Progress and Conservation
Authors: Tunnell Byron 
Published: December 2007

Editor's Note: Texas Railroad Commissioner Byron Tunnell delivered the following speech at the June 15 dinner meeting of SPE's Gull Coast Section in Houston. The editors are grateful to Gulf Coast Section Member J. Donald Clark, with Union Oil of California, for soliciting a copy of the talk and for obtaining Commissioner Tunnell's permission to publish it in JOURNAL OF PETROLEUM TECHNOLOGY.

Common Goals
The more I study the problems involved in conservation, the more difficult it becomes to clearly distinguish the various roles of the Railroad Commission, the (Texas) Legislature, the courts, the industry as a whole and you as petroleum engineers. The Texas statutes charge the Commission to conserve Texas' natural resources of oil and gas by prevention of waste, and in so doing, to protect the rights of all owners of these hydrocarbons. I recently read in your JOURNAL OF PETROLEUM TECHNOLOGY an article by P. L. Essley, Jr., entitled "What is Reservoir Engineering?". Among other things, Essley states that "The goal of engineering is optimization. The purpose of reservoir engineering is to provide facts, information and knowledge necessary to control operations to obtain the maximum possible recovery from a reservoir at the least possible cost."Now both of these rather oversimplified statements may adequately state our respective purposes, but the tough part lies in the implementation. "Conservation" is not hoarding, but wise use, achieved by prevention of reasonably avoidable waste of hydrocarbons. "Waste" may be defined as the failure to recover, or to prevent the loss of, hydrocarbons. Conservation requires an accurate knowledge of the physical properties which govern the behavior of oil and gas. Engineers know that engineering requires this same accurate knowledge to achieve its objectives. Thus, it appears that engineers should be in possession of knowledge necessary to achieve practical conservation objectives, and should welcome the responsibility to their fellow man which possession of this knowledge properly requires they accept.

Waste Prevention-Correlative Rights
The advance of technical knowledge and the body of law relating to property rights clearly reveal a close relationship and interdependence between waste prevention and correlative rights. An individual's conduct is governed, to a substantial extent, by selfish motives. The individual is competitive by nature. When confronted with a situation and a set of accepted operating rules which permit him to manipulate operations to serve his self-interest, he will usually indulge in the permitted manipulations profitable to him. Such actions on the part of an individual are attributable to his competitive nature and to a natural desire to achieve the fullest protection of his property rights. In our modern form of society, this is hardly distinguishable from the instinctive "urge to survive".In consideration of this natural desire on the part of all people, it inevitably follows that advanced conservation practice requires, first, that the property rights of all owners in an oil and gas reservoir be adequately protected. Wasteful practices result from failure to adequately protect property rights. Once assured that their property rights are protected, the individual owners in the oil and gas reservoirs have a single and common objective to promote in the furtherance of their individual self-interest. That objective is to operate wells producing from the common accumulation of hydrocarbons so as to recover the maximum economic quantity of oil and gas. This concept of the interrelationship between conservation and correlative rights is so basic and so simple as to be almost axiomatic. No longer can waste prevention be considered as a subject separate from protection of correlative rights. Effective prevention of waste requires. as an essential prerequisite, the protection of property rights. In a short capsule of time, 35 years. tens of thousands of people oil producers, engineers, legislators, administrators, lawyers, property owners and others working in an uncharted field and with a still-developing science, hammered out and adopted conservation practices and regulations that already have preserved for us an enormous volume of petroleum resources. And the full benefit of conservation progress these past 35 years has yet to be fully realized.

Reviews Essential
It is true that time-lags or gaps have occurred. Hindsight, or Monday-morning quarterbacking, is being engaged in by those who should know better. However, the informed realize the unrelenting advance of technical knowledge demands constant reappraisal of statutes, practices and concepts relating to conservation. The latest era of reappraisal began in 1961 and 1962 with the advent of the Normanna and Port Acres decisions of the Texas Supreme Court.
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