1-108.

INTERSTATE COMPACT TO CONSERVE OIL AND GAS

AN ACT to authorize and direct the Governor of Nebraska, for and in the name of the State of Nebraska, to join with other states in an Interstate Compact to Conserve Oil and Gas; to provide the Governor with authority to execute agreements for extension thereof and to withdraw therefrom; to provide for an official representative on the Interstate Oil Compact Commission; to permit the Governor to appoint an assistant representative; to provide his powers; and to limit the power of the Governor or the assistant representative to put into effect any rules, regulations, or decisions affecting the oil industry in Nebraska.

Be it enacted by the people of the State of Nebraska,

Section 1. The Governor of the State of Nebraska is hereby authorized and directed for and in the name of the State of Nebraska to join with other states in the Interstate Compact to Conserve Oil and Gas, which was executed in the city of Dallas, Texas, on February 16, 1935, and has been extended to September 1, 1955, with the consent of Congress. Such compact and all extensions are now on deposit with the Department of State of the United States, and is set forth as a part of this act marked "Exhibit A."

Sec. 2. The Governor is authorized and empowered, for and in the name of the State of Nebraska to execute agreements for the extension of the expiration date of the Interstate Compact to Conserve Oil and Gas, and to determine if and when it shall be for the best interest of the State of Nebraska to withdraw from the compact upon sixty days' notice as provided by its terms. In the event he shall determine that the state shall withdraw from the compact, he shall have the power and authority to give necessary notice and to take any and all steps necessary and proper to effect withdrawal of the State of Nebraska from the compact.

Sec. 3. The Governor shall be the official representative of the State of Nebraska on the Interstate Oil Compact Commission provided for in the Interstate Compact to Conserve Oil and Gas, and shall exercise and perform for the state all of the powers and duties as members of the Interstate Oil Compact Commission; Provided, that he shall have the authority to appoint an assistant representative who shall act in his stead as the official representative of the State of Nebraska as a member of the commission; and provided further, that neither the Governor nor his assistant representative shall have any power to put into effect any rules, regulations, or decisions affecting the oil industry in Nebraska without the approval of the Legislature.

"EXHIBIT A

THE INTERSTATE COMPACT TO CONSERVE OIL AND GAS ARTICLE I

This agreement may become effective within any compacting state at any time as prescribed by that state, and shall become effective within those states ratifying it whenever any three of the states of Texas, Oklahoma, California, Kansas and New Mexico have ratified and Congress has given its consent. Any oil producing state may become a party hereto as hereinafter provided.

ARTICLE II

The purpose of this Compact is to conserve oil and gas by the prevention of physical waste thereof from any cause.

ARTICLE III

Each state bound hereby agrees that within a reasonable time it will enact laws, or if laws have been enacted, then it agrees to continue the same in force, to accomplish within reasonable limits the prevention of:

(a) The operation of any oil well with an inefficient gas-oil ratio.

(b) The drowning with water of any stratum capable of producing oil or gas, or both oil and gas in paying quantities.

(c) The avoidable escape into the open air or the wasteful burning of gas from a natural gas well.

(d) The creation of unnecessary fire hazards.

(e) The drilling, equipping, locating, spacing or operating of a well or wells so as to bring about physical waste of oil or gas or loss in the ultimate recovery thereof.

(f) The inefficient, excessive or improper use of the reservoir energy in producing any well.

The enumeration of the foregoing subjects shall not limit the scope of the authority of any state.

ARTICLE IV

Each state bound hereby agrees that it will, within a reasonable time, enact statutes, or if such statutes have been enacted, then it will continue the same in force, providing in effect that oil produced in violation of its valid oil and/or gas conservation statutes or any valid rule, order or regulation promulgated thereunder, shall be denied access to commerce; and providing for stringent penalties for the waste of either oil or gas.

ARTICLE V

It is not the purpose of this Compact to authorize the states joining herein to limit the production of oil or gas for the purpose of stabilizing or fixing the price thereof, or create or perpetuate monopoly, or to promote regimentation, but is limited to the purpose of conserving oil and gas and preventing the avoidable waste thereof within reasonable limitations.

ARTICLE VI

Each state joining herein shall appoint one representative to a commission hereby constituted and designated as the Interstate Oil Compact Commission, the duty of which said Commission shall be to make inquiry and ascertain from time to time such methods, practices, circumstances and conditions as may be disclosed for bringing about conservation and the prevention of physical waste of oil and gas, and at such intervals as said Commission deems beneficial it shall report its finding and recommendations to the several states for adoption or rejection.

The Commission shall have power to recommend the coordination of the exercise of the police powers of the several states within their several jurisdictions to promote the maximum ultimate recovery from the petroleum reserve of said states, and to recommend measures for the maximum ultimate recovery of oil and gas. Said Commission shall organize and adopt suitable rules and regulations for the conduct of its business.

No action shall be taken by the Commission except: (1) By the affirmative votes of the majority of the whole number of the compacting states, represented at any meeting, and (2) by a concurring vote of a majority in interest of the compacting states at said meeting, such interest to be determined as follows: Such vote of each state shall be in the decimal proportion fixed by the ratio of its daily average production during the preceding calendar half-year to the daily average production of the compacting states during said period.

ARTICLE VII

No state by joining herein shall become financially obligated to any other state, nor shall the breach of the terms hereof by any state subject such state to financial responsibility to the other states joining herein.

ARTICLE VIII

This Compact shall expire September 1, 1937. But any state joining herein may, upon sixty (60) days' notice, withdraw herefrom.

The representatives of the signatory states have signed this agreement in a single original which shall be deposited in the archives of the Department of State of the United States, and a duly certified copy shall be forwarded to the Governor of each of the signatory states.

This Compact shall become effective when ratified and approved as provided in Article I. Any oil producing state may become a party hereto by affixing its signature to a counterpart to be similarly deposited, certified and ratified.

Done in the City of Dallas, Texas, this sixteenth day of February, 1935."