1 STATE OF OKLAHOMA
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2 1st Session of the 59th Legislature (2023)
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3 SENATE BILL 18 By: Rader
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6 AS INTRODUCED
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7 An Act relating to Oil and Gas Produced Water and
7 Waste Recycling and Reuse Act; amending 52 O.S. 2021,
8 Section 86.7, as amended by Section 1, Chapter 31,
8 O.S.L. 2022 (52 O.S. Supp. 2022, Section 86.7), which
9 relates to definitions, purpose, and operator rights
9 and responsibilities; modifying definition; excluding
10 certain persons from liability; updating statutory
10 reference; and providing an effective date.
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13 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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14 SECTION 1. AMENDATORY 52 O.S. 2021, Section 86.7, as
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15 amended by Section 1, Chapter 31, O.S.L. 2022 (52 O.S. Supp. 2022,
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16 Section 86.7), is amended to read as follows:
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17 Section 86.7. A. As used in this act the Oil and Gas Produced
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18 Water and Waste Recycling and Reuse Act:
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19 1. “Commission” means the Oklahoma Corporation Commission;
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20 2. “Constituent elements” means salts, metals, elements and
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21 other mineralized substances that are naturally occurring and
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22 dissolved, entrained or suspended in subterranean water in situ and
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23 after extraction from the ground, suspended in the oil and gas
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 1 produced water and waste or as part of the brine, as defined in
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2 paragraph 4 of Section 502 of Title 17 of the Oklahoma Statutes;
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3 3. “Nonoperator” means persons, other than the operator,
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4 contributing to the cost and expense of drilling and completing or
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5 operating a well for the intended development and production of oil,
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6 gas or other hydrocarbons, regardless of whether the well is
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7 completed or produces any oil or gas;
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8 4. “Oil and gas produced water and waste” means the fluid
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9 containing salt or other mineralized substances, hydraulic
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10 fracturing fluid, flowback water, formation water, injection water
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11 and any chemicals added downhole, associated with the drilling
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12 completion or production of an oil or gas well, incidental to or
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13 extracted from hydrocarbon-bearing strata during the drilling.
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14 Oil and gas produced water and waste shall also include hydrogen
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15 sulfide and carbon oxides emissions produced as a byproduct of
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16 natural gas production. Except as provided in Section 86.8 of this
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17 title, oil and gas produced water and waste, including its
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18 constituent elements, shall not be considered brine for purposes of
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19 the Oklahoma Brine Development Act;
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20 5. “Operator” means the person authorized by the Corporation
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21 Commission to drill, complete and operate a well for the intended
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22 development and production of oil, gas or other hydrocarbons,
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23 regardless of whether the well is completed or produces any;
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 1 6. “Person” means any individual, partnership, corporation,
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2 limited liability company or any type of association;
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3 7. “Recycled water” means oil and gas produced water and waste
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4 that has been reconditioned or treated by mechanical, chemical,
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5 thermal, or any other commercially viable technological processes
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6 available into a reusable form; and
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7 8. “Treated constituents” means any chemical, compound or other
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8 byproduct naturally occurring in the subterranean water that is
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9 removed from oil and gas produced water and waste through
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10 reconditioning or treating of the fluid by mechanical, chemical,
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11 thermal, or any other commercially viable technological processes
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12 available.
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13 B. The Legislature finds that oil and gas produced water and
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14 waste has minimal or no intrinsic value without substantial
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15 expenditures to process, treat or recycle the oil and gas produced
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16 water and waste and declares it desirable, necessary and in the
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17 public interest to designate the parties who shall own and be
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18 responsible for the handling, transfer and disposition of the oil
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19 and gas produced water and waste. The Legislature recognizes that
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20 it has imposed upon the operator of an oil and gas lease a duty to
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21 safely dispose of oil and gas produced water and waste, as defined
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22 in this act the Oil and Gas Produced Water and Waste Recycling and
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23 Reuse Act. It is further found to be in the public interest to
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24 foster, encourage and promote the development of methods and means
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 1 to economically process, treat and recycle oil and gas produced
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2 water and waste for beneficial uses, including the commercial
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3 extraction of constituent elements from the oil and gas produced
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4 water and waste and to ensure appropriate disposal in accordance
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5 with Corporation Commission rules.
