DEPARTMENT OF CONSUMER AND INDUSTRY SERVICES  
PUBLIC SERVICE COMMISSION  
PRODUCTION AND TRANSMISSION OF NATURAL GAS  
R 460.851 Scope and application.  
Rule 1. These rules apply to the conduct of the business of all natural gas  
producers, gathering companies and transmitters which are or may hereafter be  
subject to the jurisdiction of the Michigan public service commission under the laws  
of the state of Michigan: provided, that when the production of natural gas is  
incidental to, and unavoidable to connection with, the production of oil or mineral  
water,  
R
460.860, R 460.861, R 460.862, R 460.864, R 460.865, R 460.866, R  
460.867, R 460.869, R 460.870, and R 460.871 shall not apply, but special rules  
and regulations pertaining in each such case will be issued by the Michigan public  
service commission whenever necessary. The grouping of rules under the headings of  
production and transmission is for convenience only and the application of any rule is  
not restricted because of this fact.  
History: 1979 AC.  
R 460.852 Definitions.  
Rule 2. For the purposes of these rules the following definitions apply:  
(a) The word "commission" shall be defined to mean the Michigan public service  
commission.  
(b) The words "producer" or "operator" shall be defined to mean any  
corporation, association or person now or hereafter controlling or being responsible  
for the control of any well, or of the production of gas therefrom.  
(c) The term "well owner" shall mean any owner of a full working interest in  
any well, and the term "fractional well owner" shall mean any owner of a fractional  
working interest in any well.  
(d) The word "transmitter" shall be defined to mean any corporation, association  
or person, now or hereafter engaging in the carrying or transporting of natural gas  
by pipe line or lines.  
(e) The term "common purchaser" shall be defined to mean any transmitter  
engaging in the business of purchasing and transporting natural gas for hire,  
compensation or otherwise: provided, that factories or industries in this state may  
transport or transmit natural gas through pipe lines for their own use in plants  
located wholly within this state without constituting themselves common purchasers.  
(See sections 3 and 4 of Act No. 9 of the Public Acts of 1929.)  
(f) The term "common carrier" shall be defined to mean any  
corporation,  
association or person purchasing or collecting natural gas and conveying or transmitting  
the same for hire, compensation or otherwise by pipe line or lines as a common carrier.  
(See section 6 of Act No. 9.)  
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(g) The words "gas" or "natural gas" as used in these rules shall, unless  
otherwise specifically provided, be defined to mean dry, merchantable, natural  
gas, either dry gas as produced from a dry gas well or so-called casinghead gas after  
removal of gasoline vapors, or either such gas after dilution with other gas or gases,  
as distinguished from so-called casinghead gas before treatment for removal of  
gasoline vapors.  
(h) The term "cubic foot" of gas as used in these rules shall have the following  
meanings:  
(i) In cases where gas is supplied and metered to the ultimate consumer at the  
standard delivery pressure which may vary from 3 inches to 10 inches water  
column, a cubic foot of gas shall be defined to be that volume of gas which, at the  
temperature and pressure existing in the meter, occupies 1 cubic foot.  
(ii) In cases where gas is supplied to purchasers through orifice or positive  
meters at other than standard delivery pressure as defined above, a cubic foot of gas shall  
be defined to be that volume of gas which, at 60 degrees Fahrenheit and at absolute  
pressure of 14.65 pounds per square inch, occupies 1 cubic foot; except that in  
cases where a different pressure base that is considered by the commission to be  
fair and reasonable is provided for in gas sales contracts or in rules or practices of a  
distributor such different pressure base shall be effective. (Corrections for  
temperature and pressure shall be made in accordance with  
Charles' law and Boyle's law respectively, except that, when the meter pressure is  
125 pounds per square inch gauge or greater, correction shall be made for deviation from  
such laws (supercompressibility) in accordance with American gas association gas  
measurement committee report no. 3, "Orifice Metering of Natural Gas" dated April,  
1955, or other procedures which may be approved by the commission.)  
(iii) The cubic foot of gas for the purposes of measuring gas produced and  
purchased at wells shall be defined to be that volume of gas which, at an assumed  
temperature of 60 degrees Fahrenheit and an absolute pressure of 15.025 pounds per  
square inch, occupies 1 cubic foot: provided, that contracting parties may agree to  
any special method or procedure in measuring or determining temperatures that is  
considered by the commission to be reasonable. (Corrections for temperature and  
pressure shall be made in accordance with Charles' law and Boyle's law respectively,  
except that, when the meter pressure is 125 pounds per square inch gauge or  
greater, correction shall be made  
(supercompressibility) in accordance with American  
for  
deviation  
from  
gas  
such  
association  
laws  
gas  
measurement committee report no. 3, "Orifice Metering of Natural Gas" dated April,  
1955, or other procedures which may be approved by the commission.)  
