NATURAL RESOURCES CODE
CHAPTER 87. REGULATION OF SOUR NATURAL GAS
SUBCHAPTER A. GENERAL PROVISIONS
§ 87.001. DEFINITIONS. In this chapter, the words
"oil," "gas," "commission," "common reservoir," "gas well," "oil
well," "sour gas," "sweet gas," "natural gasoline," "cubic foot of
gas," and "casinghead gas" are defined as provided in Section
86.002 of this code.
Acts 1977, 65th Leg., p. 2541, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 87.002 to 87.010 reserved for expansion]
SUBCHAPTER B. POWERS AND DUTIES OF COMMISSION
§ 87.011. RULES AND ORDERS. (a) In administering the
provisions of this chapter, the commission shall hold hearings,
make determinations, and promulgate rules and orders as provided in
Sections 86.084-86.090 of this code and other laws of this state.
(b) After notice and hearing as provided by law, the
commission shall promulgate any other rule or order it finds
necessary to carry out the provisions of this chapter.
Acts 1977, 65th Leg., p. 2541, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.012. VALIDITY. (a) Rules and orders adopted by
the commission under the terms of this chapter are considered prima
facie valid.
(b) A person affected by an order may sue to test the
validity of the order adopted by the commission under this chapter
in the same manner, on the same conditions, and in the same court or
courts as prescribed for suits testing the validity of orders of the
commission promulgated under the general oil conservation statutes
of this state.
Acts 1977, 65th Leg., p. 2541, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.013. HEARINGS. From time to time, the commission
shall hold hearings, after proper notice, to hear evidence and to
adopt rules and orders to enforce the provisions of this chapter.
Acts 1977, 65th Leg., p. 2541, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.014. INSPECTION OF RECORDS; REPORTS. In addition
to authority given by existing law, the commission or its agents
may:
(1) inspect the books and records of any person who is
affected by the provisions of this chapter; and
(2) require sworn reports to be filed from time to time
as the commission finds necessary.
Acts 1977, 65th Leg., p. 2541, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 87.015 to 87.050 reserved for expansion]
SUBCHAPTER C. PRODUCTION OF SOUR GAS
§ 87.051. LIMITATION OF SOUR GAS PRODUCTION. No person
may produce sour gas from any sour gas well in a reservoir producing
both sweet and sour gas in excess of the daily allowable production
for the gas well as fixed by the orders and schedules of the
commission. The rate of production from a sour gas well is
considered to be the daily average rate of production for the
calendar month.
Acts 1977, 65th Leg., p. 2542, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.052. MAXIMUM PRODUCTION OF SOUR GAS FOR CARBON
BLACK MANUFACTURE. (a) In any common reservoir in the state
producing both sweet and sour gas, there shall never be produced
from the common reservoir for use in carbon black manufacture a
maximum daily volume of sour gas from the gas wells in excess of 750
million cubic feet.
(b) The commission shall prorate the daily volume of sour
gas from gas wells among all the sour gas wells in the reservoir to
prevent cognizable and preventable drainage of gas from tracts of
land in the sour gas producing area segregated as to surface
position and common ownership on which the sour gas wells are
located.
Acts 1977, 65th Leg., p. 2542, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.053. EFFECT OF DEMAND BELOW MAXIMUM ALLOWABLE
PRODUCTION. (a) If the daily demand for sour gas from gas wells
for use in carbon black manufacture is less than the daily maximum
allowable permitted in Section 87.052 of this code, the total daily
volume of gas from gas wells from the sour gas area for use in carbon
black manufacture shall be equal to the daily demand.
(b) The commission shall determine the daily demand and
prorate it among all the sour gas wells in the area as provided in
Section 87.052 of this code.
Acts 1977, 65th Leg., p. 2542, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.054. EFFECT OF DEMAND FOR OTHER PURPOSES THAN
CARBON BLACK MANUFACTURE. (a) If a lawful daily demand exists for
sour gas from gas wells for purposes of utilization permitted by
law, other than the manufacture of carbon black, the additional
demand shall be added to the daily demand for carbon black
manufacture, and that sum shall constitute the daily volume of sour
gas from gas wells that may be withdrawn from the common reservoir
for utilization.
(b) The commission shall prorate the daily volume provided
for in Subsection (a) of this section among the sour gas wells in
the area on the basis set forth in Section 87.052 of this code.
Acts 1977, 65th Leg., p. 2542, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 87.055 to 87.090 reserved for expansion]
SUBCHAPTER D. PLANTS EXTRACTING NATURAL GASOLINE
§ 87.091. PROHIBITED COMMINGLING OF GAS. In a plant for
the extraction of natural gasoline content of gas, no sweet gas may
be commingled with sour gas and no casinghead gas may be commingled
with sweet gas or sour gas or both, except on the conditions and
requirements stated in this subchapter.