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6 C. Prior to its extraction from the ground, subterranean water,
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7 including its constituent elements, is the property of the owner of
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8 the surface estate, as defined in paragraph 9 of Section 802 of this
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9 title and shall be subject to the right of the mineral owner or the
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10 oil and gas lessee of the mineral owner, or both, to extract the
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11 subterranean water as part of the oil and gas produced water and
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12 waste as is reasonably necessary for, or incident to, the
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13 exploration, exploitation or extraction of hydrocarbons. Nothing
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14 contained in this act the Oil and Gas Produced Water and Waste
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15 Recycling and Reuse Act shall be construed to:
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16 1. Prevent the owner of the surface estate from being
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17 considered the brine owner, as defined by paragraph 5 of Section 502
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18 of Title 17 of the Oklahoma Statutes, for purposes of Section 86.8
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19 of this title or the Oklahoma Brine Development Act; or
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20 2. Limit the ability of the owner or owners of the surface
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21 estate to enter into any legally binding contract with persons for
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22 the payment of money or other valuable consideration for the
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23 extraction of subterranean water, including the constituent elements
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24 contained therein, or brine, as defined in paragraph 4 of Section
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 1 502 of Title 17 of the Oklahoma Statutes, from the property of the
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2 owner or owners. However, if said extraction of subterranean water
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3 or brine is to be done as part of oil and gas operations, the
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4 contract shall be entered into prior to the filing of the drilling
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5 permit of the oil and/or gas well. If the contract is entered into
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6 after the filing of the drilling permit of the oil and/or gas well,
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7 the contract shall be with the operator, or with the consent of the
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8 operator, any other person or persons. The operator shall not
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9 withhold consent unreasonably. Any such contract and the use or
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10 disposal of oil and gas produced water and waste, shall be subject
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11 to the requirements and limitations set forth in Section 86.8 of
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12 this title and subject to any and all applicable governmental laws,
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13 rules and regulations and subordinate to any preexisting, legally
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14 binding, arms-length contracts relating to the use or disposal of
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15 oil and gas produced water and waste. Provided, however, that the
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16 contracts shall not result in additional costs or delays to the
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17 rights of the operator to extract subterranean water reasonably
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18 necessary for, or incident to, the exploration, exploitation or
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19 extraction of hydrocarbons. Evidence, in the form of an affidavit,
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20 of any contract entered into under the terms of this act the Oil and
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21 Gas Produced Water and Waste Recycling and Reuse Act may be filed in
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22 the office of the county clerk for the county in which the lands
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23 described in the contract are located. The affidavit shall set out
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24 the names and address of each party to the contract, the legal
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 1 description of the lands covered by the contract and the effective
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2 date of the contract. Once filed, the affidavit shall serve as
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3 constructive notice of the contract under this act the Oil and Gas
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4 Produced Water and Waste Recycling and Reuse Act.
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5 D. 1. Subject to the requirements and limitations set forth in
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6 subsection C of this section and Section 86.8 of this title and
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7 unless otherwise provided by Corporation Commission order, an oil or
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8 gas lease, brine lease, recycling agreement, surface use agreement,
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9 contract, bill of sale or another legally binding document:
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10 a. the operator or operators, and the nonoperator or
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11 nonoperators, of an oil and/or gas well shall be the
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12 owner or owners of the oil and gas produced water and
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13 waste extracted from the ground through the borehole
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14 of the oil or gas well, and
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15 b. the operator or operators, and the nonoperator or
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16 nonoperators, shall have the right to use, possess,
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17 handle, dispose of, transfer, sell, convey, transport,
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18 process, recycle, reuse or treat the produced water
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19 and waste and shall also have the exclusive right to
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20 obtain proceeds for any of the uses of the oil and gas
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21 produced water and waste or some portion thereof,
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22 including recycled water and treated constituents.
