Source: http://www.iea.org/ccsdatabase/ccs/unitedstates/name-42504-en.html
Timestamp: 2017-11-22 07:17:43
Document Index: 71295239

Matched Legal Cases: ['art 1', 'art 33', 'art 33', 'arts 1', 'art 2', 'arts 1', 'arts 1', 'arts 1', 'arts 1', 'arts 144', 'arts 144']

United States: Montana Oil and Gas Statute
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Montana Code Annotated 2011, Title 82: Mineral, Oil and Gas, Chapter 11: Oil and Gas Conservation, Part 1: Regulation by Board of Oil and Gas Regulation (Montana Oil and Gas Statute)
Instrument Date
Relevant Regulatory Authority
Montana Oil and Gas Conservation Board
The Montana Oil and Gas Statute forms part of the Montana Code, and sets out the functions and responsibilities of the Montana Oil and Gas Conservation Board in regulating oil and gas activities and, following amendments made in 2009, the injection of CO2 for geological storage. The Statute also addresses the rights, obligations and liabilities of operators in undertaking such activities, including by providing for operators to transfer their obligations and liabilities to the state following project completion, subject to certain conditions.
Montana Oil and Gas Statute
Associated instruments
Montana Code Title 75 Chapter 5
Instrument Access Date
I. Regulatory scope and definitions
Summary and Article/Section No.
Instrument Text
Article/Section No.
Section 82-11-101
82-11-101. (Temporary) Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply: (1) "Administrator" means the administrator of the division of oil and gas conservation. (2) "Board" means the board of oil and gas conservation provided for in 2-15-3303. (3) "Class II injection well" means a well, as defined by the federal environmental protection agency or any successor agency, that injects fluids: (a) that have been brought to the surface in connection with oil or natural gas production; (b) for purposes of enhancing the ultimate recovery of oil or natural gas; or (c) for purposes of storing liquid hydrocarbons. (4) "Department" means the department of natural resources and conservation provided for in Title 2, chapter 15, part 33. (5) "Determinations" means those decisions delegated to the state by or under authority of the Natural Gas Policy Act of 1978 or any successor or similar legislation relating to oil and gas. (6) "Enhanced recovery" means the increased recovery from a pool achieved by artificial means or by the application of energy extrinsic to the pool; such artificial means or application includes pressuring, cycling, pressure maintenance, or injection into the pool of any substance or form of energy as is contemplated in secondary recovery and tertiary programs but does not include the injection in a well of a substance or form of energy for the sole purpose of aiding in the lifting of fluids in the well or stimulating of the reservoir at or near the well by mechanical, chemical, thermal, or explosive means. (7) "Field" means the general area underlaid by one or more pools. (8) "Fluid" means any material or substance that flows or moves, whether in a semisolid, liquid, sludge, gas, or any other form or state. (9) "Owner" means the person who has the right to drill into and produce from a pool and to appropriate the oil or gas the person produces from a pool either for the person or others or for the person and others, and the term includes all persons holding that authority by or through the person with the right to drill. (10) "Person" means any natural person, corporation, association, partnership, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind and includes any agency or instrumentality of the state or any governmental subdivision of the state. (11) "Pollution" means contamination or other alteration of the physical, chemical, or biological properties of any state waters that exceeds that permitted by state water quality standards or standards adopted by the board, including but not limited to the disposal, discharge, seepage, drainage, infiltration, flow, or injection of any liquid, gaseous, solid, or other substance into any state waters that will or is likely to create a nuisance or render the waters harmful, detrimental, or injurious to public health, recreation, safety, welfare, livestock, wild animals, birds, fish, or other wildlife. A disposal, discharge, seepage, drainage, infiltration, flow, or injection of fluid that is authorized under a rule, permit, or order of the board is not pollution under this chapter. (12) "Pool" means an underground reservoir containing a common accumulation of oil or gas or both; each zone of a structure which is completely separated from any other zone in the same structure is a pool, as that term is used in this chapter. (13) "Producer" means the owner of a well or wells capable of producing oil or gas or both. (14) "Responsible person" means a person who is determined by the board under 82-10-402 to have abandoned an oil or gas well, injection well, disposal well, water source well, drill site, sump, seismographic shot hole, or other area where oil and gas drilling and production operations were conducted. (15) "State waters" means any body of water, either surface or underground. (16) (a) "Waste" means: (i) physical waste, as that term is generally understood in the oil and gas industry; (ii) the inefficient, excessive, or improper use of or the unnecessary dissipation of reservoir energy; (iii) the location, spacing, drilling, equipping, operating, or producing of any oil or gas well or wells in a manner which causes or tends to cause reduction in the quantity of oil or gas ultimately recoverable from a pool under prudent and proper operations or which causes or tends to cause unnecessary or excessive surface loss or destruction of oil or gas; and (iv) the inefficient storing of oil or gas. (The production of oil or gas from any pool or by any well to the full extent that the well or pool can be produced in accordance with methods designed to result in maximum ultimate recovery, as determined by the board, is not waste within the meaning of this definition.) (b) The loss of gas to the atmosphere during coal mining operations is not waste within the meaning of this definition. (Effective on occurrence of contingency) 82-11-101. (Effective on occurrence of contingency) . Definitions. As used in this chapter, unless the context requires otherwise, the following definitions apply: (1) "Administrator" means the administrator of the division of oil and gas conservation. (2) "Board" means the board of oil and gas conservation provided for in 2-15-3303. (3) "Carbon dioxide" means carbon dioxide produced by anthropogenic sources that is of such purity and quality that it will not compromise the safety of a geologic storage reservoir and will not compromise those properties of a geologic storage reservoir that allow the reservoir to effectively enclose and contain a stored gas. (4) (a) "Carbon dioxide injection well" means a well that injects carbon dioxide for the underground storage of carbon dioxide in a geologic storage reservoir. (b) The term does not include a class II injection well in which carbon dioxide is injected for the purpose of enhancing the recovery of oil and gas. (5) "Class II injection well" means a well, as defined by the federal environmental protection agency or any successor agency, that injects fluids: (a) that have been brought to the surface in connection with oil or natural gas production; (b) for purposes of enhancing the ultimate recovery of oil or natural gas; or (c) for purposes of storing liquid hydrocarbons. (6) "Department" means the department of natural resources and conservation provided for in Title 2, chapter 15, part 33. (7) "Determinations" means those decisions delegated to the state by or under authority of the Natural Gas Policy Act of 1978 or any successor or similar legislation relating to oil and gas. (8) "Enhanced recovery" means the increased recovery from a pool achieved by artificial means or by the application of energy extrinsic to the pool; artificial means or application includes pressuring, cycling, pressure maintenance, or injection into the pool of any substance or form of energy as is contemplated in secondary recovery and tertiary programs but does not include the injection in a well of a substance or form of energy for the sole purpose of aiding in the lifting of fluids in the well or stimulating of the reservoir at or near the well by mechanical, chemical, thermal, or explosive means. (9) "Field" means the general area underlaid by one or more pools. (10) "Fluid" means any material or substance that flows or moves, whether in a semisolid, liquid, sludge, gas, or any other form or state. (11) "Geologic storage operator" means a person holding or applying for a carbon dioxide injection well permit. (12) (a) "Geologic storage reservoir" means a subsurface sedimentary stratum, formation, aquifer, cavity, or void, whether natural or artificially created, including vacant or filled reservoirs, saline formations, and