Opinion ID: 2437936
Heading Depth: 1
Heading Rank: 2

Heading: rrc classification entitled to great deference

Text: I agree with the court that the statutory definition of casinghead gas is the appropriate definition to apply in this case. However, I disagree with the court's conclusion that the statutory definition is unambiguous. In my opinion, the definition of casinghead gas is ambiguous and we should look to the RRC interpretations. The RRC has been charged by the legislature to apply the statutory definition of casinghead gas. Tex.Nat.Res.Code Ann. § 86.041 (Vernon 1978); see also Gulf Land Co. v. Atlantic Refining Co., 131 S.W.2d 73, 81 (Tex.1939) (RRC is given power and duty to make rules and orders to effectuate aims and purposes of statute). The RRC applied this definition in classifying the wells in question. Amarillo Oil has not properly challenged the construction or application of this definition by the RRC in this case as being erroneous or unsound. Thus, the court should give the RRC's classification great weight and deference. Courts give great weight to long standing construction of statutes by the RRC. Deep South Oil Co. v. Texas Gas Corp., 328 S.W.2d 897, 903 (Tex.Civ.App.-Beaumont 1959, writ ref'd n.r.e.); see also Franklin Fire Ins. Co. v. Hall, 247 S.W. 822, 823 (Tex.1923). Especially when interpreting an ambiguous or uncertain statute, the proper course is to follow the departmental construction, unless that interpretation is clearly erroneous or unsound. Shaw v. Strong, 96 S.W.2d 276, 281 (Tex. 1936) (Cureton, C.J., concurring); see also Ex parte Roloff, 510 S.W.2d 913, 915 (Tex. 1974). The only way to attack a RRC determination is through the judicial review process outlined in the Natural Resources Code. See Tex.Nat.Res.Code Ann. § 86.225. This has not been done, and the RRC's conclusion that the substance in question is casinghead gas should therefore stand. The question of what is gas, casinghead gas, and oil is complicated because hydrocarbons exist in either a liquid or vapor phase or in a mixed vapor or liquid phase depending on temperature, pressure, and chemical composition. If any one of these variables is altered, a portion of oil may become a gas and vice versa. The time and place of inquiry are also critical variables. Whether a substance is oil or gas depends on whether it is located in the reservoir, the wellbore, or after separation. Hydrocarbons may change from a gas to a liquid or vice versa in each of these locations. See Note, Phase Severance of Gas Rights From Oil Rights, 63 Tex.L.Rev. 133 (1984). The application of the definition of casinghead gas requires technical expertise, and the legislature has provided that the RRC maintain such experts on its staff. Gregg v. Delhi-Taylor Oil Corp., 162 Tex. 26, 344 S.W.2d 411, 413 (1961). For this reason, it makes more sense for the RRC to make the determination of what is oil and what is gas or casinghead gas. [2] The court would allow individual juries to determine (in a sense make classifications) whether a substance being extracted is oil, gas, or casinghead gas. This ad hoc approach extends to potentially thousands of leases [3] and will create uncertainty and chaos in the oil and gas industry, which will likely discourage drilling. [4] Juries will be charged with interpreting and applying the same definition as the RRC is charged by the legislature with applying. Juries will also consider the same evidence as the RRC. Our already overburdened court system will in all likelihood be inundated with these types of cases, and different juries faced with identical evidence on adjoining tracts may reach different results. After today, even though the RRC classifies wells as oil wells or gas wells and issues permits accordingly, operators may not exercise their rights under the permits out of fear of litigation and inconsistent jury verdicts. [5] Adherence to the RRC determinations leads to consistency and orderly development of the State's oil and gas reservesthis the court sacrifices. As I have previously stated, the RRC's determination of what is gas or casinghead gas is not the last word. Parties dissatisfied with the RRC's classification have the right to judicial review as outlined in the Natural Resources Code.