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23 2. Subject to the requirements and limitations set forth in
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24 subsection C of this section and Section 86.8 of this title and
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 1 unless otherwise provided by Corporation Commission order, oil or
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2 gas lease, brine lease, recycling agreement, surface use agreement,
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3 contract, bill of sale or another legally binding document, until
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4 there is a transfer to another person, the operator or operators,
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5 and the nonoperator or nonoperators, shall be responsible for the
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6 use, disposition, transfer, sale, conveyance, transport, recycling,
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7 reuse, treatment or disposal of the transferred oil and gas produced
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8 water and waste, recycled water and treated constituents or any
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9 other byproducts.
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10 3. Subject to the requirements and limitations set forth in
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11 subsection C of this section and Section 86.8 of this title and
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12 unless otherwise provided by Corporation Commission order, an oil or
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13 gas lease, brine lease, recycling agreement, surface use agreement,
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14 contract, bill of sale or another legally binding document:
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15 a. when oil and gas produced water and waste is
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16 transferred to a person for the purpose of processing
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17 or treating for subsequent beneficial use, disposal or
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18 both, the transferred material, recycled water and
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19 treated constituents shall be the property of that
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20 person until such time that the person disposes of the
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21 produced water and waste in accordance with Commission
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22 rules or there is a transfer of the material to a
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23 subsequent person, and
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 1 b. transferred oil and gas produced water and waste shall
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2 be the property of such transferee and the transferees
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3 shall have control of and responsibility for the
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4 substance, including the right to use, possess,
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5 handle, dispose of, transfer, sell, convey, transport,
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6 process, recycle, reuse or treat the produced water
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7 and waste and to obtain proceeds for any uses of the
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8 substance or any portion thereof, including recycled
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9 water and treated constituents.
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10 E. Except as provided in paragraph 1 of subsection D of this
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11 section, a person is not liable in tort for consequences of
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12 subsequent use of recycled water or treated constituents if that
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13 person:
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14 1. Processes oil and gas produced water and waste in order to
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15 produce recycled water or treated constituents that are generally
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16 considered in the oil and gas industry to be suitable for use in
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17 connection with drilling, completion or production operations of oil
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18 and gas or both; or
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19 2. Transfers the recycled water or treated constituents, or
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20 both, to another person for use in connection with oil and gas
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21 drilling, completion or production operations.; or
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22 3. Captures or sequesters hydrogen sulfides and carbon oxides
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23 in connection with natural gas production for the purpose of
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24 protecting the environment.
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 1 This subsection shall not be construed to affect the liability
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2 of a person in possession of oil and gas produced water and waste,
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3 recycled water or treated constituents, or both, in an action
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4 brought by a person for damages for personal injury, death or
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5 property damage arising from a release of or exposure to any of
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6 these substances.
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7 F. A person who acquires possession of oil and gas produced
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8 water and waste for the purpose of recycling it for subsequent
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9 beneficial use may dispose of the oil and gas produced water and
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10 waste, including recycled water, treated constituents or other
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11 byproducts of the recycling process, in his or her permitted
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12 disposal well or wells, regardless of the source or prior ownership
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13 of the oil and gas produced water and waste. The disposal shall not
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14 require a commercial disposal well permit from the Corporation
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15 Commission but shall otherwise be subject to any other permit
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16 restrictions applicable to disposal wells.
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17 SECTION 2. This act shall become effective November 1, 2023.
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19 59-1-179 RD 12/8/2022 3:21:29 PM
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Statutes affected:
Introduced: 52-86.7
Floor (House): 52-86.7
Floor (Senate): 52-86.7
Engrossed: 52-86.7
Enrolled (final version): 52-86.7