coal seams suitable for or capable of being made suitable for injecting and storing carbon dioxide. (b) The term does not include a natural gas storage reservoir. However, the owner of a natural gas storage reservoir may convert a depleted natural gas storage reservoir into a geologic storage reservoir to be used pursuant to Title 82, chapter 11, parts 1 and 2. (13) "Owner" means the person who has the right to drill into and produce from a pool and to appropriate the oil or gas the person produces from a pool either for the person or others or for the person and others, and the term includes all persons holding that authority by or through the person with the right to drill. (14) "Person" means any natural person, corporation, association, partnership, receiver, trustee, executor, administrator, guardian, fiduciary, or other representative of any kind and includes any agency or instrumentality of the state or any governmental subdivision of the state. (15) "Pollution" means contamination or other alteration of the physical, chemical, or biological properties of any state waters that exceeds that permitted by state water quality standards or standards adopted by the board, including but not limited to the disposal, discharge, seepage, drainage, infiltration, flow, or injection of any liquid, gaseous, solid, or other substance into any state waters that will or is likely to create a nuisance or render the waters harmful, detrimental, or injurious to public health, recreation, safety, welfare, livestock, wild animals, birds, fish, or other wildlife. A disposal, discharge, seepage, drainage, infiltration, flow, or injection of fluid that is authorized under a rule, permit, or order of the board is not pollution under this chapter. (16) "Pool" means an underground reservoir containing a common accumulation of oil or gas or both. Each zone of a structure that is completely separated from any other zone in the same structure is a pool. For the purposes of unitization pursuant to Title 82, chapter 11, part 2, "pool" also includes an underground reservoir for the long-term storage of carbon dioxide after the effective date of this section. (17) "Producer" means the owner of a well or wells capable of producing oil or gas or both. (18) "Responsible person" means a person who is determined by the board under 82-10-402 to have abandoned an oil or gas well, injection well, disposal well, water source well, drill site, sump, seismographic shot hole, or other area where oil and gas drilling and production operations were conducted. (19) "State waters" means any body of water, either surface or underground. (20) "Verification and monitoring" means measuring the amount of carbon dioxide stored at a specific geologic storage reservoir, checking the site for leaks or deterioration of storage integrity, and ensuring that carbon dioxide is stored in a way that is permanent and not harmful to the ecosystem. The term includes: (a) using models to show, before injection is allowed, that injected carbon dioxide will be securely stored. Modeling includes but is not limited to consideration of seismic activity, possible paths for fugitive emissions, and chemical reactions in the geologic formation. (b) tracking plume behavior after injection of carbon dioxide, including the use of pressure monitoring; and (c) establishing a system of leak monitors. (21) (a) "Waste" means: (i) physical waste, as that term is generally understood in the oil and gas industry; (ii) the inefficient, excessive, or improper use of or the unnecessary dissipation of reservoir energy; (iii) the location, spacing, drilling, equipping, operating, or producing of any oil or gas well or wells in a manner that causes or tends to cause reduction in the quantity of oil or gas ultimately recoverable from a pool under prudent and proper operations or that causes or tends to cause unnecessary or excessive surface loss or destruction of oil or gas; and (iv) the inefficient storing of oil or gas. (b) (i) The production of oil or gas from any pool or by any well to the full extent that the well or pool can be produced in accordance with methods designed to result in maximum ultimate recovery, as determined by the board, is not waste within the meaning of subsection (21)(a). (ii) The loss of gas to the atmosphere during coal mining operations is not waste within the meaning of subsection (21)(a).
Classification of CO2
Section 82-11-111(9) of the Montana Oil and Gas Statute states that, for the purposes of administering CO2 injection wells under the Statute, CO2 within a storage reservoir does not constitute a pollutant, a nuisance, or a hazardous or deleterious substance.
Injection of CO2 into a storage reservoir in accordance with a permit issued under the Statute is also expressly excluded from:
the definition of contamination of groundwater under Title 75 Chapter 5 section 103 of the Montana Code; and
groundwater permit requirements under Title 75 Chapter 5 section 401.
Section 82-11-111
Associated legislation:
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. (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, 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 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 tech of the university of Montana 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). (Effective on occurrence of contingency) 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 purposes material to the interpretation or enforcement of this chapter; (c) adopt and enforce rules and orders to implement this chapter. (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 (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 tech of the university of Montana 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). (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.
Composition of CO2 stream
Section 82-11-101 of the Montana Oil and Gas Statute defines “carbon dioxide” as CO2 from anthropogenic sources that is of such purity and quality that it will not compromise:
the safety of a storage reservoir; or
the properties of a reservoir that allow it to effectively enclose and contain stored gas.
Geographical coverage, exclusions and prohibitions
Section 82-11-103 of the Montana Oil and Gas Statute specifies the lands to which the Statute applies. These lands include, among others:
all lands in Montana lawfully subject to its police powers, including all state-owned lands;
lands of the United States or lands subject to the jurisdiction of the United States, to the extent that oil and gas conservation by the United States on such lands fails to effect the intent and purposes of the Statute; and
any lands committed to a unit agreement approved by the secretary of the interior or the secretary's duly authorized representative.
Section 82-11-180(2) provides that the Statute may not be construed to apply within any federally recognized Indian reservation in Montana, unless the governing body of the tribe adopts a carbon sequestration law and enters into a cooperative agreement with the state.
Under section 82-11-185, certain oil and gas exploration and development activities cannot be undertaken on certain lands managed as part of Makoshika State Park. However, development of geologic storage reservoirs from beneath the park through directional drilling or access from outside the park boundaries is permitted provided surface resources are not disturbed. The prohibition also does not apply to storage reservoirs within the park that are owned by private persons.
Section 82-11-103
Section 82-11-180
Section 82-11-185
82-11-103. Lands subject to law. This chapter applies to all lands in the state lawfully subject to its police powers, including all state-owned lands. It applies to lands of the United States or to lands subject to the jurisdiction of the United States only to the extent that control and supervision of conservation of oil and gas by the United States on its lands fails to effect the intent and purposes of this chapter and otherwise applies to those lands to the extent that any officer of the United States having jurisdiction or the officer's duly authorized representative approves any of the provisions of this chapter or an order of the board that affects those lands. This chapter also applies to any lands committed to a unit agreement approved by the secretary of the interior or the secretary's duly authorized representative, except that the board may, with respect to those unit agreements, suspend the application of this chapter or any part of this chapter so long as the conservation of oil and gas and the prevention of waste as provided in this chapter is accomplished under the unit agreements. The suspension does not relieve an operator or owner from making reports that may be required by the board with respect to operations and production under the unit agreement, and the suspension does not relieve an operator or owner from the payment of taxes on oil and gas production or payment for permit fees as required by this chapter.
