*1 47,420 No. Corporation Commission Hartman, Appellant, W. L. v. The State Saffles, Chairman, and E. Kansas; Dale of The State Jules Doty Stroberg, Commissioners, Appellees. A. V. Vernon 134) (529 2dP. Opinion filed December 1974. Schell, Martin, Pringle, Fair, Wichita, Schell argued William F. Martin, Swartz, cause, Taylor Neuschwander, Paul B. Robert J. firm, appellant. him on the brief for same were Glaves, special counsel, argued cause, Wells, general E. Jack James counsel, appellees. him on was with the brief the court opinion was delivered by Harman, C.: The commission promulgated a certain regulation requiring information and samples obtained filed oil and wells to be with the state geological sur- L.W. Hartman’s Applicant Certain were vey. exceptions provided. the regulation request the district court by the commission. review Upon denied *2 the the denial order and Finney county commission’s upheld appeal. matter is now here on applicant’s in hearings holding of notice and after Following publication their which owners or royalty several oil drillers and producers, August on representatives the commission appeared, corporation 19, 82-2-125, 1971, a new as rule promulgated regulation designated became Hartman effective 1972. January Applicant present at the and of the hearing adoption regulation. protested KAR 82-2-125 provides: samples association, Every person, firm, logs. “Preservation or well and of corporation drilling responsible drilling purpose or of dis- holes for the covery ‘coreholes’) gas (excluding or of or seismic ‘shofholes’ preserve expense following shall (prepaid), and have delivered at his the samples survey, street, geological information to the 4150 Monroe Kansas

Wichita, Kansas, 67209. “(A) (drill drilling samples normally opera- cuttings) Formation saved in request tions operator; shall be retained of Kansas the the geological survey, samples washed, splits (sets) shall cut into be placed sample envelopes one ready set repository when delivered the required above operator samples address. Notification to shall the are be appended made copy either notice the to or on of notice of intention operator to drill returned to the conservation division of Kansas the the corporation Delivery processed samples commission. of the shall made be days completion drilling operations. within 90 survey may, of the The on holes, request samples portions some may bore shallow hole that normally operations. event, saving, proc- be saved in In this essing delivery requested additionally samples voluntary of such shall be a part operator. act on repository (sample accept library) The shall samples requested. all washed cut whether or not “(B) copy logs, radioactivity logs, A logs electric and similar wireline surveys or operator (excluding run ‘coreholes,’ seismic, all boreholes logs obtaining run for geo-physical data) shall de- be days livered to the following running above address within 90 of such logs surveys. or “(C) Copies logs prepared prescribed by driller’s on a form the Kansas completed commission shall be geological and filed with the Kansas survey days completion within 90 after of the well. “(D) Upon receipt request aof herein, written at the address listed said request prior to be simultaneously with, any submitted either samples to or or all required or (A), (B) information (C) filed as in items shall hereof be held custody by survey confidential period year for an initial of one from the receipt thereof, date of samples ap- unless release of said proved writing prior expiration year period: Provided, to the of the one addi- custody may for one extended however, period be The confidential at least survey, to be received year by such notice to the tional written notice year period. days expiration one prior of the initial prior completed surveys logs manner, of wells “(E) samples, aIn like survey will may to the be submitted to the effective date this order writing requested do so. custody if

be maintained in confidential logging performing company services duty “(F) of each It shall be survey geological month, to state of to furnish each within the Kansas logged. herein, a list of all holes at the address listed may granted whenever “Exceptions this rule justified because granting of such shall find following: one of the “(1) Compliance hardship. create economic with this order will “(2) Submitting requested samples, neces- and information sary prescribed for a local or area. “(3) custody length not sufficient to of confidential satisfy developing operator. needs of “Exceptions requested may setting supporting facts. affidavit forth requested exception fully supported, event is not the commission hearing giving set the matter for notice thereof.” after *3 Applicant gas Hartman is an oil operator and independent in in Finney county, extensive lease field holdings the Damme Kansas. In he since pool 1951 discovered the Damme and has drilled oil in or near that area. approximately and wells fifty well in connection with each Geological information is collected also logs drilled. Electric are utilized seismographs are kept the in helpful determining on wells. The information acquired to applicant what land to lease and drill. occasion Upon where whereby past support agreements had in the entered hole dry into times and drilling in exchange log, for formation electric samples, leases holding other information him to other supplied operators field, toward money drilling in the contribute the the latter of the parties. well benefit (or the mutual acreage), 19, 1972, seeking ex- application On Hartman filed January he was the alleged from the of rule 82-2-125. He ception 4,600 owner of tracts covering twenty-one leases about aggregating acres in the and he pool sought Damme from exemption the his the acreage of all of Damme Pool generally”. “and/or information to be filed alleged required the had sub- application disclosure public stantial economic value would create an no economic in that hole dry support burden contributions available; two maximum year further the of confi- was insufficient in that the was still dentiality pool being developed arrangements the state geological survey and in any event information inadequate. Applicant the filed were safeguarding in result confiscation alleged also with the rule would compliance of his property.