(iv) The standard cubic foot of gas for testing the gas itself for heating value,  
etc., shall be that volume of gas which, when saturated with water vapor and at a  
temperature of 60 degrees Fahrenheit and under a pressure equivalent to that of 30  
inches of mercury (mercury at 32 degrees Fahrenheit and under standard gravity)  
occupies 1 cubic foot. (Corrections for temperature and pressure shall be made in  
accordance with Charles' law and Boyle's law respectively, except that, when the meter  
pressure is 125 pounds per square inch gauge or greater, correction shall be made  
for deviation from such laws (supercompressibility) in accordance with American  
Page 2  
gas association gas measurement committee report no. 3, "Orifice Metering of Natural  
Gas" dated April, 1955, or other procedures which may be approved by the commission.)  
(i) "Absolute open flow" is defined as the number of cubic feet of gas per 24  
hours that would be produced by a well if the only pressure against the face of the  
producing sand in the well bore were atmospheric pressure.  
(j) "Modified open flow" is defined as the absolute open flow of a well multiplied  
by the acreage factor applied to such well. (See R 460.865(2).)  
History: 1979 AC.  
R 460.853 Qualifying clause.  
Rule 3. The adoption of these rules shall in no way prevent the commission  
from altering or amending the same in due legal form, in whole or in part, or from  
requiring any other or additional services, appliances or standards, either upon its own  
motion or upon the application of any consumer, producer, transmitter or  
distributor.  
History: 1979 AC.  
R 460.854 Reference to commission.  
Rule 4. In any case where the parties concerned shall fail to agree upon the  
application or the interpretation of any of these rules, or in case of disagreement  
regarding regulations promulgated by any producer, common carrier, common  
purchaser or distributor concerning service, the matter may be referred by either party  
to the commission for settlement.  
History: 1979 AC.  
R 460.855 Jurisdiction.  
Rule 5. (1) The jurisdiction of this commission, according to Act No. 9 of the  
Public Acts of 1929, over all gas wells and over the production of gas from such wells  
shall begin at the time the production or preparation for production is started and  
shall continue and remain with the  
commission until production is abandoned. The  
operations  
of  
drilling,  
deepening, plugging and abandoning, and in fact all underground work on gas wells,  
is under the jurisdiction of the supervisors of wells of the department of conservation.  
(Refer to the rules of the department of conservation covering the drilling,  
deepening and plugging of wells for natural dry gas.)  
(2) Any gas well shall be considered as producing or preparing for production  
at such time as an application for a well connection permit has been filed with the  
commission, but in case connection with a line to take gas from any well for any  
purpose is made before an application for a well connection permit is filed, the  
commission's jurisdiction over  
connections is started.  
such  
well shall begin when work of installing  
Page 3  
(3) During the period that gas wells are under the supervision of the commission  
it shall be the duty of the chief engineer, directly or through his authorized  
representatives:  
(a) To enforce such rules as the commission may adopt to carry out the  
requirements of said act.  
(b) To inspect the maintenance and operations of all gas wells with a view to  
preventing waste of gas, damage to gas producing strata or formation, or injury to  
life or property, and to issue in accordance with the natural gas acts, necessary  
instructions to guard against and prevent such waste, damage or injury.  
(c) To determine the percentage of the open flow capacity of any gas well which  
may be utilized when in his opinion such action is necessary to protect the gas  
producing formation; and to specify the time and method for determining the open  
flow capacities of wells.  
(d) To regularly gather data and compile statistics showing production of gas from  
all wells, fields or pools, and the value of the gas produced.  
History: 1979 AC.  
R 460.856 Availability of records.  
Rule 6. All records required by these rules shall be kept in files within the  
boundaries of the state, at the offices of the producer or transmitter responsible for  
such records, and shall be available at all  
reasonable times for examination by authorized  
commission: provided, that temporary absence of records from the state that are  
necessary or convenient in the record system of producer or transmitter are  
representatives  
of  
the  
a
approved, and that in specific cases the commission may at its own discretion or upon  
proper showing, authorize other modifications of this provision. All such records shall  
be preserved for at least 3 years after they are made, except as otherwise provided.  
History: 1979 AC.  
R 460.857 Waste prohibited and defined.  
Rule 7. (1) Natural gas shall not be produced, transmitted or distributed in  
the state of Michigan in such manner and under such conditions as to constitute  
waste.  
(2) The term "waste" as used in these rules in addition to its ordinary meaning  
shall include (a) the permitting of any gas to wastefully burn, (b) the wasteful use of  
gas including the use of gas in its natural state in engines or pumps where its pressure is  
the main or direct operating force, unless such gas can be consumed after discharge  
from such engines or  
pumps for normal use for fuel purposes, (c) surface waste, which shall include  
the unnecessary blowing, release or escape of natural gas into the open air, and any  
unnecessary or excessive surface loss, including leakage, fire loss and loss or  
destruction incident to the manner of equipping, operating or producing of such well  
or wells, or by inefficient handling thereof, (d) underground waste, which shall  
Page 4  
include inefficient, excessive, or improper use or dissipation of the reservoir  
energy, including gas energy and water drive, of any pool; and the equipping,  
operating, or producing of any well or wells in such a manner as to reduce or tend to  
reduce the total quantity of gas ultimately recoverable from such pool, and the  
unreasonable damage to underground deposits from the operation, maintenance or  
production of gas; and (e) the intentional drowning with water of a gas stratum  
capable of producing gas (except that temporary drowning may become necessary as  
an exigency of drilling or repairing wells).  