82-11-180. Preservation of property rights.
(1) Title 82, chapter 11, parts 1 and 2, and the issuance of a permit for a carbon dioxide injection well pursuant to Title 82, chapter 11, parts 1 and 2, do not: (a) prejudice the rights of property owners within a geologic storage reservoir to exercise rights that have not been committed to a storage reservoir; or (b) prevent a mineral owner or mineral lessee from drilling through or near a storage reservoir to explore for and develop minerals, provided that the drilling, production, and related activities comply with board requirements that preserve the storage reservoir's integrity and implement Title 82, chapter 11, parts 1 and 2. (2) Title 82, chapter 11, parts 1 and 2, may not be construed to: (a) change or alter common law in accordance with 1-1-108 as it relates to the rights belonging to or the dominance of the mineral estate, including but not limited to the right to mine, drill, or recomplete a well, to inject substances to facilitate production, or to implement enhanced recovery for the purposes of recovery of oil, gas, or other minerals; (b) impede or impair the ability of an oil and gas operator to inject carbon dioxide for enhanced recovery or to establish, verify, register, and sell emission reduction credits or attributes associated with the project; (c) change or alter common law or statutory provisions regarding the ownership of surface or subsurface rights; (d) diminish, impair, or in any way affect the rights of a natural gas public utility, as defined in 82-10-301, to own, operate, or control a gas storage reservoir in use prior to May 6, 2009; or (e) apply within the exterior boundaries of any federally recognized Indian reservation within the state of Montana unless the governing body of the tribe adopts a carbon sequestration law and enters into a cooperative agreement with the state. (3) If the ownership of the geologic storage reservoir cannot be determined from the deeds or severance documents related to the property by reviewing statutory or common law, it is presumed that the surface owner owns the geologic storage reservoir.
82-11-185. (Effective on occurrence of contingency) Makoshika state park requirements. (1) Except as provided in subsection (3), on lands managed as Makoshika state park pursuant to Title 23, chapter 1, and under the control of the department of fish, wildlife, and parks by grant, acquisition, lease, easement, or other means, a person may not: (a) drill, construct, convert, or operate an oil or gas well, stratigraphic test well, or core hole; (b) conduct vibroseis, drill a seismic shot hole, or set a surface charge; (c) explore for oil or gas in a manner that damages the land surface; or (d) construct or place any surface facility associated with oil or gas exploration or development. (2) The prohibitions in subsection (1) do not preclude the development of geologic storage reservoirs or of oil or gas resources from beneath Makoshika state park through directional drilling or access from property outside the boundaries of the state park provided that the surface resources of the state park are not disturbed. (3) The prohibitions listed in subsection (1) do not apply to geologic storage reservoirs or to oil or gas resources within Makoshika state park that are owned by a private person, nor do the prohibitions apply to school trust lands within the boundaries of the park. The state acknowledges the mineral rights of Dawson County and the state school trust and the private property rights of persons owning private mineral rights within Makoshika state park. The department of fish, wildlife, and parks is directed to conduct negotiations with the owners of mineral rights within Makoshika state park with the purpose of acquiring those rights in the name of the state.
Section 82-11-180(2) of the Montana Oil and Gas Statute provides that the Statute may not be construed to, among other things:
change common law as it relates to the rights or dominance of mineral estates, including the right to implement enhanced recovery of oil, gas or other minerals; or
impair the ability of an oil and gas operator to inject CO2 for enhanced recovery.
Section 82-11-184 provides that a well used to inject CO2 for enhanced oil and gas recovery can be converted to a CO2 injection well for storage operations, and requires the Oil and Gas Conservation Board to develop rules with regard to such conversion. Converted wells will be subject to CO2 injection and storage regulations, including requirements regarding financial security, the issuance of a certificate of completion and acceptance or transfer of liability.
Section 82-11-184
82-11-184. (Effective on occurrence of contingency) Conversion of enhanced recovery wells. (1) A well regulated under this chapter in which carbon dioxide is injected for the purpose of enhancing the recovery of oil and gas may be converted to a carbon dioxide injection well. (2) (a) The board shall develop rules with regard to the conversion of wells referred to in subsection (1) to carbon dioxide injection wells. The rules must be in accordance with all application, permitting, and regulatory requirements for carbon dioxide injection wells pursuant to this part. (b) The rules must include provisions for a fee to be paid by the owner of a converted well in an amount equivalent to the fee required to be paid by a geologic storage operator pursuant to 82-11-181(1). (3) Wells converted to carbon dioxide injection wells pursuant to this section are subject to carbon dioxide injection well and geologic storage reservoir regulations pursuant to this chapter, including requirements for bonding or other surety, the issuance of a certificate of completion, and acceptance or transfer of liability.
II. The scope and management of rights
Section 82-11-180(1) of the Montana Oil and Gas Statute provides that issuance of a permit for a CO2 injection well does not:
prejudice the rights of property owners within a geologic storage reservoir to exercise rights that have not been committed to a storage reservoir; or
prevent a mineral owner or lessee from drilling through or near a storage reservoir to explore for and develop minerals, provided that the activities meet requirements that preserve the reservoir's integrity and implement the Statute.
Section 82-11-180(2) provides that the Statute may not be construed to, among other things:
change common law as it relates to the rights or dominance of mineral estates;
change common law or statutory provisions regarding the ownership of surface or subsurface rights; or
diminish, impair, or in any way affect the rights of a natural gas public utility to own, operate, or control a gas storage reservoir in use prior to May 6, 2009.
Section 82-11-180(3) provides that if ownership of a storage reservoir cannot be determined, it is presumed to be owned by the surface owner.
Competition with other Interests
Section 82-11-180(1) of the Montana Oil and Gas Statute provides that issuance of a permit for a CO2 injection well does not prevent a mineral owner or lessee from drilling through or near a storage reservoir to explore for and develop minerals, provided that the activities meet requirements that preserve the reservoir's integrity and implement the Statute.
change common law as it relates to the rights or dominance of mineral estates; or
III. Permitting storage site exploration, project development and CO2 injection
Controls on site selection
Under section 82-11-123(2) of the Montana Oil and Gas Statute, the CO2 injection well permitting system under the Statute must include, among other things, characterisation of the injection zone and aquifers above and below this zone that may be affected.
Section 82-11-123(2)
82-11-123. (Effective on occurrence of contingency) . Requirements for oil and gas and carbon dioxide injection operations.
(2) In addition to the requirements of subsection (1), the geologic carbon dioxide injection well permitting system must include: (a) recordkeeping and reporting requirements sufficient to measure the effectiveness of carbon dioxide injection wells and geologic storage reservoirs; (b) characterization of the injection zone and aquifers above and below the injection zone that may be affected, including applicable pressure and fluid chemistry data to describe the projected effects of injection activities; (c) verification and monitoring at geologic storage reservoirs; (d) mitigation of leaks, including the ability to stop the leaking of carbon dioxide and to address impacts of leaks; (e) adequate baseline monitoring of drinking water wells within 1 mile of the perimeter of the geologic storage reservoir; and (f) at a minimum, requirements pursuant to applicable federal regulatory standards established by: (i) the Energy Independence and Security Act of 2007, Public Law 110-140, and subsequent acts; (ii) the Safe Drinking Water Act, 42 U.S.C. 300f, et seq.; and (iii) the underground injection control program, 40 CFR, parts 144 through 147.
