MBN C.S.H.B. 2691 75(R)BILL ANALYSIS


ENERGY RESOURCES
C.S.H.B. 2691
By: Merritt
4-16-97
Committee Report (Substituted)



BACKGROUND 

The East Texas Oil Field is not only the largest oil field in Texas, but
is the largest and most productive field in the lower 48 states.  This
field, which covers portions of Gregg, Rusk, Smith, Upshur, and Cherokee
Counties, has produced more than 5.2 billion barrels of oil since its
discovery in 1930.  The impact of this national treasure on the Texas
economy and local employment is massive.  Unfortunately, production is in
steady decline, and if some new approach to capturing more oil from this
field is not implemented, production is projected to diminish to a trickle
within 10 years.  Current trends indicate that techniques being used today
will produce 80 percent of the oil originally in place-an outstanding
recovery rate considering that many Texas fields produce less than 30
percent.  However, the fact that this field began with 7.0 billion barrels
of oil means that the 20 percent left behind equals an enormous loss of
economic potential (1.4 billion barrels of oil). 

PURPOSE

The purpose of this legislation is to facilitate the deployment of advance
recovery technologies, including horizontal wells, multilateral wells,
water flood optimization, and potentially, enhanced oil recovery, in areas
of the field that have lower recovery efficiencies in order to maximize
the recovery  and to sustain production from the East Texas Oil Field.    

RULEMAKING AUTHORITY

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

SECTION BY SECTION ANALYSIS

SECTION 1. Creates subchapter L entitled STUDY OF EAST TEXAS OIL FIELD in
Chapter   85 of the Natural Resources Code. 

 Sec. 85.401. Defines the advisory committee.

 Sec. 85.402. States that the Railroad Commission shall conduct a study of
the East Texas  Oil Field for the purpose of maximizing oil and gas
recovery for the field. 

 Sec. 85.403.  (a)Details the composition of the Advisory Committee.
   
   (b)States that a member of the Advisory Committee serves at the will of
the person who appointed them. 
   
   (c)States that the Railroad Commission Advisory Committee member is
the presiding officer of the committee. 

   (d)Allows members of the Advisory Committee to receive reimbursement
for actual and necessary expenses in the performance of their duties. 

   (e)States that costs for the committee operations shall be paid by
money    appropriated to the committee. 

   (f)States that the Advisory Committee shall meet at the call of the
presiding officer. 

   (g)States that the Advisory Committee shall keep a public record or its
decisions at the office of the Railroad Commission. 

   (h)States that the Advisory Committee shall advise the Railroad
Commission with regard to the study. 

 Sec. 85.404.  States that, not later than January 1, 2000, the Railroad
Commission shall  prepare a report for the Governor, Lieutenant Governor,
and Speaker containing    recommendations to maximize oil and gas recovery
from the East Texas Oil Field. 

 Sec. 85.405. Abolished the Advisory Committee September 1, 2008.

SECTION 2. States that committee appointments shall be made as soon as
practical after the   effective date of this Act. 

SECTION 3. Effective date: September 1, 1997.

SECTION 4. Emergency Clause.

COMPARISON OF ORIGINAL TO SUBSTITUTE

The substitute to H.B. 2691 typographically corrects Sec. 85.404 stating
that the Railroad Commission report shall be prepared not later than
January 1, 2000.  There are no substantive changes.