                                                                   R-238
                               OFFIcE        OF

                  THE ATTORNEY                 GENERAE
                             AUSTIN~       TEXAS
PRICE  DANIEL                                  1
ATTORNEYGENERAL
                                                               May 14, 1947
                                     -




      Honorable Ernest 0, Thompson
         Chairman
      Honorable W. J. Murray, Jr.
         Comlssloner
      Honorable Olin Culberson
         Commissioner
      Railroad Commlsslon ol Texas
      Capitol station
      Auetln, Texas
                                         Opinion Nor V-197
                                         Re: Is the Railroad Commis-
                                             sion or Texas empowered
                                             under Article 6008,
                                             v. c. s., to amend a
                                             gas proration order for
                                             the Carthage Field,
                                             thereby permittingthe
                                             balancing of over and
                                             under pro’ductionfor a
                                             period of a year with
                                             proviso. And related
                                             questions.
      Dear Sirs:
                We have your letter ot Maroh 1, 1947, read- ,
      lng ae followa:
                 “This Commission has held extensive
            hearings looking to the entry of’a leaslble
            plan of proration for the Carthage Gas
            Field, Panola County,Texas. Many wit-
            nesses have been heard and considerable
            evidence ofrered, in support of an order
            containing provisions substantiallyas
            follows:
                  7’(B) Underproduction:
Hon. Ernest 0. Thompson - Page 2


         "'(1) In the event there shall not be proi
         duced from any gas well In the Carthage
         Field, during any one month, as much gas
         as Is allocated thereto under schedules of
         well allowables issued under orders of the
         Commission,the operator of any such well
         shall be pelmftted to carry fonrard to the
         succeeding month, as allowable gas to be
         produced during the succeedingmonth from
         suoh well, the amount of such month's under-
         production for that well.
         "'(2) If, during any succeedingmonth, all
         such underproductioncarried foxward from
         the preoeding month for any gas well is not
         produced during such suoeeeding month, ovm
         and above the current monthly allowable of
         such well as shown by the Commission'ssohed-
         riles,,
               then the amount of such underproduotlon
         so carried forward and remaining unproduoed
         at the end of the succeedingmonth, may be
         oarrled forward to the suooeedlngmonths,
         as allowable production over and above the
         allowable for such well as may be shown by
         the Commission'sschedules.
         "'(3) Any well incapable of producing its
         scheduled allowable shall have assigned as
         an allowable that quantity of gas that it
         can deliver in a 24 hour period ageist  the
         pressure existing in the pipe Une to whloh
         it is connected. Such well will be given
         preferred treatment to the end that Its our-
         rent allowable may be produced monthly since
         such well is incapable of making up any
         underproduction.
            "'(C) Overproduction:
         "'(1) Exoept as hereinafter provided each
         operator of each gas well in the Carthage
         Field, whloh is over-produosdat the end
         of the oalendar month, shall so operate
         suoh well during the succeedingmonth so
         that the total productionfrom suchwell
         for the two months' period is not in ex-
         oesa of the total allouable of such well
         for the two months' period.
Eon. Ernest 0. Thompson - Page 3


           v’(2) To facilitate the purchase of gas
           from any gas well any operator, upon cer-
           tification of necessity by his purchaser
           to the commission,can dontinue to over-
           produce an well, beyond the limits of Para-
           graph C (1 providi the overproduction
           does not exceed
                       v   six3 6) times the current
           allowable, and further providing that any
           well overproducedby any amount will have
           its cumulative production balanced with its
           cumulativeallowable within one year after
           the first day of the first month when such
           accumulatedoverproductionbegan. No well
           shall be permitted to prod,uceduring any
           month a total quantity of gas in excess of
           two and one half times its c’urr~ent
                                              monthly
           allowable.
                “‘D) Ratable Take:
           “‘It is the intent of this order that eaoh
           well in the Carthage Field will produce
           ratably with every other well and all pre-
           ceding regulationsare designed to this
           end; and each purchaser shall take gas
           ratably from the wells to which it is con-
           neoted.
            “‘Any operator of a gas well in the Car-
            thage Field may call the attention of the
            Commission to conditions in the Field that
            result in un-ratable production of gas from
            gas wells therein. Upon taking evidence
            in a hearing, the Commissionwill take any
            action deemed proper to restore ratable
            production.’
                *The present basic order for the field pro-
     vides as   r0ii0ws:

