Proration in Texas

The efforts towards curtailment in Texas have been successful, despite thegreat area covered and the wide variety of oils offered. There are, of course, examples of noncooperation, perhaps of absolute indifference, but of such itcan at least be said that they have benefited from the restrictions imposedelsewhere. The prevention of waste is the legal background for proration in Texas. Thelegislature in 1899 passed the first laws to prevent waste of oil and gas.Subsequent legislatures, especially those of 1905, 1913 and 1917, undertook toregulate the development and transportation of oil and gas to the end thatwaste would not occur. In 1917 a constitutional amendment was submitted to thepeople, providing that natural resources of the state should be conserved andrequiring that the legislature pass appropriate laws. This amendment wasadopted, and the Acts of 1919 and 1929 have been passed, and these have had theeffect of making a rather elaborate plan for the conservation of oil and gasand their protection against waste, In 1930 the new pipe line act, designed toprovide for ratable purchases, was passed. The administration of these laws has been placed under the Oil and Gas Divisionof the Railroad Commission of Texas. The Commission can only consider actualwaste, not economic waste, The various proration plans in use in the state, while differing in efficiency, are based on engineering principles. In theproration of flush fields, the limiting of drilling and the steady productionof oil under restriction are the principal points involved, and these methodsare entirely different from those which prevailed until recently in theOklahoma City Pool, where apparently nothing beyond the restriction ofproduction on a time basis was attempted. There is little to say in defense of proration in the older and smallerproducing areas in Texas, except that, inasmuch as the market outlet has beenreduced, proration distributes the market ratably among the producers.