The state government gave the TRC the responsibility to regulate oil and gas production in the state of Texas. The TRC in turn regulated well spacing, depletion rates, forced unitizing of property parcels astride the oil fields, and thus indirectly set the price of oil. And these controls worked, were replicated in other states, and the TRC essentially controlled the price of oil in the United States for the next 50 years. Interestingly, the Texas Railroad Commission was set up to deal with overbuilding and tariff exploitation by railroad companies, yet another tragedy of the commons situation.
People living together must find some way to preserve common resources. Unfortunately, there are strong incentives for people to exploit these resources when they are held in common by everyone. As Prof. Sean Mullholland at Stonehill College explains, the ‘tragedy of the commons’ occurs when individuals acting independently end up depleting shared resources, such as fisheries or pastureland. Prof. Mullholland discusses two potential solutions to this problem: public ownership, where the property is owned and administered by the government, and private ownership. He discusses the strengths and weaknesses to each approach and some key considerations for determining which institutions best protect useful resources.
In an approximate way, the logic of commons has been understood for a long time, perhaps since the discovery of agriculture or the invention of private property in real estate. But it is understood mostly only in special cases which are not sufficiently generalized. Even at this late date, cattlemen leasing national land on the western ranges demonstrate no more than an ambivalent understanding, in constantly pressuring federal authorities to increase the head count to the point where overgrazing produces erosion and weed-dominance. Likewise, the oceans of the world continue to suffer from the survival of the philosophy of the commons. Maritime nations still respond automatically to the shibboleth of the "freedom of the seas." Professing to believe in "the inexhaustible resources of the oceans," they bring species after species of fish and whales closer to extinction (9).