Compulsory Pooling & Unitization: Saltwater Disposal Fees Compulsory Pooling & Unitization: Operator Powers and Duties Administrative Law: Scope of Judicial Review

摘要

Mason seeks review of a compulsory pooling order of the Oklahoma Corporation Commission (Commission) to the extent it allows New Dominion, L.L.C. (New Dominion), as the designated operator of a force-pooled unit, to charge Mason, a participating working interest owner, a fee in excess of the actual expenses for saltwater disposal. Held: affirmed in part, reversed in part, and remanded. New Dominion files a force-pooling application for a unit and seeks to be designated as the operator. Mason protests the application and the matter is set for hearing. At the hearing, New Dominion's landman testifies that New Dominion owns no actual interest in the Unit, but has a contract with 87.5% of the working interest to operate the Unit. Mason owns the remaining 12.5% interest. New Dominion's engineer testifies that it charges a saltwater disposal fee of $0.50 per barrel and that this is "a fair and reasonable cost" that was "established in pooling orders." The engineer concedes that she did not arrive at that figure by calculating actual disposal costs. The Commission enters its order granting New Dominion's pooling application and appointing New Dominion as operator. It reasons that, since New Dominion does not have an ownership in the Unit, it provides saltwater disposal services as a third party. It further concludes the Commission has no control over the price charged by New Dominion for its services and could only determine whether the charge is reasonable.