Hearing on Hartman’s was had before 23,1972. also appeared Four major producers March at the Applicant’s in evidence hearing opposition application. consisted L. testimony Schmidlapp, of exhibits Robert testi- his geologist, Schmidlapp engineer manager. he each wells in fied had of Hartman’s drilling supervised field; is im- during drilling collected Damme information drilling portant leasing completion acreage wells; spent by of other well average per years cost over $2,500 in the electric had been but applicant running $125,000 $3,400; now around has thus about applicant spent field; has about fifty spent wells drilled him in he $200,000 toward drilling in contributions seismographs; he received in expense exchange discovery information log electric 1953; well drilled in others drilled in applicant from two has type arrangement declined occasions to enter into this because did want the information obtained he to disclose adjacent leases drilling; he has undeveloped acreage have leases around present operators boundaries pool; when these perimeter pool; competition there leases expire; the obtained in geological drilling information applicant’s wells of benefit to been fifty general area used leases; types new all information secured applicant acquiring data; used to are evaluate drilling seismograph him, obtained paid belongs it by applicant him, to use it give he it and does want to com- expects area; to do would be an economic petitors disadvantage; so *4 time but applicant present is not wells at has drilled any the rule no completed adopted; two wells since was samples nominal; filed; have filing these two been cost drilled; locations remain presently contemplated appli- three the Damme than pool cant has more wells in drilled in his two opinion The witness also testified operator. enough was not long protect year confidentiality interest; he storage had examined facilities of applicant’s did not were survey they believe geological adequate. might obtain the information. He feared applicant’s competitors in opposition same had also testified applicant This witness adoption. the rule at held its hearing Hambleton, who also W. The state Dr. William geologist, Preliminarily, he testified. survey, director the state geological in hearings rule after extensive adopted stated 82-2-125 had been lost; would not significant important order after rule considering testimony presented adopted all the an commission’s sensitivity expression compromise of all excellent testimony interested parties did not yet which satisfied the for information state’s need add have stringent cost of More rules unduly business. doing been established in where in other states there less confidence the petroleum industry. rules and adequate Absence elsewhere, coupled wilful have caused practices, agencies the federal in government to become interested environmental protection as related to the Some petroleum industry. congressional taken, action been if already which completed, probably result in more than under stringent required by measures consideration. out the carrying the rule the state geological has been survey not to unneeded request samples careful and information and has developed procedures adequate safe- guard A confidentiality burglar the information. fire resistant file has been requisitioned The witness purpose. further testified granting Hartman’s application under the circum- stances would set a precedent which would emasculate the rules since his leases are little different from held in leases elsewhere state; anyone who drills a towell extract minerals not only gains information, mineral resources and he also produces a hole which under certain circumstances can be detrimental to the health public and safety; blowouts related to the oil and gas industry have oc- Kansas; in curred recent years information from holes particular areas was to determine inadequate the source of the solutions; or the problems at least seven major collapses surface have occurred which resulted from corrosion casing caused by solutions; salt underlying where information is inadequate new holes have to be drilled in the area to adequate secure knowledge; such information is protection of fresh water resources for correction of and protection from blowouts and surface collapses; electric logs are used with other geological data acquire rock knowledge pathology and changes fluids, study essential of blowouts. *5 Dilts, sample library the Wichita well

Robert manager generally are samples requests testified geological survey, from away mile or more drilled limited “wildcats” one (wells wells that nearby, those wells drilled than production), deeper are presently which samples from those from away are one-half mile interest; are logs held, special survey wells wherein well; an as Damme area such each information requested from survey necessary; drilled many field so holes have been where to protect in the area in the pipe surface setting interested as to areas strata; would reveal fresh water electric formation. above the producing hearing. Champlin at the made statements

