BILL ANALYSIS



S.B. 1551
By: Haywood (Williamson)
May 9, 1995
Committee Report (Unamended)


BACKGROUND

Gas and oil production within the Boonesville area of Wise County
results from many small, individual producing zones, or lenses,
throughout the area.  Disputes in the late 1970s and early 1980s
concerning the development of the Boonesville area resulted in the
severe restriction of the authority of the Railroad Commission of
Texas to regulate the area; consequently, Boonesville is the only
area of the state where gas and oil production is regulated by
statute rather than the Railroad Commission.


PURPOSE

S.B. 1551 repeals certain provisions of the Natural Resources Code
that limit the Railroad Commission's authority to regulate
production of oil and gas from multiple stratigraphic oil and gas
reservoirs.


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 85.053(b), Natural Resources Code, to
allow the Railroad Commission of Texas to distribute, prorate,
apportion, or allocate the production of oil or gas from pools of
certain commingled separate accumulations of oil or gas, or both. 
Deletes Subdivision (i) which prohibits these activities for
separate accumulations discovered between Jan. 1, 1940, and June 1,
1945, if the effect would be to expand, add to, or extend the
vertical or areal extent of any single pool.  Deletes Subdivision
(iv) which prohibits any gas well in any field under former
Subdivision (i) from being assigned an allowable in excess of its
production during the last production period reported to the
commission. Renumbers remaining Subdivisions accordingly.

SECTION 2. Amends Section 85.055(d), Natural Resources Code, to
make conforming changes.

SECTION 3. Amends Section 86.081(b), Natural Resources Code, to
make conforming changes.

SECTION 4. Emergency Clause.
           Effective Date: upon passage.


SUMMARY OF COMMITTEE ACTION

S.B. 1551 was considered by the Energy Resources Committee in a
public hearing on May 8, 1995. The following witnesses testified in
favor of the bill:

     Bob Stout, representing Mitchell Energy and Development
Corporation;
     Brian Sullivan, also representing Mitchell Energy Corporation;
     Joe McClendon, representing Lone Star Gas Company; and,
     Lindsey Dingmore, representing Texas Independent Producers and
Royalty Owners           Association.

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.