### OFFICEOFTHEATTORNEYGENERALOFTEXAS AUSTIN

Mr. Oil 

### JohnIt. Taylor, Chief supemlsor k0ai1Di~ia10~ 

### Railroad Commlsal~n oi Texas Austin, Texan Dear Mr. Taylor;



### 9, 19&O,rsquee


### has the author or not thr Commlsolon head gar to be 

### burned without such gas line Content, protidrd plant is avallabla in

on has arisen, nodoubt, by maeon 

### d (I), Saetion 3cr drtiala 6006,

Thaproduction of natural 

### gaa in oxcees of transportation 

### or market faallltlee, or raaoonabla market demandfor the type of gaa produaed." (Oneof the enumerated purposelr tor 

### which the production of gas is prohibited.)Mr. John E. Taylor, pags 2

Ths aseumsd finding on the part of the Railroad Comrsission that, as to tbs aubjsat gas, there would br no adequate trsnaportation or market facilities, mkss it nsosasary to deterstins whethdr them limitations operate on production for othar purpoaes; that is, if the gas cannot bs transported orsold, do the llmltatlone prevent its production for othsr purposes? Othsr.provisions of the aat warrant uasa of gaa by ths owner other than for transporting or selling the sane on ths mark&. Aocordlngly, subdsotlon (h) of Ssction 3is a?plicabls as a llnitatlon only whers the owuer is sn- *aged in transporting or selling the gsa on ths market. There can be noproduotion In axcsss of ths ncsd ror tranaport or sala except that ths sxcsss bs used ror somsothsr lawful purposa. Thalimitation contained in anyons subsaotlon of the act aannot reasonably be interpreted to preoluds other lawful use andwedo not consider that the limnitation of this ssotlon operates to pr;aoluds the manufacture of carbon black without rirat extracting the gasoline content. Wsnext sxamins subasotlon (1) of Ssotion 3, Article 6006:

“(1) Theuse or natural gas ror the manuraaturs ot carbon black without first having extraotsd the natiral gaaoline content from such gas.” (Onaof the enumerated purposes for whish the produotion of gas la prohlbltsd.) WIlntsrprst this’ subsootion to smbraos a limltatlon on produotlon of gas for a partloular ass; that like subsection (h), It ia not lnoluaivs of other ussa. wh6rs ths owner puts hla gas primarily to ths use of manufaoturing carbon black, the natural gasoline content mat be flrst rsaonored.

Hers the subjeot gas Is casinghead‘ gas and
**itB** production i3 Only Incident t0 the production Or oil, not primarily 

### rorthe manufacture of carbon black. T’:edonot consider subssotion (1) of Section 3, Article 6008, as a limitation on it13use.’

hr. John E. Taylor, pegs 3

In examining the whole of Article 6008, ws find other rsaaona for arriving at this conclusioa.

Casinghead gas Is by subsection (i), Section 2 of Article 6008 dsfined to be‘*any gas and/or vapor indigenous to anoil stratum andpr@duced from such stratum with 011.” Inasmuchaa br aubseatlou (d) of Ssation 2 anywell producing in sxcsss of a gas/all ratio of 100,000 cubic fset of natural gas to each barrel of oruds petroleum oil aonstltutsa a gas well, than ths prcductlon cbgas In anywell of less ratio oonstltutes an011well utisr sub- -sotion (s) OSSection 2, and ths gas from an 011well is naosasarily casinghead gas.

Xs find in aubssation (m), Section 3, Articls 6008. by implication, gas from awell producing agas/oil ratlo of leas than 100,000 to 1maybe put to anyuse, because it la only gaa produced in excess of that ratio $a:sz;t be put to one or mora of the uses authorized.

: %xctLon~ (ml.. Theproduction of mars than one hundredthousand ‘(1uZ:,UUoj -cubic feet of gas to each barrel of crude petroleum unless such gas Is put to one or more of tbv uass authorized for the typs of such gaB so produced under nllocations madeby the Commission.IQ Thia provision Is one of anunber defining *waste”

. Byit oasinghead gas say be produced In quantltiea of less than 100,000 cubic rest for 1 barrel of 011, and not further utilized, without committ?ng statutory waete. Accordingly, should wehave given subsection (i) of this section an Interpretation other than excluslvs In ahsraatsr It v:ould hsvs bssn at variance with ths permlasivs rssults of subsection (a). That gas not in exCeBS of the prohibited ratio of 100,000 cubla feet of gas to 1 barrel of oil mayby virtue of subssotion (m) be ellovsd to esaaps free into ths air without committing statutory waste, it follovs that no reasonable li~aitation could be placed upon the use of that gaa if not allowed to escape. T2eprevention of waste is thefoundation or the poyrerof this governmental regulation arrdif complets liberation of thegee withcut use is not wcste, than no particular US4 of the gas could reasonably be determined to be waste.Mr. John B. Taylor, paga 4

For furthar light

_ on the intendmant of tha ~. .~. Lagialatura, werarer to subaeation (31 of Section 7, Article 6008, for speclrlo authorization tar tha uses of casingheed gaa. It reads:

*Subsection (a). Caainghaad gaa may be used for eny benafiolal Durpcaa, which includes the manuracture of nstural gasollne.w oQaphasla oura) P;ainterpret this provlalon undoubtedly to include the sanufactura of carbon block, without the in oaition cl the Ilaitatlons provided in subsections (h7 and (1) of Section 3of Article 6008.

Tour aeaond quaation 13 as ioll0ws: aDoes the~Conuaisslonhave the authority to parnit a gaaolina plant, -&lch vents a portion of Its residue gas to the air end operntaa iii a field which doea not produce both sweat and 8our gas to take Into its gathering linea and comaingle in auohlines andin the plant meet or aour gas with casinghead gas if avolume of reelduo gas eqaivalant to or in axcasa of the total intake rrrvpgas walla, laes shrinkage resulting 

### rromgasoline exLraotion, ie utilized for tha purpoa6 permitted for awaat and aour gas byArtiols 6008. ” Youhays quotad subsection (k) of Seatlon 3, Article 6006, and aubaaotiona (1) and (2) of Saotlon 7, Article 6008. prammably‘aa provisions of the law rafalng doubt as to the power of the Commiaalonto al**low** the venting,

of dry gas, lrreapaotivs of the circumatancea sat out in your qunation. Theatatad alrcumatanoes would indicate that aaid **dry** gaa would be handled in such !na~er as aifactually to avoid waste. It seam to us, howaver, that even though the manner in which the dry gas maybe handled would afiactually avoid naata, yet neoerthalaaa, if in direct contravention of the provisions of the statutes, the ealaacannot be sanctioaad. Subsection (k) OSSection 3providaa:A!r. John l3.Taylor. pagr 5

%ubsectlon **(k)**

. Permitting anynatural gas produced iron agas wall to escape into the air before or after such gas has bean processed 

### for its gaeolina content.* (Onaof savaral provlslons darining mwaaten.) Also Section 

### 7 of Artiole 600e provides that nogas from agas wall shall be pemitted to escape Into tha air, excopt that it be utilized for certain purposes. Inthe faoa of these two express statutory prohibitions against the ralaasa of dry gas, that is, awaet or sour gas 

### iromaftaswell, woara of the belief that it cannot be done. f there is awayof kindling the gas so as to avoid praotioal waata with the venting of a commingled mixture, containing in part dry gas, the samewill have to begauthorized by the Legislature.

RQB :BBB Yours vary truly

Hugh&. Book Assistant