Bill Summary – FastDemocracy

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68th Legislature 2023                                                                                                 HB 928.1
                                                   HOUSE BILL NO. 928
                                          INTRODUCED BY J. FITZPATRICK
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  A BILL FOR AN ACT ENTITLED: “AN ACT CLARIFYING THAT THE BOARD OF OIL AND GAS
  CONSERVATION REGULATES CERTAIN WATERS PRODUCED FROM OIL AND GAS OPERATIONS;
  AUTHORIZING THE BOARD TO ESTABLISH A HEARINGS FEE; PROVIDING RULEMAKING AUTHORITY;
  AND AMENDING SECTIONS 82-11-111 AND 85-2-510, MCA.”
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  BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MONTANA:
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          Section 1. Section 82-11-111, MCA, is amended to read:
          "82-11-111. (Temporary) Powers and duties of board. (1) The board shall make investigations that
  it considers proper to determine whether waste exists or is imminent or whether other facts exist that justify any
  action by the board under the authority granted by this chapter.
          (2)      Subject to the administrative control of the department under 2-15-121, the board shall:
          (a)      require measures to be taken to prevent contamination of or damage to surrounding land or
  underground strata caused by drilling operations and production, including but not limited to regulating the
  disposal or injection of water and disposal of oil field wastes;
          (b)      classify wells as oil or gas wells or class II injection wells for purposes material to the
  interpretation or enforcement of this chapter;
          (c)      adopt and enforce rules and orders to implement this chapter; and
          (d)      adopt and enforce rules and orders to implement the provisions of 85-2-510, including the
  establishment of a fee for petitioners seeking a hearing.
          (3)      The board shall determine and prescribe which producing wells are defined as "stripper wells"
  and which wells are defined as "wildcat wells" and make orders that in its judgment are required to protect
  those wells and provide that stripper wells may be produced to capacity if that is considered necessary in the
  interest of conservation.
          (4)      With respect to any pool from which gas was being produced by a gas well on or prior to April
                                                                -1-                      Authorized Print Version – HB 928
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68th Legislature 2023                                                                                              HB 928.1
  1, 1953, this chapter does not authorize the board to limit or restrain the rate, daily or otherwise, of production
  of gas from that pool by any existing well or a well drilled after that date and producing from that pool to less
  than the rate at which the well can be produced without adversely affecting the quantity of gas ultimately
  recoverable by the well.
          (5)      The board has exclusive jurisdiction over all class II injection wells and all pits and ponds in
  relation to those injection wells. The board may:
          (a)      issue, suspend, revoke, modify, or deny permits to operate class II injection wells consistent
  with rules made by it;
          (b)      examine plans and other information needed to determine whether a permit should be issued
  or require changes in plans as a condition to the issuance of a permit;
          (c)      clearly specify in a permit any limitations imposed as to the volume and characteristics of the
  fluids to be injected and the operation of the well;
          (d)      authorize its staff to enter upon any public or private property at reasonable times to:
          (i)      investigate conditions relating to violations of permit conditions;
          (ii)     have access to and copy records required under this chapter;
          (iii)    inspect monitoring equipment or methods; and
          (iv)     sample fluids that the operator is required to sample; and
          (e)      adopt standards for the design, construction, testing, and operation of class II injection wells.
          (6)      The board shall determine, for the purposes of using the oil and gas production damage
  mitigation account established in 82-11-161:
          (a)      when the person responsible for an abandoned well, sump, or hole cannot be identified or
  located or, if the person is identified or located, when the person does not have sufficient financial resources to
  properly plug the well, sump, or hole; or
          (b)      when a previously abandoned well, sump, or hole is the cause of potential environmental
  problems and no responsible party can be identified or located or, if a responsible party can be identified and
  located, when the person does not have sufficient financial resources to correct the problems.
