      OFFICE OF THE ATTORNEY GENERAL OF TEXAS
                            AUSTIN




Mr. John It. Taylor,   Chief supemlsor
Oil k 0ai1 Di~ia10~
Railroad Commlsal~n oi Texas
Austin, Texan
Dear Mr. Taylor;




9, 19&O, rsquee
                                       or not thr Commlsolon
has the author                        head gar to be burned
                                            without such gas
                                          line Content, protidrd
                                            plant is avallabla in


                       on has arisen,       no doubt,   by maeon
                       d (I),   Saetion     3 cr drtiala   6006,

                 Tha production of natural gaa
     in oxcees of transportation   or market
     faallltlee,  or raaoonabla market demand for
     the type of gaa produaed."    (One of the
     enumerated purposelr tor which the production
     of gas is prohibited.)
Mr. John E. Taylor,      pags 2


 Ths aseumsd finding on the part o f the Railroad Comrsis-
 sion that, as to tbs aubjsat gas, there would br no
 adequate trsnaportation        or market facilities,    mkss it
 nsosasary to deterstins      whethdr them limitations       operate
 on production     for othar purpoaes; that is, if the gas
 cannot bs transported       or sold, do the llmltatlone
 prevent its production       for othsr purposes?      Othsr.pro-
 visions    of the aat warrant uasa of gaa by ths owner
 other than for transporting        or selling    the sane on ths
 mark&.      Aocordlngly,    subdsotlon    (h) of Ssction 3 is
 a?plicabls    as a llnitatlon     only whers the owuer is sn-
*aged    in transporting     or selling   the gsa on ths market.
 There can be no produotion In axcsss of ths ncsd ror
 tranaport or sala except that ths sxcsss bs used ror
 soms othsr lawful purposa.         Tha limitation    contained
 in any ons subsaotlon of the act aannot reasonably be
 interpreted    to preoluds other lawful use and we do not
 consider that the limnitation of this ssotlon operates
 to pr;aoluds the manufacture of carbon black without
 rirat extracting     the gasoline     content.    Ws next sxamins
 subasotlon    (1) of Ssotion 3, Article        6006:

            “(1)   The use or natural gas ror
      the manuraaturs ot carbon black without
      first  having extraotsd the natiral gaao-
      line content from such gas.” (Ona of the
      enumerated purposes for whish the produo-
      tion of gas la prohlbltsd.)
WI lntsrprst    this’ subsootion  to smbraos a limltatlon   on
produotlon of gas for a partloular      ass; that like sub-
section    (h), It ia not lnoluaivs   of other ussa.    wh6rs
ths owner puts hla gas primarily      to ths use of manufaotur-
ing carbon black, the natural gasoline content mat be
flrst   rsaonored.
             Hers the subjeot gas Is casinghead‘ gas and
itB   production  i3 Only Incident t0 the production    Or
oil,   not primarily    ror the manufacture of carbon black.
T’:e do not consider subssotion     (1) of Section 3, Article
6008,   as a limitation    on it13 use.
’




