Relating to the recovery of stranded oil, gas, or oil and gas from depleting Cenozoic Era reservoirs.
Impact
If enacted, HB1392 would amend the Natural Resources Code to include Chapter 104, detailing the regulatory processes for unitization and the necessary conditions for implementing tertiary recovery methods. This amendment is expected to streamline the licensing and approval process in oil and gas operations, thus potentially increasing the economic viability of oil and gas extraction in Texas. Additionally, by enhancing recovery methods, the bill aims to conserve natural resources and reduce wastage, responding to the environmental concerns increasingly prevalent in the industry.
Summary
House Bill 1392, titled the Texas Tertiary Recovery Unitization Act, is legislation aimed at enhancing the recovery of stranded oil and gas from Cenozoic Era reservoirs through a structured unitization process. The bill establishes a framework for owners of oil and gas interests to collaborate in unit operations that utilize tertiary recovery methods. This approach is intended to increase production yields compared to traditional recovery techniques, thereby promoting more efficient resource utilization within these reservoirs. The provisions in the bill include defining the roles and rights of both working interest and royalty interest owners, establishing voting requirements and procedures for approving unitization plans, and mandating compliance with state regulations overseen by the Railroad Commission of Texas.
Contention
Some notable points of contention surrounding HB1392 include concerns over the potential impact on landowners' rights and the distribution of production proceeds. Opponents argue that the plan may favor larger companies at the expense of smaller landowners or independent operators, particularly regarding the allocation of costs and benefits from production. Moreover, there are apprehensions about how the unitization process may alter existing contracts or agreements between parties, raising questions about equitable treatment among interest owners. Discussions are ongoing about the environmental implications of expanding such operations, particularly in the context of minimizing ecological disruptions caused by increased extraction activities.
Relating to the ownership of the pore space underlying the surface of land and to the use of that space for the geologic storage of carbon dioxide; authorizing a fee.
Relating to the reduction and plugging of orphaned oil and gas wells; providing for the imposition of a fee and an exemption from certain taxes and fees.
Relating to the reduction and plugging of orphaned oil and gas wells; providing for the imposition of a fee and an exemption from certain taxes and fees.
The temporary exemption for oil and gas wells employing a system to avoid flaring, an exemption from gross production tax for gas produced from certain enhanced oil recovery projects, and the definition of development incentive well; to provide an effective date; and to provide an expiration date.