          (7)      The board may take measures to demonstrate to the general public the importance of the
  state's oil and gas exploration and production industry, to encourage and promote the wise and efficient use of
                                                               -2-                      Authorized Print Version – HB 928
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68th Legislature 2023                                                                                                HB 928.1
  energy, to promote environmentally sound exploration and production methods and technologies, to develop
  the state's oil and gas resources, and to support research and educational activities concerning the oil and
  natural gas exploration and production industry. The board may:
          (a)      make grants or loans and provide other forms of financial assistance as necessary or
  appropriate from available funds to qualified persons for research, development, marketing, educational
  projects, and processes or activities directly related to the state's oil and gas exploration and production
  industry;
          (b)      enter into contracts or agreements to carry out the purposes of this subsection (7), including
  the authority to contract for the administration of an oil and gas research, development, marketing, and
  educational program;
          (c)      cooperate with any private, local, state, or national commission, organization, agent, or group
  and enter into contracts and agreements for programs benefiting the oil and gas exploration and production
  industry;
          (d)      coordinate with the Montana university system, including Montana technological university or
  any of its affiliated research programs;
          (e)      accept donations, grants, contributions, and gifts from any public or private source for deposit
  in the oil and gas education and research account established in 82-11-110;
          (f)      distribute funds from the oil and gas education and research account to carry out the provisions
  of this subsection (7); and
          (g)      make orders and rules to implement the provisions of this subsection (7).
          82-11-111.     (Effective on occurrence of contingency) Powers and duties of board. (1) The board
  shall investigate matters it considers proper to determine whether waste exists or is imminent or whether other
  facts exist that justify any action by the board under the authority granted by this chapter.
          (2)      Subject to the administrative control of the department under 2-15-121, the board shall:
          (a)      require measures to be taken to prevent contamination of or damage to surrounding land or
  underground strata caused by drilling operations and production, including but not limited to regulating the
  disposal or injection of water or carbon dioxide and disposal of oil field wastes;
          (b)      classify wells as oil or gas wells, carbon dioxide injection wells, or class II injection wells for
                                                                -3-                       Authorized Print Version – HB 928
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68th Legislature 2023                                                                                                HB 928.1
  purposes material to the interpretation or enforcement of this chapter;
          (c)      adopt and enforce rules and orders to implement this chapter; and
          (d)      adopt and enforce rules and orders to implement the provisions of 85-2-510, including the
  establishment of a fee for petitioners seeking a hearing.
          (3)      The board shall determine and prescribe which producing wells are defined as "stripper wells"
  and which wells are defined as "wildcat wells" and make orders that in its judgment are required to protect
  those wells and provide that stripper wells may be produced to capacity if that is considered necessary in the
  interest of conservation.
          (4)      With respect to any pool with gas being produced by a gas well on or prior to April 1, 1953, this
  chapter does not authorize the board to limit or restrain the rate, daily or otherwise, of production of gas from
  that pool by any existing well or a well drilled after that date and producing from that pool to less than the rate at
  which the well can be produced without adversely affecting the quantity of gas ultimately recoverable by the
  well.
          (5)      Subject to subsection (8), the board has exclusive jurisdiction over carbon dioxide injection
  wells, geologic storage reservoirs, all class II injection wells, and all pits and ponds in relation to those injection
  wells. The board may:
          (a)      issue, suspend, revoke, modify, or deny permits to operate carbon dioxide injection wells and
  class II injection wells, consistent with rules made by it and pursuant to 82-11-123. If a permit for a carbon
  dioxide injection well is revoked, an operator may not seek a refund of application or permitting fees or fees
  paid pursuant to 82-11-181 or 82-11-184(2)(b).
          (b)      examine plans and other information needed to determine whether a permit should be issued
  or require changes in plans as a condition to the issuance of a permit;
          (c)      clearly specify in a permit any limitations imposed as to the volume and characteristics of the
  fluids to be injected and the operation of the well;
          (d)      authorize its staff to enter upon any public or private property at reasonable times to:
          (i)      investigate conditions relating to violations of permit conditions;
          (ii)     have access to and copy records required under this chapter;
          (iii)    inspect monitoring equipment or methods; and
                                                                 -4-                      Authorized Print Version – HB 928
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68th Legislature 2023                                                                                             HB 928.1
          (iv)     sample fluids that the operator or geologic storage operator is required to sample; and
          (e)      adopt standards for the design, construction, testing, and operation of carbon dioxide injection
  wells and class II injection wells.
