Pampa Daily News from Pampa, Texas on May 31, 1936 · Page 18
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Pampa Daily News from Pampa, Texas · Page 18

Pampa, Texas
Issue Date:
Sunday, May 31, 1936
Page 18
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£AGE FOUR THE PAMPA DAILY NEW§, PaihpV Texas SUNDAY 'MORNING, MAY 31, 1931 REGULATION OF OIL INDUSTRY SPREADS TO MANY STATES , o STILL UN NEEDED INEFFICIENT METHODS HIT AS CONSERVATION STEP (Following 1 is an address of .T. D. Oollett, oil operator, on the present status of the industry •with respect to regulation.) Time will not permit of a history of the efforts, within the various states to enact and enforce conservation laws relating to oil and gas. It would seem, however, to be In order to summarize briefly the present status of oil and gas conservation legislation. Twenty-three states now have statutes that in some way pertalu to the conservation of petroleum and natural gas, though In several of these states the provisions extend' only to the protection of productive oil and gas strata, fresh water strata or productive coal Beams. Seventeen states exercise some control over the drilling of wells for oil or gas, with fifteen requiring notice of intention to drill or the securing of permits therefor, and practically all of them require that drilling records be kept and filed with the state authorities. Fourteen states have provisions with regard to spacing of wells. 'Waste of gas in the Texas Panhandle has finally been prohibited. Only five of the states have provisions for prorating the production of crude oil. California exercises some control over production through the fixing of oil gas ratios. Only seven states prohibil the taking of oil In excess of market demand. With reference to natural gas, seventeen states have provisions prohibiting the escape of either oil or gas above ground; seven states specifically prohibit inefficient recovery of either oil or gas—wltl varying definitions of "Inefficien recovery." Ten states prohibit the wasteful utilization of natural gas and seven fix or authorize the fixing of oil gas ratios. Nine states prohibit the taking of gas In excess of market demand and eleven states have provisions for the pro- ration or limitation of the production of natural gas. It is apparent from the abovi that there is a decided lack of mil formlty between the basic conserva. tlon laws of the various producing states and one, of the importan improvements that could be madi in this situation would be the en< actment in all of the oil and gas producing states of laws as nearly uniform as possible. The adoption of comparatively uniform laws does not mean that the rules and regulations promulgated by the various boards and commissions would be ; uniform for the reason that the commissions or boards, if dealing intelligently with their particular problems, must fit their requirements to the particular area In which they have jurisdiction. Anyone who has had experience in the oil and gas business knows that no one formula can be written that would apply equitably to all of the states, or for that matter, to all of the fields in any one state. The varying conditions in the different areas call for specific rules to apply to the various fields according to the physical conditions governing the production of oil and gas in the area and rules and regulations that would be fair and reasonable as applied to one area would be totally impractical and Burdensome in another. Fortunately a great deal of the pioneering work has been done in. nost of the important producing tates. A slow and tedious part of his pioneering was the task of convincing the various boards and eglslative bodies that conservation aws would be beneficial to the in- lustry and further that they were n the public interest. Securing the .upport of the producers was even nore difficult and was a gradual process. II. was a "bitter dose" the old time producers had to take vhen they were called upon to bandon the old and wasteful methods of big flush production and the accompanying quick profits and laturally they were slow to accept any new plan which promised _reater ultimate production, but also greatly delayed the realization of profits. Much experimenting has of course been done, as in every line of adventure and it follows that some mistakes were made but the trend has gradually changed and the demand has become more insistent Tor adequate, reasonable and fair egislation in the states regulating oil and gas production. Many of the failures to secure needed regulations have been due Lo the opposition of factions within the industry who opposed any restraint of their activities, regard- ess of its guise, and there has also been much propaganda to the effect that the conservation laws were designed for the benefit of the producers and particularly for the benefit of the major companies in the business. It is also o fact that some of the efforts at drafting legislation were more or less empirical because of lack of scientific knowledge or just what the results would be and, therefore, resort was had to the "cut and fit" method. We have reached the stage in our industry where the necessity for just and reasonable conservation laws is recognized as essential to the stability of. the industry and to the presentation of these two great and most important natural resources and our task now is to bring about such improvements as may further assist us in the safe, reasonable and profitable conduct of the business for the future. Assuming the right of the states to regulate and control the production of oil and gas within their respective borders and granting to the federal government its right of supervision and control of interstate commerce, we shall be Increasingly dependent upon the states to administer and enforce the existing conservation laws and those that may