Rep. Norm Thurston — Voting Record

Bill

Number

H.B. 295 (2024GS)

Sponsor

Rep. Lund, S.

Final action

Governor Signed 3/12/2024

Outcome

Became law — signed by Gov. Spencer J. Cox

Summary

What it does

• This bill:
• defines terms;
• provides for the scope of the Produced Water Act;
• addresses the Board of Oil, Gas, and Mining's regulation of produced water;
• addresses water right issues;
• enacts provisions related to possessory interests and control; and
• makes technical changes.

Every vote on this bill

Bill text

PRODUCED WATER AMENDMENTS
GENERAL SESSION
STATE OF UTAH
Chief Sponsor: Steven J. Lund
Senate Sponsor: 
 Evan J. Vickers
LONG TITLE
General Description:
This bill addresses issues related to produced water.
Highlighted Provisions:
This bill:
▸ defines terms;
▸ provides for the scope of the Produced Water Act;
▸ addresses the Board of Oil, Gas, and Mining's regulation of produced water;
▸ addresses water right issues;
▸ enacts provisions related to possessory interests and control; and
▸ makes technical changes.
Money Appropriated in this Bill:
None
Other Special Clauses:
None
Utah Code Sections Affected:
AMENDS:
40-6-5
, as last amended by Laws of Utah 2022, Chapter 62
ENACTS:
40-12-101
, Utah Code Annotated 1953
40-12-102
, Utah Code Annotated 1953
40-12-201
, Utah Code Annotated 1953
40-12-202
, Utah Code Annotated 1953
Be it enacted by the Legislature of the state of Utah:
Section 1. Section 
40-6-5
 is amended to read:
40-6-5.
Jurisdiction of board -- Rules.
(1) The board has jurisdiction over all persons and property necessary to enforce this
chapter. The board shall make rules in accordance with Title 63G, Chapter 3, Utah
Administrative Rulemaking Act.
(2) The board shall make rules and orders as necessary to administer the following
provisions:
(a) Ownership of all facilities for the production, storage, treatment, transportation,
refining, or processing of oil and gas shall be identified.
(b) Well logs, directional surveys, and reports on well location, drilling, and production
shall be made and filed with the division. Logs of wells marked "confidential" shall be kept
confidential for one year after the date on which the log is required to be filed, unless the
operator gives written permission to release the log at an earlier date. Production reports shall
be:
(i) filed monthly;
(ii) accurate; and
(iii) in a form that reasonably serves the needs of state agencies and private fee owners.
(c) Monthly reports from gas processing plants shall be filed with the division.
(d) Wells shall be drilled, cased, cemented, operated, and plugged in such manner as to
prevent:
(i) the escape of oil, gas, or water out of the reservoir in which they are found into
another formation;
(ii) the detrimental intrusion of water into an oil or gas reservoir;
(iii) the pollution of fresh water supplies by oil, gas, or salt water;
(iv) blowouts;
(v) cavings;
(vi) seepages;
(vii) fires; and
(viii) unreasonable:
(A) loss of a surface land owner's crops on surface land;
(B) loss of value of existing improvements owned by a surface land owner on surface
land; and
(C) permanent damage to surface land.
(e) The drilling of wells may not commence without an adequate and approved supply
of water as required by Title 73, Chapter 3, Appropriation. This Subsection (2)(e) is not
intended to impose additional legal requirements, but to assure that existing legal requirements
concerning the use of water have been met before the commencement of drilling.
(f) Subject to Subsection (9), an operator shall furnish a reasonable performance bond
or other good and sufficient surety, conditioned for the performance of the duty to:
(i) plug each dry or abandoned well;
(ii) repair each well causing waste or pollution;
(iii) maintain and restore the well site; and
(iv) except as provided in Subsection (8), protect a surface land owner against
unreasonable:
(A) loss of a surface land owner's crops on surface land;
(B) loss of value of existing improvements owned by a surface land owner on surface
land; and
(C) permanent damage to surface land.
(g) Production from wells shall be separated into oil and gas and measured by means
and upon standards that are prescribed by the board and reflect current industry standards.
(h) Crude oil obtained from any reserve pit, disposal pond or pit, or similar facility, and
any accumulation of nonmerchantable waste crude oil shall be treated and processed, as
prescribed by the board.
(i) Any person who produces, sells, purchases, acquires, stores, transports, refines, or
processes oil or gas or injects fluids for cycling, pressure maintenance, secondary or enhanced
recovery, or salt water disposal in this state shall maintain complete and accurate records of the
quantities produced, sold, purchased, acquired, stored, transported, refined, processed, or
injected for a period of at least six years. The records shall be available for examination by the
board or the board's agents at any reasonable time. Rules enacted to administer this Subsection
(2)(i) shall be consistent with applicable federal requirements.
(j) Any person with an interest in a lease shall be notified when all or part of that
interest in the lease is sold or transferred.
(k) The assessment and collection of administrative penalties is consistent with Section
40-6-11
.
(l) The board shall regulate the disposition, transfer, use, transport, recycling,
treatment, and disposal by injection of produced water, as defined in Section 
40-12-101
,
during, or for reuse in an oil and gas activity, as defined in Section 
40-6-2.5
, including disposal
by injection pursuant to authority delegated to the board by the United States Environmental
Protection Agency to be done in a manner that protects surface water and fresh water resources.
(3) The board has the authority to regulate:
(a) all operations for and related to the production of oil or gas including:
(i) drilling, testing, equipping, completing, operating, producing, and plugging of
wells; and
(ii) reclamation of sites;
(b) the spacing and location of wells;
(c) operations to increase ultimate recovery, such as:
(i) cycling of gas;
