You’ve been granted free access to this subscribers only article.
Eagle Ford: Second — or third — time’s a charm for oil recovery
Wilson County NewsApril 24, 2013 | 2,680 views | 1 comment
As the Eagle Ford shale oil and gas exploration continues, two Texas congressmen have introduced bills that could increase the state’s production of oil, helping to make the United States less dependent on foreign oil.
While Texas is rated among the top 10 producing states in the nation, the state is behind in the use of “unitization.” House Bill (HB) 100, authored by Rep. Van Taylor, and Senate Bill (SB) 136 by Sen. Rodney Ellis would allow for this.
Since the bills have been introduced, division between the oil industry and landowners -- including agriculture groups -- has arisen.
Pooling vs. unitization
While some landowners have sold their royalty rights to energy-type companies, others continue to negotiate with oil and gas companies for a share of the royalty money. Included in most leases are clauses regarding “pooling.”
According to “Hints on Negotiating An Oil and Gas Lease” by Judon Fambrough, senior lecturer and attorney at law at Texas A&M University, pooling is used “to unite under one operator all the mineral owners having an interest in a common underground reservoir. By doing so, the lease avoids unnecessary drilling, protects the rights of the mineral owners to the common reservoir, and prevents waste.
“In Texas, mineral owners may be subjected to two types of pooling. One is voluntary, and the other is compulsory or statutory.” Voluntary is included in most leases, while the second involves Chapter 10 of the Texas Natural Resources Code.
State Sen. Judith Zaffirini, who chairs the Government Organization Committee of the Eagle Ford Shale Legislative Caucus, provided the Wilson County News with clarification and background data.
“Senate Bill 136 and its companion, House Bill 100, are about unitization, not about forced pooling,” Zaffirini said. “Forced pooling is already part of Texas law and involves combining mineral interest tracts during initial production from a reservoir on a certain acreage.
“Unitization, a different concept, involves an entire oil field and deals only with secondary and tertiary recovery, otherwise known as enhanced oil recovery (EOR).
“Because of EOR, old, depleted oil fields can now be tapped, and significant amounts of CO2 [carbon dioxide] can be captured and prevented from entering the atmosphere,” Zaffirini said. “Unitization could help facilitate the orderly development of EOR projects.”
Thus far, two state organizations are against the bills -- the Texas Farm Bureau and the Independent Cattlemen’s Association of Texas (ICA) -- since both mention “forced pooling.”
In its Jan. 18 Austin Newsletter, the state Farm Bureau explains: HB 100 and SB 136 “will allow forced pooling of private mineral owners. Provided an operator obtains agreements from 70 percent of the leasehold owners and 70 percent of the royalty owners in the area to be unitized, the operator can force pool the mineral, royalty, and leasehold interest into a single unit. The unleased mineral owners could then be pooled and treated as owning a one-sixth royalty interest and a five-sixths working interest in the unit.”
Independent Cattlemen’s Association of Texas (ICA) Executive Director Bill Hyman said that the state cattlemen’s association also opposes this.
He wrote in his Executive Director’s Report in an April 5 Southern Livestock Standard, “The ICA considers this bill a serious violation of private property rights.”
What’s in the bills?
In the bills being considered, for unitization to be implemented:
•All affected parties must be contacted
•70 percent of working and royalty interest owners must be in agreement
•A public hearing will be held
•The Railroad Commission must ensure revenues exceed expenses, production is allocated fairly, and a well-thought-out plan of operations exists.
An Oct. 3, 2012, a Houston Chronicle article states that enhanced oil recovery represents about 20 percent of the state’s oil production. Also, the U.S Department of Energy estimates the Texas Gulf Coast could account for more than 4 billion barrels of recoverable oil of the 23 billions barrels statewide.
Zaffirini stated that “... these bills could still move, but it is getting late in the session for action to be taken. SB 136 has not been scheduled for a hearing, and HB 100 has been heard in committee, but has not been scheduled for a vote.”
The senator welcomes feedback from her constituents regarding these bills.
Watch for more information regarding these bills in a coming issue.
Pooling vs. unitization
“The term ‘pooling’ refers to ‘the bringing together of small tracts of land for the granting of a well permit within an established drilling unit. The primary legal consequence of pooling oil and gas leases is that production and operations anywhere on the pooled unit are considered as if they have taken place on each tract within the unit. ...
“Pooling can be done voluntarily or through regulation by a statutory authority. ...
“Although frequently used interchangeably, the terms ‘pooling’ and ‘unitization’ refer to separate procedures. While pooling involves the combination of several small tracts of land to meet the spacing requirements for a single well, unitization refers to field-wide or partial field-wide operation of a producing reservoir involving multiple adjoining land tracts.
“Unitization is the unit-based operation of an oil pool by consolidating or merging the entire field or a substantial part of it as a single entity and designating one or more of the parties as operator. The unitization is done without regard to surface boundary issues and merges all the involved gas and oil leases into one contract.”
Your Opinions and Comments
Patrick L Meyer
La Vernia, TX
April 27, 2013 10:28am
Share your comment or opinion on this story!
You must be logged in to post a comment.
