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S.B. No. 1170
AN ACT
relating to the regulation of gas production by the Railroad
Commission of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Subsection (a), Section 86.081, Natural
Resources Code, is amended to read as follows:
(a) For the protection of public and private interests, the
commission, on written complaint by an affected party or on its own
initiative and after notice and an opportunity for a hearing, shall
prorate and regulate the daily gas well production from a [each]
common reservoir if the commission finds that action to be
necessary to:
(1) prevent waste; or [and]
(2) adjust the correlative rights and opportunities of
each owner of gas in a common reservoir to produce and use or sell
the gas as permitted in this chapter.
SECTION 2. Subsection (a), Section 86.084, Natural
Resources Code, is amended to read as follows:
(a) The commission, on written complaint by an affected
party or on its own initiative, may [shall] determine the status of
gas production from any reservoir [all reservoirs] in the state.
SECTION 3. Section 86.085, Natural Resources Code, is
amended to read as follows:
Sec. 86.085. DETERMINATION OF DEMAND AND VOLUME. On or
before the last [25th] day of each month, the commission or a person
authorized by the commission[, after notice and hearing,] shall
determine:
(1) the lawful market demand for gas to be produced
from each prorated reservoir during the following month; and
(2) the volume of gas that can be produced without
waste from each prorated [the] reservoir and each well in the
reservoir during the following month.
SECTION 4. Section 86.086, Natural Resources Code, is
amended to read as follows:
Sec. 86.086. MONTHLY RESERVOIR ALLOWABLE. After
determining demand for and volume of production from a prorated
reservoir as provided in Section 86.085 [of this code], the
commission shall fix the monthly reservoir allowable of gas to be
produced from the reservoir at the lawful market demand for the gas
or at the volume that can be produced from the reservoir without
waste, whichever is the smaller quantity.
SECTION 5. Section 86.087, Natural Resources Code, is
amended to read as follows:
Sec. 86.087. MONTHLY WELL ALLOWABLE. The monthly reservoir
allowable shall be allocated among all wells entitled to produce
gas from a prorated [the] reservoir to give each well its fair share
of the gas to be produced from the reservoir, but each well is
restricted to the amount of gas that can be produced from it without
waste. The volume of gas allocated to each well is the monthly
allowable for that well.
SECTION 6. Subsection (a), Section 86.089, Natural
Resources Code, is amended to read as follows:
(a) In determining the daily allowable production for each
gas well in a prorated reservoir, the commission shall take into
account:
(1) the size of the tract segregated with respect to
the surface position and common ownership on which the gas well or
wells are located;
(2) the relation between the daily producing capacity
of each gas well and the aggregate daily capacity of all gas wells
producing the same kind of gas in the same common reservoir or zone;
and
(3) other factors that are pertinent.
SECTION 7. Section 86.094, Natural Resources Code, is
amended to read as follows:
Sec. 86.094. AUTHORITY TO INCREASE TAKE ABOVE ALLOWABLE.
If unforeseen contingencies increase the demand for gas required by
a distributor, transporter, or purchaser to an amount in excess of
the total allowable production of the wells in a prorated reservoir
to which the person [he] is connected, the distributor,
transporter, or purchaser may increase the person's [his] take
ratably from all these wells in order to supply the person's [his]
demand for gas, provided that notice of the increase and the amount
of the increase are given to the commission within five days; and
provided further, the commission[, at its next hearing,] shall
adjust the inequality of withdrawals caused by the increase in
fixing the allowable production of the various wells in the common
reservoir or zone.
SECTION 8. This Act takes effect immediately if it receives
a vote of two-thirds of all the members elected to each house, as
provided by Section 39, Article III, Texas Constitution. If this
Act does not receive the vote necessary for immediate effect, this
Act takes effect September 1, 2005.
______________________________ ______________________________
President of the Senate Speaker of the House
I hereby certify that S.B. No. 1170 passed the Senate on
May 3, 2005, by the following vote: Yeas 31, Nays 0; and that the
Senate concurred in House amendment on May 27, 2005, by the
following vote: Yeas 29, Nays 0.
______________________________
Secretary of the Senate
I hereby certify that S.B. No. 1170 passed the House, with
amendment, on May 25, 2005, by the following vote: Yeas 144,
Nays 0, two present not voting.
______________________________
Chief Clerk of the House
Approved:
______________________________
Date
______________________________
Governor