Acts 1977, 65th Leg., p. 2543, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.092. PERMIT REQUIRED. In any common reservoir in
this state producing both sweet and sour gas, no person may operate
a plant for the extraction of the natural gasoline content of gas in
which sweet gas and sour gas are commingled, or plant casinghead gas
is commingled with either sweet gas or sour gas or both, until the
person secures from the commission a permit authorizing the
operation of the plant.
Acts 1977, 65th Leg., p. 2543, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.093. ISSUANCE OF PERMIT. The commission shall
issue a permit if it appears that the plant is being operated and
the residue gas from the plant is and will be disposed of in
accordance with the provisions of this subchapter.
Acts 1977, 65th Leg., p. 2543, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.094. CANCELLATION OF PERMIT. (a) If it appears to
the commission that a plant is operating in violation of any of the
provisions of this subchapter, the commission shall cancel the
permit issued to the plant.
(b) After the cancellation of the permit, no operator of the
plant may commingle either sweet gas and sour gas or casinghead gas
with sweet gas or sour gas in the plant for the purpose of
extracting the natural gasoline content.
Acts 1977, 65th Leg., p. 2543, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.095. RESIDUE GAS ALLOWED IN AIR. (a) Except as
provided in Subsection (b) of this section, if a plant operating
under this subchapter commingles casinghead gas with sweet gas or
sour gas or both, the operator of the plant shall not blow, or
permit to be blown, in the air any of the residue gas remaining
after the gasoline content of the gas is extracted.
(b) The operator of a plant may blow in the air an amount of
residue gas from the plant that is determined by the commission to
be necessary to accomplish uninterrupted deliveries in required
amounts to carbon black plants for carbon black manufacture.
Acts 1977, 65th Leg., p. 2543, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.096. RESIDUE GAS: DETERMINATION BY COMMISSION. If
a plant operating under this subchapter commingles casinghead gas
with sweet gas or sweet gas with sour gas, the commission shall
ascertain:
(1) the quantity of residue gas required to be used for
fuel purposes in the efficient operation of the plant; and
(2) the quantity of residue gas required to be
returned by the operator of the plant to the leases to which the
plant is connected for use as fuel in the operation of the leases.
Acts 1977, 65th Leg., p. 2543, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.097. USE OF RESIDUE GAS FOR OTHER
PURPOSES. (a) The operator of the plant is required to use, or
cause to be used, for one or more of the uses provided for sweet gas
by law a quantity of the residue gas from the plant equal to the
quantity of sweet gas taken into the plant for processing, less the
extraction loss from the processing.
(b) The operator shall not be credited with use of residue
for plant-fuel or lease-fuel operations in an amount in excess of
the quantity of the residue gas found by the commission to be
necessary for the efficient operation of the plant and return to the
leases for fuel for lease operations.
Acts 1977, 65th Leg., p. 2544, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 87.098 to 87.130 reserved for expansion]
SUBCHAPTER E. USE OF GAS WITHOUT EXTRACTION OF NATURAL GASOLINE
§ 87.131. USE OF SWEET GAS FOR CARBON BLACK
MANUFACTURE. Sweet gas produced from any gas well in this state
may be used without the prior extraction of its gasoline content for
the manufacture of carbon black if it is used in a plant producing
an average recovery of not less than five pounds of carbon black for
each 1,000 cubic feet of gas.
Acts 1977, 65th Leg., p. 2544, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.132. USE OF GAS FROM CERTAIN WELLS FOR CARBON BLACK
MANUFACTURE. (a) Gas from any gas well completed on or before
September 5, 1947, within a common reservoir producing both sweet
and sour gas from which the gas was not sold off the leased premises
to an interstate pipeline company during the year immediately
preceding September 5, 1947, or gas from any gas well completed
after September 5, 1947, within a common reservoir producing both
sweet and sour gas, may be used for the manufacture of carbon black
without the prior extraction of its natural gasoline content if:
(1) it is used in a plant producing an average recovery
of not less than one and one-half pounds of carbon black for each
1,000 cubic feet of gas; and
(2) the royalty rate and market price paid for the gas
at the wellhead at least equals the royalty rate and market price
paid at the wellhead in the immediate area for gas used for light
and fuel purposes.
(b) In arriving at the market price of sour gas, a reduction
of not more than one-half cent per 1,000 cubic feet shall be allowed
for purifying the gas to render it suitable for light and fuel
purposes.
(c) If the gas is used by a producer, any royalty rate paid
shall be paid on the same basis.
