Opinion ID: 1659585
Heading Depth: 1
Heading Rank: 3

Heading: LAW The Authority of the Commissioner of Conservation

Text: 1940 La.Acts No. 157, as amended, constitutes Louisiana's basic conservation law with respect to the oil and gas industry. [13] See La.R.S. 30:1-78. Pursuant to the Conservation Law, The Commissioner has the general power and authority over all persons and property necessary to enforce effectively the provisions of this Chapter [La.R.S. 30:1-78] and all other laws relating to the conservation of oil and gas. He has specific investigative powers to determine whether or not waste exists or is imminent and the general authority to establish whatever rules, regulations, and orders are necessary to prevent it and enforce the conservation laws. In recognition of the physical factors involved in the production of hydrocarbons, the Commissioner is also given the specific power to establish a drilling unit or units for each pool .... [T]he Commissioner is authorized to require unwilling owners to pool their interests if he finds it necessary to prevent waste or to avoid drilling unnecessary wells. (Emphasis in original) (Notes omitted). Nunez v. Wainoco Oil & Gas Co., 488 So.2d 955, 961 (La.1986). The Commissioner has jurisdiction and authority over all persons and property necessary to enforce effectively the provisions of the Conservation Law and all other laws relating to the conservation of oil and gas. La.R.S. 30:4 A. The Commissioner has the authority to make any reasonable rule, regulation and/or order that is necessary to properly administer and enforce the Conservation Law. La.R.S. 30:4 C. Specifically, the Commissioner has the power to make any rule, regulation and/or order necessary to (a) prevent wells from being drilled, operated or produced in a manner which causes injury to neighboring leases or property, (b) limit and prorate the production of oil or gas or both for the prevention of waste, and (c) regulate the spacing of wells and establish drilling units. La.R.S. 30:4(C)(3), (11) and (13). The Commissioner has the power to establish compulsory units and designate unit operators therefor. La.R.S. 30:9(B) and 30:10(A). The primary duty of the Commissioner is to prevent waste of the state's mineral resources by exercising his authority to promote the full and efficient development of these resources. La.R.S. 30:2, 3 and 4. In the exercise of this duty, the Commissioner has the power to form compulsory drilling and production units to prevent waste or to avoid drilling unnecessary wells. La.R.S. 30:10(A)(1). All orders forming compulsory units shall be upon terms and conditions that are just and reasonable and that will afford the owner of each tract the opportunity to recover or receive his just and equitable share of the oil and gas in the pool without unnecessary expense. La.R.S. 30:10(A)(1)(a). The Commissioner may fix production allowables, but, in doing so, shall prorate the allowable production ... so that each producer will have the opportunity to produce or receive his just and equitable share, subject to the reasonable necessities for prevention of waste. La.R.S. 30:11(B). (Emphasis in original). Amoco Production Company v. Thompson, 516 So.2d 376, 388-89 (La.App. 1st Cir.1987), writ denied, 520 So.2d 118 (La.1988). As the above quotations, and the statutory citations therein, demonstrate, the authority and responsibility for conserving Louisiana's oil and gas resources are virtually entirely vested in the office of the Commissioner of Conservation, Department of Conservation. The Commissioner's authority, as explained in Amoco Production Company v. Thompson, 516 So.2d 376 (La.App. 1st Cir.1987), writ denied, 520 So.2d 118 (La.1988), necessarily encompasses the power to partition the gas produced in compulsory units and, where necessary, to order balancing among the owners when an imbalance occurs.