Newspaper article THE JOURNAL RECORD

Effects of Lower Gas Rates Questioned/by Rule Change Opponents

Newspaper article THE JOURNAL RECORD

Effects of Lower Gas Rates Questioned/by Rule Change Opponents

Article excerpt

Lower natural gas production rates would not solve the correlative rights problems occurring in isolated natural gas fields in the state, the Oklahoma Corporation Commission was told Friday.

The regulatory remedies to those resource drainage problems are already available at the commission, said opponents of a proposed rules change.

The proposal would limit the production level of a natural gas well capable of producing more than 2 million cubic feet per day to 37.5 percent of the well's capacity. Current rules allow wells to produce 50 percent of their maximum levels.

Also, the proposed lower production rates would not raise the price of natural gas, of which Oklahoma has a 10 percent national market share, the opponents said.

If Oklahoma loses 1 percent of the national market share, that loss will affect 10 percent of the producers in the state, said Gordon Brown, an attorney for Hadson Corp.

However, Oklahoma could take the lead, proponents told the commissioners, and be the first state to reduce the amount of natural gas on the market, which is currently burdened with an estimated 3 trillion cubic foot surplus.

"This is a great opportunity for leadership," said Bud Stewart, speaking for the Energy Consumers and Producers Association of Oklahoma. If Texas, Louisiana and other natural gas-producing states follow suit, the price of natural gas would rise, Stewart told the commissioners.

Others told the commission that it was trying to regulate natural gas prices, which the state is powerless to do since the natural gas market is international in scope.

Richard Harris, an attorney for Tenneco Oil Co. …

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