Bastrop Advertiser (Bastrop, Tex.), Vol. 98, No. 5, Ed. 1 Thursday, March 30, 1950 Page: 4 of 8
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BASTROP ADVERTISER MARCH 30. 1950
FACTS RELATING TO THE TAXATION OF
NATURAL GAS BEING EXPORTED FROM
TEXAS TO THE NORTHERN MARKETS
L
The proper development of the
new market for natural gas has,
up to this time, been of some as-
sistance to local companies and
to the State in two ways. It has
eliminated the (a) blowing of gas
to the air, and (b) has helped in
the development of new fields
for local use and sale, although
it has created a highly competi-
tive situation in the purchase price
of gas at the well which has
caused a material increase in
price which is beneficial to royalty
owners and producers in this
State. Texas gas companies are
opposed to the excessive exporta-
tion of gas, and probably have a
greater interest in preventing the
depletion of the gas reserves of
the State more than any other
group. This reason is obvious.
Without ample gas, the millions
invested in Texas natural gas
facilities by the companies as well
as- the consumers will be lost.
II.
The history of the natural gas
business in Texas sheds consider-
able light on the current problem.
It will be remembered that Lone
Star Gas Company was a pioneer
in the field of long line trans-
mission of natural gas. In 1909
the first long distance line in
Texas was built from the Petrolia
Field in Clay County to Fort Worth
and Dallas, a distance of 135 miles.
In February and April 1910 this
gas was furnished to Fort Worth
and Dallas to approximately 15,-
000 customers. Soon the Petrolia
field began to play out, and the
period from 1915 to 1924 fre-
quently found the company with-
out sufficient gas to meet the
needs of its customers. On three
separate occasions during that per-
iod the company was faced with
receivership proceedings. In 1919
an 18-inch line one hundred miles
long was laid to West Texas, but
before it could be completed it
was found the gas had been de-
pleted. New supplies were obtain-
ed in southern Oklahoma, and Lone
Star Gas Company customers to-
day are still using large quanti-
ties of natural gas produced and
imported from Oklahoma. Later,
the company engineers in 1924
succeeded in perfecting a method
of utilizing casinghead gas which
was being blown in to the air
from gasoline absorption plants
in central West Texas. From that
date the company has been able
to furnish adequate gws service.
The history of Lone Star is
typical of other Texas companies,
and is given to show that a few
short years ago there was no
large scale exploration for gas
and no large volume markets to
encourage development. This fact
of the absence of markets was
painfully realized when the Sham-
rock Field was discovered in
Wheeler County in 1921. Until
markets were found for this gas
more of it was blown to the air
and waited than Lone Star Gas
Company has sold in its 40 years
of existence. A lot of this gas was
sold, when a market could he
found, on contract prices as low
as three-tenths of a cent per 1,000
cubic feet.
During all this time, the gas perty?
that was not wasted had remained
underground on the private pro- i an indication of the fact that
perty of the ranchers and farm- Texas natural gas industry is
ers of Texas who owned the land, already carrying a heavy load for
It was being saved for posterity, the taxing powers of the State,
It was being conserved. There was 1939 revenue from the production
no market. It produced no busi- tax was $726,323 against $8,8C2,-
ness and many of the farmers 970 for 1949. This is an 1100 per
who wanted to send their child- cent increase and as withdrawals
ren to college were denied the increase in the future the tax
income that a market for the gas wjjj increase proportionately. In
would have produced. 1 addition, natural gas companies
| operating in Texas paid to the
Large volumes of natural gas j state, counties and cities many
were discovered in such states as millions of dollars in ad valorem,
Pennsylvania, West Virginia and; franchise, street and gross re-
Obio from 1890 to 1920, and nat- j ceipts taxes. Natural gas produc-
ural gas was used generally by tion is currently being taxed by
all urban people in those and this State at 5.72 per cent of
other states. However, their sup- value while oil is being taxed
to the best records obtainable of
gas produced in Texas for utili-
zation, approximately 7$ per cent
is used in Texas and the remain-
ing 30 per cent is being exported
to other states.