                “Vnderproduction.
               “‘1) In the event there shall not be
            produced from any gas well in the Carthage
            Field, during any one month, as ‘much gas
            as is allocated thereto under schedules of
            well allowable issued under orders of the
            Commission,the operator of any such well
Hon. Ernest 0. Thompson - Page 4


            shall be permitted to carry forward to the
            suoceedingmonth, as allowable gas to be
            produced during the succeedingmonth from
            such well, the amount of such month’s under-
            produotion for that well.
               “I(2) If, during any succeedingmonth,
            all suoh underproductioncarried forward
            rrom the preceding month for any gas well
            is not produced,during such succeedingmonth,
            over and above the current monthly allowable
            of suoh well as shown by the Commission’s
            schedules, then the amount of such under-
            productionso carried forward and remaining
            unproduced at the end of the succeedingmonth,
            may be carried forward to the next succeed-
            ing month, as allowable production over and
            above the allowable for such well as may be
            shown by the Commission’sschedule, all sub-
            ject to the limitationsimposed by the next
            succeeding paragraph hereof.
                “‘(3) No operator shall ever be per-
            mitted to carry forward as allowable produo-
            tlon for any gas well, any underproduotion
            of gas from such well incurred during a pre-
            ceding  month, or months, in exoess of the
            current monthly allowable gas allocated to
            such well, as shown by the current Commls-
            slon’s schedule of well allowables.
               “l(C) Overproduction.
               “‘(1) Each operator of each gas well
            in the Carthage Field, which is overpro-
            duced at the end of the calendar month,
            shall so operate such well during the suc-
            ceeding month so that the total production
            from such well for the two months’ period
            is not in ,excessof the total allowable
            of suoh well for the two months* period.
               “‘(2) Any gas well which, at the end
            of the oalendar month, is overproducedto
            the extent that its produotionduring that
            month is in excess of the allowable for
            such month, plus the allowable for the
            succeeding month, shall be shut in until
            its aocumulatedallowable, from the first
Hon. Ernest 0. Thompson - Page 5


           day of the calendar month in which such
           overproductionoccurred, is equal to its
           total productionsince that date.’
               “Under the present order the Commission
         prorates the productionof gas from the Car-
         thage Field by determiningmonthly the market
         demand for gas based upon the nominations of
         purchasers and other information; When the
         mrket   demand has been ascertained,a pro-
         portionate part thereof is allocated, ratably,
         to each well connection in the field based
         upon an allocation formula not here involved.
              “Under the portion of the present order
          above quoted, a well is permittedto overpro-
          duce during any one calendar month provided
          such overproductionis made up during the
          succeeding calendar month ‘so that the total
          production from such well for a two months’
          period is not in excess of tbe t,otalallow-
          able of such well for the two months.’
             “Evidence has been offered the Commis-
         sion that this go-day period has not sufficient
         flexibility to care for the requirementsof
         all gas lines during the seasonal highs. For
         example, a particular line taking gas from
         certain connections in the field will have in
         the winter months a demand for considerably
         more gas than allowed to its well connections;
         in the summer months the demand on this line
         will be less than the allowable of its well
         connections. In other lines from the field,
         the converse is true. The various pipe lines
         are not interconnectedas the pressures in
         the lines differ. Without regard to the dif-
         ficulty of working out the conflictingcon-
         tractual rights involved, it has,been esti-
         mated that a very considerableamount of money
         would be required completely to interoonnect
         all of the lines and wells in the field and
         install the required measuring devices and
         compress0rs. The proposed plan of proration
         has been offered to the Commission for con-
         sideration as designed to eliminate these
         difficultiesby providing a ‘bankingsystem’
         of gas withdrawals whereby overproduction
         will be permitted for a six months’ period
Hon. Ernest 0. Thompson - Page 6