be later placed upon their statute books. In the effort to work out a plan whereby the producing states might cooperate with each other in their conservation activities, a state compact (in which six important states have joined, with Congressional sanction) has been considering the problems of those states for a period of about one year. I am by no moans opposed to the idea of state compacts, but I am also not unmindful of the fact that there are many difficulties to be met in the operation of such agreements. The compact in question is limited, in its effort to regulate production by a provision which limits that regulation to the prevention of physical waste only, while some of the states that are parties to the compact have conservation laws that include the rights to regulate production not alone to prevent physical waste, but the right to prohibit economic waste, as well as to prohibit the production of oil and gas in excess of market demand. I ido not believe that state compacts will reach their maximum efficiency until they are limited only by the limitations placed by statute upon production in each of the signatory states. They are not going the whole route when they agree to consider only physical Noted Jockeys Aid Texas Exposition Two of the nation's leading Jockeys—Johnny Longtlen, left, recent winner of the Louisiana Derby at New Orleans, and Charley Corbett, leading rider at Santa Anita in 1935—find time to help Rangerettes Eleanor Akers and Lucy Ann Snell do n bit of advertising for the Texas Centennial Exposition, $25,000,000 \Yorld's Fair which opens in Dallas June 6. The photograph was taken at Arlington Downs, one of the finest race tracks, a few miles from Dallas. waste. It is to be hoped that other states can be induced to adopt the compact idea and that the scope of activities of the compact con be broadened to include every phase of conservation that would be possible under such an agreement. No sound reason exists for preventing the transportation of oil or gas out of a production state but very little time has elapsed since strenuous efforts have been made, through recourse to the courts, to prevent such shipments. To argue that the oil and gas products of one state may not be transported out of that state, is no more sound and practical than to argue that wheat, corn, and other food stuffs of one state may not feed the people of another commonwealth. Not one of the larger producing states uses or could use any large percentage of its daily production of oil or gas, but must, of necessity, market its surplus elsewhere—and in markets that are dependent upon it. The entire industrial and transportation structure of the nation has become dependent upon our Industry for motive power and lubricants to the extent that the sudden crippling, for a period of a few days only, of the customary .flow of oil and gas and their products would paralyze the industrial activity of the nation. Every factory in the land, every railroad, every automobile, every naval vessel, and practically every piece of machinery in the land is dependent upon our industry for an essential part of their daily supplies for motive power or lubricants. Thus a greater responsibility rests upon the authorities of the producing states, other than the simple matter of caring for their own needs. They have the added responsibility of conserving, for the use of the nation as a whole, the most essential products that move in the commerce of this country. In the matter of states revenues the producing states have another esponsibillty; that of conserving he source of their greatest in- ome. It is a matter of common inowledge that oil and gas and the •arious products thereof provide nore than half of the entire tax evenue of several of the states and .nd wasteful depletion of oil and gas resources would mean financial •uin to those states and leave to losterity a burden it could not houlder. In the larger producing states the vSTATE BONDED WAREHOUSE MOVING Let us relieve you of the worries of packing. . . We do all packing and unpacking, crating and preparing for shipping, Local and Long Distance Moving Bonded a'nd Insured Across the Street or Across the Country Pampa Transfer & Storage Co. 500 W. Brown Pampa, Texas prosperity df.the oil and gas business Is the greatest factor In the general prosperity of Its. entire citizenship and, by the same token, when prices of our products decline to a minimum and development work stops—the loss of revenue to producers, to land owners, and the consequent drop in revenues to the state, means sudden and serious depression. Thousands of land owners have pulled through long drouths, crop failures, declines in cattle prices and the prices of farm products solely by reason of lease rentals paid thein by optimistic oil and gas producers, who were carrying their leases on from year to year with the hope of developing them at a future time. Another matter of interest to the state lies in the constant threat to their domestic production from imported petroleum and its products. No state has authority to prevent the shipment of imported crudes or products to refineries within its borders or to its industrial consumers. The volume of such importation might reach the point of almost or complete annihilation of its local producers but the state could, on its own intlative, do nothing about It. It can, however, and should lend its support to the effort to secure federal regulation of imports, restricting the importation of foreign cnide oil and products to some reasonable percentage of the domestic demand. Without this protection the menace of having the entire market for domestic crude and products upset and demoralized by excessive Imports will continue to exist. The states have by this time had opportunity to observe the protection afforded them and the industry at large by the Connally act (S. 