History: 1979 AC.  
R 460.858 Fire prevention and control.  
Rule 8. The commission recognizes that practically all gas well fires occurring  
after wells have been placed on production are due to improper wellhead design or  
carelessness and the attention of well owners and operators is particularly directed  
to the following R 460.859 and R 460.860 in order to eliminate this hazard.  
History: 1979 AC.  
PRODUCTION  
R 460.859 Wellhead heaters.  
Rule 9. Heaters for preventing freezing in wellhead connections shall be installed  
or reinstalled for service at the beginning of each winter, only after wellhead  
connections are checked for leakage, and after any leakages have been repaired and  
stopped. The products of combustion, or the burned fumes from gas or any other fuel,  
shall not be used in such heaters or in any other way to apply heat directly to  
wellheads or to thaw out connections. The points of air mixture for any flame at  
any wellhead heater shall be located at least 10 feet from the wellhead, and any burned  
exhaust gases shall be discharged from flue or chimney at least 8 feet from wellhead  
or wellhead connections and at least 4 feet higher than the top of wellhead connections.  
All heaters installed at or near wellheads shall be inspected at least once daily while  
in operation.  
History: 1979 AC.  
R 460.860 Wellhead fittings.  
Rule 10. (1) Wellhead connections shall be designed and installed in accordance  
with principles of design and installation illustrated on plate 1A, appendix A, unless  
specific approval is secured in writing from the chief engineer.  
(2) Master or control valve shall be installed with valve stem not less than 2, nor  
more than 4 feet above the ground level, provided that whenever tubing or siphon  
is installed in any well, the valve and wellhead fitting construction and spacing will  
necessarily be governed by special conditions in each separate case.  
Page 5  
(3) Wheels on valves shall be left and secured in place to facilitate emergency  
opening or closing of valves with an emergency long stemmed wrench or key.  
(4) A space free from surface obstructions shall be kept clear on the stem or  
wheel side of each control gate or valve, so that workmen can approach wells and  
use long stemmed wrenches or keys in opening or closing valves in case of fire.  
History: 1979 AC.  
R 460.861 Determination of well capacity.  
Rule 11. (1) The producing or open flow capacities of wells to be used as a basis  
for proration shall be determined by the commission at its discretion, when  
necessary for the practical, equitable and economical operation of wells, pools or  
fields. The method of determining said capacity where practicable shall avoid the  
waste of gas encountered in the "open flow" test method, and shall make use of the  
United States bureau of mines production capacity test method that is based on  
observations  
production  
of shut-in well pressure and the measurement of volumes of gas  
at varying wellhead pressures, or of any improvements that may be  
approved by the commission.  
(2) Capacity tests may also be made by producers, purchasers or transmitters  
with the approval of the commission. The commission may require that any  
applicant for such test shall make a sufficient showing of necessity for a test. All  
information obtained from such tests shall be  
promptly compiled and filed with the commission.  
(3) When a producer is dissatisfied with a capacity test he may require the  
commission to redetermine the open flow capacity of the well by notifying it to that  
effect and depositing the sum of $10.00 with it. If the retest shows the original test to  
be materially in error, the deposit will be refunded, otherwise it will be retained as  
nominal compensation for the costs incurred in making the test.  
(4) Records of tests of meters, well capacity tests or tests of specific gravity,  
chemical composition or heating value of gas made by or on the order of any  
producer, transmitter, purchaser, distributor, or consumer shall be available for  
information of the commission, and reports shall be filed with the commission when  
requested.  
History: 1979 AC.  
R 460.862 Well meters.  
Rule 12. (1) No gas shall be withdrawn from wells for transportation or sale, nor  
for any other regular and extended uses, except for fuel for drilling on the same lease,  
or for use for domestic purposes by lessors (as usually specified in oil and gas  
leases), without being metered, provided, however, that the commission may approve  
in advance an estimate of the amount that will be required for a specific drilling  
operation off the lease. The commission's representatives shall have access to all meter  
houses and meters at all times.  
Page 6  
(2) Each gas well completed after the effective date of this order shall be equipped  
with its own separate meter, except that:  
(a) The commission may, in cases of small wells, permit the measurement of the  
gas from more than 1 well through a single meter.  
(b) The commission, the interested well operator and the gas purchaser jointly  
may, in cases of large wells of identical operator control, agree to the measurement of  
the gas from more than 1 well through a single meter; provided that:  
(c) In either case (a) or (b) of this subrule, the gas from only 1 well at a time shall  
be measured by a single meter, and that through the use of check-valves, "blind" discs  
or other device or means, lines from all wells except the one from which gas is being  
measured shall be completely closed so that the gas from any 2 or more wells shall  
not be in any way intermixed prior to measurement.  