Environmental protection and impact assessment
Under section 82-11-111(2) of the Montana Oil and Gas Statute, the Oil and Gas Conservation Board has the power to, among other things, require operators to take measures to prevent contamination of, or damage to, surrounding land or underground strata caused by drilling operations. This power includes regulation of the injection of CO2.
Section 82-11-127 prohibits, among other things:
pollution of any state waters; and
placing, or causing to be placed, any liquid, gaseous, solid, or other substance in a location where the substance is likely to cause pollution of any state waters.
The Statute also requires the Board to obtain comments from the Department of Environment Quality at various points during the permitting and administration of CO2 injection activities, including:
under section 82-11-111, before holding a hearing on a proposed CO2 injection well permit;
under section 82-11-183(5), before issuing an operator with a certificate of completion (although the Board is nonetheless responsible for making the final decision); and
before effecting a transfer of liability from an operator to the state under section 82-11-183 (although the Board of Land Commissioners will be responsible for making the final decision on such transfer).
Section 82-11-111(2)
Section 82-11-111(8)
Section 82-11-127
Section 82-11-183
82-11-111. (Effective on occurrence of contingency) . Powers and duties of board.
(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 purposes material to the interpretation or enforcement of this chapter; (c) adopt and enforce rules and orders to implement this chapter.
(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.
82-11-127. (Temporary) Prohibited activity -- Makoshika state park. (1) A person may not: (a) cause pollution of any state waters or place or cause to be placed any liquid, gaseous, solid, or other substance in a location where the substance is likely to cause pollution of any state waters; (b) violate any provision set forth in a permit or stipulation, including but not limited to limitations and conditions contained in it; (c) violate an order issued pursuant to this chapter; or (d) violate a provision of this chapter. (2) A person may not drill, construct, convert, or operate a class II injection well or drill an oil or gas well or stratigraphic test well or core hole as described under 82-11-134 without a valid permit or order from the board. (3) Except as provided in subsection (5), on lands managed as Makoshika state park, pursuant to Title 23, chapter 1, and under the control of the department of fish, wildlife, and parks, by grant, acquisition, lease, easement, or other means, a person may not: (a) drill, construct, convert, or operate an oil or gas well, stratigraphic test well, or core hole; (b) conduct vibroseis, drill a seismic shot hole, or set a surface charge; (c) explore for oil or gas in a manner that damages the land surface; or (d) construct or place any surface facility associated with oil or gas exploration or development. (4) The prohibitions in subsection (3) do not preclude the development of oil or gas resources from beneath Makoshika state park through directional drilling or access from property outside the boundaries of the state park provided that the surface resources of the state park are not disturbed. (5) The prohibitions listed in subsection (3) do not apply to oil or gas resources within Makoshika state park that are owned by a private person, nor do the prohibitions apply to school trust lands within the boundaries of the park. The state acknowledges the mineral rights of Dawson County and the state school trust and the private property rights of persons owning private mineral rights within Makoshika state park. The department of fish, wildlife, and parks is directed to conduct negotiations with the owners of mineral rights within Makoshika state park, with the purpose of acquiring those rights in the name of the state, and to report the results of the negotiations to the legislature no later than January 8, 2001. (Effective on occurrence of contingency) 82-11-127. (Effective on occurrence of contingency) . Prohibited activity. (1) A person may not: (a) cause pollution of any state waters or place or cause to be placed any liquid, gaseous, solid, or other substance in a location where the substance is likely to cause pollution of any state waters; (b) violate any provision set forth in a permit or stipulation, including but not limited to limitations and conditions contained in it; (c) violate an order issued pursuant to this chapter; or (d) violate a provision of this chapter. (2) A person may not drill, construct, convert, or operate a class II injection well or a carbon dioxide injection well or drill an oil or gas well or stratigraphic test well or core hole as described under 82-11-134 without a valid permit or order from the board.
82-11-183. (Effective on occurrence of contingency) Certificate of completion -- department of environmental quality participation -- transfer of liability. (1) Pursuant to subsection (3), after carbon dioxide injections into a reservoir end and upon completion of the certification requirements pursuant to subsections (4) and (5), the board shall issue the geologic storage operator a certificate of project completion. (2) The board: (a) shall adopt rules pursuant to 82-11-111 necessary for implementing subsection (4) of this section, including rules for public notice and hearing; and (b) may, pursuant to 82-11-111, adopt any other rules necessary for administration of this section. (3) Except as provided in subsection (11), the certificate may not be issued until at least 25 years after carbon dioxide injections end. (4) Subject to subsection (5), the certificate may be issued only if the geologic storage operator: (a) is in full compliance with regulations governing the geologic storage reservoir pursuant to this part; (b) shows that the geologic storage reservoir will retain the carbon dioxide stored in it; (c) shows that all wells, equipment, and facilities to be used in the postclosure period are in good condition and retain mechanical integrity; (d) shows that it has plugged wells, removed equipment and facilities, and completed reclamation work as required by the board; (e) shows that the carbon dioxide in the geologic storage reservoir has become stable, which means that it is essentially stationary or chemically combined or, if it is migrating or may migrate, that any migration will not cross the geologic storage reservoir boundary; and (f) except as provided in subsection (11), shows that the geologic storage operator will continue to provide adequate bond or other surety after receiving the certificate of completion for at least 25 years following issuance of the certificate of completion and that the operator continues to accept liability for the geologic storage reservoir and the stored carbon dioxide. (5) (a) Prior to issuing a certificate of completion, the board shall solicit, document, consider, and address comments from the department of environmental quality. (b) Notwithstanding subsection (5)(a), the board makes the final decision on issuance of the certificate. (6) Except as provided in subsection (11), after issuing a certificate of completion, the board shall ensure adequate monitoring by the operator of the wells and reservoir, verifying compliance with subsection (4), for a period of 25 years. (7) (a) Following the monitoring and verification required in subsection (6) and subject to subsections (7)(b) and (7)(c), if the geologic storage operator has title to the geologic storage reservoir and the stored carbon dioxide, the geologic storage operator may transfer title to the geologic storage reservoir and to the stored carbon dioxide to the state. (b) Prior to a transfer of title, the monitoring pursuant to subsection (6) must show that: (i) the reservoir and wells are in full compliance with regulations pursuant to this part; and (ii) the reservoir will maintain its structural integrity and will not allow carbon dioxide to move out of one stratum into another or pollute drinking water supplies. (c) (i) Prior to a transfer of title, the board shall solicit, document, consider, and address comments from the department of environmental quality. (ii) The board shall make a recommendation to the board of land commissioners as to whether title should transfer to the state. (iii) Notwithstanding subsections (7)(c)(i) and (7)(c)(ii), the board of land commissioners shall make the final decision on the transfer of title. (8) If liability is transferred pursuant to subsection (7): (a) title is transferred, without payment or any compensation, to the state; (b) title acquired by the state includes all rights and interests in and all responsibilities associated with the geologic storage reservoir and the stored carbon dioxide; (c) the geologic storage operator and all persons who generated any injected carbon dioxide are released from all regulatory requirements and liability associated with the geologic storage reservoir and the stored carbon dioxide; (d) any bonds or other surety posted by the geologic storage operator must be released; and (e) monitoring and managing the geologic storage reservoir and the stored carbon dioxide is the state's responsibility to be overseen by the board until the federal government assumes responsibility for the long-term monitoring and management of geologic storage reservoirs and stored carbon dioxide. (9) (a) If the operator does not transfer title to the state pursuant to subsection (7), the operator indefinitely accepts liability, except as provided in subsection (10), for the stored carbon dioxide and the geologic storage reservoir. (b) If the operator is found not to be in compliance with subsection (7)(b), the operator retains liability until the operator is able to meet the requirements. (10) After receiving a certificate of completion, every 25 years after completing the monitoring and verification required by subsection (6), an operator may petition the board and request to transfer liability to the state and be released from liability pursuant to subsection (8). An operator who petitions the board pursuant to this subsection (10) may not request that the fee required by 82-11-181(1) or 82-11-184(2)(b) be remitted. (11) (a) The board, in consultation with the appropriate federal agencies, the department of environmental quality, and the department of natural resources and conservation, may adopt rules allowing for compliance with the requirements of this part in a period of time of less than 50 years. (b) The rules must: (i) ensure compliance with monitoring and verification requirements; and (ii) ensure that an operator provides an adequate bond or other surety and accepts liability for the geologic storage reservoir and the stored carbon for a period of at least 30 years before transferring liability to the state pursuant to subsection (7).
