FERC Orders 380, 436, 451, 490 and 500 promote competition among suppliers of gas for the benefit of the consumer and provide access to transportation of gas directly from producer to consumer. The "unbundling" of gas services has restructured the interstate pipelines and caused producers either to market their own product or find a broker. The disruption of contracts has upset the producer, pipeline and state regulatory agencies. Setting allowables, reporting gas sales, payment of taxes and royalty, and accounting to non-operating working interests are more difficult to administer and correlative rights are being confused.

The New Mexico Oil Conservation Division has changed some procedures to cope with this rapidly changing situation. More changes will be needed to do our job under the state's Oil and Gas Act. The priority system designed to keep hardship wells producing and casinghead gas flowing is in jeopardy. The State's role in preventing waste and protecting correlative (property) rights must be recognized by Federal agencies.

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