May 5 (Reuters) - Texas energy regulators on Tuesday said they will not mandate oil production cuts, ending a month-long debate about whether or not they would wade into global oil politics for the first time in 50 years as oil prices crater to historic lows.
Global energy demand has tumbled amid coronavirus-related travel and business restrictions and a glut of oil from shale. U.S. crude prices collapsed to minus $37 a barrel on April 20. Even with recent increases in U.S. oil futures to $24, local prices are still below the cost of production for some oil companies.
The turmoil prompted State Railroad Commissioner Ryan Sitton last month to push the idea after Parsley Energy and Pioneer Natural Resources asked regulators to mandate 20% curtailments, or 1 million barrels. Sitton promoted the curbs on Twitter and TV and won audiences from OPEC Secretary General Mohammad Barkindo and Russian Energy Minister Alexander Novak.
But the idea never won support from the other two commissioners, and at least two votes were needed for approval. A motion to consider proration was dismissed Tuesday.
"The industry and the market move a lot faster than we can as a regulatory body," Commissioner Christi Craddick said.
Other states and countries have not acted to cut additional output, which would have Texas "on our own with this," Commission Chairman Wayne Christian said.
Small and large companies including Chevron Corp, Exxon Mobil Corp and Occidental Petroleum Corp were already planning to cut hundreds of thousands of barrels per day of shale, well ahead of any state action.
Texas is the largest U.S. oil-producing state, pumping about 5.4 million barrels per day (bpd) of crude. Last year its output rose by 600,000 bpd, to about 41% of the nation's total.
Commissioners instead on Tuesday waived some fees and voted to allow storage of crude oil in formations other than salt domes. Storage is filling this month as supply continues to outstrip the demand and the ability of refiners to process crude.
After several producers and environmental groups raised the issue in the past month, Christian also asked the state's major trade organizations to come back with suggestions before its June meeting for how to address high levels of natural gas flaring in the state's oil fields. (Reporting by Jennifer Hiller Editing by Marguerita Choy)