Texas House Bill HB1597

Texas 2017 - 85th Regular

Caption

Relating to the recovery of stranded oil, gas, or oil and gas from depleting Cenozoic Era reservoirs.

Impact

By setting forth a clear regulatory framework for unitization, HB1597 seeks to streamline operations related to the extraction of oil and gas from these specific reservoirs. This bill emphasizes that unit operations must be reasonably anticipated to result in significant increases in oil or gas recovery compared to traditional methods. It allows for collaborative agreements among working interest owners and royalty owners, which provides certainty and a standardized procedure for recovery that may enhance operational efficiency across individual tract boundaries.

Summary

House Bill 1597 aims to facilitate the recovery of stranded oil, gas, or oil and gas from depleting Cenozoic Era reservoirs in Texas. The bill introduces a new chapter to the Natural Resources Code titled the Texas Tertiary Recovery Unitization Act, which provides guidelines on how unitization plans can be structured, approved, and executed for enhancing oil and gas recovery utilizing tertiary methods. This act is particularly concerned with the management and utilization of natural resources to ensure sustainable recovery processes while minimizing waste in production operations.

Contention

One of the critical points of contention surrounding HB1597 relates to the balance between promoting economic benefits from enhanced resource recovery and ensuring that individual land and resource owners are not inadvertently stripped of their rights or facing inappropriate financial burdens due to unit operations. There are concerns regarding the regulation of expenses and allocations for production among different stakeholders, particularly for unleased mineral interests. Strong support from industry stakeholders emphasizes the economic and operational efficiencies, while advocacy groups may question the implications it has on environmental protections and local governance.