1190) in preventing the shipment in interstate and foreign commerce of crude petroleum produced in violation of state laws. This Federal law, first applied in Texas, cured one of the most serious situations faced by the oil business in recent years. Tills law expires in 1937 but it should be made permanent. It has demonstrated its worth, and the states can render a further service to the industry by assisting In securing the passage of an act making this law permanent. • ' The tragedy of it is that the violators have been rewarded with quick and tremendous profits. They S.M.U. Co-eds Send Exposition Bids Here are Emily Anne Black, Kappa Kappa Gamma, left, and liuth Greemim, Delta Gamma and president of the SMU fan-Hellenic society, us they mailed invitations to sororities in all Darts of the na- pronteil at the expense of the other producers and at the expense of the industry at large through demoralization of markets. I am a firm believer in what we will call "Permissive Legislation" as applied to the production of oil and gas. By that I mean legislation which will permit agreements to be made, for instance, between the operators in a given pool, by the terms of which, they may agree upon such matters as the spacing of wells, the manner of producing same to conserve oil and. gas, as well as promote and insure the greatest possible ultimate recovery from the pool, and at the minimum cost for development and operation of the producing leases. I would also include voluntary unit operation. Provision should be made that tion, asking them to make full use of Southern Methodist University's facilities If they visit the $25,000,000 Texas Centennial Exposition wliicli opens in Dallas June 6 nnd continues until Nov. 29. .such agreements may become effective only after they- have been approved by duly constituted State and Federal authorities and only if and when sucn agreements are found to be in the interest of conservation and economy and not against the public interest. The expense of many unnecessary wells could be avoided if such laws were in force and the conservation cause would be further strengthened. In conclusion 1 would appeal to the states to recognize fully the importance of the tasks imposed upon those who are charged with the promulgation of the orders and regulations under their conservation laws and also the extreme importance of the proper, fair and rigid enforcement of all such, rules and regulations. I would plead that the conservfi/- tfon laws of every state provide that all members of every board or commission, set up to administer and enforce conservation laws, be eligible only if qualified by actual experience or training in the oil and ' gas business. The suggestion dealing with the qualification of all officials authorized to promulgate rules and regulations and who must, In the discharge of their duties, make decisions that vitally affect the investment of billions of dollars and also affect the stability of one of the nation's greatest industries, needs little argument in its behalf. The ramifications of oil and'gas production under such varying conditions as to make each".field or pool * a' separate problem are too complex and intricate to be handled..intelligently by laymen. I would go further and provide for similar qual- *' Ificatlons for all key men employed In supervision and field work. "A consummation devoutly to be wished" but one which may not be realized would be something on the order of Civil Service rules in our conservation laws that would prevent the loss of the services of true, tried and experienced employees to make room for some po- , lltical appointees who do not know the difference between B. S. and benzine. The job is difficult enough for experienced men arid Important enough to command the very best obtainable talent. We pay enough in taxes to be entitled to the protection of our Interests; the interests of the states and of the nation and those Interests can best '* be protected by men thoroughly conversant with the details, practices and history of our industry. < MANY TO SING M'KINNEY, May 3D. (IP)— Several hundred singers from north: Texas and southern Oklahoma are expected to attend the Collin County Singing convention here June 8 and 7. The convention will be held in the court house and B. F. Williams of McKinney, president, will be in charge. Wendy Barrie's first name was taken from "Peter Pan" and she borrowed the surname of its author, Sir James M. Barrie, her godfather, for screen purposes. A PIONEER ;TRY IN TEXAS A Pioneer organization who had faith in the PANHANDLE PLAINS COUNTRY ... We built the first large Refinery in the Wichita District to serve thee Plains 20 Years ago. . . We can now serve you better with our REFINERY and LUBRICATING Warehouse, located just a few miles West of Pampa (Kingsmill) on State Hi Way No. 33. THOUSANDS OF BARRELS OF PAMPA DISTRICT CRUDE REFINED EACH MONTH. We have also spent thousands of dollars pioneering the producing- and developing of the Panhandle District since 1920. By assigning a large block of our acreage to another company for a test, we were instrumental in having the discovery oil well drilled in Hutchinson couinty. Our first producing oil wells in Hutchinson county were drilled in 1925. Satisfaction to the Consumer is a SOLID ROCK FOUNDATION for"any Company to build and expand on.—THAT IS WHY WE HAVE BEEN ABLE TO WEATHER THE TEST. . . . BUY PANHANDLE PRODUCTS. BECOME A REGULAR CUSTOMER . . . SEE YOUR PANHANDLE DEALER. GASOLINE KEROSENE DIESEL FUEL FUEL OIL PANOCLEAN (Cleaners Naptha) JOBBERS See Our Representatives for Prices and Territory Available PANOLENE MOTOR OILS AND GREASES For Cars, Trucks, Tractors, all j • types of Stationary ngines— Pampa Refining Company REFINERIES Wichita Falls General Offices WICHITA FALLS, TEXAS v ...V"'' \ Lueders

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