Permitting CO2 injection and storage
Section 82-11-122(2) of the Montana Oil and Gas Statute stipulates that it is unlawful to commence drilling a CO2 injection well without first:
notifying the Oil and Gas Conservation Board of the intention to drill; and
obtaining a drilling permit.
Under section 82-11-111, the Board has the power to, among other things:
issue permits to operate CO2 injection wells;
examine plans and other information needed to determine whether a permit should be issued; and
specify in a permit any limits as to the volume and characteristics of the fluids to be injected and the operation of the well.
However, before holding a hearing on a proposed CO2 injection well permit, under subsection (7)(a) the Board must first solicit and consider comments from the Department of Environment Quality.
Section 82-11-118
Section 82-11-122
82-11-118. (Temporary) Fees for processing applications. (1) The board shall establish a fee schedule to defray the expenses incurred for processing an application from an operator or producer of oil seeking approval of a new or expanded enhanced recovery project, as defined in 15-36-303. The fee must be paid by the owner or operator seeking approval of the project. (2) The board shall, by rule, determine the amount of the fee based on the complexity of processing the application. (Effective on occurrence of contingency) 82-11-118. (Effective on occurrence of contingency) . Fees for processing applications. (1) The board shall establish a fee schedule to defray the expenses incurred for processing an application from a geologic storage operator or an operator or producer of oil seeking approval of a new or expanded enhanced recovery project, as defined in 15-36-303. The fee must be paid by the owner, geologic storage operator, or operator seeking approval of the project. (2) The board shall, by rule, determine the amount of the fee based on the complexity of processing the application.
82-11-122. (Temporary) Notice of intention to drill or conduct seismic operations -- notice to surface owner. It is unlawful to commence the drilling of a well for oil or gas without first filing with the board written notice of intention to drill and obtaining a drilling permit as provided in 82-11-134. After the permit is issued, an oil and gas developer or operator as defined under 82-10-502 shall comply with the notice requirements of 82-10-503 before commencing drilling operations. It is unlawful to conduct seismic explorations without first giving the board a copy of the notice of intention to explore filed with the county under 82-1-103. (Effective on occurrence of contingency) 82-11-122. (Effective on occurrence of contingency) . Notice of intention to drill or conduct seismic operations -- notice to surface owner. (1) It is unlawful to commence the drilling of a well for oil or gas without first filing with the board written notice of intention to drill and obtaining a drilling permit as provided in 82-11-134. After the permit is issued, an oil and gas developer or operator as defined under 82-10-502 shall comply with the notice requirements of 82-10-503 before commencing drilling operations. It is unlawful to conduct seismic explorations without first giving the board a copy of the notice of intention to explore filed with the county under 82-1-103. (2) It is unlawful to commence the drilling of a carbon dioxide injection well without first filing with the board written notice of intention to drill and obtaining a drilling permit. Prior to issuing the permit, the board shall provide notice of an application for a permit. The notice must be: (a) published in a newspaper of general circulation in each county where the carbon dioxide injection well and geologic storage reservoir is located; and (b) mailed to all surface owners, mineral claimants, mineral owners, lessees, and other owners of record of subsurface interests that are located within 1 mile of the proposed boundary of the geologic storage reservoir.
IV. Operating and closing storage facilities
Under section 82-11-123(1) of the Montana Oil and Gas Statute, the Oil and Gas Conservation Board has the power to, among other things, require operators to:
make and file well logs;
make and file reports on well locations, and file directional surveys, geological sample logs, mud logs, core descriptions, and ordinary core analysis;
make available complete and accurate records of the quantities of CO2, and any reports with respect to quantities, transportations, and storages of CO2 as the Board may require;
install, use and maintain monitoring equipment or methods in the operation of CO2 injection wells.
Under section 82-11-123(2), the CO2 injection well permitting system under the Statute must include, among other things:
recordkeeping and reporting requirements sufficient to measure the effectiveness of injection wells and storage reservoirs;
verification and monitoring at storage reservoirs; and
baseline monitoring of drinking water wells within one mile of the storage reservoir.
Subject to certain confidentiality requirements, under section 82-11-117 any information furnished to or obtained by the Board or its staff will be a matter of public record and open to public use.
Section 82-11-117
Section 82-11-123
82-11-117. Confidentiality of records. (1) Any information that is furnished to the board or the board's staff or that is obtained by either of them is a matter of public record and open to public use. However, any information unique to the owner or operator that would, if disclosed, reveal methods or processes entitled to protection as trade secrets must be maintained as confidential if so determined by the board. (2) If an owner or operator disagrees with a determination by the board that certain material will not be maintained as confidential, the owner or operator may file a declaratory judgment action in a court of competent jurisdiction to establish the existence of a trade secret if the owner or operator wishes the information to enjoy confidential status. The department must be served in the action and may intervene as a party. (3) Any information not intended to be public when submitted to the board or the board's staff must be submitted in writing and clearly marked as confidential. (4) Data describing physical and chemical characteristics of a liquid, gaseous, solid, or other substance injected or discharged into state waters may not be considered confidential. (5) The board may use any information in compiling or publishing analyses or summaries relating to water pollution if the analyses or summaries do not identify the owner or operator or reveal any information that is otherwise made confidential by this section.