           provided such overproductionis maae up during
           the succeeding six months’ period.
                “The Commission understandsthat before
           any such plan of proration can be authorized
           for the Carthage Gas Field, the Commission
           must find that the plan will not cause waste,
           and will either prevent waste or protect cor-
           relative rights and promote the ratable taking
           of gas.
                 “It has been suggested, however, that al-
            t,;;;;&t,heCommissionmay rake these necessary
                      nevertheless,the proposed plan and
            order might be unlawful under the provisions
            of Article 6008, V. A. C. 5.
                 “The opinion of the Attorney General is
            therefore respectfullyrequested in answer to
            the following question:
              “Is the Railroad Commission of Texas em-
              powered under the provisions of Article
              6008, V. A. C. S., to enter a gas pro-
              ration order for the Carthage Field oon-
              taining provisionssubstantiallyin
              keeping with the proposed plan outlined
              in this letter, provided the Commission
              finds that the plan is necessary to pre-
              vent waste or to protect correlative
              rights and promote the ratable taking of
              gas from the field?
                    “. . .
                 “The further opinion of the Attorney Gen-
           eral is respectfullyrequested in answer to
           the following questions:
             “(1)   Would an order containing the language
                    in t(B) Underproduction1and contain-
                    ing the three pSI%grSphS therein noted,
                    on page one thereof, be violative of
                    the court’s decision and the Commis-
                    sion’s orders with reference to ‘back
                    allowable’?
             “(2)   Would an ,ordercontaining the language
                    in l(C) Overproduotion’and the
                 w
Hon. Ernest 0. Thompson - Page 7


     following two paragraphs be violative of
     Section 16, Article 6008, Revised Civil Stat-
     utsa , and of the Commission~sorder in Oil
     and Gas~,DocketNo. 108, dated Deoember 10,
     1935, titled ‘SpecialOrder Fixing the Allow-
     able Production of Sweet and Sour Natural
     Gas in all Districts in Texas Except the
     Panhandle District’Pw
          We reword for clarificationthe problem you
have in the Carthage Field.
           There are several outlets    (pi,pelines) for the
Field. Some of these outlets have a constant daily ae-
mand or load factor. The other outlets      vary with’the
weather, i.e., one has a demand varying     from practically
zero in the summer months to in excess of 40 million cubic
feet per day in the winter months. Under the present,    _.
                                                          ..,
method of proration the pipe lines wit  h
daily demand canno in the winter months (because of the
increased demands of the pipe lines having seasonal de-
mands) take all of the allowable     gas from its oonnections.
In the summar months, those ipe lines do not have suf-
ficient allowable for their 7constant) requirementsb’e-
cause of the low demand of the lines with t~heseas,onal
demands. ,And on the other hand, the pipe’lines with
seasonal demands cannot in the summer months take the.
allowables assigned to their connections,while in the
winter months, the allowable8 are not sufficient to meet
their market demand.
          We have given your request extensive and studied
research, for we are informed that the operators and royal-
ty owners favor the proposed amendments,and by these amend-
ments you seek to alleviate the operating problems encoun-
tered in the Carthage Field. It is only after this study
and our conclusionsthat we proceed with this opinion. It
is without the province of your Attorney General to make
the law. Our duty is ta enforce the law and to interpret
it for your guidance.
          The Legislature in the exercise of its power
has passed regulatory measures to protect correlative
rights and prevent the waste of natural gas in this
State. Title 102, V. C. 5. A considerationof these
legislativeaats discloses, we think, a ~realization by
the Legislature that due to the magnitude ana multi-
plicity of problems encounteredin the productionand
                  4                            V
Hon. Ernest 0. Thompson - Page 8


