Texas Senate Bill SB177

Texas 2017 - 85th Regular

• Filed: 11/14/16

Caption

Relating to unit operations for oil, gas, or oil and gas production from depleting reservoirs or carbon dioxide storage; authorizing a fee.

Impact

The bill's passage is anticipated to significantly alter how oil and gas operations are conducted within Texas, favoring a more coordinated approach to resource extraction and environmental responsibility. By promoting unitization, the legislation seeks to optimize resource allocation, ensuring that recovery is maximized and costs are shared among interest owners. The incorporation of carbon dioxide storage provisions aligns with modern efforts to mitigate climate change effects while utilizing existing reservoirs more effectively.

Summary

SB177 is a legislative proposal aimed at establishing a systematic framework for unit operations concerning oil and gas production, as well as carbon dioxide storage in Texas. This bill introduces Chapter 104 to the Natural Resources Code, which revolves around unitization practices that enhance oil and gas recovery while allowing for carbon dioxide storage operations. It emphasizes collaboration among working interest owners, royalty owners, and the Railroad Commission of Texas, which is tasked with overseeing the implementation and regulation of these operations.

Contention

However, contentious points may arise particularly concerning the rights of various stakeholders, such as royalty and working interest owners. Issues regarding financial obligations, potential variances in profit distribution, and the authority of the Railroad Commission could lead to disputes among involved parties. Additionally, the bill’s provisions to allow carbon dioxide storage operations could spark debates over environmental impacts, particularly in areas where local communities may oppose such initiatives based on public health and environmental concerns.