I 
108TH CONGRESS 
1ST SESSION H. R. 3698
To assure that development of certain Federal oil and gas resources will 
occur in ways that protect water resources and surface owner rights, 
and for other purposes. 
IN THE HOUSE OF REPRESENTATIVES 
DECEMBER 8, 2003
Mr. UDALL of Colorado (for himself and Mr. UDALL of New Mexico) intro-
duced the following bill; which was referred to the Committee on Re-
sources, and in addition to the Committee on Transportation and Infra-
structure, for a period to be subsequently determined by the Speaker, in 
each case for consideration of such provisions as fall within the jurisdic-
tion of the committee concerned 
A BILL 
To assure that development of certain Federal oil and gas 
resources will occur in ways that protect water resources 
and surface owner rights, and for other purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled, 
SECTION 1. SHORT TITLE; FINDINGS; PURPOSE. 
(a) SHORT TITLE.—This Act may be cited as the 
‘‘Western Waters and Surface Owners Protection Act’’. 
(b) FINDINGS.—The Congress finds the following:
(1) Domestic oil and gas resources, including 
coalbed methane, are an important part of the Na-
tion’s energy supply portfolio and their development 
in appropriate locations and in appropriate ways can 
help reduce dependence on imported energy supplies. 
(2) In many areas of the Western United 
States, federally owned minerals, including oil and 
gas, are in lands where the surface estate belongs to 
non-Federal parties whose interests can be adversely 
affected if the development of the minerals is not 
done in an appropriate manner. 
(3) Development of oil and gas—and especially 
coalbed methane—often involves removal of a sig-
nificant volume of groundwater. 
(4) Some of the water extracted in connection 
with this development is reinjected into the ground, 
while some is retained in surface holding ponds or 
released on the surface and allowed to flow into 
streams or other waterbodies, including ditches used 
for irrigation. 
(5) The quality of these extracted waters varies 
from one location to another. Some of these waters 
are of good quality, but they often contain dissolved 
minerals (such as sodium, magnesium, arsenic, or 
selenium) that can contaminate other waters as a re-
sult of leaks or leaching from holding ponds or dis-
charge of extracted waters. In addition, extracted 
waters often have other characteristics, such as high 
acidity and temperature, that can adversely affect 
agricultural uses of land or the quality of the envi-
ronment. 
(6) Clearer requirements for proper disposal of 
these extracted waters is necessary in order to avoid 
adverse effects on the quality of ground and surface 
waters as well as the productivity of surrounding ag-
ricultural lands. 
(7) To reduce the chance of potential harm to 
water supplies, agricultural production, and the envi-
ronment that otherwise could result from disposal of 
water extracted in connection with coalbed methane 
development or the development of other oil or gas 
resources, the Congress should act to ensure that 
such disposal is subject to regulation under the Fed-
eral Water Pollution Control Act (33 U.S.C. 1251 et 
seq.) and the Mineral Leasing Act (30 U.S.C. 181 
et seq.). 
(8) Under the Stock-Raising Homestead Act 
(43 U.S.C. 291 et seq.) and other laws, the Federal 
Government has transferred to other parties the sur-
face estate in millions of acres in Western States
where ownership of coal, oil, gas, and other minerals 
has been retained by the Federal Government. 
(9) Under current Federal law, the leasing of 
federally owned coal on lands where the surface es-
tate is not owned by the United States is subject to 
the consent of the surface estate owners, but neither 
this consent requirement nor the operating and 
bonding requirements applicable to development of 
federally owned locatable minerals applies to the 
leasing or development of oil or gas in similar split-
estate situations. 
(10) To better balance the need for develop-
ment of oil and gas resources (including coalbed 
methane) with the rights and interests of the owners 
of the surface estate of affected lands, current law 
should be revised so as to increase the involvement 
of the surface estate owners in developing and imple-
menting plans for such development and to provide 
clearer and more adequate standards for such devel-
opment. 
(c) PURPOSE.—The purpose of this Act is to provide 
for the protection of water resources and surface estate 
owners in the development of oil and gas resources, includ-
ing coalbed methane.
TITLE I—PROTECTION OF 
WATER RESOURCES 
SEC. 101. MINERAL LEASING ACT REQUIREMENTS. 
