Opinion ID: 2429351
Heading Depth: 4
Heading Rank: 3

Heading: Commingling statutes

Text: Senate Bill 1146 amended section 86.081 of the Natural Resources Code by adding subsection (b). In light of the judicial action and legislative reaction in the Boonsville cases, the language in section 86.-081(b) is significant. It provides: When, as provided in Subsection (b) of Section 85.046 or Subsection (b) of Section 86.012 of this code, as amended, the commission has permitted production by commingling oil or gas or oil and gas from multiple stratigraphic or lenticular accumulations of oil or gas or oil and gas, the commission may prorate, allocate, and regulate the production of such commingled, separate multiple stratigraphic or lenticular accumulations of oil or gas or oil and gas as if they were a single common reservoir.... Tex.Nat.Res.Code § 86.081(b) (emphasis added). We interpret the words prorate, allocate, and regulate, and especially the broad word regulate, to evidence an intention to grant the commission broad authority over gas production from commingled reservoirs. The MIPA is one means by which the commission exercises its regulatory authority over oil and gas production. Furthermore, section 86.081(b)'s reference to sections 85.046 and 86.012 of the code is significant. These sections both address and define waste of gas. Section 85.046 is located in subchapter C of Chapter 85 of the code and is entitled PROVISIONS GENERALLY APPLICBLE TO THE CONSERVATION OF OIL AND GAS. Section 86.012 is located in Chapter 86 of the code, which is entitled REGULATION OF NATURAL GAS. Subsections (b) of these provisions both provide: Notwithstanding the provisions contained in this section or elsewhere in this code or in other statutes or laws, the commission may permit production by commingling oil or gas or oil and gas from multiple stratigraphic or lenticular accumulations of oil or gas or oil and gas where the commission, after notice and hearing, has found that producing oil or gas and oil and gas in a commingled state will prevent waste, promote conservation, or protect correlative rights. Tex.Nat.Res.Code §§ 85.046, 86.012. These general provisions show the legislature's intention to permit gas production from commingled reservoirs, regardless of any other provisions to the contrary, if commingling is necessary to achieve the stated objectives. The stated objectives in subsections (b) are virtually identical to the stated purposes of the MIPA; they are to avoid drilling unnecessary wells, protect correlative rights and prevent waste. To the extent that commingling of separate gas reservoirs not in natural communication achieves these objectives, the commission may permit such commingling in the exercise of its pooling authority. We conclude that the legislature intended that the commission have the authority to decide what constitutes a common reservoir for the purposes of the MIPA.