(3) Meters shall be located as close to wells as is reasonably practicable,  
considering accessibility and the possible desirability in some cases of grouping not  
more than 4 well meters in 1 meter house. Flow lines from wells to meters shall be  
constructed, maintained and operated in such manner that leakage losses and waste may  
be avoided, and these lines shall be patrolled regularly to check for leaks or breakage  
that may develop through unforeseeable and unavoidable accidents.  
(4) In view of the latitude allowed in the location of meters and the probability  
that the "point of delivery" of gas at the wellhead will be some distance from the  
point of measurement, the gathering company or purchaser is charged with a high  
degree of care in preventing all gas loss between these 2 points and shall therefore  
arrange its operating procedure to that end.  
(5) The commission shall have authority, upon notice to any purchaser or  
transmitter, to cause to be made such tests as it may deem necessary to determine the  
accuracy or other conditions of any meter or if its appurtenances, (see R 460.907  
and R 460.909 in "standards of gas service") and any such purchaser or transmitter shall  
be entitled to be present at any such test if he so elects.  
(6) Upon written request by an interested well operator, well owner or fractional  
well owner, the commission shall cause to be made special tests of meter through which  
gas from a well is being measured for any purpose, and the applicant, the gas  
purchaser or transmitter, and other interested parties shall be entitled to be present  
when any such test is made. One such special test of a meter shall be made during any  
calendar year for a fee of $5.00; further special tests of the same meter during a  
calendar year may be made at the discretion of the commission upon written  
application of an interested well owner or operator presenting evidence of the necessity  
for such special test, for a fee of $15.00; but for any test after the first one during any  
calendar year, the commission may at its discretion add to the fixed fee of $15.00 a  
charge for all traveling and subsistence expenses incurred by its representatives in  
making such tests.  
(7) Any application by an interested well owner or operator for a special meter  
test shall be accompanied by a deposit of the fixed fee for such test. If the test shows  
that the calculated measurements of gas are or have been in error more than 2% in favor  
of the gas purchaser, the deposit made by the well owner or operator shall be  
refunded to him, and the amount of such refund shall be paid to the commission by  
the gas purchaser.  
Page 7  
(8) In cases where gas measurements are shown by meter tests to have been in  
error more than 2%, adjustments of accounts shall be made in favor of the party in  
interest who has been injured by reason of such errors, the measurement error  
indicated by the meter test being applied to all recorded gas measurements during  
the time such error has existed if such time is ascertainable, and if not ascertainable  
then said correction shall be made for 1/2 of the period since the meter was last tested and  
adjusted in a manner satisfactory to the commission; except that in cases where a  
different basis of adjustment considered by the commission to be fair and reasonable is  
provided for in gas purchase contract such different basis shall be effective.  
(9) No adjustments in accounts need be made if such adjustments amount to less  
than $2.00 per month.  
History: 1979 AC.  
R 460.863 Unmetered gas.  
Rule 13. Lessors of lands who are using unmetered gas from wells located on their  
lands for domestic fuel in their principal houses or dwellings, and well operators or  
owners who are using unmetered gas from their wells for fuel for drilling on the same  
lease, shall so construct and maintain their lines and the fittings thereon that there  
shall be no leakage losses. No wasteful gas burners or other wasteful gas  
consuming appurtenances shall be used by these consumers of unmetered gas. The  
representatives of the commission shall require the immediate correction of any  
wasteful use of gas by these classes of consumers, and may prohibit the continued use of  
gas if such corrections are not made immediately.  
History: 1979 AC.  
R 460.864 Permit for well connection.  
Rule 14. (1) The operator of each well shall, before gas is produced from such  
well, make application to the commission on form provided therefor, (form 15A,  
appendix A) for permission to sell gas from such well: provided, that application and  
permit shall not be required for making connection to pipe lines used exclusively  
for transporting or transmitting gas for fuel for drilling wells, or gas used in homes  
of lessors of lands on which wells are located.  
(2) Any application for a standard well connection permit should be submitted  
to the commission not less than 15 days before the first day of the month during which  
it is expected that receiving, transmitting or purchasing of gas shall commence.  
Upon receipt from a well operator of a properly executed application for a well  
connection permit, the commission will issue well connection permit order (form 16A,  
appendix  
A)  
and  
will furnish a copy thereof to the purchaser or transmitter  
designated by the applicant operator, such copy to be furnished to the purchaser  
or transmitter at least 10 days before the first day of the monthly period used in  
accounting for gas. The commission will cause a well capacity test to be made, and  
following such test will issue an allowable withdrawal order (form 17A, appendix A)  
Page 8  
to the well operator, and will furnish a copy thereof to the purchaser or transmitter on or  
before the first day of the monthly period used in accounting for gas.  
