By Bivins S.B. No. 781
74R6936 MI-D
A BILL TO BE ENTITLED
1-1 AN ACT
1-2 relating to the determination of reservoir market demand for
1-3 natural gas.
1-4 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS:
1-5 SECTION 1. Sections 86.085 and 86.086, Natural Resources
1-6 Code, are amended to read as follows:
1-7 Sec. 86.085. Determination of Demand and Volume. Except as
1-8 provided by Section 86.0865, on <On> or before the 25th day of each
1-9 month, the commission<, after notice and hearing,> shall determine:
1-10 (1) the lawful market demand for gas to be produced
1-11 from each reservoir during the following month; and
1-12 (2) the volume of gas that can be produced without
1-13 waste from the reservoir and each well in the reservoir during the
1-14 following month.
1-15 Sec. 86.086. Monthly Reservoir Allowable. Except as
1-16 provided by Section 86.0865, after <After> determining demand and
1-17 volume of production as provided in Section 86.085 of this code,
1-18 the commission shall fix the monthly reservoir allowable of gas to
1-19 be produced from the reservoir at the lawful market demand for the
1-20 gas or at the volume that can be produced from the reservoir
1-21 without waste, whichever is the smaller quantity.
1-22 SECTION 2. Subchapter D, Chapter 86, Natural Resources Code,
1-23 is amended by adding Sections 86.0865 and 86.098 to read as
1-24 follows:
2-1 Sec. 86.0865. OPTIONAL MONTHLY RESERVOIR ALLOWABLE
2-2 DETERMINATION. (a) The commission may elect to determine monthly
2-3 reservoir allowables as provided by this section.
2-4 (b) If the commission elects to proceed under this section
2-5 on or before the 25th day of the preceding month, the commission
2-6 shall:
2-7 (1) determine the lawful market demand for gas to be
2-8 produced from all wells in all gas reservoirs during the following
2-9 month; and
2-10 (2) fix the monthly reservoir allowable of gas to be
2-11 produced from each reservoir by allocating the demand determined
2-12 under Subdivision (1) to each reservoir on a reasonable basis.
2-13 (c) If the commission elects to proceed under this section,
2-14 the reservoir allowable for each gas reservoir shall be determined
2-15 under this section whether or not the open flow or daily potential
2-16 capacity of the reservoir's wells exceeds the reasonable market
2-17 demand as provided by Section 86.083.
2-18 Sec. 86.098. HEARING TO REVIEW COMMISSION DETERMINATION OF
2-19 MARKET DEMAND AND RESERVOIR ALLOWABLE. (a) A person affected by a
2-20 commission determination under Section 86.085, 86.086, or 86.0865
2-21 may request a hearing before the commission to review the
2-22 commission's determination.
2-23 (b) The hearing is limited to the reservoir the
2-24 determination for which affects the person requesting the hearing.
2-25 (c) If the commission issues a final order changing the
2-26 determination of the reservoir allowable, the well allowables for
2-27 the applicable month shall be recalculated.
3-1 SECTION 3. This Act takes effect September 1, 1995.
3-2 SECTION 4. The importance of this legislation and the
3-3 crowded condition of the calendars in both houses create an
3-4 emergency and an imperative public necessity that the
3-5 constitutional rule requiring bills to be read on three several
3-6 days in each house be suspended, and this rule is hereby suspended.