Section 17 of the Mineral Leasing Act (30 U.S.C. 
226) is amended by adding at the end the following: 
‘‘(p) WATER REQUIREMENTS.—
‘‘(1) An operator producing oil or gas (includ-
ing coalbed methane) under a lease issued under this 
Act shall—
‘‘(A) replace the water supply of a water 
user who obtains all or part of such user’s sup-
ply of water for domestic, agricultural, or other 
purposes from an underground or surface 
source that has been affected by contamination, 
diminution, or interruption proximately result-
ing from drilling operations for such produc-
tion; 
‘‘(B) assure that any reinjection of water 
produced by drilling in connection with oper-
ations under the lease will return the water into 
the same aquifer from which it was extracted or 
an aquifer of no better water quality; and 
‘‘(C) comply with all applicable require-
ments of Federal and State law for discharge of
any water produced under the lease that is not 
reinjected. 
‘‘(2) An application for a lease under this sub-
section shall be accompanied by a proposed water 
management plan including provisions to—
‘‘(A) protect the quantity and quality of 
surface and ground water systems, both on-site 
and off-site, from adverse effects of the explo-
ration, development, and reclamation processes 
or to provide alternative sources of water if 
such protection cannot be assured; 
‘‘(B) protect the rights of present users of 
water that would be affected by operations 
under the lease, including the discharge of any 
water produced in connection with such oper-
ations that is not reinjected; and 
‘‘(C) identify any agreements with other 
parties for the beneficial use of produced waters 
and the steps that will be taken to comply with 
state and Federal laws related to such use.’’. 
SEC. 102. CLEAN WATER ACT REQUIREMENTS. 
Section 402(b) of the Federal Water Pollution Con-
trol Act (33 U.S.C. 1342) is amended by adding at the 
end the following:
‘‘(10) To issue permits that comply with sub-
section (a) and any other relevant requirements of 
this Act, and to ensure that waters extracted from 
a subsurface formation in connection with develop-
ment of oil or gas, including coalbed methane, will 
be subject to appropriate requirements to minimize 
adverse effects on any lands or waters that would be 
affected by disposal or other uses of such extracted 
waters.’’. 
SEC. 103. RELATION TO STATE LAW. 
Nothing in this Act or any amendment made by this 
Act shall—
(1) be construed as impairing or in any manner 
affecting any right or jurisdiction of any State with 
respect to the waters of such State; or 
(2) be construed as limiting, altering, modi-
fying, or amending any of the interstate compacts or 
equitable apportionment decrees that apportion 
water among and between States. 
TITLE II—SURFACE OWNER 
PROTECTION 
SEC. 201. DEFINITIONS. 
As used in this title—
(1) the term ‘‘Secretary’’ means the Secretary 
of the Interior;
(2) the term ‘‘lease’’ means a lease issued by 
the Secretary under the Mineral Leasing Act (30 
U.S.C. 181 et seq.) or any other law, providing for 
development of oil and gas resources (including coal-
bed methane) owned by the United States;
(3) the term ‘‘lessee’’ means the holder of a 
lease; and 
(4) the term ‘‘operator’’ means any person that 
is responsible under the terms and conditions of a 
lease for the operations conducted on leased lands or 
any portion thereof. 
SEC. 202. POST-LEASE SURFACE USE AGREEMENT. 
(a) IN GENERAL.—Except as provided in section 203, 
the Secretary may not authorize any operator to conduct 
exploration and drilling operations on lands with respect 
to which title to oil and gas resources is held by the United 
States but title to the surface estate is not held by the 
United States, until the operator has filed with the Sec-
retary a document, signed by the operator and the surface 
owner or owners, showing that the operator has secured 
a written surface use agreement between the operator and 
the surface owner or owners that meets the requirements 
of subsection (b). 
(b) CONTENTS.—The surface use agreement shall 
provide for—
(1) the use of only such portion of the surface 
estate as is reasonably necessary for exploration and 
drilling operations based on site-specific conditions; 
(2) the accommodation of the surface estate 
owner to the maximum extent practicable, including 
the location, use, timing, and type of exploration and 
drilling operations, consistent with the operator’s 
right to develop the oil and gas estate; 
(3) the reclamation of the site to a condition ca-
pable of supporting the uses which such lands were 
capable of supporting prior to exploration and drill-
ing operations; and 
(4) compensation for damages as a result of ex-
ploration and drilling operations, including but not 
limited to—
(A) loss of income and increased costs in-
curred; 
(B) damage to or destruction of personal 
property, including crops, forage, and livestock; 
and 
(C) failure to reclaim the site in accord-
ance with this paragraph (3). 
