Page 24


.,V,V,S,,b ,of En-er-gy cri-sis en-er-gy cri-sis energy crisis energy crisis energy crisis energycrisisenergycrisiscrisiscrisjscrisiscrisis Austin Got that? The message cost the petroleum industry $3 million last year. The American Petroleum Institute which sponsors the campaign estimates that the energy ads \(“A nation that runs on oil 95 percent of all American homes with television sets. Only one other child of the media, the POW, is more popular than the energy crisis. Now that the POW’s are coming home the API may be able to hire some former prisoners of war to endorse the energy crisis, combining the best of both campaigns: Imagine a happy hoviecoming scene, a POW and his family. Alas, there’s no reunion dinner because the kitchen doesn’t have any electricity, and grandpa and grandma haven’t arrived because they can’t find gas for their car. This is not to say that the energy crisis is a complete figment of the oil industry’s imagination. There may really be an energy crisis. This is just to say that the crisis is being sold to the public just like a Glad Wrap bag or a vaginal deodorant. As a result of the massive p.r. campaign, the oil industry is in a very good position to get what it asks for this year. What the majors want from the Texas Legislature is compulsory unitization. Senate sponsor Jack Hightower of Vernon introduced his for the energy crisis, and the unitization lobby, the Texas Conservation Committee for Unitization, has milked the crisis for every advantage it could offer. UNITIZATION really is a conservation practice, endorsed by such respectable outfits as the Texas Environmental Coalition and the Lone Star Chapter of the Sierra Club. Only a small percentage of oil can be extracted from the ground using a well’s natural pressure. Approximately 146 billion barrels of oil have been discovered under Texas soil. To date, some 35 billion barrels of crude oil have been recovered and 13 billion barrels more can be extracted using conventional methods. That leaves 98 billion barrels unrecoverable by current methods of operation in Texas. The Conservation Committee estimates that 9 billion of those barrels could be forced out of the ground 6 The Texas Observer through secondary recovery if Texas operators could unitize the fields. Nine billion barrels of oil, sold at the wellhead for $3.40 a barrel, is a gusher of money, even by oil industry standards. Under the proposed unitization bill, 75 percent of the royalty owners and working owners of a field could band together and get permission from the Railroad Commission to operate the field as a unit. A substance, water or natural gas usually, is pumped down into the oil reservoir through two of the wells to force the oil out of the ground through other wells. Revenue from the sale of the oil is divided among all the owners of the field. Present Texas law requires virtually 100 percent agreement among owners before a field can be operated as a unit. Unitization proposals have been surfacing in the Legislature for more than a decade, but they invariably have been beaten down by independent operators. Some of the fights must have been magnificent. Stuart Long recalled in a Feb. 4 column that “the old time independents fought off [unitization] time and again, afraid it would be the `majors’ who would be the unit operators; they thought they would be squeezed out of their fair share of the oil and gas by the high-priced reservoir engineers who could out-testify their engineers before the Railroad Commission.” The best of the maverick operators, like the late Gillis Johnson of Fort Worth, opposed any kind of unitization, voluntary or involuntary. According to Long, the way Johnson “fought the creation of the SACROC Unit in the Scurry County fields 20 or more years ago was fabulous. They still talk about the brief he filed against it, in Shakespearean style, in which the Witches stirring the brew in the cauldron of unitization carried the names of all the major companies.” But the times they are a-changin’. This year the lobby effort, which is going under the guise of the aforementioned Texas Conservation Committee for Unitization, includes not only Getty Oil, Gulf Oil, Exxon, the Texas Mid-Continent Oil & Gas Assn., Dowell, Otis, Harding and the Texas Manufacturers Association but also the Texas. Independent Producers and Royalty the unitization bill two years ago, but this time the majors allowed a Tipro committee to write no fewer than 39 safeguards for independents into the bill. Still, many wildcatters from the giant East Texas oil field and the Permian Basin Petroleum Association in Midland are holding out against unitization. Last fall, the unitization lobbyists started riding the Chamber of Commerce circuit, eliciting endorsements from Dallas, Houston, Schulenburg, La Grange and every regional C of C in the state. Luncheons were held in many cities for legislators and oil folks. “As go oil and gas, so may go the economy of Texas,” Forrest E. Hoglund, East Texas division manager for Exxon, would warn the luncheon guests. The fact that the Conservation Committee chose Hoglund as one of its main front men says something about the group’s sophistication. Hoglund is a youngish, Bill Moyers-like executive, a man capable of dealing calmly with the apocalypse. It helps that his message is reasonable. There’s nothing wrong with unitization, as long as everyone owning a share of the unit gets his share of the profit. \(Of course, one can go a step further and ask if it’s right for individuals and corporations to make a profit from exploiting a state’s natural resources. See “Why not produce our own oil?” by Ronnie Dugger Obs., June 26, 1970. But no one’s opening that can of worms in the It’s not “compulsory” unitization this year but rather “majority consent” or “statutory” unitization. Gov . Dolph Briscoe endorsed the concept early this year and many of the state’s major dailies \(the Houston Chronicle, Dallas Morning . printed editorials in favor of unitization just days before the bills were introduced. Some small town papers have been using pro-unitization releases with virtually no rewriting \(look at the Garland News, the Vernon Record and the Kilgore News Herald BILLS WERE introduced amid much fanfare Jan. 29 by Rep. Dave Finney of Fort Worth and Senator Hightower. In addition to handing out printed news releases, the Conservation Committee sent television stations film clips of interviews with Finney and Hightower standing outside the Capitol. The film releases did not get much air play, at least not on the large television stations in the state. Bob Richardson of KTBC-TV told the Observer