The Commission was charged by Texas state law with the administration of oil and gas regulations, including production quotas for each field and well. Quotas were set in conjunction with other oil- and gas-producing states. Part of its duties was regulating the spacing of the individual oil wells. Because of the complex geology of oil fields and multiple division of surface rights, one user’s oil drilling activity can affect the production of others, which meant that both public and private interests were at stake. Underground water and gas pressure needed to be monitored in order to maintain steady oil production and prevent waste.
Because the rule governing the spacing of wells over the oil field, known as “Rule 37”, generated a large amount of litigation among many competing landowners and potential drillers, the Texas Legislature had developed a special system of judicial... Read More