactive status longer than regulations typically permitted. The policy was designed to prevent producers from either bringing more unwanted crude to market or being forced to abandon wells.
The Railroad Commission of Texas is expected to vote on Tuesday on a state-mandated 20% oil and natural gas production cut in that state.
Wayne Christian, one of the three commissioners, has said he is opposed to the plan.
Texas is the No. 1 drilling state.
In Oklahoma, the Oklahoma Corporation Commission has scheduled a public hearing on May 11 on prorationing or cutting production.
The request for prorationing of crude oil was filed last month by the Oklahoma Energy Producers Alliance with 500 member companies.
Earlier, the alliance had submitted a letter, complaining that Oklahoma-produced crude oil was being wasted because of low commodity prices, to state officials.
The state has the obligation to ensure that crude oil is not sold below its actual value, the alliance said.
