As expected, there still is nearly complete disagreement amongOklahoma gatherers and producers over the fairness of current ratesand service treatment. Responses to a recent Oklahoma CorporationCommission (OCC) questionnaire reveal that nearly half of producerrespondents felt similarly situated producers on the same gatheringsystem received higher or lower prices than they received. Also,79% said this was unduly discriminatory.

“A large number of producers reported perceived unfair orunethical treatment by gas gatherers. Seventy-two percent ofrespondents reported this problem,” according to a report tocommissioners on questionnaire responses. “It should be noted thatin each category, such as threats of increased gathering rates inorder to purchase gas, high rate and low price in non-competitivesituations, inducing long-term commitments by threats ofcurtailment, etc. that the respondents reporting no problems inthat area approximately equaled those reporting unfair treatment.”

Gatherers who responded to the commission questionnaire declinedto disclose whether similarly situated producers received higher orlower prices for gas/rates for gathering. However, gatherers”universally felt such practices were not unduly discriminatory.”Gatherers also were in near complete agreement opposing publicdisclosure of rates, terms and conditions. “The gatherers citedcompetitive reasons as the rationale for their position. Abouttwo-thirds of the gatherers offer the same terms to all parties atthe wellhead. One-third do not.”

The OCC is in the midst of considering whether to begin arulemaking on gathering regulation and an informal gatheringcomplaint mediation procedure that does not require parties to hirelegal representation. Here, according to questionnaire responses,gatherers and producers seem to be united in their distaste forhiring lawyers. Combined, 140 respondents favor an informalmediation procedure, and only 14 oppose such a measure.

Following a veto of gathering legislation in the last session ofthe Oklahoma legislature, the governor issued an executive order tothe OCC to review gathering rules and regulations to determinewhether revision or update was necessary. The OCC held its firsthearing session Oct. 19 in a notice of inquiry for a possiblerulemaking on gathering. That hearing is to resume Wednesday.Previously, technical conferences were held at the OCC Aug. 14 andSept. 14. A decision on whether the commission will proceed with arulemaking should come shortly after this week’s resumption of thehearing, according to Larry Lago, an aide to OCC Commissioner BobAnthony.

Joe Fisher, Houston

©Copyright 1998 Intelligence Press, Inc. All rightsreserved. The preceding news report may not be republished orredistributed in whole or in part without prior written consent ofIntelligence Press, Inc.