(3) The purchaser or transmitter shall connect such well to its gathering  
system and prepare to receive, transmit or purchase gas during the next succeeding  
monthly period used in accounting for gas, provided that it has received the copy of  
the well connection permit from the commission at least 10 days before such date;  
that the operator has prepared and placed the well in condition to make such  
connection conveniently possible, and that obstacles or conditions beyond its  
reasonable control do not prevent such connection.  
(4) In case of emergency a temporary well connection permit may be issued by  
wire upon receipt of an application by telegraph from well operator, giving the full  
name of the applicant, the full name of the well, the conservation department  
permit number, the date of well completion, and the open flow capacity of the well;  
and also a telegraphic statement from the prospective transmitter or common purchaser  
of gas that it will accept said well for connection. Such telegraphic application must be  
followed within 10 days by the regular application required in subrule (1) of this  
rule.  
(5) The commission and a transmitter or purchaser may at their option and  
discretion cooperate, if it is reasonably practicable, to issue orders, make well  
capacity tests, connect to wells and make provisions for receiving, transmitting or  
purchasing gas from a well if  
the  
application for temporary or standard well  
connection permit has not been filed with the commission as much as 15 days before  
the beginning of the monthly period used by the transmitter or purchaser in  
accounting for gas, but there shall be no obligation in such cases on the part of  
either the commission or the transmitter or purchaser to either commence or complete  
such orders, tests, connections or preparations to receive, transmit or purchase gas  
during the next succeeding monthly period.  
(6) With each standard well connection permit there will be issued a metal plate  
bearing the permit number. This plate must be affixed to the wellhead substantially as  
shown on plate 1A, appendix A, and in case of loss or destruction must be  
immediately replaced. The original plate will be furnished without charge, but a nominal  
charge of 50 cents will be made for each replacement plate.  
(7) When processed casinghead gas is to be transmitted for  
public  
use,  
application shall be made to the commission for a special connection permit before  
transmission by pipe line is begun. (See R 460.851.)  
History: 1979 AC.  
R 460.865 Taking of gas.  
Rule 15. (1) Maximum withdrawal:  
(a) General. The maximum withdrawal during any 12 months' period from any  
gas well shall average on a daily basis not more than 17 1/2% of the current approved  
absolute daily open flow capacity of such well, such withdrawal being the allowable  
maximum annual withdrawal. Whenever a new open flow capacity test is made and  
approved by the commission, such new test will, upon notice to the producer and  
transmitter, become immediately effective in determining the maximum withdrawal. In  
Page 9  
order to provide for a variable seasonable demand, the following percentages of the  
last determined allowable maximum annual withdrawal may be taken, but not  
exceeded: In any 6 consecutive months, 66%; in any 1 month, 12 1/2%; and in any 1  
day, .6 of 1%.  
(b) Special. The maximum withdrawal from Monroe gas wells located in the  
Walker-Talmadge oil field shall not exceed 50% of the last officially measured open  
flow of each such well.  
(c) Special. The maximum withdrawal during any 12 months' period from any  
gas well in the Howell field shall average on a daily basis not more than 25% of the  
current approved absolute daily open flow capacity of such well, such withdrawal being  
the allowable maximum annual withdrawal. The allowance for seasonable variation in  
the rate of take as set forth in subrule (1)(a) shall continue to be based on the annual  
maximum allowable withdrawal determined as 17 1/2% of the open flow, unless the  
allowance so determined shall be less than 25% in which case the 25% allowance  
shall prevail.  
(d) Special. When a dry natural gas field has been depleted to such an extent that  
production has become merely a stripper operation, the commission may approve  
different maximum withdrawals than required by subrule (1)(a) if it finds that such  
different withdrawals will conserve gas and, in its opinion, support commercial  
production for a longer period than would otherwise be the case.  
(2) Acreage factor. The acreage or area from which any well is considered  
to produce or draw gas shall enter into the determination of the take of gas from such  
well, a well in the center of a square 40-acre tract of land being considered as unity,  
with an acreage factor of 1. The factor for a well producing from a square or  
rectangular tract of any area other than 40 acres shall be the area in acres allotted to  
such well divided by 40, and the factor for a well in the center of a base drilling or  
producing unit of 160 acres of land shall be 4; provided that:  
(a) No side of the area allotted a well shall be farther from the well than the  
distance from the center point of the production area to the most distant side thereof,  
excepting that:  
(i) In the case of a discovery well, this distance may be increased by as much as  
330 feet for a well located on a 40-acre tract of land, and 990 feet for a well located on a  
160-acre tract of land.  
(ii) In the case of a well drilled off center of a production area because of  
topographical or other physical conditions, this distance may be increased by not to  
exceed 25% upon presentation to the commission of satisfactory proof, supported by  
a map and a written statement showing that a center location was prohibited. Every  
reasonable effort shall be made to drill wells at center locations.  
