15-614
Montana Attorney General Opinion 15-614
Length: 1,249 wordsOfficial source
Cite as 15 Mont. Op. Att'y Gen. No. 614
Opinion No. 614
Oil and Gas-Oil Consen'ation Roan1
-Crude Oil, Statement of Imports
-Foreign Corpomtion
-Refineries.
HELD: The Oil Conservation Board
has the power to require the producer
of or dealer in crude oil within the
state to furnish it with a monthly re-
port of his activities in that behalf; and
has the power to require the trans-
[lorter or storer of crude oil within the
state, irrespective of the place from
whence it came, to furnish it with a
monthly report of his actidties in that
behalf.
That the concern in question is a
foreign corporation, engaged partly in
interstate commerce, does not alter the
~ituation.
The Act does not authorize the Board
to demand a statement showing the
quantity of crude oil refined in a plnnt
during any l,riven period.
September 18, 1934.
It appefirs that the Ynle Oil Cor-
poration is a foreign corporation au-
thorized to do business in the State of
:\Iontana. It operates a large oil re-
finery at or near the city of Billings
in which is processed crude oil pro-
duced in Montana and elsewhere and
purchased and transported hy it. Each
month, on a certain day, it furnishes
the Oil Consen'ation Board with a
statement which shows the quantity
of crude oil produced in Montana Hnd
treated at its plant during the pre-
ceding month. It has refused, howe\"er,
to gh'e the board information regard-
ing the quantit~' of crude oil which is
produced outside the State of Montana
and treated at its plant, thol1g"h re-
quested so to do. You now desire to
know what information the board is
entitled to exact from this concern
under the law.
Chapter 18, Laws of Extraordinary
Session 1933, created the Oil Conserm-
tion Board. conSisting of five members.
(Sec. 2) It is g-iven "general control.
regulation and supervision of the pro-
duction, transportation and storage of
crude petroleum within the State of
Montana." (Subd. 1, Sec. 9) It sball
"require each and every producer. trans-
porter, dealer in and/or storer of crude
petroleum wi thin the state to furnish
monthly, at least, and oftener if re-
quired by the board, any and all infor-
mation and reports to said hoard on
such forms as it. may prescribe lind
within the time specified by the hoa I'd,
regarding any and all of the activities
of such producer, transporter. dealer
in and/or storer with respect to his
said operations."
(Subd. 4. Id.)
It
"shall likewise have the power to re-
quire owners and/or operators of any
storage and/or transportation facili-
ties of crude petroleum in this state
to make and file such sworn statements
regarding the same and quantity and
quality of the crude petroleum in stor-
age and/or transportation of crude pe-
troleum in such manner and to such ex-
tent and at such time as shall be pre-
scribed by said board by rules and
regulations or by specified order in the
performance of its duties under this
Act." (Par. 2, Sec. 10.)
The statute seems to be a valid ex-
ercise of the police power of the state.
(Gas Products Co. v. Rankill, 63 Mont.
372; C. C. Julian CO. Y. Capshaw, 292
OPINIOXS OF 'l'HE ATTOUXEY GEXERAL
421
Pac. 841; 12 C. J. 1157. et seq.) ThE'
quoted parts of it are broad and rpn-
sonably clear. I think they not onl,
vest the bonrd with power to require
the producer of, or denIer in. crude oil
within the state to furnish it with a
monthl, report of his activities in thnt
behalf, but that the, also vest the board
with power to require the transporter
or storer of crude oil within the state.
irrespective of the place from whence it
came, to furnish it with a monthly re-
port of his activities in thn t be·half.
There cannot he much douht that this
is so when it is remembered that the
statute was primarily passed with the
view of preventing oyer-production. rE'-
suIting in great waste, of crude oil in
the state. Without adequate knowledge
of the amount of crude oil regu·larly
hrought into the state for commercinl
purposes the board would
occup~-
a
~orry position in its efforts to conserve
this yital product of our own soil. The
intention of the legislature must be
given effect wheneyer possible. (Conley
y. Conley, n2 Mont. 425: Conyerse Y.
Noi,thern -Pac. Ry. Co., 2 Ferl. (2d)
B59; 5B C. J. 948.)
That the concern in question is a
foreign corporation engaged partly in
interstate commerce does not alter' the
situation. The law applies to all alike
and does not in any way attempt to in-
terfere with or regulate interstate com-
merce. So far as interstate shipments
are concerned it merel~' requires the
C011)Orntion nnd others similarly cir-
cumstanced to ;.:b'e the board, at its
(lirection. definite information regard-
ing crude oil which has come to a state
of rest in this jurisdiction. The legis-
latiU"e could properly enact such a law.
(State v. Sun hurst Hefining Co., 73
Mont. 68; Gallatin N. G. Co. v. Public
Service Corn., 79 Mont. 269; Lewis y.
1'\orthern Pac. Ry. Co., 36 Mont. 207;
1 Thompson on Corporations, sec. 465;
:3 Thompson on Corporations, sec. 18!)5;
17 Fletcher's C~'clopedia Con/orations,
sec. 8453.)
I find nothing in the statute which
would justify the board in demanding
of the Yale Oil Corporation a state-
ment showing the quantity of crude
oil refined in its plant during any
given period. Statistics relating to the
activities of oil refinel'ies are not COy-
ered by the Aet.
Opinion No, 615
Oil and Gas--Oil Conservation Boat'd
-Rules and Regulations-Liability
of Board !\Iembers,
HELD: The adoption of a rule or
regulation beyond the powers of the
Oil Conserva tion Bonrd and enforce-
ment thereof to the detriment of a
producer. transporter or storer of or
dealer in crude oil would render each
'member of the board personally Iiahle
to such producer. transporter. storer or
dealer.
September 22, 1934.
1;"our request for an opinion follows:
"At a recent meeting of the mem-
bers of this Board, the' Secretary was
directed to request you to gi\'e the
Board an opinion as to the personal
liability of the members of the Board
as individuals for loss or damage
suffered by any oil producer, trans-
porter or refiner on account of any
act or omission of the Board or an~'
of its employees, under or connected
with any rule, regulation or order
promulgated by the Board under the
Act approved December 2!l, In33 (chap-
ter 18, Special Session Laws H133-
1934) entitled 'An Act to Prohihit and
Prevent the Waste of Crude Petroleum
ill the State of Montana (etc.)'
"The question was raised in COIl-
nection with recent discussion between
Board members and representati\'es of
producers concerning the advisahility
of issuance by the Boa rd of orders
intended to curtail or restrict crude
oil production and transportation in
the state in yiew of an alleged state
of oyer-production existing and the
apparent necessity of some action
being taken by the Board with the
view of preventing waste of oil as
defined hy the Federal Petroleum Ad-
ministrative Board."
The request for an opinion being
general in its terms, the opinion itself
must necessarily be so.
'Ve think adoption of a rule or regu-
lation beyond the powers of the Oil
Conservation Board and enforcement
thereof to the detriment of a producer,
tl'llnsporter or storer of or dealer in
crude oil would render each member