85R4238 JXC-F
	By: Bonnen of Galveston	H.B. No. 2688

	A BILL TO BE ENTITLED
	AN ACT
	relating to the authority of the Railroad Commission of Texas to
	prevent waste of oil and gas.
	BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
	SECTION 1.  Section 85.046, Natural Resources Code, is
	amended by amending Subsection (a) and adding Subsections (d) and
	(e) to read as follows:
	(a)  The term "waste," among other things, specifically
	includes:
	(1)  operation of any oil well or wells with an
	inefficient gas-oil ratio and the commission may determine and
	prescribe by order the permitted gas-oil ratio for the operation of
	oil wells;
	(2)  drowning with water a stratum or part of a stratum
	that is capable of producing oil or gas or both in paying
	quantities;
	(3)  underground waste or loss, however caused and
	whether or not the cause of the underground waste or loss is defined
	in this section;
	(4)  permitting any natural gas well to burn
	wastefully;
	(5)  creation of unnecessary fire hazards;
	(6)  physical waste or loss incident to or resulting
	from drilling, equipping, locating, spacing, or operating a well or
	wells in a manner that reduces or tends to reduce the total ultimate
	recovery of oil or gas from any pool;
	(7)  waste or loss incident to or resulting from the
	unnecessary, inefficient, excessive, or improper use of the
	reservoir energy, including the gas energy or water drive, in any
	well or pool[; however, it is not the intent of this section or the
	provisions of this chapter that were formerly a part of Chapter 26,
	Acts of the 42nd Legislature, 1st Called Session, 1931, as amended,
	to require repressuring of an oil pool or to require that the
	separately owned properties in any pool be unitized under one
	management, control, or ownership];
	(8)  surface waste or surface loss, including the
	temporary or permanent storage of oil or the placing of any product
	of oil in open pits or earthen storage, and other forms of surface
	waste or surface loss including unnecessary or excessive surface
	losses, or destruction without beneficial use, either of oil or
	gas;
	(9)  escape of gas into the open air in excess of the
	amount necessary in the efficient drilling or operation of the well
	from a well producing both oil and gas;
	(10)  production of oil in excess of transportation or
	market facilities or reasonable market demand, and the commission
	may determine when excess production exists or is imminent and
	ascertain the reasonable market demand; and
	(11)  surface or subsurface waste of hydrocarbons,
	including the physical or economic waste or loss of hydrocarbons in
	the creation, operation, maintenance, or abandonment of an
	underground hydrocarbon storage facility.
	(d)  It is not the intent of this section or the provisions of
	this chapter that were formerly a part of Chapter 26, Acts of the
	42nd Legislature, 1st Called Session, 1931, as amended, to require
	repressuring of an oil pool or to require that the separately owned
	properties in any pool be unitized under one management, control,
	or ownership.
	(e)  Notwithstanding Subsection (d), this section and the
	provisions of this chapter that were formerly a part of Chapter 26,
	Acts of the 42nd Legislature, 1st Called Session, 1931, as amended,
	do not prohibit the commission from imposing fieldwide unitization
	of a geologic formation of oil or gas of Cenozoic age for the
	purposes of a new or expanded enhanced recovery project under
	Section 202.054, Tax Code.
	SECTION 2.  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, 2017.