§ 23-2101. Interstate Compact to Conserve Oil and Gas.

1. The Interstate Compact to Conserve Oil and Gas, as first enacted by
chapter 501 of the laws of 1941, and as re-enacted by chapter 263 of the
laws of 1963, is hereby continued as follows:

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
thereto 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 of 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 that 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 at such intervals as said commission deems beneficial
it shall report its findings 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 reserves 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:

(a) By the affirmative votes of the majority of the whole number of
the compacting states, represented at any meeting, and

(b) 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 of this compact. 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.

E. W. MARLAND

The Governor of the State of Oklahoma

JAMES V. ALLRED

The Governor of the State of Texas

R. L. PATTERSON

For the State of California

FRANK VESELY

E. H. WELLS

HUGH BURCH

HIRAM M. DOW

For the State of New Mexico

The following representatives recommend to their respective Governors
and Legislatures the ratification of the foregoing agreement:

JOHN W. OLVEY

of Arkansas

WARWICK M. DOWNING

of Colorado

WILLIAM BELL

of Illinois

GORDON E. VAN EENANAAM

GERALD COTTER

of Michigan

RALPH J. PRYOR

E. B. SHAWVER

T. C. JOHNSON

of Kansas

2. The Governor of this state is authorized and empowered, on behalf
of the state, to execute agreements for the further extension of the
operation of such compact and to determine if and when it shall be for
the best interests of this state to withdraw from such compact upon
sixty days' notice as provided therein. In the event the Governor shall
determine that the state should withdraw from such compact, he shall
have full power and authority to give necessary notice and to take any
and all steps necessary and proper to effect the withdrawal of this
state from such compact.

3. The Commissioner shall be the official representative of this state
on the Interstate Oil Compact Commission. At the direction of the
commissioner, any other officer or employee of the department may serve
as substitute representative in the place and stead of the commissioner.
The commissioner shall consult and coordinate with the president of the
New York state energy research and development authority on issues
relating to state energy policy.

4. The Interstate Oil Compact Commission shall submit annually in
accordance with the laws and practices of this state, to the department,
for study and consideration an estimate of moneys required to
administer, manage and support the commission during the ensuing fiscal
year. Such estimate shall include any request for appropriation of funds
by New York and shall be accompanied by a tabulation of similar requests
which the commission expects to make to each other member state and the
formula or factors upon which such respective requests are based.

5. The department shall include a suitable item or items of estimated
expenditures for the Interstate Oil Compact Commission in the budget
estimates of the department.

6. The State Comptroller is hereby authorized and empowered from time
to time to examine the accounts and books of the commission, including
its receipts, disbursements and such other items referring to its
financial standing as such Comptroller may deem proper and to report the
results of such examination to the Governor.

7. No provision of the Conservation Law, and no provision of the
Environmental Conservation Law, if such provision of the Environmental
Conservation Law was derived from a provision of the Conservation Law,
which is inconsistent with the provisions of the Interstate Compact to
Conserve Oil and Gas shall be applicable to the Interstate Oil Compact
Commission or to any matter governed by the Interstate Compact to
Conserve Oil and Gas.

8. Nothing in this section is intended or shall be construed to
prevent or prohibit the production of oil by water induction methods
commonly called water flooding nor to require or necessitate the
enactment of conservation statutes unless and until the Legislature
shall determine by law that such statutes are advisable or necessary to
prevent the physical waste of oil or gas.

9. The commissioner shall make such reports to the Interstate Oil
Compact Commission and the Governor as he deems appropriate.

10. When the Governor on behalf of the state, executes any agreement
for the extension of the operation of the compact herein set forth, he
shall affix his signature thereto under a recital that such agreement is
executed pursuant to the provisions of the compact, subject to the
limitations and qualifications which are contained in the several
subdivisions of this section and are in aid and furtherance thereof.