Other oil operators and has interests wells producing which owns Company, Petroleum area, that in past stated in the 3,200 of land in about acres it had contrib- by drilling, testing encourage cooperative order to overriding royalty a minimum reserving to applicant, uted acreage to be of fruitful 82-2-125 that for rule position thereon. Its should exception effect, universally applied it must be denied. the application, granting objected Corporation

Mobil Oil deterrent be a serious would grant that its its position being it believed will area. Mobil development further unless and 'drilling proposals to secure approval able not be is complied the rule with. until Texaco, Inc., is no different from the applicant position deserve the exception and doesn’t Damme field else

anyone set a bad pool very for the whole Damme it granting precedent. Oil also of the Company opposed granting

Cities Service with the it would do effectiveness of grant away application; stated evidence was insufficient applicant’s bring rule. Cities also of the to the rule. any exceptions him within three 81,1972, order filed In an May denied reviewing After evidence and application. certain making order of denial contained these findings the recitals: presented “6. The Commission finds on the basis of evidence granting justified is not under exceptions grounds (F). out three set in Rule 82-2-125 The Commission presented Applicant relating finds that the evidence to economic hard- ship, apprehension possibility on their based of unauthorized dis- speculative conjectural closure of the information filed in nature. presented by Applicant It is noted the Commission that evidence as to quantity geological data accumulated the Damme Pool and value of *6 entirely required filed the relates data is not with almost Geological Survey effective date of Kansas as it obtained before the was Rule 82-2-125. Survey Geological “7. The Kansas has taken Commission finds that the adequate security precautions adopted pro- and reasonable and has reasonable Survey. protect geological or to filed the cedures to data filed Commission, history, stage having present “8. of de- considered the Pool, relating velopment to the Damme factors and characteristics year provided (D) finds that two under Rule 82-2-125 the confidential adequate protect operators and reasonable to in the said Pool. granting “9. for an The Commission finds that the the ex- ception damage purpose rule; the of the that the effectiveness required prudent provide be filed is in order to practices procedure including conservation of fresh the water health, safety well-being resources of Kansas citizens. exceptions providing “10. The Commission finds that the specific provide special involving of this was to cases extraordinary circumstances, exceptions not to of substantial allow mass portions pools of or entire from the rule.” Thereafter denied corporation commission an. amended appli- cation for filed Hartman rehearing then by applicant. petitioned district court of Finney for review of the order. That court county s of fact and conclu- corporation findings adopted reason further by sions of withheld of two issues judgment law but raised in that court: that the parties Applicant’s contention commission exceeded its statutory power promulgation rule in question and commission’s contention applicant could not attack rule in collaterally his petition judicial review. receiving After additional briefs on two these issues the relief, trial court denied holding that the commission’s order of denial was not arbitrary, unlawful; capricious it further held the rule in question was subject to attack by applicant his petition for judicial review but that corporation commission did not ex- ceed its statutory authority promulgating the rule. The court noted the legislature had empowered commission to promulgate rules for the exploration, drilling, and conservation of oil and natural gas and that K. A.S. Chapter 55 sets out guidefines for such rules in the protection public interest, including the following: economic, underground Prevention of waste; protection surface of corre- disposal rights; water; issuing lative salt permits; re-pressuring— air, injection gas, fluids; water and other plugging wells; pro- tection of fresh water. now Hartman

Applicant appeals. renewed commission’s We should first consider attack collaterally not assertion that Hartman now appellant the fact premised upon of the rule. This contention is validity held appellant present hearing and participated be adopted, commission to the rule should determine whether its 'did from the objected adoption but appellant appeal order of A number of oil promulgation. appeared op- producers position at but none district court hearing apparently sought review of the order. is that Appellee’s argument appellant may now challenge judi- rule’s that matter has become res validity, cata, and inoludes for appellee good measure appellant now laches estopped doctrine of election of remedies to assert his position. In present these latter two contentions appellee seeks refuge broad statements *7 general law here applicable and which need not be further discussed. Essentially appellee says appellant should not have a second to contest opportunity the rule. The proceeding was not an one in adversary judicial sense and the doctrine of res judicata, any of its does aspects, not bar appellant. Davis,

