Evening star. [volume] (Washington, D.C.) 1854-1972, 1931-08-16
OIL MEN FIND HOPE
IN TEXAS MEASURE
Waste Provision Believed
Sufficient to Restore Order
to Industry.
Dispatch to III. Star.

SpeCfat DlSphIcn 10 me star.
FORT WORTH, Tex, August l5.--
While Texas new oil conservation Law
enacted this week specifically prohibits
consideration of economic waste and
market demand. the stringent physical
waste features are regarded by . ma
jortty OF East Texas producers as
capable of coping with chaotic condi-
tons that have demoralized the oil
industry throughout the mid continent
for nearly six months.
majority of producers predict that
reductions ranging from 200 900 to 400
900 barrels daily in East Texas produc-
ton will be possible under application
of the conservation law passed by the
Legislature in special session.
In the meantime East Texas produe-
ton climbed to new peak during the
week ended August IL. when estimates
plsced the recovery at 100000 barrels
daily, or about 5,ll0.0o0 barrels for the
week. This production was coming
from approximately / 800 wells, or an
average Of 456.25 barrels daily per well.
The new production record was 75,764
barrels daily above the preceding week e
production of 654. 764 barrels as esti-
mated by the American Petroleum In
stitute.
Up W AAaA NWkAAHht18A0Ma
The Texas Legislature left enforce
nnent of the new conservation law en-
tirely within Jurisdiction of the Rail-
road Commission, which was charged,
at a preliminary investigation Of the
oil industry. with laxity and incom-
potency. With presentation Of testi-
mony intended to show that the Rail-
road Commission had not exercised
diligence in enforcing its regulatory
measures in East Texas, the future ac-
tons Of the States Conservation Board
will be under scrutiny by the entire
oil industry and the general public. The
Legislature refused to shift the Rail-
road Commissions oil and gas super
vising duties TO another bureau, rs rec
commended by Gov. Sterling and adj
miniStrstton forces.
The two most stringent clauses in
the new Law prohibit underground
waste Of oil or gas by dissipation Of ma
tural pressure or by Unequal with
drawals from the common reservoir
that would hasten or bring about in
trusion of water into the petroleum
producing stratum.
Since the Legislature specifically pro-
hibited the Railroad Commission from
considering market demand, or eco
nomic waste. proponents of conserva-
ton and curtailment have seized upon
a paragraph in the new bills defini-
ton Of physical waste that. they assert,
win virtually accomplish the same pur-
pose.
Withdrawals Banned.
In conjunction with new pipeline bill
passed also at the special session, trans
porters Of oil that are not included in
the category of common purchasers"
are prohibited from withdrawing larger
than possible by those utilizing
facilities of common carriers.
The two bills are construed to mean
this: The available outlet through
purchasers, plus that through
transportation agencies that are not
carriers, will equal the mar
ket demand; and since the Legislature
has enacted laws to insure equitable
of outlets among producers,
of the market demand
theory claim the new bill gives their
ranks a distinct victory.
East Texas producers regard Mag
nolia Petroleum Co.'S increase of 5
cents per barrel on the East Texas oil
price, made effective Thursday, as the
first step toward sterilization of the
market. Rumofs were heard, but not
confirmed, that one Of the large buyers.
who this week was identified in au-
thoriZation Of a new 12-inch trunk
line to the Gulf Coast, would post q
price OF 40 cents per barrel for East
Texas crude oil on Monday.
The one slight price increase and
rumors that others will follow have
made East Texas operators hopeful
that the Legislature has finally enabled
producers In the district to launch their
business on profitable basis
toopyriEht. 1881