(iii) The 16 gas wells drilled, or in the process of drilling, in the Cannon Creek  
gas field in the counties of Missaukee and Kalkaska prior to September 15, 1950, shall  
each be entitled to an acreage factor of 4, as long as the producing unit assigned to  
each is 160 acres, notwithstanding any other provisions of this rule.  
(b) In addition to the above provisions, acreage factors shall be subject to the  
following limitations:  
(i) The length of a production area shall not be greater than twice its width.  
(ii) Production areas shall not overlap.  
Page 10  
(iii) Any production area shall be entirely within the leasehold (or leaseholds in  
case 2 or more are pooled) on which the well to which it refers is drilled.  
(iv) No acreage factor shall exceed 4 except in the Kawkawlin-Salina gas field, as  
it is now or may be hereafter defined by the supervisor of wells, wherein it may be  
increased to 16.  
(v) The acreage factors for wells located on tracts that are neither square nor  
rectangular shall be determined by the commission in each individual case,  
following, insofar as they are applicable, the general principles applied herein.  
(vi) In the following fields which have been developed with 40-acre drilling  
units, there shall be no acreage factor greater  
than 1, unless the operator or  
leaseholder shall secure and file with the commission written consent from all direct  
and diagonal offset 40-acre leaseholders upon whose holdings there are producing or  
productive gas wells.  
Austin Crystal Six Lakes Broomfield New Haven-Sumner Clare (McKay)  
West Vernon Vernon  
(vii) No well drilled on a 40-acre location in any of the above fields shall each be  
entitled to an acreage factor greater than 1 if such well is directly offset by more than 2  
producing or productive wells with acreage factors of 1 or less.  
(c) Traverse oil wells drilled in the Walker-Talmadge field prior to February 25,  
1942, shall, when either deepened to produce gas from the Monroe formation or  
plugged back to produce gas from the Berea formation, receive acreage factors as  
provided by the attached map entitled plate 2a, but any Monroe or Berea gas wells  
drilled from the surface of the ground in the Walker-Talmadge oil field subsequent to  
February 25, 1942, shall receive acreage factors based on the usual provisions as  
stated in subrule (2)(a) and (b) of this rule.  
(3) Minimum take:  
(a) The minimum allowable take of gas from any well shall be 500,000 cubic  
feet per month, except under the following conditions:  
(i) In no case shall the total gas taken from a well be larger than provided for in  
subrule (1).  
(ii) The average minimum volume of gas production monthly per well shall be in  
conformity with the market demand when such market demand is not high enough to  
permit the taking of the full minimum allowable from all wells. Each operating month  
as used by the gas purchasers in a field shall be considered separately in  
administering the minimum take provisions herein, and, if the total sale or take of  
gas from any field or pool during any such monthly period is not sufficient to permit  
the taking of the full minimum allowable from each well, there shall be no carryover  
or balance of gas to be taken from such well, field, or pool under these minimum  
take provisions because of such deficiency in total market demand.  
(iii) The minimum take of gas from any well having an acreage factor other than  
1, as provided for in subrule (2), shall be modified or adjusted by multiplying the  
minimum allowable take of 500,000 cubic feet by such acreage factor, the resulting  
minimum take to be subject to the restrictions in subrule (3)(a)(i) and (ii) of this  
rule.  
Page 11  
(b) The allowable take from any well that is not capable of producing as much gas  
as its allowable minimum under the operating conditions of the field in which it is  
located shall be the total amount of gas that such well is capable of producing under  
such conditions.  
(c) For fields or pools wherein reservoir conditions and gas withdrawal operations  
do not permit the practical application of subrule (3)(a), special procedures  
applicable to such special conditions may be authorized by the commission, provided  
that any such special procedure shall accomplish the intents and purposes of the  
rule as closely as is practicably possible.  
(4) Ratable taking or gas proration: All gas produced from a field or pool in  
excess of the minimum allowable provided for in subrule (3) shall be taken ratably from  
all wells that are capable of producing more than their minimum allowable take. Such  
excess shall be divided among such wells in proportion to their modified open flow  
capacities or any other method determined by the commission to be equitable or  
less wasteful, except that in no case shall the total gas taken from a well be larger  
than provided for in subrule (1).  
(5) Proration schedules:  
(a) Proration schedules and orders shall be prepared and issued  
by  
the  
commission. Such orders shall be revised not to exceed once each month, the  
effective date of any revision being the first day of the monthly period used by the  
gathering company, transmitter, or purchaser in accounting for gas.  
(b) No proration schedule or production order affecting any well shall be made  
until after well connection permit has been issued.  
(6) Well conditioning requirements:  
(a) A well to go on proration or production shall have complied with the following  
requirements: The well and wellhead connections shall be installed in accordance  
with standards prescribed in R 460.860 of this order. The wellhead connections shall  
be tight and free from leakage. If there is evidence of underground leakage of gas or of  
water intrusion, the well shall be repaired to the satisfaction of the commission.  