2In 18.08, Administrative Law it is stated: § judicata’ “In thing name tradition ‘res adjudicated. Only means what adjudicated judicata. is can be res adjudica- Administrative action than other judicata. tion cannot be res if powers Even an rule-making exercise depends finding facts, on a neither finding regarded rule nor the as judicata.” (p.597.) res We have held the doctrine of res judicata does not ordinarily apply to the decisions of administrative tribunals v. (Warburton Warkentin, 468, 185 Kan. 345 P. 2d and in 992) Aylward Production Commission, v. Corp. Corporation 428, 162 Kan. 861, 176 P. 2d a a proceeding target which commission order establishing minimum allowable oil for wells in prorated pools, this court said: given argument by “Force is this the fact regulations that rules and judicata. res consequences the commission are never Should bad follow from being might change

such an order made it to meet conditions (p. 440.) they exist.” rule appears clearly to be that regulations made an ad- agency ministrative are not res judicata.

Appellant contends the appellee commission had no statutory authority promulgate 82-2-125 and its act in so doing was an regula- argues He of power. exercise capricious arbitrary asserts, and cor- He statutory carry out any objective. tion does within must be valid, regulations so, administrative that to be rectly regula- that administrative conferred, further authority authorization legislative conflicts with or beyond tion which goes Taxation, Arnold, Director void, v.Co. Amoco Production citing statutes give appellee our argues 2d 453. He 213 Kan. 518 P. production of oil in the current authority prevent waste only reasonable relation to that has no rule in question and the and gas helpful to secure try only end—its points oil and wells. He gas explore where knowing future oil states have ex- many producing legislatures in out that authority to regulatory agencies require their upon conferred pressly here encompassed of the material by drillers the furnishing tends to show that without specific this argues rule in question only a commission “waste” authority empowered enabling future discovery by requiring speculate is not authorized to filing logs. of electric Gas, 82, Summers, it is stated: Oil § variance the extent of the control “There a considerable location, gas producing drilling, equip- states exercise different over

ping operating prevention oí waste and the of oil wells for [pp. rights. . . 269-270] correlative . commonly require operator keep “Statutes or at each well, drilling, log, showing while an accurate record all formations through, casing, drilled method and other detailed information that completion well, require required, copies or abandonment of the agency county with the conservation be filed or other of such record *8 (pp. 274-275.) officer.” Let us examine our own statutes to pertaining the corporation duties. S. K. A. commissions 55-128 powers Supp. pro- seismic, responsible anyone vides that drilling core or explora- for the of exploration, holes tory purpose discovery or production shall first give prior oil and notice to the gas of state corporation drill, to of intent such notice commission to include certain informa- pertaining proposed tion drilling; further that: corporation commission pipe shall necessary “The determine the amount of water, protect notify person, all usable and shall so firm, to the association or corporation submitting the notice of intent to drill drilling before said is com- menced. firm, association, corporation person, or pipe “No shall any seismic, set at except exploratory approval with the or hole corporation of core the state com- corporation regulations of the rules and mission and in conformance with corpo- requirements beyond commission, except pipe of that additional any may such hole aban- Before ration commission be set the driller. drilling doned, duty party responsible such hole to it be shall water-bearing plug properly protect in all forma- same such manner as corpo- regulations adopted by tions and rules conformance commission; ration duty operator any “It now shall of well which is the owner or of purpose discovery may or drilled or that of hereafter be drilled for the gas, abandoning same, of oil and before off all water from to shut and exclude entering oil-bearing sand, gas-bearing or or formation strata encountered every any well and to protect use effort usable under- and endeavor ground any or surface water infiltration or detrimental sub- addition stances, methods, regulations corpo- accordance with state rules and any ration commission and under its direction. work is Before commenced any well, operator to abandon give the owner or shall written thereof notice corporation agent commission or the state of the commission as here- designated, well; inafter of his intention to abandon such the date begin, plug which the work abandonment shall and that he will the well regulations prescribed in accordance with the rules and as the commis- sion. . . . operations ninety (90) shall days any “Whenever cease drilled, being may well which is now drilled or hereafter be drilled in the exploration, discovery production future for the oil, gas or or minerals, operator give or owner of such well shall notice thereof and, to the commission if the commission shall deem it pollution any supply, fresh water strata or shall cause such well to be temporarily plugged in regulations accordance with the rules and of the com- mission and under its direction. . . . hereby “The state commission is authorized and directed to adopt regulations necessary carry rules out the of this section. adopting any Prior to regulations, such rules and the commission shall taire into consideration recommendations health, state board of geological survey and state water respect resources board with thereto. . . .” S. A. K. 55-130 directs the commission to adopt reasonable rules as necessary to provide methods by which oil and wells or holes may be plugged or abandoned. K. S. A. 55-601 and declares prohibits production unlawful of crude oil or petro- leum in such manner and -under such conditions as to constitute A. provides: waste. K. S. 55-602 herein, “That term ‘waste’ used ordinary addition to its meaning, waste, underground waste, shall include economic waste, surface waste reser- energy, petroleum voir crude in excess of trans- portation marketing facilities or reasonable market demands. The state cor- poration authority shall have make rules and

