Official report to the House of Representatives of the 58th Legislature of Texas Page: 8 of 94
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It appears that there may be a few, however, who have
betrayed their trust. And it is our purpose to determine
how it was possible for this illegal scheme to flourish for
so long with the aid of government officials before it was
brought to light.
In addition to the matter of the crooked holes, another
problem of tremendous magnitude is that of marginal wells.
In the East Texas Field, a well is classified as a marginal
because it is supposed to be incapable of producing more
than 20 barrels a day. A marginal well is allowed to produce
each and every day of the month so that it can produce as
much as 600 barrels a month. In the same field, top allowable
wells, many of which have tremendous capacity, are
allowed to produce only about 23 barrels per day and they
are subject to shutdown days. This means that a month
when only 8 producing days has been allowed, as has been
the case almost every month for the past year, a top allowable
well is permitted to produce a total of 184 barrels
during the month. This strange situation in the law produces
a bizarre result that a well capable of producing 21
barrels a day, being allowed to produce 168 barrels, while
if that well declines to 20 barrels per day, it is allowed to
produce 600 barrels per month. It has been widely suspected
that this strange quirk in the law has caused many wells to
be reported as marginal when in fact they are not.
It has been presented that the crooked hole investigation is
a fight between the major oil producers and independent producers.
Insofar as the Investigating Committee of the House
of Representatives is concerned, this must be either a result
of misunderstanding or a result of a studied attempt to cloud
the issues. This is not an issue between majors and independents,
but an issue for respect of the law against contempt of the law.
It is an insult to the thousands of law abiding independent oil
operators of this state to make it appear that the independents
as a class, are attempting to defend and perpetuate a scheme
for the wholesale theft of oil, Indeed, millions of barrels of
oil which have been placed on the market illegally by operators
of crooked holes have displaced barrel for barrel the oil of
other operators who have complied with the law, whether they
be independent or major. This has helped to bring about a long
string of months of only 8 producing days, which has hurt the
same independents a lot more than the majors, because independents
do not have operations in other states or in foreign
countries. For the independent his expenses and overhead goes
on for 30 days but his income days are limited to eight.
Here’s what’s next.
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Texas Legislature. House of Representatives. General Investigating Committee. Official report to the House of Representatives of the 58th Legislature of Texas, book, 1963; Austin, Texas. (texashistory.unt.edu/ark:/67531/metapth5869/m1/8/: accessed June 23, 2018), University of North Texas Libraries, The Portal to Texas History, texashistory.unt.edu; .