55-703. Regulation of production of natural gas by commission; considerations in determination of production from common sources of supply; exception for certain cities of second class.
55-703
55-703. Regulation of production of natural gas by commission; considerationsin determination of production from common sources of supply; exception forcertain cities of second class.(a) Whenever the available production of natural gas from any common sourceof supply is in excess of the market demands for natural gas from thecommon source of supply, or whenever the market demands for natural gasfrom any common source of supply can be fulfilled only by the productionof natural gas from the common source of supply under conditions constitutingwaste, or whenever the commission finds and determines that theorderly development of and production of natural gas from any commonsource of supply requires the exercise of its jurisdiction, then anyperson, firm or corporation having the right to produce natural gas fromthe common source of supply may produce onlythat portion of all the natural gas that maybe currently produced without waste and to satisfy the market demands,as will permit each developed lease to ultimately produce approximatelythe amount of gas underlying the developed lease and currently produceproportionately with other developed leases in the common source ofsupply without uncompensated cognizable drainage betweenseparately owned, developed leases or parts thereof.
Except as otherwise provided in subsection (b), the commission shallregulate the taking of natural gas from anyand all common sources of supply within this state in order to preventthe inequitable or unfair taking of natural gas from acommon source of supply byany person, firm or corporation and to prevent unreasonablediscrimination in favor of any one common source of supply as againstanother and in favor of or against any producer in any commonsource of supply. In promulgating rules, regulations and formulas, toattain such results the commission shall give equitable consideration toacreage, pressure, open flow, porosity, permeability and thickness ofpay, and such other factors, conditions and circumstances as may existin the common source of supply under consideration at the time, as maybe pertinent.
The commission in determining the market demand for gas from a commonsource of supply shall consider the reasonable current requirements forcurrent consumption and use within and without the state, and such otherfactors, conditions, or circumstances that would aid in establishing themarket demand.
(b) The provisions of this section shall not apply to that portion of acommon source of supply which is within the corporate boundaries of a cityof the second class and upon which is located a producing natural gas wellwhich is solely owned by such city and the total production from which isconsumed by and for the benefit of such city. Such well shall not be allowed to beproduced in an amount which exceeds two times the amount authorized by anyrule, regulation or formula promulgated by the commission pursuant to subsection (a).
The provisions of this subsection shall expire on July 1, 1988.
History: L. 1935, ch. 213, § 3; L. 1945, ch. 233, § 3; L.1959, ch. 237, § 1; L. 1981, ch. 222, § 1; L. 1983, ch. 184, § 1;L. 1985, ch. 183, § 1; May 9.