conservationof oil and gas, it was the clear and express
purpose and intention of the Legislature to vest in the
Commission broad and discretionarypower and authority
to carry out the duti
ciner Oil (ERefining
APP. 19431 49     w
(SUD. Ct. h?d:kk                      We recocznlze further
that “It is utterly impossiblefor the Legislature to
meet the demands of every detail in the enactment of laws
relating to the reduction of oil and gas . . . and
(the LegislatureP has authorized the Railroad Commission
to handle the details relating to the preservationand
conservationof the natural resources of the State.”
Corzelius v. Harrsll (Sup. Ct. 1945)) 186 S. Y!. (2d) 961,
    .
          Nevertheless,the broad power of the Railroad Com-
mission to act in these matters is limited by certain specif-
ic legislativeprovisi.ons.Certain acts were passed by the
Legislaturewhich specificallydeclare the publio policy of
this State with respect to the development and protection
of natural gas and establish primary standards relating to
such policy and place the duty upon the Commission to carry
out the detail under the several-provisionsof the statutes.
Compare Brown v. Humble Oil & Refinlnp
83 S. Vl.-Tza)?    940 941 Conellus
19451, i&s 9. w. I2d) ;Js1,;9K-----F
             Sections 10 and 11, Artlole 6008, V. C. S., pro-
Vi&Y   as followa :
            “SfJo.10. It shall be the duty of the
       Commissionto prorate and regulate  the dally
       aas well oroductlonfrom each common reservoir
       yn~the manner and method herein set forth,
       Th Commission shall prorate and regulate such
       przduotion for the protectionof public and
       private interests:
            ‘(a)  In the prevention of waste a8 ‘waste’
       is defined herein;
            *(b) In the adjustment of correlative
       rights and opportunitiesof each owner of gas
       in a aommon reservoir to produce and use or
       sell such gaa as permitted in this Article.”
       (Emphasissupplied).
.




    Eon. Ernest 0. Thompson - Page 9


                  “Sec. 11.  The Commissionshall exercise
             the authority to accomplishthe purpose desig-
             nated under item (a) of Seotlon 10 when the
             presenoe or imminence of waste is supported
             by a finding based upon the evidenoe intro-
             duoed at a hearing to be held as herein provided.
                    “The Commlsslon shall exeroise the au-
             thority to aooomplishthe purpose designated
             under item (b) of Section 10 when evidence
             introduced at a hearing to be held as herein
             provided will support a finding made by the
             Commission that the aggregate lawful volume’or
             the open flow or daily potential capacity to
             produoe of all gas wells located in a common
             reservoir, Is in excessof the daily reasonable
             market   demand for gas from gas wells that may
             be produced from such common reservoir, to be
             utilized as permitted in this Article.”
                  By Section 10, supra, the Legislature manda-
        torlly instructed the Commission to “prorate and regu-
        late the daily gas well produotion from each donvnon
        reservoir” to the ultimate ends of the preventionof
        waste and the adjustment of correlative rights. Sec-
        tion 11, supra, defines the conditions precedent to
        the exeroise of authority allowed in Section 10.
                  Section 12   or   Article SO@, V. C. S., provides
         as follows:
                  Wet. 12. On or before the twentieth
             (20th) day of each calendar month the Com-
             mission shall hold a.-_.
                                   hearing
                                         _ after notice has
             been given, as provlded by law, for the pur-
             pose of determining the aggregate daily ca-
             pacity to produce of all gas wells in a com-
             mon reservoir, and as nearly as possible, the
             daily volume of gas from each common reser-
             voir that will be produced from gas wells
             during the following month to be utilized as
             permitted in this Article. Upon such deter-
             mination, the Commission,based upon evidence
             introduced at suoh heering, shall allocate to
             eaoh Rae well producing gas from such common
             reservoira percentage of the daily productive
Hon. Ernest 0. Thompson - T%?e 10


