In mid-April, Midland oil executive Tim Dunn and two leaders of the National Diversity Coalition for Trump published an open letter to President Trump urging him to let Americans reopen the economy as they see fit. The letter encourages the president to confront local and state government “central planners” who “strip Americans of basic liberties” and advocate “an indefinite shutdown … to steer the country toward socialism.” Instead of a measured approach to lifting coronavirus-related restrictions, based on science and expanded testing, the authors argue that “Each one of us can determine for ourselves how best to proceed.” This message is vintage Dunn. The wealthy West Texan—who founded the conservative political powerhouse Empower Texans—has spent countless hours and millions of his own dollars promoting a libertarian vision of a society in which empowered private companies and citizens vigorously constrain government interference in their economic affairs.
No such fierce individualism appears, however, in a letter that Dunn wrote to the oil regulators at the Texas Railroad Commission five days earlier. He advised those once-and-perhaps-future central planners to carefully weigh the need to exercise their “statutory power and authority” to order across-the-board production cuts at Texas oil wells if it would “prevent waste in our industry.” Dunn stops short of calling for “proration,” the term for limiting production. But the libertarian clearly gives the commissioners his blessing to cap how much oil he and other producers can pump. “Any measure that carries with it the reasonable expectation of mitigating such waste should be implemented,” Dunn wrote. In his contrasting directives to Trump and the Railroad Commission, Dunn suggests that ordinary Americans should be entrusted to navigate a bewildering pandemic on their own, and be put at risk by those who defy social distancing advisories, while powerful oil executives may need a government rescue.
As CEO of CrownQuest Operating, a company that oversees more than one thousand wells, Dunn wrote the Railroad Commission in advance of an extraordinary ten-hour hearing on April 14. Fifty-five witnesses gave the agency’s three elected Republican commissioners conflicting advice on what to do about a formal proration petition filed by Texas producers Parsley Energy and Pioneer Natural Resources. The issue has exposed deep rifts within the industry.
Despite his free-market rhetoric, Dunn urged the commissioners to impose cuts if they determine that such a move could help the embattled industry in Texas conserve its oil until prices recover. Before launching CrownQuest and Empower Texans, Dunn was a founding general partner of Parker & Parsley Development, a precursor to Pioneer. Dunn’s old boss, Pioneer CEO Scott Sheffield, provided the hearing’s most striking testimony. “No one wants to give us capital because we have all destroyed capital and created economic waste,” Sheffield said in an unusual plea for government regulators to rescue private oil companies from themselves.
Many CrownQuest and Pioneer competitors oppose what would be the first Texas production quota in 47 years. The chief financial officer of Houston-based Diamondback Energy, Kaes Van’t Hof, testified that if the agency ordered production cuts, “We are going to cease all activity right away,” endangering three thousand jobs. Others noted that while Texas leads production in the world’s number one oil-producing nation, it accounts for about 6 percent of global production—limiting what Lone Star regulators can do to influence the price of a global commodity. State-ordered cuts might constitute an unforeseeable event that could let some producers escape unprofitable contracts, argued Jim Teague, co-CEO of pipeline giant Enterprise Products Partners. (Texas Monthly’s parent company, Enterprise Products Company, also owns interests in the midstream oil and gas industry, among other investments.) Raising a free-market argument about “government interference,” Doug Suttles, CEO of Denver-based Ovintiv, testified that if Texas limits production, “We’ll have to consider when we invest [there] in the future, will we be able to produce those barrels or not?’”
If the test of a first-rate intellect is, as F. Scott Fitzgerald had it, “the ability to hold two opposed ideas in the mind at the same time,” then Tim Dunn qualifies as a genius. Since 2013 he has contributed more than $9 million to state candidates and PACs. Dunn gave three-quarters of that money to the PAC of Empower Texans; he also contributed $93,500 to the three railroad commissioners, all of whom have been endorsed by Empower Texans. “Government power and reach must be strictly limited, with elected officials held accountable,” Empower’s website proclaims.
Dunn formed Empower in response to a 2006 state tax reform that eased property taxes by imposing a new tax on business partnerships, including those used to finance oil wells. To run the group he recruited Michael Quinn Sullivan, who already was fighting that franchise tax with a simple message. “Businesses don’t pay taxes,” Sullivan argued; individuals do. Empower made major waves in 2008, as Dunn unsuccessfully sought to prevent a coalition of Texas House Democrats and moderate Republicans from toppling fellow conservative oilman Tom Craddick as House Speaker. (Craddick’s daughter, Christi, now sits on the Railroad Commission.) Coming full circle last year, Empower’s Sullivan surreptitiously recorded damaging private comments by current GOP Speaker Dennis Bonnen, prompting him to not seek reelection as speaker in 2021. (Sullivan and Dunn did not return our calls.)
Echoing his letter to President Trump, Dunn has had oversight roles on the boards of other conservative groups promoting and coordinating protests to demand that state governments reopen their pandemic-closed economies. Dunn was a founding board member of Citizens for Self-Governance; its “Convention of States” initiative is running social media ads promoting uprisings “against these insane shutdowns.” Dunn also is vice chairman of an Austin group critical of the shutdowns. The Texas Public Policy Foundation is the Texas GOP’s de facto think tank. Nine of the foundation’s twenty board members have close ties to the oil industry. In early April, TPPF executive director Kevin Roberts argued that public officials have prioritized curtailing the pandemic “to the detriment of more than 10 million workers who have lost their jobs seemingly overnight.” Two weeks later Governor Greg Abbott appointed Roberts to his new “strike force” to restart Texas’s economy. When Texas Monthly asked what the foundation thinks of state-mandated oil cuts, however, its press secretary, Sarah Silberstein, had a remarkable response: “Unfortunately, TPPF does not have research on the proposed cap of oil production and therefore will be unable to comment at this time.”
The capital-intensive shale-fracking revolution erupted twelve years ago, when a barrel of oil sold for close to $150. The pandemic glut pushed a barrel close to $20—before entering unchartered negative territory this week—leaving some indebted oil producers near bankruptcy. Taken together, Dunn’s advice to the president (let folks open the economy) and to the Railroad Commission (cap production if it prevents industry waste) could greatly boost demand and marginally boost prices for Dunn’s oil. But his motivations may not be entirely self-centered. Instead, he could be embracing state production controls out of loyalty to his mentor, Scott Sheffield. Or he could be seeking to relieve the pandemic’s wreckage of his Permian Basin home region. For whatever reason, Dunn’s letters suggest that this influential libertarian believes that extraordinary times demand extraordinary measures.