By Thomas C. Hayes N.Y. Times News Service DALLAS _ Campaigns
by hundreds of independent drillers to curb bulging supplies of
natural gas in the Southwest scored one victory in Oklahoma last
week and appear to be headed for others soon in Texas and Louisiana.
Oklahoma Gov. David Walters, a Democrat, signed a bill last
week that is expected to reduce annual gas output there by about 5
The Texas Railroad Commission on Monday scheduled a vote on
April 27 on a narrower plan for production cutbacks, and Louisiana
is considering a similar measure.
The three states produce nearly half of the nation's natural
gas supply, but the production limits approved or under
consideration in the three states are weaker than some drillers had
sought and will probably have little impact on depressed gas prices.
The Federal Trade Commission has said that blanket restrictions
on gas output to raise prices are illegal, but that states can
impose some narrower limits. The Oklahoma measure attempts to
comply with federal law, but federal agencies are examining it.
At the urging of powerful members of Congress from
gas-consuming regions, primarily the Northeast, the Midwest and
California, federal regulators are monitoring the states' actions
for signs of illegal attempts to rig the gas markets.
But economists and other analysts say supplies are too abundant
in areas outside the Southwest for producers here to have any
lasting control over prices.
Battered by several years of gluts and depressed prices, the
region's gas producers are in turmoil. Gas prices over the last few
months have been the lowest of any winter since the 1970s.
Thousands of smaller producers have been driven out of
business, many large independent companies are losing money,
layoffs have accelerated and drilling has plunged to its lowest
level in 50 years.
Giant companies like Mobil, Amoco and Arco, as well as large
independents like Oryx Energy and Maxus Energy, have turned more to
foreign drilling, where costs are lower and prospects more
But many of the nation's independent companies, which produce
about 60 percent of the domestic gas supply, are too weak
financially to consider foreign operations.
Many of them have pressured state officials for help.
Regulators in Texas are considering changes, based on historical
trends and other factors, in how they calculate monthly production
limits for each well.
Drillers in Texas, which produced 27 percent of the nation's
gas in 1990, have complained for years that pipeline companies
abuse the current system by overestimating how much gas they can
sell each month.
Production limits are based on the pipelines' monthly demand
forecasts; when forecasts were too high, markets were glutted with
"That process was difficult to follow and was not accurate,"
Lena Guerrero, chairman of the Texas Railroad Commission, said in
Appointed last year by Gov. Ann Richards, a Democrat, to the
three-member panel that regulates the state's oil and gas industry,
Guerrero will be on the ballot for the first time in November. …