(b) In cases of wells where leaks, other defective well conditions, or water  
intrusion develop after a well has been placed on proration, the  
operator shall make repairs promptly and to the satisfaction of the commission,  
and, if repairs have not been made within a reasonable time as determined by the  
commission, then such a well shall be taken off proration and shall not be returned  
to proration until the commission has been notified that repairs have been made and  
has approved a return to proration.  
(c) After any gas well has been placed on proration, no deepening or plugging  
back work shall be started until the operator has notified the commission and the gas  
transmitter or purchaser, in writing, and until that operator has secured the approval,  
in writing, of the supervisor of wells of the department of conservation, of the  
deepening or plugging back plan, in conformity with the rules and regulations of such  
supervisor of wells.  
(d) A well that is being either deepened or plugged back may be removed from  
proration:  
(i) If, in the judgment of the commission, the showing indicates that the  
operation may affect the open flow capacity of the well.  
Page 12  
(ii) If the operation is to consume a period of 10 days or more.  
(iii) If the wellhead fittings remain altered in such a manner that reconnection  
with a pipe line cannot be made within 10 days after such fittings are removed.  
(e) A well that has been removed from proration because of deepening or  
plugging back operations shall not be returned to proration until it has been placed in  
condition to resume production in a manner satisfactory to the supervisor of wells of  
the department of conservation and to the commission, and the gas transmitter or  
purchaser have been so advised in writing.  
History: 1979 AC.  
R 460.866 Production reports.  
Rule 16. (1) Every operator of 1 or more gas wells shall file with the commission,  
on or before the twenty-fifth day of each month, producer's monthly report (form no.  
18A or 18B, appendix A) giving full information as to production of gas from each well  
separately and such other data as is requested. This report shall be signed by the  
producer or by a responsible employee, whose capacity or title shall be indicated, and  
who is in position to know that the data or information given is correct. The  
commission may permit, upon application and satisfactory showing, a reporting  
interval of more than 1 month. If this gas production information is regularly  
furnished to the commission by the purchaser or transmitter of gas, based on  
information or data gathered by such purchaser or transmitter, the producer may be  
relieved of obligation to furnish data.  
(2) Any gas used, whether metered or unmetered, for drilling or lease operating  
or other field fuel purposes on a lease other than the one from which it is produced  
shall be reported to the commission monthly by the gas producer on form 18B  
appendix A. Either the price per M. cubic feet of gas or the flat rate charge that is made  
shall be stated, and in the case of gas that is not metered the estimated approximate  
volume of gas used shall be stated.  
History: 1979 AC.  
R 460.867 Pumps or compressors.  
Rule 17. No gas well, pool or field shall be placed under vacuum by the use of  
compressors, pumps or other devices except with the approval of the commission. If  
and when the placing of a vacuum in any well, pool or field is planned, application for  
approval shall be made to the commission,  
and the adjoining lease owners and  
operators of a pool or field who may be affected shall be given notice. The  
commission may call a hearing on the subject, or may take such action as it deems  
advisable.  
History: 1979 AC.  
TRANSMISSION  
Page 13  
R 460.868 Approval for pipe line project.  
Rule 18. (1) Every transmitter shall file with the commission an application  
(see form 19A, appendix A), setting forth the necessity and practicability of such  
proposed transmission line or lines; and the commission shall, if its study of the  
proposed project shows that such line or lines will, when constructed and in  
operation, serve the convenience and necessities of the public, grant said application;  
and no construction shall begin prior to the granting of the application and the  
approval of the map, route and type of construction by the said commission;  
provided that this rule shall not apply to the laying of pipe lines used exclusively for  
transporting or transmitting gas for drilling purposes.  
(2) The transmitter shall, as a part of the application, submit to the commission a  
map or plat of the proposed line or lines, showing the dimensions and character of  
such line or lines, its compressor stations, control valves and connections; an estimate  
of the cost of the project; an estimate of the proven reserves of gas available for  
transportation through the proposed line; and an estimate of the anticipated revenue,  
operating expenses and earnings of the project for a 5-year period.  
(3) The transmitter's application shall, among other things, state (a) when said  
transmitter is a common purchaser the price to be paid producers for the gas and the  
price at which gas will be sold to distributors; (b) when said transmitter is a common  
carrier, the rates and fee which it will charge for the service to be performed by it.  
Certified copies of all executed or proposed contracts with producers or distributors  
shall be filed with the application, together with such additional information as the  
commission may require.  
History: 1979 AC.  
R 460.869 Requirements before transmitter may connect to gas wells.  
Rule 19. Transmitters shall not connect with any gas well until a temporary or  
standard well connection permit has been issued by the commission. (This permit  
is not required for connecting lines exclusively for carrying gas for drilling purposes.)  
History: 1979 AC.  
R 460.870 Maximum taking of gas.  
Rule 20. The transmitters in any field shall not at any time take gas from such  
field in greater total amounts than the sum of the withdrawal allowances of all  
connected individual wells as determined by R 460.865(1).  
History: 1979 AC.  