Acts 1977, 65th Leg., p. 2544, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.134. EFFECT OF SUBCHAPTER. The provisions of this
subchapter are cumulative of existing laws relating to the uses of
gas and do not restrict or affect the manufacture of carbon black
from processed sour gas as authorized by Section 86.182 of this
code.
Acts 1977, 65th Leg., p. 2545, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 87.135 to 87.170 reserved for expansion]
SUBCHAPTER F. USE OF GAS DETERMINED BY HYDROCARBON CONTENT
§ 87.171. GAS CONTAINING LOW HYDROCARBON CONTENT. Any
natural gas, including casinghead gas, produced from any gas well
or oil well in this state, containing less than one and one-half
gallons of propane and heavier hydrocarbons per 1,000 cubic feet,
as determined by fractional analysis made of the gas, may be used
for the manufacture of carbon black in a plant producing an average
recovery of at least one and one-half pounds of carbon black for
each 1,000 cubic feet of gas consumed.
Acts 1977, 65th Leg., p. 2545, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.172. GAS CONTAINING HIGH HYDROCARBON
CONTENT. (a) Except as provided in Subsection (b) of this
section, no natural gas, including casinghead gas, produced from
any gas well or oil well in this state, containing one and one-half
gallons or more of propane and heavier hydrocarbons per 1,000 cubic
feet, as determined by fractional analysis made of the gas, may be
used for the manufacture of carbon black in a plant producing an
average recovery of at least one and one-half pounds of carbon black
for each 1,000 cubic feet of gas consumed without the prior
extraction of its natural gasoline content.
(b) On the filing of an application and after proper notice
and hearing as provided by law, the commission may authorize the use
of any natural gas, including casinghead gas, containing one and
one-half gallons or more of propane and heavier hydrocarbons per
1,000 cubic feet, as determined by fractional analysis made of the
gas, in the manufacture of carbon black in a plant producing an
average recovery of at least one and one-half pounds of carbon black
for each 1,000 cubic feet of gas consumed if the commission finds it
is unprofitable to first extract the natural gasoline content of
the gas.
Acts 1977, 65th Leg., p. 2545, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.173. ADDITIONAL EXTRACTION TO ALLEVIATE
SHORTAGE. If a general shortage of propane or heavier liquid
hydrocarbons occurs, the commission, after notice and hearing, may
require additional extraction of hydrocarbons from the gas to
alleviate the shortage, but additional extraction shall not be
required if it is not economically feasible to do so.
Acts 1977, 65th Leg., p. 2545, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
§ 87.174. APPLICABILITY OF THIS SUBCHAPTER. The
provisions of this subchapter shall not apply to:
(1) gas produced from a common reservoir that contains
both sweet and sour gas which was being lawfully used for the
manufacture of carbon black under the provisions of the source law
codified in Subchapters D and E of this chapter at the time of the
passage of the source law for this section; or
(2) gas from gas wells located in these reservoirs
which were entitled to be so used under the provisions of the source
law codified in Subchapters D and E of this chapter at the time of
the passage of the source law for this section.
Acts 1977, 65th Leg., p. 2545, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 87.175 to 87.210 reserved for expansion]
SUBCHAPTER G. CARBON BLACK PLANTS
§ 87.211. PROHIBITED LOCATION. Unless adequate
precaution is taken to minimize the emission of smoke from the
plant, no channel-type carbon black plant shall be erected or
constructed closer than five miles to:
(1) the limits of a city, town, or village
incorporated at or before the time the erection or construction of
the plant is begun; or
(2) a commercially operated citrus fruit orchard
planted not less than one year before the time the erection or
construction of the plant is commenced.
Acts 1977, 65th Leg., p. 2546, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
[Sections 87.212 to 87.240 reserved for expansion]
SUBCHAPTER H. ENFORCEMENT
§ 87.241. PENALTY. (a) A person who violates this
chapter is liable to a penalty of not more than $1,000 for each
offense.
(b) Each day a violation occurs constitutes a separate
offense.
(c) The penalty may be recovered by the State of Texas, with
costs of suit, in a civil action instituted by the attorney general
in Travis County, in the county in which the violation occurred, or
in the county of residence of the defendant.
Acts 1977, 65th Leg., p. 2546, ch. 871, art. I, § 1, eff. Sept. 1,
1977. Amended by Acts 1983, 68th Leg., p. 5255, ch. 967, § 3,
eff. Sept. 1, 1983.
§ 87.242. INJUNCTIVE RELIEF. (a) A violation or
threatened violation of this chapter may be enjoined by any court of
competent jurisdiction in which suit for penalty may be brought.
(b) The court shall issue the writs or prohibitory or
mandatory injunctions that the facts justify.
Acts 1977, 65th Leg., p. 2546, ch. 871, art. I, § 1, eff. Sept. 1,
1977.