     capacity of euoh vie11which may be produced
     daily during the following month from each
     gas well producinggas from such common reser-
     voir. Such percentn<:e of the daily producing
     capacity of each :vellshall be re,Tardedas its
     daily allowable production of such daily vol-
     ume required for utilizationfrom such common
     reservoir. The d.ailynllo%sble production
     of eech gas well shall be computed anfi,
                                            allo-
     cated as provided in Sections 13 and 14.”
          In this Section, the Legislature provided that
the Commission “shall allocate to eoc!?gas well” a -per-
centage of the daily productive capacity of each well
;;;S$ ma~,,“,;,,p;o,c~,e;~~during the following month.”
                         be retarded as its daily allow-
able production.” Any flexibility in determiningthis
“percentage”is constricted by those mandatory factors
enumerated in Section 13, infra.
            The “dallv allowable prsducti.on”
                                            or “prrcen-
taplenis to be computed and allocated in accord~anaewith
Sections 13 and 14 of Article 6008, V. C. S., providing
as r0ii0w8:
         Vet, 13. In determininr?   the daily allow-
    able prod,uctlonfor each gas well the Commis-
    sion shall take into occount the size of the
    tract segre,gatedwith respect to surface po-
    sition and common ownershio upon which such gas
    well or wells are located; the relation be-
    tween the daily ?roducinK cnpacity of each gas
    well and the aggregate daily capacity of all
    gas wells producinv the seme kin.6 of gas in
    the same common reservoir or zone; and ~11 other
    faotors which nre p<!rtinent;provi,ded tl1r.t the
    Commission shall not tnke into account the
    afve of the tract upon which any gas well or
    wells are located in exceea of the efficient
    drainage area of such Tide11
                               or wells, producing
    at twenty-five per cent (25;) of the doily oro-
    ductive capacity,which drainage area shall be
    determinedby the Commission. In ascertaining
    the drainage area of R well, the Commission
    shall take into account such factors as are
    reflected in the pror’uctivecapacity of R nas
    well, including formation pressure, the
Hon. Ernest 0. Thompson - Page 11


    permeabilityand porosity of the producing
    formation, and the well bore’s structural po-
    sition, together with all other factors taken
    Into aooount by a reasonably prudent operator
    In determiningthe drainage area for a gas
    well.
          “Sec. 14. It shall be the duty of the
    ‘ConunIssIon,after notice and hearing, to as-
     certain and determine the reasonablemarket
     demand for gas from gas wells to be used for
     light and fuel purposes and for all other law-
     ful purposes to which sweet gas may be put
     under the terms of this Article and by proper
     order to restrict the production of gas from
     all gas wells in said field producing such gas
     to an amount equal to market demand or to ,an
     amount which may be produced without waste as,
     otherwise defined; provided, however, the pro-
     duction of such gas shall in any event he
     restrictedto the amount of the reasonable mar-
     ket demand therefor. In such order the Com-
     mission shall allocate, distribute or apportion
     the total allowable production from such field
     among the various zas wells affected by the order
     on a reasonablebasis, and as provi.dedin Sec-
     tion 13. It shall likewise be the dut of the
     Commission to prorate the daily n,asweP1 pro-
     duotion of sour gas produced from each common
     reservoir of sour gas In this State. The hear-
     ins for such purpose shall be held at the same
     time as the hearing pertaIni,ngto the proration
     of sweetsgas well production. The proration
     of sour gas well production shall be accom-
     pli.shedaccording to the manner and method
     herein provided for the proration of sweet
     gas well production.”
          The phrase ‘Vailother facts which nre pertinentfq
in Seotlon 13, supra, must be interpretedIn accordsnce
with those faotore preceding. We cannot include within
thIe phrase any power within the Commission commensurate
with t.hepower you propose to exercise in your proposed
amendments. The phrase has reference t,ofaotors similar
to the “size of the tract”, “drai,nagearefl”,etc.
          In Section 14, supra, the Commission is to
allocate “the total allowable production”‘from such field
among the various gas wells on a “reasonable basi9 and
.