(ii) the maintenance of pressure; and
(iii) the introduction of gas, water, or other substances into a reservoir;
(d) the disposal of salt water and oil-field wastes;
(e) the underground and surface storage of oil, gas, or products; and
(f) the flaring of gas from an oil well.
(4) For the purposes of administering this chapter, the board may designate:
(a) wells as:
(i) oil wells; or
(ii) gas wells; and
(b) pools as:
(i) oil pools; or
(ii) gas pools.
(5) The board has exclusive jurisdiction over:
(a) class II injection wells, as defined by the federal Environmental Protection Agency
or a successor agency;
(b) pits and ponds in relation to these injection wells;
(c) when granted primacy by the Environmental Protection Agency, class VI injection
wells, as defined by the Environmental Protection Agency or a successor agency; and
(d) storage facilities, as that term is defined in Section 
40-11-1
.
(6) The board has jurisdiction:
(a) to hear questions regarding multiple mineral development conflicts with oil and gas
operations if there:
(i) is potential injury to other mineral deposits on the same lands; or
(ii) are simultaneous or concurrent operations conducted by other mineral owners or
lessees affecting the same lands; and
(b) to enter the board's order or rule with respect to those questions.
(7) The board has enforcement powers with respect to operators of minerals other than
oil and gas as are set forth in Section 
40-6-11
, for the sole purpose of enforcing multiple
mineral development issues.
(8) Subsection (2)(f)(iv) does not apply if the surface land owner is a party to, or a
successor of a party to:
(a) a lease of the underlying privately owned oil and gas;
(b) a surface use agreement applicable to the surface land owner's surface land; or
(c) a contract, waiver, or release addressing an owner's or operator's use of the surface
land owner's surface land.
(9) (a) The board shall review rules made under Subsection (2)(f) to determine whether
the rules provide adequate fiscal security for the fiscal risks to the state related to oil and gas
operations.
(b) During the board's review under this Subsection (9), the board may consider the
bonding schemes of other states.
Section 2. Section 
40-12-101
 is enacted to read:
CHAPTER 12. PRODUCED WATER ACT
Part 1. General Provisions
 40-12-101.
Definitions.
As used in this chapter:
(1) "Board" means the Board of Oil, Gas, and Mining.
(2) "Division" means the Division of Oil, Gas, and Mining.
(3) "Nonconsumptive use of produced water in an oil and gas activity" means the
transfer, use, temporary storage before disposal, transport, recycling, treatment, or other
disposal of produced water in an oil and gas activity that does not reduce the volume of
produced water.
(4) "Oil and gas activity" means the same as that term is defined in Section 
40-6-2.5
.
(5) "Oil or gas producing well" means a well that, at the time produced water is
brought to the surface, is a drillhole boring in earth that is intended to bring and does bring
hydrocarbons and associated fluids to the surface.
(6) "Operator" means a person authorized by the division to operate a unit for an oil or
gas producing well.
(7) "Produced water" means water that is:
(a) (i) extracted below the earth's surface by means of an oil or gas producing well; or
(ii) separated from hydrocarbons after extraction; and
(b) required to be disposed of pursuant to board rules for waste management and
disposal made pursuant to Subsection 
40-6-5
(3) and in accordance with Title 63G, Chapter 3,
Utah Administrative Rulemaking Act.
(8) "Transfer" means to sell or otherwise convey.
(9) "Transferee" means one of the following who receives a possessory interest in
produced water:
(a) an operator;
(b) a person who provides recycling or treatment services for produced water; or
(c) a person who provides disposal services for produced water.
Section 3. Section 
40-12-102
 is enacted to read:
 40-12-102.
Scope of chapter.
(1) This chapter does not authorize the use of produced water as part of a consumptive
beneficial use without a water right.
(2) A person may engage in the nonconsumptive use of produced water in an oil and
gas activity only in a manner consistent with this chapter.
(3) Nothing in this chapter modifies the statutory enforcement and other duties of the
state engineer under Title 73, Water and Irrigation, except as provided in Subsection
40-12-201
(2).
Section 4. Section 
40-12-201
 is enacted to read:
Part 2. Produced Water in General
 40-12-201.
Regulation by board - Water rights.
(1) The board shall regulate produced water used in an oil and gas activity as provided
in this title.
(2) (a) The nonconsumptive use of produced water in an oil and gas activity is not:
(i) an appropriation of water for beneficial use under Title 73, Water and Irrigation; or
(ii) a waste of water.
(b) A water right is not established by the nonconsumptive use of produced water in an
oil and gas activity.
(c) Notwithstanding Title 73, Water and Irrigation, the state engineer may not require
an operator or transferee to obtain a water right for the nonconsumptive use of produced water
in an oil and gas activity.
Section 5. Section 
40-12-202
 is enacted to read:
 40-12-202.
Responsibility and control of produced water.
(1) Unless otherwise provided by statute or a legally binding agreement, this section
applies.
(2) (a) Produced water from an oil or gas producing well is the responsibility of the
operator of the oil or gas producing well.
(b) The operator has a possessory interest in produced water from a oil and gas activity,
including the right to:
(i) take possession of the produced water;
(ii) engage in the nonconsumptive use of produced water in an oil and gas activity; and
(iii) obtain proceeds from an action described in this Subsection (2)(b).
(3) When a person with a possessory interest in produced water under Subsection (2)
transfers the produced water to a transferee, upon transfer, the transferee has a possessory
interest in the produced water and is liable for the disposal of the produced water.
Section 6. 
Effective date.
This bill takes effect on May 1, 2024.