Emergency Sections An agency may adopt a new or amended section or repeal an existing section on an emergency basis if it determines that such action is necessary for the public health, safety, or welfare of this state. The section may become effective immediately upon filing with the Texas Register, or on a stated date less than 20 days after filing, for no more than 120 days. The emergency action is renewable once for no more than 60 days. Symbology in amended emergency sections. New language added to an existing section is indicated by the use of bold text. [Brackets] indicate deletion of existing material within a section. TITLE 16. ECONOMIC REGULATIONS Part I. Railroad Commission of Texas Chapter 3. Oil and Gas Division Conservation Rules and Regulations 16 TAC sec.3.31 The Railroad Commission of Texas adopts on an emergency basis an amendment to sec.3.31, concerning gas well allowables. The existing language in sec.3.31 was adopted by the Railroad Commission of Texas on April 28, 1992, and published in the May 5, 1992, issue of the Texas Register (17 TexReg 3239). This amendment is adopted to offset systematic inaccuracy that results in a Forecast Correction Adjustment that inappropriately reduces reservoir allowables. Because this systematic inaccuracy is cumulative, its negative effect increases with time. Consequently, the Commission is in danger of setting gas allowables below market demand in direct conflict with the Commission's statutory mandate, thereby threatening the public health, safety, and welfare. This amendment will enable the Commission to fulfill its statutory mandate to accurately determine market demand, set the reservoir allowable to market demand, and to protect correlative rights. The Commission recognizes that this emergency rule only temporarily corrects the problem and will commence formal notice and comment rulemaking to address the underlying problem. Once the underlying problem is addressed, a second "resetting" of the Forecast Correction Adjustment will be necessary to alleviate the error that will accumulate between the time this emergency rule is adopted and the adoption of the rule to correct the underlying problem (the Commission expects to complete the formal rulemaking within six months). The amendment is adopted on an emergency basis under the Texas Natural Resources Code, sec.sec.81.051, 81.052, 85.046, 85.053, 85.055, 85.201-85.203, 86. 011, 86.012, 86.041, 86.042, 86.081, 86.083-86.090, 86.094, 111.083, 111.090, and 111.133, which provides the Railroad Commission of Texas with the authority to adopt rules for the following purposes: to govern and regulate persons and their operations under the jurisdiction of the Railroad Commission; to prevent waste of oil and gas in drilling and producing operations; to determine the status of gas production from all gas reservoirs; to distribute, prorate, and apportion allowable production; to determine the lawful market demand for gas to be produced from each reservoir; to adjust correlative rights and opportunities; to determine the daily allowable production for each gas well; to effectuate the provisions and purposes of the Natural Resources Code, Chapter 86; to conserve and prevent waste of gas; to prevent discriminate in the production and purchasing of gas; to prevent monopolistic practices which may be injurious to the general public; and to regulate common purchasers of gas to achieve the prior purposes. sec.3.31. Gas Reservoirs and Gas Well Allowable. (a)-(c) (No change.) (d) Determining prorated reservoir allowable and lawful market demand. (1) On or before the 20th day of the preceding month, the commission will determine the lawful market demand for gas to be produced from each reservoir during the upcoming allowable month. The monthly reservoir allowable shall be equal to the lawful market demand for that reservoir. The lawful reservoir market demand for prorated reservoirs shall be equal to the adjusted reservoir market demand forecast adjusted by a forecast correction adjustment, a supplemental change adjustment, and a commission adjustment (A)-(D) (No change.) (E) Forecast Correction Adjustment. [the difference between the reservoir production and the adjusted reservoir market demand forecast adjusted by the supplemental change adjustment and Commission adjustment during the most recently reported production month.] (i) The August 1993 Forecast Correction Adjustment shall be the difference between the allowable assigned for May 1993 and the production reported for May 1993. (ii) The September 1993 Forecast Correction Adjustment shall be the difference between the allowable assigned for June 1993 and the production reported for June 1993. (iii) The October 1993 Forecast Correction Adjustment shall be the difference between the allowable assigned for July 1993 and the production reported for July 1993. (iv) For November 1993 and subsequent months, the Forecast Correction Adjustment shall be: (I) the difference between the most recently reported production month's reservoir production and adjusted reservoir market demand forecast, adjusted by the Commission adjustment for that month; (II) less the difference between the most recently reported production month's allowable assigned to, and the production from, special allowable wells. (F)-(G) (No change.) (2) (No change.) (e)-(k) (No change.) Issued in Austin, Texas, on July 12, 1993. TRD-9325703 Mary Ross McDonald Assistant Director, Legal Division, Gas Utilities/LP Gas Railroad Commission of Texas Effective date: July 15, 1993 Expiration date: November 13, 1993 For further information, please call: (512) 463-6923