R 460.871 Proration among pipe lines and fields.  
Rule 21. The allowable rates of withdrawal of gas for purposes of proration  
among producers and among several purchasers, transmitters or pipe lines from the  
same field, and the prorating of withdrawals among several fields shall be subject to  
Page 14  
approval by the commission. It shall be the duty of the commission to determine that  
production from any pool or field is not abandoned or unreasonably curtailed until  
recovery of all economically recoverable gas has been assured.  
History: 1979 AC.  
R 460.872 Discrimination.  
Rule 22. (1) Common purchasers and common carriers are expressly  
prohibited from discrimination in amount of gas taken, price paid for or rates charged  
for like grades of natural gas or facilities as between producers or persons; and if a  
common purchaser or common carrier is likewise a producer, it shall not  
discriminate in favor of its own production or of production in which it may be  
interested directly or indirectly. The commission shall have authority to relieve any  
such common purchaser or common carrier, after due application,  
notice  
and  
hearing, from the obligation of purchasing or receiving gas from wells which due to  
variation in quality and pressure, or for economic reasons, are not at the time a  
practicable source of supply.  
(2) Except in cases where exigency of service requires emergency measures,  
common purchasers or common carriers shall not abandon nor curtail withdrawals  
or purchases of gas from any pool or section of pool in favor of another pool or section  
thereof, because of temporary or permanent decline in reservoir or producing  
pressure without having first received the approval of the commission.  
History: 1979 AC.  
R 460.873 Patrolling and supervision.  
Rule 23. It shall be the duty of all transmitters to closely supervise the operation  
of all their lines to the end that leakage may be kept at the lowest practical minimum.  
This shall include regular patrolling by competent employees and prompt attention to  
leaks discovered or to other conditions affecting the safe and efficient operation of  
pipe line systems.  
History: 1979 AC.  
R 460.874 Transmitter's or purchaser's reports and records.  
Rule 24. (1) Every common purchaser, common carrier or transmitter of natural  
gas shall file with the commission on or before the twenty-fifth day of each month, for  
the last preceding month, gas transmitters monthly report (form 20A, appendix A),  
giving full information as to gas purchased from each producer and as to sales or  
deliveries. Said report shall be signed by the transmitter or by a responsible  
employee, whose capacity or title shall be indicated, and who is in a position to know  
that the data or information is correct.  
Page 15  
(2) Meter charts shall be kept on file at the office of the transmitter, and the  
commission shall have access to all such records at any reasonable time. Also refer to R  
460.902 in "standards of gas service."  
History: 1979 AC.  
R 460.875 Filing of rates, contracts, and regulations.  
Rule 25. (1) Complete rate schedules, and rules and regulations governing  
each common purchaser's or common carrier's relations with its producers and  
distributors, shall be filed in compliance with commission order D-3096, or in  
pertinent superseding or modifying orders. In case all purchase contracts in a single  
field are identical, the filing of such contracts as provided in section 25(2) hereof,  
shall be considered as fulfillment by the common purchaser of this requirement.  
(2) Every common purchaser or common carrier shall file with the  
commission a true and verified copy of any contracts for purchasing, receiving or  
supplying of gas within 30 days after the making thereof.  
(3) No change shall be made in any filed rates, charges, rules or regulations  
without approval of the commission.  
Distributors  
Utilities distributing natural gas should also refer to and be governed by "standards  
of gas service," commission order no. 1982.  
3. That attached hereto and made a part hereof is a map or plat of proposed line  
or lines, showing the dimensions and characters of such line or lines, compression  
stations, control valves and connections.  
4. That attached hereto and made a part here of is an exhibit showing the gas  
reserves served by the proposed main or mains.  
5. That attached hereto and made a part hereof is a schedule of the rates and  
prices at which the applicant herein will receive gas at delivery stations and a  
schedule of rates or charges at which it will deliver gas to connecting carriers or  
distributing lines or customers, and, in case it is proposed to operate as a carrier for  
hire, a schedule of the rates and charges to be made for the services to be performed  
by the applicant.  
6. That attached hereto and made a part hereof are certified copies of all contracts  
now signed for the purchase or sale of natural gas.  
7. That attached hereto and made a part hereof is a carefully compiled estimate  
by expert engineers setting forth the total cost of the completed project.  
8. That attached hereto and made a part hereof is a carefully prepared estimate by  
competent engineers showing the anticipated revenue, operating expenses and earnings  
for a five-year period. And said petitioner, therefore, prays that the Michigan Public  
Service Commission, under the authority of Act No. 9, of the Public Acts of  
Michigan for the year 1929, may grant to said petitioner its approval of the said map  
or plat and of the construction of said line or lines and may determine that such line or  
lines, when constructed and in operation, will serve the convenience and necessity of  
the public.  
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Figure for 460.875 (Part 1 of 8)  
Figure for 460.875 (Part 2 of 8)  
Page 17  
Figure for 460.875 (Part 3 of 8)  
Page 18