          (6)      The board shall determine, for the purposes of using the oil and gas production damage
  mitigation account established in 82-11-161 or the geologic storage reservoir program account established in
  82-11-181:
          (a)      when the person responsible for an abandoned well, sump, or hole cannot be identified or
  located or, if the person is identified or located, when the person does not have sufficient financial resources to
  properly plug the well, sump, or hole; or
          (b)      when a previously abandoned well, sump, or hole is the cause of potential environmental
  problems and a responsible party cannot be identified or located or, if a responsible party can be identified and
  located, when the person does not have sufficient financial resources to correct the problems.
          (7)      The board may take measures to demonstrate to the general public the importance of the
  state's oil and gas exploration and production industry, to encourage and promote the wise and efficient use of
  energy, to promote environmentally sound exploration and production methods and technologies, to develop
  the state's oil and gas resources, and to support research and educational activities concerning the oil and
  natural gas exploration and production industry. The board may:
          (a)      make grants or loans and provide other forms of financial assistance as necessary or
  appropriate from available funds to qualified persons for research, development, marketing, educational
  projects, and processes or activities directly related to the state's oil and gas exploration and production
  industry;
          (b)      enter into contracts or agreements to carry out the purposes of this subsection (7), including
  the authority to contract for the administration of an oil and gas research, development, marketing, and
  educational program;
          (c)      cooperate with any private, local, state, or national commission, organization, agent, or group
  and enter into contracts and agreements for programs benefiting the oil and gas exploration and production
  industry;
          (d)      coordinate with the Montana university system, including Montana technological university or
                                                               -5-                     Authorized Print Version – HB 928
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68th Legislature 2023                                                                                               HB 928.1
  any of its affiliated research programs;
          (e)      accept donations, grants, contributions, and gifts from any public or private source for deposit
  in the oil and gas education and research account established in 82-11-110;
          (f)      distribute funds from the oil and gas education and research account to carry out the provisions
  of this subsection (7); and
          (g)      make orders and rules to implement the provisions of this subsection (7).
          (8)      (a) Before holding a hearing on a proposed permit for a carbon dioxide injection well, the board
  shall solicit, document, consider, and address comments from the department of environmental quality on the
  proposal.
          (b)      Notwithstanding the provisions of subsection (8)(a), the board makes the final decision on
  issuance of a permit.
          (9)      Solely for the purposes of administering carbon dioxide injection wells under this part, carbon
  dioxide within a geologic storage reservoir is not a pollutant, a nuisance, or a hazardous or deleterious
  substance."
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          Section 2. Section 85-2-510, MCA, is amended to read:
          "85-2-510.      Production of water from oil and gas wells -- hearings -- jurisdiction of board of oil
  and gas conservation. Within any designated or modified controlled ground water area or subarea wherein oil
  and/or gas wells produce either fresh, brackish, or saline water associated with oil and gas, the volume of
  production of which is dependent entirely on the oil and/or gas withdrawals, such production of water The
  regulation of the production, use, or disposal of fresh, brackish, or saline water that is entirely the result of the
  production of oil or gas, or both, shall must be under the prior jurisdiction of the board of oil and gas
  conservation and is subject to the requirements of 82-11-123. Hearings pertaining to the production, use, or
  disposal of water from those wells shall must be held by that board in accordance with the procedures
  established by that board. The department may petition the board of oil and gas conservation for hearings in
  regard to those operations, and it shall must be notified by the board of oil and gas conservation of those
  hearings instigated by other parties when those hearings involve operations within a controlled ground water
  area or subarea."
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68th Legislature 2023                                    HB 928.1
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                         -7-      Authorized Print Version – HB 928
Statutes affected: 
HB0928_1.pdf: 82-11-111, 85-2-510
Introduced: 82-11-111, 85-2-510