Unlocking the Legal Definition of Maximum Efficient Rate [MER]
Definition & Meaning
The maximum efficient rate (MER) refers to the highest sustainable level of oil or gas production from a reservoir that allows for economic development without harming the reservoir's natural energy. Exceeding this rate can lead to a decline in natural pressure, which may ultimately reduce the total recoverable amount of oil or gas. Understanding MER is crucial for effective resource management and economic viability in the energy sector.
Legal Use & context
The concept of maximum efficient rate is primarily used in the fields of energy law and environmental regulation. It is relevant in legal contexts involving:
- Resource extraction agreements
- Environmental impact assessments
- Regulatory compliance for oil and gas production
Users can manage their legal obligations through resources like US Legal Forms, which offers templates for contracts and agreements related to energy production.
Real-world examples
Here are a couple of examples of abatement:
Example 1: An oil company determines that the MER for a specific reservoir is 1,000 barrels per day. If they produce at this rate, they can maintain reservoir pressure and maximize recovery over time.
Example 2: A gas extraction operation exceeds its MER of 500,000 cubic feet per day. As a result, the reservoir pressure drops, leading to a significant decrease in the total amount of gas that can be recovered in the future. (hypothetical example)