AUSTIN - State Senator Van Taylor today filed S.B. 177, the Majority Rights Protection Act, which establishes a legal framework to protect the property rights of Texas oil field owners and increase production during secondary or tertiary recovery.
“New techniques in oil extraction continue to offer our state and nation immeasurable opportunities, however Texas law has failed to keep up with these advancements," stated Taylor. "The Majority Rights Protection Act would unlock hundreds of billions of dollars of energy production by establishing a proven legal framework successfully used in 29 other states. Passing this bill has the potential to be the biggest job creation, investment expanding, and revenue generating legislation in a generation.”
The Majority Rights Protection Act updates Texas' unitization procedures to be similar to that of the other top-ten oil producing states, allowing a super majority of 70 percent or more of both working and royalty interest owners to enter into a pool to move forward with field development for secondary and tertiary recovery operations. With a 70 percent supermajority of both working interest owners and royalty interest owners, Texas would have a standard of agreement greater than or equal to 26 of the 29 states with a Majority Rights Protection statute already in place. Current law requires that all rights holders of an oil field agree to any field level redevelopment activity. This means that a single owner, or small group of owners, can stall the redevelopment of an oil reservoir. This effectively negates the property rights of all of the other owners in the field to use Enhanced Oil Recovery (EOR) methods.
Importantly, this legislation only effects secondary or tertiary recovery. Since enhanced recovery operations used for redevelopment involves the creation of a underground reservoir, the physical location of minerals may shift necessitating the management of the entire reservoir as one property, or unit.
Geologists estimate that an additional 10 to 20 billion barrels of oil worth over $1 trillion will come out of the ground if Majority Rights Protection Act were adopted. Increased oil production yields a host of benefits for this state, including increased private investment, job creation, more state revenue including deposits into the state's Permanent School Fund, and enhanced compliance with federal CO2 sequestration mandates.
A seventh generation Texan, local small businessman, and decorated Marine Officer, Van Taylor serves the majority of Collin County and a portion of Dallas County in the Texas Senate where he is widely recognized as a conservative leader. Taylor serves as Vice-Chairman of both the Nominations Committee and the Sunset Advisory Commission. He is also as a member of the Education, Health and Human Services, and Transportation Committees as well as the interim Committee on Property Tax Reform and Relief. Van and his wife, Anne, married after his return from Iraq and are the proud parents of three young girls. Van and his family reside in Plano near the land his great-grandfather farmed during the Great Depression.