82-11-123. (Temporary) Requirements for oil and gas operations. Subject to the administrative control of the department under 2-15-121, the board shall require: (1) identification of ownership of oil or gas wells, producing properties, and tanks; (2) the making and filing of acceptable well logs, including bottom-hole temperatures (in order to facilitate the discovery of potential geothermal energy sources), the making and filing of reports on well locations, and the filing of directional surveys, geological sample logs, mud logs, core descriptions, and ordinary core analysis, if made; however, logs of exploratory or wildcat wells need not be filed for a period of 6 months following completion of those wells; (3) the drilling, casing, producing, and plugging of wells and class II injection wells in a manner that prevents the escape of oil or gas out of one stratum into another, the intrusion of water into oil or gas strata, blowouts, cave-ins, seepages, and fires and the pollution of fresh water supplies by oil, gas, salt, or brackish water; (4) the restoration of surface lands to their previous grade and productive capability after a well is plugged or a seismographic shot hole has been utilized and necessary measures to prevent adverse hydrological effects from the well or hole, unless the surface owner agrees in writing, with the approval of the board or its representatives, to a different plan of restoration; (5) the furnishing of a reasonable bond with good and sufficient surety, conditioned for performance of the duty to properly plug each dry or abandoned well. The bond may be forfeited in its entirety by the board for failure to perform the duty to properly plug each dry or abandoned well and may not be canceled or absolved if the well fails to produce oil or gas in commercial quantities, until: (a) the board determines the well is properly plugged and abandoned as provided in the board's rules; or (b) the requirements of 82-11-163 are met. (6) proper gauging or other measuring of oil and gas produced and saved to determine the quantity and quality of oil and gas; (7) that every person who produces, transports, or stores oil or gas or injects or disposes of water in this state shall make available within this state for a period of 5 years complete and accurate records of the quantities. The records must be available for examination by the board or its employees at all reasonable times. The person shall file with the board reports as it may prescribe with respect to quantities, transportations, and storages of the oil, gas, or water. (8) the installation, use, and maintenance of monitoring equipment or methods in the operation of class II injection wells. (Effective on occurrence of contingency) 82-11-123. (Effective on occurrence of contingency) . Requirements for oil and gas and carbon dioxide injection operations. (1) Subject to the administrative control of the department under 2-15-121, the board shall require: (a) identification of ownership of carbon dioxide injection wells, carbon dioxide, geologic storage reservoirs, and oil or gas wells, producing properties, and tanks; (b) the making and filing of acceptable well logs, including bottom-hole temperatures, in order to facilitate the discovery of potential geothermal energy sources, the making and filing of reports on well locations, and the filing of directional surveys, geological sample logs, mud logs, core descriptions, and ordinary core analysis, if made. However, logs of exploratory or wildcat wells need not be filed for a period of 6 months following completion of those wells. (c) the drilling, casing, producing, and plugging of wells, carbon dioxide injection wells, and class II injection wells in a manner that prevents the escape of carbon dioxide, oil, or gas out of one stratum into another, the intrusion of water into carbon dioxide, oil, or gas strata, blowouts, cave-ins, seepages, and fires and the pollution of fresh water supplies by carbon dioxide, oil, gas, salt, or brackish water; (d) the restoration of surface lands to their previous grade and productive capability after a well is plugged or a seismographic shot hole has been utilized and necessary measures to prevent adverse hydrological effects from the well or hole, unless the surface owner agrees in writing, with the approval of the board or its representatives, to a different plan of restoration; (e) except as provided in subsection (1)(f), the furnishing of a reasonable bond with good and sufficient surety, conditioned for performance of the duty to properly plug each dry or abandoned well. The bond may be forfeited in its entirety by the board for failure to perform the duty to properly plug each dry or abandoned well and may not be canceled or absolved if the well fails to produce oil or gas in commercial quantities, until: (i) the board determines the well is properly plugged and abandoned as provided in the board's rules; or (ii) the requirements of 82-11-163 are met. (f) the furnishing of reasonable bond or other surety for a carbon dioxide injection well, geologic storage reservoir, and the carbon dioxide stored in the reservoir with good and sufficient surety for performance of the duty to operate and manage a carbon dioxide injection well, geologic storage reservoir, and the carbon dioxide stored in the reservoir and to properly plug and reclaim each carbon dioxide injection well. The bond or other surety may be forfeited in its entirety by the board for failure to perform the duty to properly manage and operate a well, reservoir, and stored carbon dioxide or to plug a well. Except as provided in 82-11-183(8), the bond or other surety may not be canceled or absolved. (g) proper gauging or other measuring of oil and gas produced and saved to determine the quantity and quality of oil and gas; (h) that every person who produces, transports, or stores oil or gas or injects or disposes of water or carbon dioxide in this state shall make available within this state for a period of 5 years complete and accurate records of the quantities. The records must be available for examination by the board or its employees at all reasonable times. The person shall file with the board reports as it may prescribe with respect to quantities, transportations, and storages of the oil, gas, carbon dioxide, or water. (i) the installation, use, and maintenance of monitoring equipment or methods in the operation of carbon dioxide injection wells and class II injection wells. (2) In addition to the requirements of subsection (1), the geologic carbon dioxide injection well permitting system must include: (a) recordkeeping and reporting requirements sufficient to measure the effectiveness of carbon dioxide injection wells and geologic storage reservoirs; (b) characterization of the injection zone and aquifers above and below the injection zone that may be affected, including applicable pressure and fluid chemistry data to describe the projected effects of injection activities; (c) verification and monitoring at geologic storage reservoirs; (d) mitigation of leaks, including the ability to stop the leaking of carbon dioxide and to address impacts of leaks; (e) adequate baseline monitoring of drinking water wells within 1 mile of the perimeter of the geologic storage reservoir; and (f) at a minimum, requirements pursuant to applicable federal regulatory standards established by: (i) the Energy Independence and Security Act of 2007, Public Law 110-140, and subsequent acts; (ii) the Safe Drinking Water Act, 42 U.S.C. 300f, et seq.; and (iii) the underground injection control program, 40 CFR, parts 144 through 147.
Under section 82-11-111(5) of the Montana Oil and Gas Statute, the Oil and Gas Conservation Board has the power, among other things, to authorize its staff to enter any public or private property to:
investigate conditions relating to violations of permit conditions;
access and copy records;
inspect monitoring equipment or methods; and
sample fluids that the operator is required to sample.
Section 82-11-111(5)
(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 (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.
Corrective and remedial measures
Under section 82-11-123(2) of the Montana Oil and Gas Statute, the CO2 injection well permitting system under the Statute must include, among other things, mitigation of leaks, including the ability to stop CO2 leakage and to address leakage impacts.
Operational liabilities
Section 82-11-182 of the Montana Oil and Gas Statute stipulates that, until a certificate of project completion is issued in accordance with section 82-11-183(1) and title to stored CO2 transfers to the state in accordance with section 82-11-183(8), the operator is liable for the operation and management of the injection well, the storage reservoir and the injected CO2.