    Hon. Ernest 0. Thompson - Page 12


    as provided In Section 13. This Is a standard for the
    CommIsaIon. It must consider the factors outlined in
    Section 13 and allocate that productionamong those wells
    eon “8 reasonable besis” so as to prevent waste and/or
    protect correlativerights. It must do so to prevent
    dIsorImInatIonIn allocationamong gas wells of that
    “total allowable production”.
              In this connectionArticle 604961,Section 4,
    y. c. s., provides as follows:
                     Vet. 4. Whenever the full production,
              from wells producing gas onlv, from any common
              source   of supply of natural gas in this State
              ie in excess of the reasonsblemarket demand,
              the Railroad Commission shall Inquire into the
              productionand reasonablemarket demand therefor
              and shell determine the allowable production
              from such common source of supply, which shall
              be the reasonablemarket demand which can be
              produced without we&e, and the Commission
              shell allocate, distribute or apportion the al-
              lowable produotion from such common source
              of supply among the various producers on a
              reasonablebasis, and shall limit the produc-
              tion of each producer to the amount allocated
              or apportioned to such producer.”
              The CornmissIonis, therefore, to “limit the pro-
    duation of each produoer to the amount allocated or ap-
    portioned to such producer.”
               Your procedure is, therefore, outlined by
    statute  and your duties provided. If the conditions
    are met as prescribed in Section 11, supra, on or before
    the 20th of each month, you are to hold a hearing,a fter
    proper notiae, for the purpose of determining the “ag-
    qregate daily capacity to produce of all gas wells In
    a common reservoir”and the “reasonablemarket demand
    for gas from gas wells that may be produced from the
    reservoir to be utilized as permitted” In Article 6008.
    (Sections11 and 12, supra) Upon t.hlsdetermination
    you are to allocate to each gas well producing gas from
    the coprmonreservoir, “a percenta.?e of tke daily pro-
    duotlve capacity of each well which may be produced daily
    during the following month.” Such percentage is “its
    daily allowable production”. Factors to be used in your
    determInatIonof this “daily allowable production”are
    outlined  In Section 13, supra. By Article 6049d, Section
    4, supra, you are to "limit  the productionof each pro;
    duoer to the amount allocated or apportioned to such
    producer.”
    .   .
.                                      L

            Hon. Ernest 0. Thompson - Page 13


                        An aoourate formula for the allocation of~mar-
            ket   demand, pursuant to those legislativestandards,would
            ordinarily effeotuate   the protection of correlativerights
            and/or the prevention of waste. The conditions you de-
            scribe do not necessarily Imply that the present formula
            is ill-designedfor the effectuationof those purposes if
            the oonditionsare the result      of lndlvldual pipe lines at-
            tempting to .rulflll  their contractual   obligationsor mar-
            kets,   taking gas only from their conneotions. Contractual
            obligations do not determine correlativerights. See Ed-




            formula              whether market demand is rigid or
                          ol’ allocation,
                                 oses (correlativeriuhts and pre-
                                            ur
            ~Z~~:.~t~~~a-~w~~complished~           for-the alloaa-
            tlon “percentage*wm  zmain stable, iariatlon   will be
            in the amount.
                        The efieotuationof produotloe under the sllo-
            oatlon remains with the operator. All the Commission can
            do is allocate   the market demand reasonablyand In agoord-
            anoe with legislativestandards to etfeotuatethe pur-
            poses of the act. This was the intent of the Legislature.
            We cannot attribute an intent of the Legislature to provide
            powers which are expressly denied in Section 16, inf’ra,
            the mandates of preceding sections, and further without
            the oontemplationof the Legislatureas gathered from Ar-
            tiole 6008.
                            Section 16, Article 6008, V. C. S., provides as
            roiiows:


                            *Sec. 16. It shall be unlawful for any
                       person to produce gas from a gas well as herein
                       defined in exoess of the daily allowable pro-
                       duction in such sohedule of allowable produo-
                       Mon. The rate of productiontram any gas
                       well shall be deemed to be the average dally
                       rate o? produotion for the month.”
                     A *soheduleW, as long issued by the Railroad
            Commission, is an enumerationof the various producers
.   .