(c) PROCEDURE.—(1) An operator shall notify the 
surface estate owner or owners of the operator’s desire to 
conclude an agreement under this section. If the surface
estate owner and the operator do not reach an agreement 
within 90 days after the operator has provided such notice, 
the matter shall be referred to third party arbitration for 
resolution within a period of 90 days. The cost of such 
arbitration shall be the responsibility of the operator. 
(2) The Secretary shall identify persons with experi-
ence in conducting arbitrations and shall make this infor-
mation available to operators. 
(3) Referral of a matter for arbitration by a person 
identified by the Secretary pursuant to paragraph (2) 
shall be sufficient to constitute compliance with paragraph 
(1). 
(d) ATTORNEYS FEES.—If action is taken to enforce 
or interpret any of the terms and conditions contained in 
a surface use agreement, the prevailing party shall be re-
imbursed by the other party for reasonable attorneys fees 
and actual costs incurred, in addition to any other relief 
which a court or arbitration panel may grant. 
SEC. 203. AUTHORIZED EXPLORATION AND DRILLING OP-
ERATIONS. 
(a) 
AUTHORIZATION
WITHOUT
SURFACE
USE 
AGREEMENT.—The Secretary may authorize an operator 
to conduct exploration and drilling operations on lands 
covered by section 202 in the absence of an agreement 
with the surface estate owner or owners, if—
(1) the Secretary makes a determination in 
writing that the operator made a good faith attempt 
to conclude such an agreement, including referral of 
the matter to arbitration pursuant to section 202(c), 
but that no agreement was concluded within 90 days 
after the referral to arbitration; 
(2) the operator submits a plan of operations 
that provides for the matters specified in section 
202(b) and for compliance with all other applicable 
requirements of Federal and State law; and 
(3) the operator posts a bond or other financial 
assurance in an amount the Secretary determines to 
be adequate to ensure compensation to the surface 
estate owner for any damages to the site, in the 
form of a surety bond, trust fund, letter of credit, 
government security, certificate of deposit, cash, or 
equivalent. 
(b) SURFACE OWNER PARTICIPATION.—The Sec-
retary shall provide surface estate owners with an oppor-
tunity to—
(1) comment on plans of operations in advance 
of a determination of compliance with this title; 
(2) participate in bond level determinations and 
bond release proceedings under this section;
(3) attend an on-site inspection during such de-
terminations and proceedings; 
(4) file written objections to a proposed bond 
release; and 
(5) request and participate in an on-site inspec-
tion when they have reason to believe there is a vio-
lation of the terms and conditions of a plan of oper-
ations. 
(c) PAYMENT OF FINANCIAL GUARANTEE.—A sur-
face estate owner with respect to any land subject to a 
lease may petition the Secretary for payment of all or any 
portion of a bond or other financial assurance required 
under this section as compensation for any damages as 
a result of exploration and drilling operations. Pursuant 
to such a petition, the Secretary may use such bond or 
other guarantee to provide compensation to the surface 
estate owner for such damages. 
(d) BOND RELEASE.—Upon request and after inspec-
tion and opportunity for surface estate owner review, the 
Secretary may release the financial assurance required 
under this section if the Secretary determines that explo-
ration and drilling operations are ended and all damages 
have been fully compensated. 
SEC. 204. SURFACE OWNER NOTIFICATION. 
The Secretary shall—
(1) notify surface estate owners in writing at 
least 45 days in advance of lease sales; 
(2) within ten working days after a lease is 
issued, notify surface estate owners of regarding the 
identity of the lessee; 
(3) notify surface estate owners in writing con-
cerning any subsequent decisions regarding a lease, 
such as modifying or waiving stipulations and ap-
proving rights of way; and 
(4) notify surface estate owners within five 
business days after issuance of a drilling permit 
under a lease. 
TITLE III—RECLAMATION AND 
BONDING 
SEC. 301. RECLAMATION STANDARD AND BOND. 