The financial security provided pursuant to section 82-11-123(1)(f) must be adequate to meet the above requirements.
Section 82-11-182
82-11-182. (Effective on occurrence of contingency) Liability for carbon dioxide during injection. (1) Until the certificate of project completion is issued pursuant to 82-11-183(1) and title to the stored carbon dioxide and geologic storage reservoir is transferred to the state pursuant to 82-11-183(8), the geologic storage operator is liable for the operation and management of the carbon dioxide injection well, the geologic storage reservoir, and the injected or stored carbon dioxide. (2) Bond or other surety furnished pursuant to 82-11-123(1)(f) must be adequate to meet the requirements of subsection (1). (3) For the purposes of 82-11-183 and this section, "title" includes title to the geologic storage reservoir and the stored carbon dioxide.
Under section 82-11-123(1)(f) of the Montana Oil and Gas Statute, the Oil and Gas Conservation Board has the power, among other things, to require operators to provide reasonable financial security for performance of the duties to operate and manage CO2 injection wells, storage reservoirs and stored CO2, and to properly plug and reclaim each well.
The security may be forfeited for failure to perform these duties, and may not be canceled or absolved except as provided in section 82-11-183 as part of a transfer of liability from the operator to the state.
Section 82-11-182(2) requires that such financial security be adequate to meet the requirements set out in section 82-11-182(1).
Section 82-11-123(1)(f)
82-11-123. (Effective on occurrence of contingency) . Requirements for oil and gas and carbon dioxide injection operations. (1) Subject to the administrative control of the department under 2-15-121, the board shall require:
(f) the furnishing of reasonable bond or other surety for a carbon dioxide injection well, geologic storage reservoir, and the carbon dioxide stored in the reservoir with good and sufficient surety for performance of the duty to operate and manage a carbon dioxide injection well, geologic storage reservoir, and the carbon dioxide stored in the reservoir and to properly plug and reclaim each carbon dioxide injection well. The bond or other surety may be forfeited in its entirety by the board for failure to perform the duty to properly manage and operate a well, reservoir, and stored carbon dioxide or to plug a well. Except as provided in 82-11-183(8), the bond or other surety may not be canceled or absolved.
Under section 82-11-111 of the Montana Oil and Gas Statute, the Oil and Gas Conservation Board has the power to, among other things:
adopt and enforce rules and orders to effectuate the purposes and intent of the Statute;
suspend or revoke permits for CO2 injection wells; and
authorize its staff to enter any public or private property to investigate violations of permit conditions.
Section 82-11-147 enables the Board to take a range of enforcement actions in the event of a violation or threatened violation of the Statute or a rule or Board order, while section 82-11-148 specifies various misdemeanors which will be subject to criminal penalties, including:
willfully violating any lawful rule or order of the Board; and
knowingly and willfully making or causing to be made a false entry or statement in a report, for the purpose of evading the Statute or any rule or order of the Board.
Under section 82-11-151, if a person is committing or about to commit a violation of the Statute or any order or rule that will cause substantial pollution, the person may, subject to certain conditions, be ordered to stop, avoid, or moderate the activity causing the violation, including through immediate closure or shutdown of any well.
Section 82-11-147
Section 82-11-148
Section 82-11-149
Section 82-11-151
82-11-147. Violations. (1) Notwithstanding any other provisions of this chapter, if the board finds upon receipt of evidence: (a) that a person is violating or threatening to violate this chapter or a rule or order of the board, the board may bring suit against that person in the district court of any county where the violation occurs or is threatened to restrain the person from continuing the violation or from carrying out the threat of violation; or (b) that a person is violating this chapter or a rule or order of the board in a manner for which the board is authorized to institute proceedings pursuant to 82-11-149, the board may issue an order either assessing a civil penalty in the amount prescribed in 82-11-149, up to a maximum administrative penalty of $125,000, or requiring compliance with this chapter or a rule or order, or both. (2) In a suit under subsection (1)(a), the court may grant to the board, without bond or other undertaking, such prohibitory and mandatory injunctions as the facts may warrant, including temporary restraining orders.
82-11-148. Criminal penalties. A person is guilty of a misdemeanor and shall be subject to a fine of not more than $10,000 per day of violation or imprisonment in a county jail for a term not exceeding 6 months or to both the fine and imprisonment if that person willfully violates any lawful rule or order of the board or if that person, for the purpose of evading this chapter or any rule or order of the board, knowingly and willfully: (1) makes or causes to be made a false entry or statement in a report required by this chapter or by a rule or order of the board or a false entry in a record, account, or memorandum required by this chapter or by a rule or order; (2) omits or causes to be omitted from the record, account, or memorandum full, true, and correct entries as required by this chapter or by a rule or order; or (3) removes from this state or destroys, mutilates, alters, or falsifies the record, account, or memorandum.
82-11-149. Civil penalties. (1) A person is guilty of a misdemeanor and is subject to a civil penalty of at least $75 and not more than $10,000 a day for each violation if that person violates any rule or order of the board or a provision of this chapter. Each day of violation constitutes a separate violation. (2) Action under this section does not bar enforcement of this chapter or of rules or orders issued under it by injunction or other appropriate remedy. (3) The board, or the attorney general upon request of the board, shall institute and maintain any enforcement proceedings in the name of the state. (4) Civil penalties collected pursuant to this section must be deposited in the state general fund.
82-11-151. Emergencies -- notice and hearing. (1) Notwithstanding any other provisions of this chapter, if the administrator or a board member finds that a person is committing or about to commit an act in violation of this chapter or any order or rule issued under it that, if it occurs or continues, will cause substantial pollution, the administrator under order of the board or the board member is authorized to order the person to stop, avoid, or moderate the act, including immediate closure or shutdown of any well. This authority is limited to acts the harmful effects of which will not be remedied immediately after the commission or cessation of the act or will represent an immediate threat to public health, safety, or welfare. (2) When any emergency requiring immediate action is found pursuant to subsection (1), the board is authorized to issue an emergency order without notice or hearing, which is effective upon issuance as provided in 82-11-141(3). (3) The board may have written notice served, personally or by mail, on the alleged violator or the violator's agent. The notice must state the provision alleged to be violated, the facts alleged to constitute the violation, the nature of corrective action the board requires, and the time within which the action is to be taken. For the purposes of this section, service by mail is complete on the date of mailing. (4) The notice must indicate that the order is an emergency order. (5) Pursuant to 82-11-141(3), the board may consider the emergency order at its next regular meeting, without compliance with the notice requirements of this chapter if they cannot be accomplished within the time available, and enter a second emergency order. (6) Upon issuing an order under subsection (2), the board may fix a place and time for a hearing, not later than 5 days after issuance unless the person to whom the order is directed requests a later time. The board may deny a request for a later time if it finds that the person to whom the order is directed is not complying with the order. If the board considers it practicable, the hearing must be held in the county where the violation is alleged to have occurred. As soon as practicable after the hearing, the board shall affirm, modify, or set aside the order. (7) If the order of the board is affirmed, it must be accompanied by a statement specifying the date or dates by which a violation must cease and may prescribe timetables for necessary action in preventing, abating, or controlling the pollution. An action for review of the order of the board may be initiated in the manner specified in 82-11-144. The initiation of an action or taking of an appeal may not stay the effectiveness of the order unless the court finds that the board did not have reasonable cause to issue an order under this section.