VI-
Suppose a heavier and more bur-
densome tax is levied on all gas
produced in Texas in order to
further tax the exported gas?
This might mean that Texans only
will pay such a tax. Competent
attorneys have rendered opinions
based on United States Supreme
Court holdings to the effect that
a tax on the gathering of gas
which is exported would be a
burden on interstate commerce and
invalid because it conflicts with
th-? Commerce Clause.
If a production tax .s levied
at the mouth of the well then
our Texas producers and royalty
owners, when current and long
term contracts exist, would have
the entire amount to pay.
VII.
Suppose the tax is levied only
on Texas companies? Texas home
owners and Texas industry will
be required to pay the bill. Fur-
thermore, the incentive for the
establishmet of new businesses in
Texas, which will result and is
resulting in new state, county and
city ad valorem taxes, will be
curtailed. One of the major in-
centives offered to lure industry
from other states to Texas is
cheap industrial fuel. It is wise
to burden present Texas indus-
tries with high-priced fuel and
make it less attractive for those
not now here to come to Texas?
VIII.
The economy of the State Jias
been greatly improved by the gas
industry. Now, in the Shamrock
Field, against the three-tenths of
a cent per 1,000 cubic feet origin-
ally paid for gas, contracts are
being signed for as high as 10 cents
per 1,000 cubic feet. Texas pro-
ducers and royalty owners bene-
fited by this increase in price
and the wastage of gas has been
practically eliminated.
IX.
Probably most intra-state na-
tural gas companies in Texas
might even welcome measures
which may legally be taken to
conserve the local supply for local
companies in the future. It does
urge caution in the means used
to accomplish these legitimate and
desirable purposes to the end that
discrimination against and stag-
nation of the industry will not
result. Even if it were wise to
do so, thus far no legal method
of stopping the exportation of
gas, oil, sulphur, gypsum, gravel,
timber, or anything else produced
in Texas and sold in other states
has been found. And after all,
should Texas people desire to re-
strict commerce between the
States? We do live in a nation,
not just in one State. Natural gas
is just as much privately owned
as are our houses and real estate.
It is not any more government
property than they are. Then how
can we say to the owners of gas
that they shall not export it and
at the same time not say the same
thing to owners of other pro-
Samples Of Banners
On Display At C of C
The Chamber of Commerce has
a list of Store Front Banners that
may be purchased for Homecom-
ing that will be held June 1, 2, 8,
ai.d 4. The price on these banners
are cheaper than those rented
last year. These banners consist
of five (5) pieces and are made
of fast color Indian Head material,
which can be dry cleaned and
should last for many years.
The price on these Store Front
sets are $9.95 and those interested
in purchasing banners and all
other merchants who own theirs,
are requested to give an addition-
al $2.00 towards the purchase of
street streamers that sell for
$8.45. The Chamber of Commerce,
as a sponsoring organization re-
ceives a 10 per cent discount,
which inturn, will be applied to-
wards the purchase of street
streamers. Many of the merchants
have committed themselves to pur-
chase these banners, and any other
merchant that is interested con-
tact the Chamber of Commerce
and they will order for you.
Samples will be on display at
the Chamber of Commerce this
week.
conducted its operations in such
manner as not only to conserve
gas but to make available to the
producers of gas within reason-
able radius of its system a pipe
line market. Lone Star for many-
years has purchased the larger
portion of the gas which it trans-
ports and distributes.
TO HAVE RARE
CENTRAL TEXANS
OPPORTUNITY
Central Texans will have a rare
opportunity April 1 to visit with
their favorite Texas authors in-
formally. The occasion is the se-
cond annual Autograph Hound
Party of Theta Sigma Phi at 8
o'clock Saturday night in the ball-
room of the new Commodore Perry
Hotel in Austin.
Sponsored annually by the na-
tional honorary fraternity for wo-
men in journalism, the party
brings authors, their readers, and
would-be authors together for an
informal evening. Guests may ask
any questions they wish on how
to get a book published, or how
to start writing one.