prevention of such waste and for the of all strata, fresh-water *9 for, produc- any well drilled gas-bearing strata encountered oil- and ing, . . .” oil. K. S. A. 1973 55-604 Supp. provides: given jurisdiction hereby and au- “(A) shall and is The commission have involving thority act enforcement all matters over authority oil, etc.], petroleum production and shall have regulating [act prevention regulations rules, orders for the waste make and enforce to enforcing pro- carrying all out and and for each as herein defined .” of this act. . visions . 55-704, and conservation A. relating K. S. gas, natural states: may promulgate as such rules commission shall “The act, prevention

necessary this of waste defined gas-bearing water, in such oil strata encountered in well drilled all supply as the commission find source of ... common spirit carry and the of this act. . . .” proper out the to authority broad and direction to statutes foregoing provide waste, including to economic prevent the corporation conserve these waste, gas, of oil and to natural in the production it may usable be affected to water as protect resources drilling, with duties respect It gas. specific for oil of wells. To and plugging and abandonment of pipe placement must effectively legislature all these discharge responsibilities need certain information aware the commission would been have Rule-making given was the com- power tire holes drilled. as to functions. asserts rule 82-2-125 out its carrying Appellee mission of this state’s recovery loss ultimate adopted help Historically, granted regulatory powers reserves. liberally have been construed under conservation statutes bodies Production com- Aylward Corp. the courts. In rule-making power a restricted view of its own with mission took broadening fixing minimum allowables. the com- respect looking narrow this court conceded interpretation mission’s one statute the commission’s construction at the provisions only then observed: proper, provisions pur- must be construed connection with the whole “But these pose commis- the broad with reference of the act (p. 441.) power, been heretofore set out.” all have sion’s Co. Com- Corporation Natural Gas v. State In Kansas-Nebraska 704, mission, 222 P. 2d the court was concerned with 169 Kan. fix a minimum wellhead authority commission’s the corporation natural These observations were made: gas. price *10 purpose prohibit “The dominant of is to of [55-704] this statute waste gas Kansas, only natural in the and under the conditions of its manner production, purposes but for such as would constitute waste. order that narrowly the term clear waste’ should not be construed the statute makes it economic, waste, underground that it is to include and surface and the term necessary, purpose, ‘economicwaste’ is if defined. These were expanding meaning purpose of term and not for the ‘waste’ limiting meaning. rights such The statute also deals with the of owners of property supply gas. is a under which there common source of of natural enough We think the statute is broad to authorize the commission to make prohibit gas, upon proper application rule or order to of natural waste specifically to it. . . . It made is true statute did not authorize the price paid gas to produced. commission fix a wellhead minimum It did not forbid the commission to do so if and when the evidence disclosed fixing price prevent inequitable of such would tend to and waste taking gas supply. Hence, legal question unfair from a common source of presented by appellants, that the statute did not authorize the commission complained of, (p. 732.) to make the order interim is not well taken.” The court further held: production “In this gas state the light, distribution of natural fuel power public nature, ais business of a belongs the control of which

the state. pertaining “The dominant of our statutes to the [55-701, gas seq.J prohibit natural conservation of et gas waste of natural Kansas, only in the manner and under production, the conditions of its purposes (Syl. 3.) but such as would constitute waste.” 2 &f f also contends the Appellant information required by the regu- lation bears no reasonable relation to the prevention of waste. We are aware of no case in any jurisdiction having either rule or statute similar to 82-2-125 where such a challenge has been made. The evidence here on this is somewhat point vague due fact raised the appellant point before collaterally the district court hearing of its petition review. The hearing before the was to determine whether should appellant granted to the regulation. However, the record before us reveals that when regulation was adopted com- mission made the following findings: presented supporting adoption “3. The evidence proposed (4) including consisted of four witnesses Geological members of the Kansas Survey, past the President and Geological President of Society, the Kansas Geologists gas industry. active in the oil and The substance of their testimony presented present voluntary evidence system, voluntary samples logs