Under section 82-11-183 of the Montana Oil and Gas Statute, the Oil and Gas Conservation Board is required to issue an operator with a certificate of project completion once the following conditions are met:
CO2 injection has ended and 25 years have elapsed since such cessation;
the operator is in full compliance with regulations governing the storage reservoir;
the operator has shown that the reservoir will retain the CO2 stored in it, and that all wells, equipment, and facilities to be used in the post-closure period are in good condition and retain mechanical integrity;
the operator has shown that it has plugged wells, removed equipment and facilities, and completed all required reclamation work;
the operator has shown that the CO2 in the reservoir has become stable; and
except as provided in subsection (11), the operator has shown that it will continue to provide adequate financial security for at least twenty five years following issuance of the certificate of completion, and that the operator continues to accept liability for the reservoir and the stored CO2.
Before issuing a certificate of completion, the Board is also required under section 82-11-183(5) to solicit and consider comments from the Department of Environmental Quality (although the Board is nonetheless responsible for making the final decision).
Issuance of a certificate of completion forms the basis for the transfer from the operator to the state of liability for the storage reservoir and stored CO2, in accordance with section 81-11-183(7).
V. Management of long-term responsibilities and liabilities
Allocation of long term responsibilities & liabilities
Section 82-11-183 of the Montana Oil and Gas Statute provides for liability in respect of storage reservoirs and stored CO2 to transfer from the operator to the state following the issuance of a certificate of project completion, subject to several conditions.
Following issuance of a certificate of completion, the Oil and Gas Conservation Board is required to ensure that the operator monitors the wells and reservoir, in order to verify compliance with the various conditions, for a period of twenty five years.
After this period has elapsed, the operator can transfer title to the storage reservoir and stored CO2 to the state, provided that:
the reservoir and wells are in full compliance with applicable regulations;
the reservoir will maintain its structural integrity and will not allow CO2 to escape or pollute drinking water.
This transfer is to be effected as follows:
The Board must first solicit and consider comments from the Department of Environmental Quality.
The Board must then make a recommendation to the Board of Land Commissioners as to whether title should transfer to the state.
The Board of Land Commissioners will be responsible for making the final decision on the transfer.
This transfer encompasses all rights and interests in and all responsibilities associated with the storage reservoir and the stored CO2. Although made without payment or compensation, the transfer will release the operator and all persons who generated any injected CO2 from all regulatory requirements and liability associated with the reservoir and the CO2. Any financial security must also be released, and the state will become responsible for monitoring and managing the reservoir and stored CO2 until the federal government assumes this responsibility.
If the operator does not succeed in making this transfer, it will be liable for the reservoir and stored CO2 indefinitely, but may petition the Board every twenty five years to request such transfer.
Financial contributions to long term stewardship
Section 82-11-181 of the Montana Oil and Gas Statute requires operators to pay a fee on each ton of CO2 injected, to finance the state’s monitoring and management of storage reservoirs following any transfer of liability in accordance with section 82-11-183. The fee must be based on the anticipated actual expenses that will be incurred in monitoring and managing reservoirs post-closure.
If, however, an operator chooses to indefinitely accept liability pursuant to section 82-11-183(9)(a), the fee must be remitted to the operator. Where an operator is required to maintain liability under section 82-11-183(9)(b), the fee must not be remitted.
In addition, operators can be required under section 82-11-137(1)(b) to pay an annual operating fee of up to $5000 per injection well, to provide funds for the operation and enforcement of the CO2 injection well regulatory program.
Section 82-11-137
Section 82-11-181
82-11-137. (Temporary) Class II injection well operating fee. (1) For the purpose of providing funds for defraying the expenses of operating and enforcing the class II injection well regulatory program, as defined by the federal environmental protection agency or any successor agency, each operator of a class II injection well may be required to pay an annual operating fee not to exceed $300 per injection well. (2) The department shall collect the operating fee at such time as the board may prescribe by rule. All money collected under this section must be forwarded to the state treasurer for deposit in the state special revenue fund and must be used for the purpose prescribed in subsection (1). (3) The board shall, by rule adopted pursuant to the provisions of the Montana Administrative Procedure Act, fix the amount of the fee described in subsection (1) and may from time to time reduce or increase the amount thereof as the expenses chargeable against the state special revenue fund may require. However, the assessment fixed by the board may not exceed the limits prescribed in subsection (1). The amount of the fee must be expressed in dollars. (Effective on occurrence of contingency) 82-11-137. (Effective on occurrence of contingency) . Class II injection well operating fee -- carbon dioxide injection well operating fee. (1) For the purpose of providing funds for defraying the expenses of operating and enforcing: (a) the class II injection well regulatory program, as defined by the federal environmental protection agency or any successor agency, each operator of a class II injection well may be required to pay an annual operating fee not to exceed $300 per injection well; and (b) the carbon dioxide injection well regulatory program, each geologic storage operator of a carbon dioxide injection well may be required to pay an annual operating fee not to exceed $5,000 per injection well. (2) The department shall collect the operating fee at a time established by board rule. All money collected under this section must be forwarded to the state treasurer for deposit in the state special revenue fund and must be used for the purpose prescribed in subsection (1). (3) The board shall, by rule adopted pursuant to the provisions of the Montana Administrative Procedure Act, fix the amount of the fee described in subsection (1) and may from time to time reduce or increase the amount of the fee as the expenses chargeable against the state special revenue fund may require. However, the assessment fixed by the board may not exceed the limits prescribed in subsection (1). The amount of the fee must be expressed in dollars.
82-11-181. (Effective on occurrence of contingency) Geologic storage reservoir administrative fee -- account established. (1) (a) A geologic storage operator shall pay to the board a fee on each ton of carbon dioxide injected for storage for the purpose of carrying out the state's responsibility to monitor and manage geologic storage reservoirs. If a geologic storage operator chooses to indefinitely accept liability pursuant to 82-11-183(9)(a), the board shall remit the fee to the operator. If a geologic storage operator is required to maintain liability pursuant to 82-11-183(9)(b), the board may not remit the fee. (b) The fee must be in the amount set by board rule. (c) The amount must be based on the anticipated actual expenses that the board will incur in monitoring and managing geologic storage reservoirs during their postclosure phases. (2) There is a geologic storage reservoir program account in the special revenue fund. (3) (a) Each fiscal year there must be deposited in the account the fees collected pursuant to 82-11-184(2)(b) and subsection (1) of this section, to be used by the board for monitoring and managing geologic storage reservoirs pursuant to 82-11-183(6) and (8). (b) Funds received from bonds or other surety as authorized in 82-11-123(1)(f) and 82-11-183 must be deposited in the account. (4) Interest and earnings on the funds in the geologic storage reservoir program account accrue to that account.