Section A: General News Archives
Berger earns Ph.D. from Columbia University (May 18, 2016)
Brahma Happenings (May 18, 2016)
Burning body spurs murder investigation (May 18, 2016)
Can I negotiate? (May 18, 2016)
Court Update (May 18, 2016)
Editorial: Narrow views promote intellectual, moral dry rot (May 18, 2016)
Editorial: The political climate in America goes from bad to worse (May 18, 2016)
Falls City ISD’s new K-12 building almost complete (May 18, 2016)
Floresville parks master plan would relocate ball fields (May 18, 2016)
Floresville parks plan wins council approval (May 18, 2016)
Foundation awards $9K in grants (May 18, 2016)
Foundation opens health grant process (May 18, 2016)
Graco recalls booster seats (May 18, 2016)
Grass fires on the rise (May 18, 2016)
Letter: An open letter to Congress (May 18, 2016)
Letter: Illegal immigration: Who will laugh last? (May 18, 2016)
Letter: What Hispanic vote? (May 18, 2016)
Lone Star Greys to meet (May 18, 2016)
Meeting Watch: La Vernia City Council (May 18, 2016)
Meeting Watch: Poth ISD (May 18, 2016)
Police Blotter (May 18, 2016)
Police recover one of two stolen trucks (May 18, 2016)
Register for free watercolor lesson (May 18, 2016)
Stockdale campus to get upgrade soon (May 18, 2016)
Stockdale City Council approves electronic payment processing (May 18, 2016)
TAMU-SA matches student scholarships (May 18, 2016)
Time to make plans to attend Jubilee (May 18, 2016)
Want fire protection? Attend May 19 hearing (May 18, 2016)
Acme Gold Buyers marks fifth year in Floresville (May 11, 2016)
All Veterans Job Fair (May 11, 2016)
Cemetery group to meet (May 11, 2016)
Children’s Alliance enhances care services (May 11, 2016)
China Grove mayor, police chief trade barbs at meeting (May 11, 2016)
Commissioners lukewarm toward hot coffee at library (May 11, 2016)
Competency and integrity (May 11, 2016)
Court Update (May 11, 2016)
Coy to get Ranger Cross (May 11, 2016)
Cub Scout Roundup (May 11, 2016)
Donate blood in May (May 11, 2016)
Editor: Trump’s candidacy sets in motion affliction in future elections (May 11, 2016)
Editorial: The voters have spoken — well, some of them have! (May 11, 2016)
Former Sutherland Springs VFD considered as a substation (May 11, 2016)
Free caregivers class starts May 26 (May 11, 2016)
Information sought in Walmart theft (May 11, 2016)
Lack of super majority vote keeps Clean Water Rule flowing (May 11, 2016)
Leetter: The government is a terrible investor (May 11, 2016)
Letter: Injection well site is near river, creeks (May 11, 2016)
Letter: Stop being negative (May 11, 2016)
LV youths win new wheels at Bike Rodeo (May 11, 2016)
Meeting Watch: La Vernia ISD (May 11, 2016)
Mineral rights workshop set (May 11, 2016)
Miss LV Pageant, Bluebonnet Parade, graduation fill La Vernia calendar (May 11, 2016)
New Wilson County justice center nears completion (May 11, 2016)
Personalized brick for Veterans Memorial (May 11, 2016)
Police Blotter (May 11, 2016)
Precinct 3 primary runoff is May 24 (May 11, 2016)
Rangers to honor Lorenz (May 11, 2016)
Rohrs takes over Floresville athletics (May 11, 2016)
Tanneberger qualifies for Executive Club membership (May 11, 2016)
Voters respond: One bond passes, another fails (May 11, 2016)
Wednesday morning crash injures nine (May 11, 2016)
AACOG plans public meeting (May 4, 2016)
Accident injures two drivers (May 4, 2016)
AgriLife offers tips to protect from Zika, other mosquito-borne diseases (May 4, 2016)
Behind the lens: Solitary stillness (May 4, 2016)
Celebration Mass June 12 (May 4, 2016)
Cemetery association meeting (May 4, 2016)
Condos are fine, but do your research (May 4, 2016)
Court Update (May 4, 2016)
Crime Stoppers aids police anonymously (May 4, 2016)
DA, DPS bust nets 86 charges (May 4, 2016)
Debate over citizens comments dominates Floresville council (May 4, 2016)
Dwellings At Home offers lodge, ranch furnishings, more (May 4, 2016)
Editorial: Overbearing city council threatens boards’ independence (May 4, 2016)
Editorial: Taking personal responsibility will bring possibilities (May 4, 2016)
Editorial: Trump is the same old song with one more verse (May 4, 2016)
FEDC tables recommendation of master parks plan (May 4, 2016)
FELPS tornado repair continues as FEMA help stalls (May 4, 2016)
Floresville Chamber Luncheon May 18 (May 4, 2016)
Hall of Fame inductees: Joe Kotwig, Malcolm and Beverly Talley (May 4, 2016)
Letter: Alamo Colleges: A bust for Floresville (May 4, 2016)
Local nursing homes plan Senior Olympics May 9-13 (May 4, 2016)
Look twice for motorcycle riders (May 4, 2016)
Lyssy’s vault earns gold, sets records! (May 4, 2016)
Medicaid, CHIP application assistance (May 4, 2016)
Meeting Watch: Wilson County Commissioners Court (May 4, 2016)
National Day of Prayer May 5 (May 4, 2016)
Police Blotter (May 4, 2016)
Ramirez promoted to colonel (May 4, 2016)
Reserve a seat for SA Tea Party (May 4, 2016)
Tanneberger tops in sales (May 4, 2016)
Treviño prepares to take reins of East Central athletics (May 4, 2016)