Others will include Robert Lee
Brothers, rancher poet; Senator
Curios Ashley, athlete and lawyer,
and author of "That Spotted
Sow," and other Texas Ballads;
Mary Goldman, Kegina Shepperd,
and Mr. and Mrs. Arthur I,. Cole-
man. culinary experts; Virginia
May Moffitt, Esther Huffier, and
Esse Forrester O'Brien, authors of
children's books.
Also DeWitt C. Reddick, fea-
ture writing expert and author of
a text on that subject; Winnie
Mims Dean, columnist and novel-
ist; Homer Ulrich, author of books
on music; Rector Vern Swarts-
fager, author of "The Bell Ring-
ers"; and Carl Coke Rlster, au-
thor of the best-seller, "Oil! T'tan
of the Southwest."
is
I. S. MILTON
REAL ESTATE — RENTALS
Office Phone 200
Residence Phone 255W
FOR THAT OUTING
ICE
GOLD
BEER TO GO
All TEXAS DEEDS
CASE OF 12. 91.M
CASE OF 24 $3.75
CANS
ALL OUT-OF-STATE
CASE OF 12 12.25
CASE OF 24- $4.00
We are still Nerving the Choicest Cuts of Steaks
Mexican Foods — Short Orders
FOR THE FINEST IN FOODS, COME TO
TONY'S CAFE
X
Regular
Statements
ply has been depleting for many
yearB and many Middle West and
Eastern cities were forced to re-
turn to manufactured gas. They
have built pipelines to Texas, Ok-
lahoma, New Mexico and Kansas
and Louisiana to augment their
supplies of manufactured and na-
tural gas, and have thus stimu-
lated 'the exploration for gas in
Texas to supply the markets
which they created. This has in
turn helped Texas to grow to the
point that new markets have been
created in Texas. These new mar-
kets have resulted in the estab-
lishment of new plants by North-
ern and Eastern concerns, and
(iur growth and development has
been phenomenal.
IV.
Many Texans, in watching this
development, and many members
of the Legislature, have attempted
to create an atmosphere favorable
to business in older to encourage
th« orderly development of the
State. Oklahoma, Louisiana and
Arkansas have passed anti-busi-
ness and tax legislation hurriedly
to the advantage of Texas and
to the disadvantage of the people
in their own states.
V.
In spite of widely publicized
figures to the contrary, according
4.54 per cent of value. Therefore,
any argument to the effect that
gas is not paying its fair share
of taxes is, of course, erroneous.
XI.
It seems clear that this is a
subject which requires special
study and careful consideration of
all legal and economic elements
before one takes a positive posi-
tion with respect to it. Saving a
natural resource, and the final
decision should be based on wis-
dom, facts, law, and business judg-
ment exercised for the benefit of
all of the people of Texas.
Only a very small percentage
of the gas handled by Lone Star
Gas Company is transported out
of Texas and this is used to sup-
ply a few small towns in South-
ern Oklahoma. Ivone Star is not
affiliated either directly or indir-
ectly with any other cor.cern which
is engaged in the natural gas pipe
line busine k. Lone Star is a Tex
as corporation engaged in the nat-
ural gas and petroleum business
almost wholly in Texas,
Lone Star has always been vit-
ally interested in the conservation
of natural ga:-. It took a leading
part in the movement to stop the
enormous wante of natural j'a* in
the Panhandle, and ha- always
(yoi,
JUr f O fi
(a<act si}a;
siiown)
500 For $3.75 Ask For Pi ices on Larger Quantities
Bastrop Advertiser
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Standifer, Amy S. Bastrop Advertiser (Bastrop, Tex.), Vol. 98, No. 5, Ed. 1 Thursday, March 30, 1950, newspaper, March 30, 1950; Bastrop, Texas. (https://texashistory.unt.edu/ark:/67531/metapth237264/m1/4/: accessed July 18, 2024), University of North Texas Libraries, The Portal to Texas History, https://texashistory.unt.edu.; crediting Bastrop Public Library.