Gas Proration Today and Tomorrow
Authors: Harris Bob R. 
Published: December 2007

The purpose of this paper is to discuss the gas proration aspect of the over-all gas situation in Texas, both today and in the immediate future.

There have been several recent changes in this area. The old proration problems have bee practically eliminated. The problem of nominating practically eliminated. The problem of nominating procedure is no longer a major problem, and the procedure is no longer a major problem, and the development of small tracts is properly controlled. Similarly, associated gas-well gas operations are relatively trouble free.

Conversely, casinghead gas is becoming quite a problem. As soon as one plant eliminates flares, another develops similar problems. Thus both the Texas Railroad problems. Thus both the Texas Railroad Commission and the gas industry may be criticized since gas is being flared during a national fuel shortage.

Communication is a major problem. The consuming public, the oil and gas industry, and the regulatory agency must work together in order to eliminate this problem. People must realize that natural gas is a bargain today and that a relatively large increase in the wellhead price should result in a very nominal increase price should result in a very nominal increase in the home energy bill.

On the other hand, the Texas Railroad Commission is determined to eliminate the unnecessary wasting of gas while attempting to create the maximum incentives for oil and gas development and to communicate the dire need of accomplishing these goals to the consuming public.

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When Jack Paxton first talked to me about speaking before this group, I assumed that you were interested in the over-all gas situation from the Texas Railroad Commission standpoint. As usual, on Nov. 30, I was late getting in an outline to Jack, and at that time Jack told me he thought you would be particularly interested in the gas proration aspect, both now and in the immediate future.

This is one of those cases when I think the good news should come first. Our proration problems have been practically eliminated. problems have been practically eliminated. That is, the old problems concerned with prorated fields. Apparently, most of the operators prorated fields. Apparently, most of the operators are operating at an optimum level and do not feel that their correlative rights are being adversely affected. Actually, most of our better gas fields appear to be operating at the approximate capacity of the handling facility. In the opposite case, I believe we have had an average of about two applications per formal conference to suspend the existing allocation formula in gas fields and allow all wells to operate at capacity during this past year.

In the past, I think I have complained about the nominating procedure of many companies, but again, this problem has become moot.

Three or four years ago, operators in the Permian Basin area were having pipeline problems Permian Basin area were having pipeline problems in such fields as Gomez and Coyanosa particularly. I do not recall a single incident in 1970 when a serious proration problem has occurred in either of these two fields or, for that matter, in any of the new, deep Ellenburger fields in this area. When I was out here the last time, the major gas discoveries for the state were coming from these deep fields. If we can include the Panhandle with the Permian Basin, I think the major Texas gas discoveries are still coming from deep reservoirs in West Texas.

The new system of adopting temporary gas field rules and the compulsory pooling statute appears to have eliminated most of the old problems of small tract development.