Section 17 of the Mineral Leasing Act (30 U.S.C. 
226) is amended by adding at the end the following: 
‘‘(p) RECLAMATION REQUIREMENTS.—An operator 
producing oil or gas (including coalbed methane) under 
a lease issued pursuant to this Act shall—
‘‘(1) at a minimum restore the land affected to 
a condition capable of supporting the uses that it 
was capable of supporting prior to any drilling, or 
higher or better uses of which there is reasonable 
likelihood, so long as such use or uses do not present
any actual or probable hazard to public health or 
safety or pose any actual or probable threat of water 
diminution or pollution, and the permit applicants’ 
declared proposed land use following reclamation is 
not impractical or unreasonable, inconsistent with 
applicable land use policies and plans, or involve un-
reasonable delay in implementation, or is violative of 
Federal, State, or local law; 
‘‘(2) ensure that all reclamation efforts proceed 
in an environmentally sound manner and as contem-
poraneously as practicable with the oil and gas drill-
ing operations; and 
‘‘(3) submit with the plan of operations a rec-
lamation plan that describes in detail the methods 
and practices that will be used to ensure complete 
and timely restoration of all lands affected by oil 
and gas operations. 
‘‘(q) RECLAMATION BOND.—An operator producing 
oil or gas (including coalbed methane) under a lease issued 
under this Act shall post a bond that covers that area of 
land within the permit area upon which the operator will 
initiate and conduct oil and gas drilling and reclamation 
operations within the initial term of the permit. As suc-
ceeding increments of oil and gas drilling and reclamation 
operations are to be initiated and conducted within the
permit area, the lessee shall file with the regulatory au-
thority an additional bond or bonds to cover such incre-
ments in accordance with this section. The amount of the 
bond required for each bonded area shall depend upon the 
reclamation requirements of the approved permit; shall re-
flect the probable difficulty of reclamation giving consider-
ation to such factors as topography, geology of the site, 
hydrology, and revegetation potential; and shall be deter-
mined by the Secretary. The amount of the bond shall be 
sufficient to assure the completion of the reclamation plan 
if the work had to be performed by the Secretary in the 
event of forfeiture. 
‘‘(r) REGULATIONS.—No later than one year after 
the date of the enactment of this subsection, the Secretary 
shall promulgate regulations to implement the require-
ments of subsections (p) and (q). 
‘‘(s) STUDY
BY
THE GENERAL ACCOUNTING OF-
FICE.—(1) The Comptroller General shall conduct a re-
view to assess the adequacy of the regulations issued by 
the Secretary pursuant to subsection (r) to ensure that 
operators will meet the requirements of subsection (p). 
‘‘(2) A report of the results of the review required 
by paragraph (1) shall be transmitted to the Committee 
on Resources of the House of Representatives and the 
Committee on Energy and Natural Resources of the Sen-
ate no later than 180 days after the date on which the 
Secretary promulgates regulations pursuant to subsection 
(r). 
‘‘(3) The report required by paragraph (2) shall in-
clude findings and conclusions by the Comptroller General 
of the United States, and any recommendations the Comp-
troller General may make with respect to any legislation 
or administrative actions the Comptroller General deter-
mines would be appropriate to ensure compliance with the 
requirements of subsection (p).’’. 
TITLE IV—ABANDONED WELLS 
SEC. 401. DEFINITION. 
As used in this title, the term ‘‘abandoned well’’ 
means any well drilled for the purpose of exploring for 
or developing oil or gas resources (including coalbed meth-
ane) that—
(1) has not been in operation for a period of 12 
continuous months, unless the owner or operator has 
notified the Secretary of the Interior (for wells 
drilled to explore for or develop minerals owned by 
the United States) or the relevant State regulatory 
agency (for wells drilled to explore for or develop 
minerals not owned by the United States) that the 
well has been temporarily shut down; or
(2) has not been operative for more than 60 
continuous months after the owner or operator has 
notified the Secretary of the Interior (for wells 
drilled to explore for or develop minerals owned by 
the United States) or the relevant State regulatory 
agency (for wells drilled to explore for or develop 
minerals not owned by the United States) that the 
well has been temporarily shut down. 
SEC. 402. FEDERAL REMEDIATION PROGRAM. 
