Public Law 78–194

AN AGREEMENT TO EXTEND THE INTERSTATE COMPACT TO CONSERVE OIL AND GAS

Whereas, on the 16th day of February, 1935, in the City of Dallas, Texas, there was executed “An Interstate Compact to Conserve Oil and Gas” which was thereafter formally ratified and approved by the States of Oklahoma, Texas, New Mexico, Illinois, Colorado, and Kansas, the original of which is now on deposit with the Department of State of the United States, a true copy of which follows:

“An Interstate Compact to Conserve Oil and Gas

“article i

“This agreement may become effective within any compacting state at any time as prescribed by that state, and shall become effective within those states ratifying it whenever any three of the states of Texas, Oklahoma, California, Kansas, and New Mexico have ratified and Congress has given its consent. Any oil-producing state may become a party hereto as hereinafter provided.

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“article ii

“The purpose of this compact is to conserve oil and gas by the prevention of physical waste thereof from any cause.

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“article iii

“Each state bound hereby agrees that within a reasonable time it will enact laws, or if laws have been enacted, then it agrees to continue the same in force, to accomplish within reasonable limits the prevention of:

“(a)“(a)

The operation of any oil well within an inefficient gas-oil ratio.

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“(b)“(b)

The drowning with water of any stratum capable of producing oil or gas, or both oil and gas in paying quantities.

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“(c)“(c)

The avoidable escape into the open air of the wasteful burning of gas from a natural gas well.

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“(d)“(d)

The creation of unnecessary fire hazards.

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“(e)“(e)

The drilling, equipping, locating, spacing, or operating of a well or wells so as to bring about physical waste of oil or gas in the ultimate recovery thereof.

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“(f)“(f)

The inefficient, excessive or improper use of the reservoir energy in producing any well.

“The enumeration of the foregoing subjects shall not limit the scope of the authority of any state.

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“article iv

“Each state bound hereby agrees that it will, within a reasonable time, enact statutes, or if such statutes have been enacted then that it will continue the same in force, providing in effect that oil produced in violation of its valid oil and/or gas conservation statutes or any valid rule, order or regulation promulgated thereunder, shall be denied access to commerce; and providing for stringent penalties for the waste of either oil or gas.

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“article v

“It is not the purpose of this compact to authorize the states joining herein to limit the production of oil or gas for the purpose of stabilizing or fixing the price thereof, or create or perpetuate monopoly, or to promote regimentation, but is limited to the purpose of conserving oil and gas and preventing the avoidable waste thereof within reasonable limitations.

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“article vi

“Each state joining herein shall appoint one representative to a commission hereby constituted and designated as

“The Interstate Oil Compact Commission,

the duty of which said Commission shall be to make inquiry and ascertain from time to time such methods, practices, circumstances and conditions as may be disclosed for bringing about conservation and the prevention of physical waste of oil and gas, and at such intervals as said Commission deems beneficial it shall report its findings and recommendations to the several states for adoption or rejection.

“The Commission shall have power to recommend the coordination of the exercise of the police powers of the several states within their several jurisdictions to promote the maximum ultimate recovery from the petroleum reserves of said states, and to recommend measures for the maximum ultimate recovery of oil and gas. Said Commission shall organize and adopt suitable rules and regulations for the conduct of its business.

“No action shall be taken by the Commission except: (1) By the affirmative votes of the majority of the whole number of the compacting states represented at any meeting, and (2) By a concurring vote of a majority in interest of the compacting states at said meeting, such interest to be determined as follows: Such vote of each state shall be in the decimal proportion fixed by the ratio of its daily average production during the preceding calendar half-year to the daily average production of the compacting states during said period.

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“article vii

“No state by joining herein shall become financially obligated to any other state, nor shall the breach of the terms hereof by any state subject such state to financial responsibility to the other states joining herein.

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“article viii

“This compact shall expire September 1, 1937. But any state joining herein may, upon sixty (60) days notice, withdraw herefrom.

“The representatives of the signatory states have signed this agreement in a single original which shall be deposited in the archives of the Department of State of the United States, and a duly certified copy shall be forwarded to the Governor of each of the signatory states.

“This compact shall become effective when ratified and approved as provided in Article 1. Any oil producing state may become a party hereto by affixing its signature to a counterpart to be similarly deposited, certified and ratified.

“Done in the City of Dallas, Texas, this sixteenth day of February, 1935.

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“Whereas said Interstate Compact was heretofore duly renewed and extended for two (2) years from September 1, 1937, its original expiration date, to September 1, 1939; and,

“Whereas said Interstate Compact was again duly renewed and extended for two (2) years from September 1, 1939, its second expiration date, to September 1, 1941; and,

“Whereas said interstate Compact was again duly renewed and extended for two (2) years from September 1, 1941, its third expiration date, to September 1, 1943; and,

“Whereas it is desired to again extend and renew said Interstate Compact to Conserve Oil and Gas for another period of four (4) years from September 1, 1943, its present expiration date, to September 1, 1947: Now, therefore, this writing witnesseth:

“It is hereby agreed that the said Compact entitled ‘An Interstate Compact to Conserve Oil and Gas’ executed in the City of Dallas, Texas, on the 16th day of February, 1935, and now on deposit with the Department of State of the United States, a correct copy of which appears above, be and the same hereby is, extended for a period of four (4) years from September 1, 1943, its present date of expiration, this agreement to become effective within those states joining herein when executed by any three of the States of Texas, Oklahoma, Kansas, Colorado, Arkansas, Louisiana, Kentucky and New Mexico, and consent thereto is given by Congress.

“The signatory states executed this agreement in a single original which shall be deposited in the archives of the Department of State of the United States and a duly certified copy thereof shall be forwarded to the Governor of each of the signatory states.

“Executed as of this the First day of April, 1943, by the several undersigned states, at their several capitols, through their proper officials thereunder duly authorized by statutes, resolutions, or proclamations of the several states.”