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TITLE 16ECONOMIC REGULATION
PART 1RAILROAD COMMISSION OF TEXAS
CHAPTER 2INFORMAL COMPLAINT PROCEDURE
RULE §2.5Informal Complaint Process Regarding Loss of or Inability to Account for Gas

(a) Scope. This section implements the provisions of Texas Natural Resources Code, §85.065, which applies only to the loss of or inability to account for natural gas that is tendered by a producer to a gatherer or transporter of gas on or after September 1, 2007. The loss of or inability to account for natural gas that is tendered by a producer to a gatherer or transporter of gas before September 1, 2007, is governed by the law in effect on the date the gas was tendered.

(b) Policy. The Commission will apply the policies, definitions, and procedures set forth in §2.1 of this title (relating to Informal Complaint Procedure), to the extent they are consistent with this section. If the provisions of §2.1 of this title are inconsistent with this section or are not applicable, the provisions of this section will apply to complaints filed pursuant to Texas Natural Resources Code, §85.065.

(c) Definitions. In addition to the definitions in §2.1 of this title, the following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

  (1) Accounting--A comprehensive record of the details of the taking or acceptance of a producer's gas and the movement of that gas from the time and place of taking or acceptance to a delivery point by a person who gathers or transports that gas, which may include measurements, quality analyses, processing, and treatment; amounts used for fuel, dehydration, compression, or flaring; liquids extraction or removal of hydrocarbons; quantity of gas redelivered, allocated, or sold for the producer's account; and the physical system used by the person who gathers or transports gas for a producer.

  (2) Loss of or inability to account for gas--For purposes of mediating disputes pertaining to issues involving the "loss of or inability to account for gas," the Commission will examine the difference between the amount of gas metered into a system and the amount metered out.

  (3) Person who gathers or transports gas--Any common purchaser of gas, gas utility, or taker of natural gas including but not limited to a gas pipeline that provides gas gathering and/or transmission transportation service for a fee or some other compensation. A common purchaser that does not gather or transport gas is not subject to this section.

  (4) Producer--A person who owns or operates a well or wells producing oil or gas or both.

  (5) Waste--Waste of gas as defined in Texas Natural Resources Code, §85.046.

(d) Explanation of loss of or inability to account for gas. As a prerequisite to filing an informal complaint pursuant to Texas Natural Resources Code, §85.065, and this section, a producer must submit a written request for an explanation of loss of or inability to account for gas to a person who gathers or transports gas for the producer in accordance with the requirements of this subsection.

  (1) A producer's request to a person who gathers or transports gas for the producer for an explanation of any loss of or inability to account for the gas tendered by the producer to the person shall be in writing and may ask the person to provide any or all of the following information:

    (A) the amount of gas tendered by the producer from each well that has a meter;

    (B) a laboratory analysis of the composition and heating value of the gas and other substances tendered by the producer, if such an analysis has been performed;

    (C) if available, a schematic drawing of the person's system for gathering or transporting gas that shows:

      (i) each meter type;

      (ii) the date each meter was last calibrated;

      (iii) the accuracy of each meter; and

      (iv) all equipment that alters, disposes of, or otherwise consumes any of the gas tendered to the person;

    (D) the estimated amount of gas used for fuel, flared, or vented for construction, repair, maintenance, or other operational uses and, if the information is available, the location of that use;

    (E) the estimated amount of contaminants or other impurities removed from the gas and the location at which the impurities were removed;

    (F) the estimated amount of liquid hydrocarbons and condensate removed from the gas and the location at which the liquid hydrocarbons and condensate were removed;

    (G) the estimated amount of gas lost and the location at which the gas was lost;

    (H) the estimated amount of gas redelivered by the person, including the amount of gas sold that was allocated to the producer, and the location at which the re-delivery of the gas occurred;

    (I) any amount of gas received from the producer by the person that remains unaccounted for; and

    (J) any other information the person who gathered or transported the gas considers relevant to the request for explanation of loss of or inability to account for gas.

  (2) The producer shall submit the written request to the person who gathers or transports gas for the producer. The producer shall address the request to the contact person at the address shown on the Form P-5 for the person who gathers or transports gas for the producer that is on file with the Commission. If there is no Form P-5 for the person who gathers or transports gas for the producer on file at the Commission, the producer shall use the address on the producer's contract with the person who gathers or transports gas for the producer. The producer shall send its complaint by facsimile or e-mail to the contact person and mail the request using United States Postal Service certified mail, return receipt requested, and shall retain a complete copy of the written request and the returned certified mail receipt.

  (3) Not later than the 30th day after the date the person who gathers or transports gas receives the request from the producer, the person shall provide the producer, by mail and facsimile or e-mail, a written explanation of any loss of or inability to account for the gas tendered to the person by the producer. The person shall include in the response any relevant information requested by the producer that is available to the person and that would be required to be included in an accounting under paragraph (1) of this subsection. For each element of information sought in a request for explanation for which an amount of gas is to be provided, the person who gathered or transported the gas shall state the method by which the amount was determined (measured, allocated, estimated, or other).

(e) Informal complaint. If a producer has submitted a request under subsection (d) of this section to a person who gathers or transports gas for the producer and the person provides an inadequate explanation of any loss of or inability to account for the gas, or fails to provide any explanation of any loss of or inability to account for the gas by the deadline stated in that subsection, the producer may file with the Commission an informal complaint against the person.

  (1) An informal complaint may not be filed before the 30th day after the end of the production period covered by the complaint.

  (2) An informal complaint shall comply with the requirements of §2.1 of this title and, in addition, shall:

    (A) specify the production period covered by the complaint;

    (B) state that at least 30 days have elapsed since the end of the production period covered by the complaint;

    (C) if the producer metered the volume of gas tendered to the person who gathered or transported the gas:

      (i) describe the type of meter used; and

      (ii) state the date the meter was last calibrated; and

    (D) include a copy of the producer's request to the person who gathers or transports gas for the producer for an explanation of loss of or inability to account for gas and a copy of the returned certified mail receipt.

  (3) Not later than the 14th day after the date the complaint is filed at the Commission, the person who gathered or transported the gas shall provide to the producer and the Commission, by mail and facsimile or e-mail, an accounting of the gas tendered to the person by the producer for gathering or transport during the production period covered by the complaint. The person may provide the accounting on a thousand cubic feet or a million British thermal unit basis, as applicable, and shall provide all elements of information listed in subsection (d)(1)(A) - (J) of this section that the Commission determines are necessary to resolve the complaint. In addition, for each element of information for which an amount of gas is to be provided, the person shall state the method by which the amount was determined (measurement, allocation, estimation, or other).

  (4) The Commission may grant an extension of time to the person who gathered or transported the gas to provide the accounting required by paragraph (3) of this subsection, but the additional time may not extend beyond the 45th day after the date the informal complaint was filed.

  (5) If the person who gathered or transported the gas does not have the information necessary to provide the accounting required by paragraph (3) of this subsection, the person shall provide to the producer and to the Commission, by mail and facsimile or e-mail, a written explanation of the reason the person does not have the information.

  (6) If the person who gathered or transported the gas fails to provide the accounting required by paragraph (3) of this subsection and the explanation required by paragraph (5) of this subsection, the Commission shall consider the informal complaint filed by the producer to be valid and shall refer the matter for a formal evidentiary hearing.


Source Note: The provisions of this §2.5 adopted to be effective April 28, 2008, 33 TexReg 3388

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