(a) ESTABLISHMENT OF PROGRAM.—(1) The Sec-
retary of the Interior, in cooperation with the Secretary 
of Agriculture, shall establish a program to ensure to the 
maximum extent feasible the remediation, reclamation, 
and closure of abandoned wells that—
(A) are located on lands administered by an 
agency of the Department of the Interior or the For-
est Service; or 
(B) were drilled to explore for or develop min-
erals owned by the United States located on lands 
with respect to which the surface estate is not owned 
by the United States. 
(2) In implementing the program, the Secretary of 
the Interior— 
(A) shall cooperate with the Secretary of 
Agriculture and the States with respect to the
Federal lands covered by the program are lo-
cated; and 
(B) shall consult with the Secretary of En-
ergy and the Interstate Oil and Gas Compact 
Commission. 
(3) The Secretary of the Interior shall establish the 
program by no later than 3 years after the date of enact-
ment of this section. 
(b) PROGRAM ELEMENTS.—The program established 
under subsection (a) shall—
(1) provide for identification of abandoned wells 
to be covered by the program; 
(2) establish a means of ranking critical sites 
for priority in remediation based on potential envi-
ronmental harm, other land use priorities, and pub-
lic health and safety; and 
(3) provide as far as possible for identifying any 
lessees or other persons responsible for abandoned 
wells, and for recovering the costs of remediation to 
the maximum extent feasible.
(c) PLAN.—Within 6 months after the date of enact-
ment of this section, the Secretary of the Interior, in co-
operation with the Secretary of Agriculture, shall prepare 
a plan for implementing the program established under 
subsection (a). A copy of the plan shall be transmitted
to the Committee on Resources of the House of Represent-
atives and the Committee on Energy and Natural Re-
sources of the Senate. 
(d) REVIEW AND REPORT.—(1) No later than 3 years 
after the date of enactment of this section, the Secretary 
of the Interior, in consultation with the Secretary of Agri-
culture, shall complete a review of the status of remedi-
ation, reclamation, and closure actions under the program. 
(2) Upon completion of the review required by para-
graph (1), the Secretary of the Interior shall provide to 
the Committee on Resources of the House of Representa-
tives and the Committee on Energy and Natural Re-
sources of the Senate—
(A) a report on the results of the review; 
(B) information regarding any wells on lands 
covered by the program that have been abandoned 
since the date of enactment of this section; and 
(C) any recommendations the Secretary may 
choose to make regarding legislative or administra-
tion steps to further the purposes for which the pro-
gram was established. 
(e) AUTHORIZATION
OF APPROPRIATIONS.—There 
are authorized to be appropriated to the Secretary of the 
Interior $5,000,000 for each of fiscal years 2005 through 
2006 to carry out this section.
SEC. 403. ASSISTANCE TO STATES AND TRIBES. 
(a) STATE PROGRAM.—The Secretary of the Interior, 
in consultation with the Secretary of Energy, shall estab-
lish a program to provide technical assistance to facilitate 
State efforts to develop and implement practical and eco-
nomical remedies for environmental problems caused by 
abandoned wells on lands that are not owned by the 
United States. The Secretary shall work with the States, 
through the Interstate Oil and Gas Compact Commission, 
to assist the States in quantifying and mitigating environ-
mental risks of onshore abandoned wells on State and pri-
vate lands.
(b) TRIBAL PROGRAM.—The Secretary of the Inte-
rior, in consultation with the Secretary of Energy, shall 
establish a program to provide technical assistance to fa-
cilitate efforts by Indian Tribes to develop and implement 
practical and economical remedies for environmental prob-
lems caused by abandoned wells on Indian lands, including 
lands held in trust by the United States. 
(c) PROGRAM ELEMENTS.—So far as possible, the 
programs established under this section shall include—
(1) mechanisms to facilitate identification of re-
sponsible parties; 
(2) criteria for ranking critical sites based on 
factors such as other land use priorities, potential 
environmental harm and public visibility; and
(3) information and training programs regard-
ing best practices for remediation of different types 
of sites. 
(d) AUTHORIZATION OF APPROPRIATIONS.—There is 
authorized to be appropriated to the Secretary of the Inte-
rior for activities under this section $5,000,000 for each 
of fiscal years 2005 through 2007.
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