Okla. Admin. Code § 165:10-1-37

Current through Vol. 42, No. 4, November 1, 2024

Section 165:10-1-37 - Determination of market demand

(a) The Commission shall instruct the Director of Conservation to determine the reasonable market demand for oil, gas, and other hydrocarbon products produced in Oklahoma for consumption in and outside the State for the ensuing proration period(s) that can be produced from each common source of supply on a statewide basis without avoidable waste and with equitable participation in production and markets by all operators and other interested parties.

(b) Waste, in addition to its statutory and ordinary meaning, shall include but not be restricted to economic waste, underground waste, surface waste, and waste incident to the production of oil and gas in excess of the transportation or marketing facilities or reasonable market demand.

(c) Reasonable market demand shall include, but not be restricted to, the demand for oil, gas, and other hydrocarbons for reasonable current requirements for current consumption and use within and outside the State, with such adjustment as may be necessary upward or downward to maintain adequate aboveground stocks of crude oil and its products and underground stocks of natural gas, so as to provide a continuous supply of petroleum products to the consumer and essential strategic supplies for national defense.

(d) In determining the reasonable market demand, the Commission may consider:

(1) Any statement communicated to the Commission by any purchaser or taker of oil and gas, stating the amount of oil or gas produced from common sources of supply that such purchaser or taker contemplates or intends to purchase during the period of time involved; or in lieu thereof, the capacity of the purchaser's transportation or marketing facilities which will be, during the time involved, available for transporting and/or marketing the oil or gas that may be produced from common sources of supply.

(2) Official records, reports, and statistical information compiled and kept by the Conservation Division that can be utilized in determining reasonable market demand.

(3) Reports, facts, and materials by the Bureau of Mines or any other recognized authority that impartially reflects reasonable market demand.

(4) Sworn or unsworn statements of interested parties and any other evidence which the Commission may deem relevant to the determination of reasonable market demand.

(e) For purposes of periodic market demand hearings, the Manager of Production and Proration for the Conservation Division shall prepare exhibits summarizing the nominations from the various interested parties specified in (d) in this Section. Said exhibits shall be available for public inspection not less than five days before the hearing. At the time of hearing, if no one announces any objection to the introduction of said exhibits, then the exhibits shall be admitted into evidence without need for sponsoring testimony.

(f) After the Commission has determined the amount of oil or gas to be produced from all oil and/or gas pools during the following proration period, the amount so determined will be allocated ratably and without discrimination among the various pools within the State.

Okla. Admin. Code § 165:10-1-37

Amended by Oklahoma Register, Volume 32, Issue 23, August 17, 2015, eff. 8/27/2015.