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S.B. No. 1175
AN ACT
relating to the regulation of oil and gas production by the Railroad
Commission of Texas.
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
SECTION 1. Section 85.043, Natural Resources Code, is
amended to read as follows:
Sec. 85.043. APPLICATION OF CERTAIN RULES AND ORDERS. If
the commission requires a showing that refined products were
manufactured from oil legally produced, the requirement shall be of
uniform application throughout the state; provided that, if the
rule or order is promulgated for the purpose of controlling a
condition in any local area or preventing a violation in any local
area, then on the complaint of a person that the same or similar
conditions exist in some other local area and the promulgation and
enforcement of the rule could be beneficially applied to that
additional area, the commission may [shall] determine whether or
not those conditions do exist, and if it is shown that they do, the
rule or order may [shall] be enlarged to include the additional
area.
SECTION 2. Subsection (a), Section 85.053, Natural
Resources Code, is amended to read as follows:
(a) If a rule or order of the commission limits or fixes in a
pool or portion of a pool the production of oil, or the production
of gas from wells producing gas only, the commission, on written
complaint by an affected party or on its own initiative and after
notice and an opportunity for a hearing, shall distribute, prorate,
or otherwise apportion or allocate the allowable production among
the various producers on a reasonable basis if the commission finds
that action to be necessary to:
(1) prevent waste; or
(2) adjust the correlative rights and opportunities of
each owner of oil or gas in a common reservoir to produce and use or
sell the oil or gas as permitted in this chapter.
SECTION 3. Subsections (a) and (c), Section 85.054, Natural
Resources Code, are amended to read as follows:
(a) To prevent unreasonable discrimination in favor of one
pool as against another, and on written complaint and proof of such
discrimination or if the commission on its own initiative finds
such an action to be necessary, the commission may allocate or
apportion the allowable production of oil on a fair and reasonable
basis among the various pools in the state.
(c) The commission may [shall] determine the reasonable
market demand of the respective pool as the basis for determining
the allotments to be assigned to the respective pool so that
discrimination may be prevented.
SECTION 4. Subsections (a), (b), and (c), Section 85.055,
Natural Resources Code, are amended to read as follows:
(a) If, on written complaint by an affected party or on its
own initiative and after notice and an opportunity for a hearing,
the commission finds that full production from wells producing gas
only from a common source of supply of gas in this state is in excess
of the reasonable market demand, the commission shall inquire into
the production and reasonable market demand for the gas and shall
determine the allowable production from the common source of
supply.
(b) The allowable production from a prorated common source
of supply is that portion of the reasonable market demand that can
be produced without waste.
(c) The commission shall allocate, distribute, or apportion
the allowable production from the prorated common source of supply
among the various producers on a reasonable basis and shall limit
the production of each producer to the amount allocated or
apportioned to the producer.
SECTION 5. Section 85.058, Natural Resources Code, is
amended to read as follows:
Sec. 85.058. COMMISSION INQUIRY AND DETERMINATION. From
time to time, the commission may [shall] inquire into the
production, storage, transportation, refining, reclaiming,
treating, marketing, and processing of oil and gas, and the
reasonable market demand for oil and gas, so that it may determine
whether or not waste exists or is imminent or whether the oil and
gas conservation laws of this state or the rules and orders of the
commission promulgated under those laws are being violated.
SECTION 6. 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. 1175 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. 1175 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