which relies on contributions survey, longer adequate no evidenced receipt marked decline their years. testimony such data in recent Additional indicated that much informa- exploration irretrievably tion vital to future for oil and in Kansas had been lost. 5, period July 1970, “4. Additional evidence indicated that for the 1970, samples December were received from 44% the wells drilled receipt samples and that from wildcat wells also showed a sub- samples stantial decline. The indicated that the conservation of evidence well log information and the continued loss could result in physical (Our emphasis.) economic and waste.” Appellee asserts that without reliable geological data such as that revealed by electric its conservation division cannot de- logs velop use expertise require energy of reservoir proper reserves; achieve recovery maximum further that availability oan unnecessary drilling. Upon hearing apel- *11 lant’s for can there was evidence blowouts exception water, affect fresh that electric information relative to logs provide blowouts and that the information called for is also for the design of in interest of health appropriate practices public and safety.

We need not the matter. The has authorized legislature labor the commission to of waste and adopt regulations prevention of all fresh water strata protection gas-bearing strata encountered in well drilled for oil. We think power in within those question necessarily implied to enact rule the rule broad and the information grants required reasonably in prevention related to the of waste of oil and gas it may and to the usable water as be affected production. further contends his

Appellant application for an exception to with 82-2-125 was improperly denied compliance because the find- denial which the order was based are upon unreasonable, ings and not arbitrary, capricious supported by substantial evidence. should have had an says exception He he under subsection 1 of hardship) (insufficient period the rule (economic of confiden- because he custody) produced tial evidence of past sales of the required now furnished rule and also his year believed the two expert confidentiality was insuffi- unique 'due to appellant’s position cient Damme field by number of wells he large had already reason with his mass them, on his plus of information undeveloped acreage. appellant should be noted was not seeking It exception one nor one limited well area—rather he particular sought exemption his acreage pool for all Damme the Damme pool and/or did hardship evidence eoonomic generally. Appellant’s respecting contributions show that when the was new had received field he dry under hole and that he had valuable mass agreements wells in fifty information accumulated from his pool, which he But says he would have to without disgorge recompense. this all rule. Section (E) occurred prior adoption the rule wells completed states that or sample surveys prior survey effective date the rule be submitted to wholly confidential but is required Such submission is not custody. voluntary. appellant largely Thus the material bases his contention be filed. required is not hardship economic

The within the exceptions burden of himself proof bringing was, course, provided on appellant.

specifically found that basis of evidence presented of an grant not justified. was no Appellant presented evidence with respect problems encountered likely to occur in any specific well or era. The request was simply blanket exemption entire appellant’s holdings the entire field. and/or There was no testimony concerning conditions positions of wells two after the completed of the rule adoption with relation to acreage owned others or of the three contemplated locations or how as to affected they the rule. There was no indica- dry tion hole support money sought was unavailable. was no There the rule would fact deter testimony future con- Other tributions. than the bare opinion by assertion of his expert, no appellant showing made year period one of confiden- *12 or the tiality two year period (actually years plus two ninety days) not be sufficient “to would the of satisfy needs the developing In the operator”. denying application the commission was aware then the field was entering twenty-second Damme its year of development. the size of his Except holdings number of shown to appellant wells was not be in any position different from in the field. evidence was others No offered respecting any “step- out” or other location proposed exemption what would happen the rule. All the appellant under offered must be regarded as conjecture. Conceivably he merely might make a factual case justi- from the rule but did he do fying exemption not so. The commis- that had finding geological survey adopted sion’s reasonable safeguard to information filed with it procedures is amply In arguing the evidence. by insufficiency supported of evidence that offered largely ignores commission appellant indi- As cates a need the rule. was said required by for the information Co., & 193 S. W. 2d Refining in Railroad v. Humble Oil Commission 824, (Tex. Civ. App.): responsibility proper conservation “The administration laws considered, primarily shall be factors rests Commission. What exclusively proper within the Commission’s dis- their matters evaluation are long review, they judicial bear a reasonable subject so not to cretion and 833.) subject (p.

