BILL ANALYSIS



S.B. 1356
By: Haywood (Holzheauser)
May 4, 1995
Committee Report (Unamended)


BACKGROUND

Downhole commingling is a production method used by operators to
reduce expenses and increase total recovery from wells. 
Commingling extends the productive life of wells and leases and
results in more taxes and revenue from the property.  This practice
reduces the economic abandonment of wells due to economic reasons.

Current law authorizes the approval of downhole applications after
notice has been given to others and a hearing has taken place. This
hearing is required for such an application even if there is no
opposition to the approval of the application.


PURPOSE

S.B. 1356 authorizes the Railroad Commission of Texas to permit
production by commingling oil or gas, or both, after giving notice
and an opportunity for hearing, but without the hearing being
mandatory.


RULEMAKING AUTHORITY

It is the committee's opinion that this bill does not grant any
additional rulemaking authority to a state officer, institution, or
agency.


SECTION BY SECTION ANALYSIS

SECTION 1. Amends Section 85.046(b), Natural Resources Code, to
authorize the Railroad Commission of Texas to permit production by
commingling oil or gas or both after notice and opportunity for
hearing, has found that production in a commingled state will
prevent waste, promote conservation, or protect correlative rights.

SECTION 2. Amends Section 86.012(b), Natural Resources Code, to
make a conforming change.

SECTION 3. Effective Date: September 1, 1995.

SECTION 4. Emergency Clause.


SUMMARY OF COMMITTEE ACTION

S.B. 1356 was considered by the Energy Resources Committee in a
public hearing on May 2, 1995. Elizabeth Bush, representing ARCO
Permian and Texas Mid-Continent Oil and Gas Association testified
in favor of the bill. No one testified against the bill. The bill
was left pending. Later in the same public hearing, S.B. 1356 was
laid out on pending business. The bill was reported favorably
without amendment, with the recommendation that it do pass and be
printed and be sent to the Committee on Local and Consent
Calendars, by a record vote of
7 ayes, 0 nays, 0 PNV, and 2 absent.