        Hon. Ernest 0. Thompson - Page 14


        within a given field, providing therein the authorized
        dally allowable production’forthe ensaillg,month, Seo-
        tion 16 makes nunlawful.Rany *excess* production of gas
        over that authorized “daily allowable produotion‘inthe
        schedule.”
                  Section 16 is a blanket prohibition and nega-
        tives any Implied power to permit acts whioh would be in
        violation thereof. The statute is unambiguous. In such
        oase, the proper rule of oonstrubtionIs the plain import
        and intent of the words.
                   The provisions of Artiole 6008, heretoforedis-
        oussed, oompel the preparationot a sohedule for the en-
        eulns month, proviQlng preoisely the authorized dail
        allowable for eaoh well. The proposed amendment  wou d
                                                        --if
        lloense riolatiow of that asohedule.W Section 16, supra,
        speolfioallyprohibits that violation and makes *exoess
        produotlonn (authorizedunder the proposed amendment)
        Wnlawf ul .”
                 Seotion 18 of Article 6008, V. C. S., ‘provides
        as follows:
                  Veo. ia. When unforeseenoontingenoies
             inorease the demand for gas requiredby any
             distributor,transporter or purohaser to an
             amount in exoess of the total allowable pro-
             duotion of the wells to which he is oonneot-
             ed, suoh distributor,t nsporfer or purohaser
             is authorized to increas
                                    5 his take ratably
             rrom all suoh wells in order to supply his de-
             mand for gas, provided, however, that notioe
             of suoh increase and the amount thereof shall
             be given to the Commissionwithin five (5)
             days; and provided rurther that the Corm&-
             sion, at Its next hearing, shall adjust tJie
             inequality of withdrawals caused by suoh”in-
             orease in fix1 the allowable pzroduction  or
             the various we1
                           T a in the common reservoiror
             zone.”
                  This Notion authorizes increased exoess pro-
        duotion on “unforeseenoontingenoies,”creating by stat-
        ute an exoeption to Section 16, supra, This increase in
        produotion over the authorized daily allowable must be
        balanoed the month following.
.- *                    u                          ,r/’
       Hon. Ernest 0. Thompson - Page 15


                Section 19 of Article 6008, V. C. S., provides
       as follows:
                 “Sec. 19. If the Commission finds upon
           considerationof the evidence introduced at a
           hearing that either or both of the purposes
           designated under Section 10 of this Article
           may be more adequatelyaccomplishedby zoning
           a common reservoir,the Commission shall zone
           such common reservoir. If the Commission zones
           such oommon reservoir, each zone shall be re-
           garded aa a separate oommon reservoir in making
           allooations of daily allowable produotlonas
           provided in this Artiole. The Commissionshall
           allooate to ~eaoh zone its just proportion of
           the market demand for gas from the common reser-
           voir,  and shall establish appropriaterules and
           regulationsapplicable to each zone and shall
           have the right to adjust its orders to the prac-
           ticable conditionswhich exist and to enter any
           reasonableorder which is necessary to effectu-
           ate the purpose o? this law. The Commission is
           expressly authorized to segregate a sour gas
           ,,areafrom a sweet gas area and shall not be re-
           quired to restrict the allowable production of
           the sour gas zone to the same percentagesthat
           may be produced from the sweet gas zone.*
                 If you have been unable to devise a formula for
       the allocation of production, proteotlng thereby oorrel-
       atlvs rights and/or preventingwaste, the ~Legislaturehas
       specifioallgauthorizedthe Connnlsslon  upon a finding that
       those ourooses “may be more adenuatelyaooom she
       zon$a@ to aone “such oommon reservoir.” Br%     pdebrgis
       gran ed the Commission in the effectuationof these pur-
       poses when a oommon reservoir is zoned. While we do not
       have the necessary facts to determine the question, this
       may be the solution to the conditions now existing in the
       Ca,rthageFielde This determinationis within the prov-
       ince of the Commission.
                 The essence of Section 19, ‘~supra,
                                                   supports I&
       view we have taken of the powers of the Commission. The
       Legislature provided in this Section alternativemeans for
       the effectuationof the purposes of Article 6008. If you
       determine that neither the statutory formula nor zoning
       will aooomplish the purposes of our conservationalews in
       the Carthage Field, then a change in the present laws by
       the Legislature is the only solution.
                 w

Hon. Ernest 0. Thompson - Page 16


         WO answer your first question in the negative.
          In view of this opinion, your second and third
questions do not require answers.


           The Railroad Commission of Texas is
     without power under Article 6008, V. C. S.,
     et seq.,  to authorize by rule or order the
     balancing of over and under production of the
     legally prescribed gas allowable (with pro-
     viso for maximum daily and monthly allowable)
     for a period of a year.
                               Yours very truly
                           ATTORNZYGENERAL OFTEXAS




EMH:jt




     The foregoing opinion was'consideredand approved
     inconferenoe composed of Assistant Attorneys Gen-
     eral Fagan Dickson, Joe Greenhill;Douglas Pruett,
     F. D. Brown, and Special Assistant James D. Smull-
     en.                             h

                          P2         i?c$+d
                                orney    enera
                      Chairman of the Gonferenoe