    hr.    John E. Taylor,    pegs 3


                    In examining the whole of Article   6008, ws
    find    other    rsaaona for arriving at this  conclusioa.
                 Casinghead gas Is by subsection   (i),  Section 2
    of Article    6008 dsfined to be ‘*any gas and/or vapor in-
    digenous to an oil stratum and pr@duced from such stratum
    with 011.”     Inasmuch aa br aubseatlou (d) of Ssation 2
    any well producing in sxcsss of a gas/all      ratio of 100,000
    cubic fset of natural gas to each barrel of oruds petroleum
    oil aonstltutsa     a gas well, than ths prcductlon   cb gas In
    any well of less ratio oonstltutes     an 011 well utisr sub-
    -sotion   (s) OS Section 2, and ths gas from an 011 well
    is naosasarily     casinghead gas.
               Xs find in aubssation (m), Section 3, Articls
    6008. by implication,  gas from a well producing a gas/oil
    ratlo of leas than 100,000 to 1 may be put to any use,
    because it la only gaa produced in excess of that ratio
    $a:sz;t    be put to one or mora of the uses authorized.
             :
                    %xctLon~ (ml.. The production  of
             mars than one hundred thousand ‘(1uZ:,UUoj
           -cubic     feet of gas to each barrel of crude
              petroleum unless such gas Is put to one
              or more of tbv uass authorized for the
              typs of such gaB so produced under nllo-
              cations made by the Commission. IQ
                  Thia provision    Is one of a nunber defining
    *waste”.      By it oasinghead gas say be produced In quantltiea
    of less than 100,000 cubic rest for 1 barrel of 011, and
    not further utilized,       without committ?ng statutory waete.
    Accordingly,       should we have given subsection     (i) of
    this section an Interpretation         other than excluslvs    In
    ahsraatsr It v:ould hsvs bssn at variance with ths per-
    mlasivs    rssults    of subsection   (a).  That gas not in ex-
    CeBS of the prohibited       ratio of 100,000 cubla feet of
    gas to 1 barrel of oil may by virtue of subssotion            (m)
    be ellovsd     to esaaps free into ths air without committing
    statutory     waste, it follovs     that no reasonable li~aitation
    could be placed upon the use of that gaa if not allowed
    to escape.       T2e prevention of waste is the foundation        or
    the poyrer of this governmental regulation         arrd if complets
    liberation     of the gee withcut use is not wcste, than no
    particular     US4   of the gas could reasonably be determined
    to be waste.
Mr. John B. Taylor,         paga 4



       _     For furthar light on the~. intendmant
                                            .~.       of tha
Lagialatura,    we rarer to subaeation      (31 of Section 7,
Article  6008,   for speclrlo   authorization    tar tha
uses of casingheed gaa.       It reads:
              *Subsection     (a).
                             Caainghaad gaa
      may be used     for   eny benafiolal
                                     Durpcaa,
      which includes the manuracture of
      nstural gasollne.w oQaphasla oura)
           P;a interpret   this provlalon    undoubtedly to
include the sanufactura of carbon block, without the
in oaition  cl the Ilaitatlons    provided    in subsections
(h7 and (1) of Section 3 of Article       6008.

              Tour aeaond quaation      13 as ioll0ws:

            aDoes the ~Conuaisslon have the author-
      ity to parnit a gaaolina plant, -&lch vents
      a portion of Its residue gas to the air
      end operntaa iii a field which doea not
      produce both sweat and 8our gas to take
      Into its gathering linea and comaingle
      in auoh lines and in the plant meet or
      aour gas with casinghead gas if a volume
      of reelduo gas eqaivalant    to or in axcasa
      of the total intake rrrvp gas walla, laes
      shrinkage resulting    rrom gasoline ex-
      Lraotion,  ie utilized   for tha purpoa6
      permitted for awaat and aour gas by Artiols
      6008.   ”

             You hays quotad subsection     (k) of Seatlon 3,
Article    6006, and aubaaotiona (1) and (2) of Saotlon
7, Article    6008. prammably‘aa    provisions    of the law
rafalng doubt as to the power of the Commiaalon to al-
low  the venting,of dry gas, lrreapaotivs        of the cir-
cumatancea sat out in your qunation.         The atatad alr-
cumatanoes would indicate      that aaid dry gaa would     be
handled in such !na~er     as aifactually    to avoid waste.
It seam to us, howaver, that even though the manner
in which the dry gas may be handled would afiactually
avoid naata, yet neoerthalaaa,       if in direct contraven-
tion of the provisions     of the statutes,     the ealaa can-
not be sanct ioaad.     Subsection   (k) OS Section 3 pro-
vidaa:
A!r. John l3. Taylor.   pagr 5


           %ubsectlon     (k) . Permitting any natural
     gas produced iron    a gas wall to escape into
     the air before or    after such gas has bean
     processed for its    gaeolina content.*   (Ona of
     savaral provlslons    darining mwaaten. )
           Also Section 7 of Artiole  600e provides that
no gas from a gas wall shall be pemitted    to escape
Into tha air, excopt that it be utilized   for certain
purposes.
             In the faoa of these two express statutory
prohibitions    against the ralaasa of dry gas, that is,
awaet or sour gas irom a as well, wo ara of the belief
that it cannot be done.     ftf there is a way of kindling
the gas so as to avoid praotioal     waata with the venting
of a commingled mixture, containing in part dry gas, the
same will have to beg authorized by the Legislature.
                                     Yours vary truly




                                               Hugh &. Book
                                                  Assistant
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