Master FIR (1988)

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F I S C A L I M P A C T R E P O R T

SPONSOR:	Pearce		DATE TYPED:	2/6/00		HB	24
SHORT TITLE:		Produced Water from Oil and Gas Wells				SB
					ANALYST:		Valenzuela

APPROPRIATION

Appropriation Contained		Estimated Additional Impact		Recurring or Non-Rec	Fund Affected
FY00	FY01	FY00	FY01	Recurring or Non-Rec	Fund Affected
	NFI		NFI

(Parenthesis ( ) Indicate Expenditure Decreases)

Duplicates/Conflicts with/Companion to/Relates to

SOURCES OF INFORMATION

LFC Files

Energy, Minerals and Natural Resources Department (EMNRD)

SUMMARY

Synopsis of Bill

House Bill 24 exempts water produced from oil and gas well operations from depths of 3,000 feet or more from the definition of public waters, and designates ownership to the oil and gas producer. The bill also amends law for the Oil Conservation Division to regulate this water.

Significant Issues

Produced water is a waste byproduct in the production of oil and gas. Generally, it contains hydrocarbons and heavy metals, in addition to a significant salt content, making it unusable. Consequently, oil and gas operators are required, through regulation, to dispose of this water, usually by reinjection back into the subsurface salt zone.

OCD regulates the disposal of produced water, regardless of the depth at which it is derived. Consequently, the specific language in subsection 22 of "water produced from underground sources three thousand fee or more in depth" conflicts with the existing law in subsection 15 which states the OCD has the authority "to regulate the disposition of water produced or used in connection with the drilling for or producing of oil or gas".

FISCAL IMPLICATIONS

House Bill 24 does not contain an appropriation and should not have an impact on the EMNRD.

ADMINISTRATIVE IMPLICATIONS

House Bill 24 will have a minor impact on the EMNRD, as it attempts to promulgate rules to clarify this potentially conflicting amendment.

CONFLICT/DUPLICATION/COMPANIONSHIP/RELATIONSHIP

House Bill 24 relates to House Bill 25, which appropriates funding to study technology capable of remediating produced water.

MV/prr