relation matter of the order.” to sub- denial was supported In sum the commission’s order unreasonable. arbitrary was not tantial evidence of denial en- and the order 82-2-125 contends Finally, appellant due without taking property tered it amount a pursuant to the fourteenth amendment of the process law violation the state inmay, acknowledges Appellant constitution. federal waste or legislate power, its police the exercise hand, asserts, the other he resources. On natural exploitation unreasonable, not ends must be the legislative to secure used means a real and and must have substantial relation or capricious, arbitrary attained. We treat first with the denial to be sought to the objective takes his use private property public it Appellant says order. This contention is on the postulated just compensation. without burden which we have considered already of economic same claim evidence offered. supported Appellant and held be not He not his hearing. position a fair has shown different any had rule. He others affected demonstrated he loss nor has he shown how would be adversely financial affected denial of his future exemption. substantial cost incident asserts acquisition Appellant regulation being warrants declared information unconsti- of the property just without taking compensation. as a His tutional cost of average obtaining portion was that testimony $3,400 about currently per However, well. information this it appears because misleading information is figure of a during well as obtained a matter routinely The costs procedure. operating filing standard nominal. The only shown pecuniary injury were filing declaring regulation alone warrant unconstitutional 2d, Law, Constitutional 16 Am. 294). (see § Jur. 2d, Law, Constitutional 16 Am. it stated: § Jur. constitutionally protected right *13 property of “The is not an right. absolute right subject to such reasonable restraints by established by controlling power legislature, governing in it vested law as the under subject constitution, expedient. Thus, may it is think police legitimate the state’s limitation exercises of reason and means of power.” (pp. 691-692.) his proposition cites eases Appellant support eminent domain of between of the The distinction regulation. unconstitutionally exercise of of and the right police power eminent domain Domain, 6, been S., articulated in 29A C. Eminent thus: § J. public, property “Eminent domain useful while takes because it is police power regulates in, of, impairs rights property to the use or public interest; private property detriment to in the exercise of eminent domain public police power taken for compensated, use and the owner is while regulates it, by deprives enjoyment property, owner’s use and him destruction, public welfare, compensation for the than the shar- other without ing resulting general of the (p. 178.) benefits.” In Smith v. Commission, State 346 P. 2d Highway 185 Kan. 259, this court stated: police power “The power government is the to act in furtherance public good, through legislation legiti either the exercise of means, mate promotion general public health, safety, morals and welfare, incurring liability without resulting injury private individ uals. domain, hand, power [Citations.] Eminent on the other is1 sovereign damage private payment public purpose take or property for a just compensation. . . . “. . . compensable damages Determination emi- under whether are nent noncompensable domain or power depends police rel- under the on the importance ative weigh of the interests affected. The court must the relative public interests individual, just and that of at a bal- so as to arrive ance in government unduly proper order that will not be restricted public giving exercise of good, its functions for the while at the same time due policy insuring effect to the in the eminent domain clause of the individual against an governmental unreasonable loss occasioned the exercise of

power.” (pp. 453-454.) Much of that which has been said is here. already applicable The regulation is designed to prevent waste oil and gas and to protect usable as it water be affected production. Assuming filing information could impair it, filer’s use of a period of two years confidentiality allowed for such use and proper showing of economic or that hardship short, confidentiality too under the regulation no filing need be made at all. are These adequate safe- guards for the protection of private rights as against those of the *14 the due violates the denial order 82-2-125 nor

public. Neither process olause the federal constitution. is 'affirmed.

The judgment

approved the court. that part dissent from I respectfully C. J., dissenting: Fatzer, 4,No. Paragraph in Syllabus the court contained holding Cor- the State that opinion and the corresponding portions the rule to adopt has statutory authority Commission poration to the prevention rule is related question; reasonably and to the gas, waste in of oil and that the production; affected as it usable water exemption; to sustain his burden in proving failed applicant Commissions supported order of denial was Corporation State unreasonable, and that and not arbitrary substantial evidence the due order did violate and denial Commissions process clause the federal Constitution. powers

The State Commission no Corporation possesses Commission, it statute. v. granted (Bennett Corporation 589, 596, Kan. 142 P. 2d under the 810.) Allegedly, authority ,S. 55-604, 55-704, granted K. A. 1973 and K. A. S. Supp. Commission R. promulgated K. A. 82-2-125. Rules and are void bear no reasonable agency they an administrative when they for which are authorized to be made. relation I s A. R. fail to see the Commission rule K. 82-2-125 accom- how set in the plishes the forth relevant statutes. purposes Schroeder, J., joins foregoing dissenting opinion.