1. (a) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise.

   1. (1) Scrubber oil--Liquid hydrocarbons which are accumulated prior to compression of the gas in lines gathering casinghead gas to a gas processing plant.
   2. (2) Skim hydrocarbons--Oil and condensate accumulations that result from salt water disposal skimming operations.
   3. (3) Allocation--Charging scrubber oil/skim hydrocarbons recovered by the plant/salt water disposal system operator back to the producing properties connected to the plant/salt water disposal system.
   4. (4) Tolerance--The amount of scrubber oil/skim hydrocarbons that may be recovered before the plant/salt water disposal system operator must allocate to the producing property.
   5. (5) Identifiable slug of liquid hydrocarbons--Volume of liquid hydrocarbons that is received at the disposal facility where the origin of such liquid hydrocarbons can be clearly identified.
   6. (6) Producing property--A producing unit assigned an identifying number by the commission and which is used in reporting production.

2. (b) Disposition of scrubber oil, skim hydrocarbons, and identifiable liquid hydrocarbon slugs.

   1. (1) Scrubber oil.

      1. (A) The tolerance amount of accumulated scrubber oil shall not exceed one barrel of scrubber oil per well per month. Any scrubber oil accumulated in excess of this tolerance shall be allocated to each oil producing property connected to the plant in the proportion that the volume of casinghead gas received from such producing property bears to the total volume of casinghead gas received by the plant during the reporting period. The plant operator shall have the duty to notify the operators of the allocation. The plant operator shall attach a tabulation to his plant report identifying each property and shall furnish a copy of such tabulation to the operator of each producing property to which scrubber oil is allocated.
      2. (B) The operator of each producing property shall report such excess scrubber oil as production from the producing property and shall identify the disposition of such production as scrubber oil on the appropriate production report form for the reporting period following the reporting period covered by the plant report.

   2. (2) Skim hydrocarbons.

      1. (A) Single operator salt water disposal system.

         1. (i) All liquid hydrocarbons recovered by a salt water disposal system receiving water from one operator shall be skimmed each reporting period and reported on the appropriate form for that reporting period. Such liquid hydrocarbons shall be allocated to each producing property in the proportion that the volume of water received from the producing property bears to the total volume of water received by the system during a reporting period. The liquid hydrocarbons recovered may be disposed of at the point of accumulation, but in such event, the operator of a salt water disposal system shall file with the commission a report for each reporting period of his operations for each separate system on the appropriate report form in accordance with the instructions on such form, and such report shall be the authority for the movement of the hydrocarbons to beneficial disposition, provided that the disposal system has been operated within the limits of applicable regulation.
         2. (ii) Skim or slug liquid hydrocarbons recovered from single operator systems must be reported on the skim oil/condensate report as production from the property to which it is allocated. The amount allocated shall be the total volume skimmed and shall not be subject to any tolerance provisions. The operator of the producing properties shall report the volume skimmed as production from the producing property and shall identify the disposition of such production as skim oil or skim condensate, as applicable, on the appropriate production report form.

      2. (B) Multiple operator salt water disposal system.

         1. (i) Liquid hydrocarbons recovered by a salt water disposal system receiving salt water from more than one operator, where the origin of the liquid hydrocarbons cannot be determined and allocated to the allowable of an individual producing property, and which are in excess of a ratio of more than one barrel of liquid hydrocarbons for each 2,000 barrels of water received into the system shall be allocated to each producing property in the proportion that the volume of water received from the producing property bears to the total volume received by the system during a reporting period.
         2. (ii) Any liquid hydrocarbons recovered at a salt water disposal system taking salt water from more than one operator in excess of one barrel of liquid hydrocarbons for each 2,000 barrels of water received into the system may be disposed of by the disposal system operator, but that volume of excess liquid hydrocarbons shall be allocated to each producing property served by the system in the proportion that the volume of water received from the producing property bears to the total volume received by the system during a reporting period. The salt water disposal system operator has the duty to notify the operator of each producing property of any allocation by furnishing a copy of the allocations as shown on the report form. The operator of each producing property shall report the total production on the appropriate report form as the sum of the volume allocated and the volume actually produced. The disposition of the allocated volume charged back shall be shown as skim oil or as skim condensate, as applicable, on the appropriate form.
         3. (iii) The operator of a salt water disposal system serving multiple operators' properties shall file with the commission a report for each reporting period of his operations for each separate system on the appropriate report form in accordance with the instructions on such form, and such report shall be the authority for the movement of skim hydrocarbons to beneficial disposition, provided that the disposal system has been operated within the limits of applicable regulation.

   3. (3) Identifiable liquid hydrocarbon slugs.

      1. (A) An identifiable slug of liquid hydrocarbons may be accounted for by the plant/salt water disposal system operator. If the plant/salt water disposal system operator accounts for the slug, such slug may be disposed of by the plant/salt water disposal system operator. The total volume of the slug shall be allocated to the producing property and shall be reported on the appropriate production report form as production from such producing property. The disposition of such production shall be shown as either skim oil, skim condensate, or scrubber oil, depending upon which production report form is used.
      2. (B) If the plant/salt water disposal system operator does not account for an identifiable slug of liquid hydrocarbons, such slug must be returned to the producing property within the reporting period in which the slug is received at the disposal facility. The appropriate commission district office must be notified by the plant/salt water disposal system operator prior to the return of such slug. The plant/salt water disposal system operator shall not be required to report the slug volume; such volume shall be reported by the operator as production from the producing property.

Source Note:The provisions of this §3.56 adopted to be effective November 20, 1985, 10 TexReg 4281.