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Introduction of the Western Waters and Farm Lands Protections Act

Location: Washington, DC



Mr. UDALL of Colorado. Mr. Speaker, today I am introducing the Western Waters and Farm Lands Protection Act.

The bill's purpose is to make it more likely that the energy resources in our Western states will be developed in ways that are protective of vital water supplies and respectful of the rights and interests of the agricultural community.

Toward that end, it addresses three aspects of oil and gas development.

First, it establishes clear requirements for proper management of ground water that is extracted in the course of oil and gas development.

Second, it provides for greater involvement of surface owners in plans for oil and gas development and requires the Interior Department to give surface owners advance notice of lease sales that would affect their lands and to notify them of subsequent events related to proposed or ongoing energy development.

Finally, the bill would amend the Mineral Leasing Act to require developers to draft reclamation plans and post reclamation bonds for the restoration of lands affected by oil and gas drilling.

This bill is based on H.R. 3698, which I introduced last December. Since then, I have consulted with people interested in this subject, to see whether further refinements of the legislation would be appropriate. The bill I am introducing today reflects those conversations, and in particular incorporates a change in the wording of section 102 proposed by the Colorado Farm Bureau.

That section deals with application of the Clean Water Act to waters extracted from an underground formation in connection with development of oil and gas, including coalbed methane. The Colorado Farm Bureau was concerned that the wording of the corresponding section in H.R. 3698 might be read as applying to other activities in addition to oil and gas development. That was not my intention, but to remove any doubt on that point, I agreed to the proposed revision, which is included in the bill I am introducing today.

Mr. Speaker, the western United States is blessed with significant energy resources. In appropriate places, and under appropriate conditions, they can and should be developed for the benefit of our country. But it's important to recognize the importance of other resources-particularly water-and other uses of the lands involved-and this bill responds to this need.

Its primary purposes are--(1) to assure that the development of those energy resources in the West will not mean destruction of precious water resources; (2) to reduce potential conflicts between development of energy resources and the interests and concerns of those who own the surface estate in affected lands; and (3) to provide for appropriate reclamation of affected lands. Water Quality Protection

One new energy resource is receiving great attention-gas associated with coal deposits, often referred to as coalbed methane. An October 2000 United States Geological Survey report estimated that the U.S. may contain more than 700 trillion cubic feet (tcf) of coalbed methane and that more than 100 tcf of this may be recoverable using existing technology. In part because of the availability of these reserves and because of tax incentives to exploit them, the West has seen a significant increase in its development.

Development of coalbed methane usually involves the extraction of water from underground strata. Some of this extracted water is reinjected into the ground, while some is retained in surface holding ponds or released and allowed to flow into streams or other water bodies, including irrigation ditches.

The quality of the extracted waters varies from one location to another. Some are of good quality, but often they contain dissolved minerals (such as sodium, magnesium, arsenic, or selenium) that can contaminate other waters-something that can happen because of leaks or leaching from holding ponds or because the extracted waters are simply discharged into a stream or other body of water. In addition, extracted waters often have other characteristics, such as high acidity and temperature, which can adversely affect agricultural uses of land or the quality of the environment.

In Colorado and other states in the arid West, water is scarce and precious. So, as we work to develop our domestic energy resources, it is vital that we safeguard our water-and I believe that clear requirements for proper disposal of these extracted waters are necessary in order to avoid some of these adverse effects. That is the purpose of the first part of the bill.

The bill (in Title I) includes two requirements regarding extracted water.

First, it would make clear that water extracted from oil and gas development must comply with relevant and applicable discharge permits under the Clean Water Act. Lawsuits have been filed in some western states regarding whether or not these discharge permits are required for coalbed methane development. The bill would require oil and gas development to secure permits if necessary and required, like any other entity that may discharge contaminates into the waters of the United States.

Second, the bill would require those who develop federal oil or gas-including coalbed methane-under the Mineral Leasing Act to do what is necessary to make sure their activities do not harm water resources. Under this legislation, oil or gas operations that damage a water resource-by contaminating it, reducing it, or interrupting it-would be required to provide replacement water. For water produced in connection with oil or gas drilling that is injected back into the ground, the bill requires that this must be done in a way that will not reduce the quality of any aquifer. For water that is not reinjected, the bill requires that it must be dealt with in ways that comply with all Federal and State requirements.

And, because water is so important, the bill requires oil and gas operators to make the protection of water part of their
plans from the very beginning, requiring applications for oil or gas leases to include details of ways in which operators will protect water quality and quantity and the rights of water users.

These are not onerous requirements, but they are very important-particularly with the great increase in drilling for coalbed methane and other energy resources in Colorado, Wyoming, Montana, and other western states. Surface Owner Protection
In many parts of the country, the party that owns the surface of some land does not necessarily own the minerals beneath those lands. In the West, mineral estates often belong to the federal government while the surface estates are owned by private interests, who typically use the land for fanning and ranching.

This split-estate situation can lead to conflicts. And while I support development of energy resources where appropriate, I also believe that this must be done responsibly and in a way that demonstrates respect for the environment and overlying landowners.

The second part of the bill (Title II) is intended to promote that approach, by establishing a system for development of federal oil and gas in split-estate situations that resembles-but is not identical to-the system for development of federally-owned coal in similar situations.

Under federal law, the leasing of federally owned coal resources on lands where the surface estate 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.

I believe that that there should be similar respect for the rights and interests of surface estate owners affected by development of oil and gas and that this should be done by providing clear and adequate standards and increasing the involvement of these owners in plans for oil and gas development.

Accordingly, the bill requires the Interior Department to give surface owners advance notice of lease sales that would affect their lands and to notify them of subsequent events related to proposed or ongoing developments related to such leases.

In addition, the bill requires that anyone proposing the drill for federal minerals in a split-estate situation must first try to reach an agreement with the surface owner that spells out what will be done to minimize interference with the surface owner's use and enjoyment and to provide for reclamation of affected lands and compensation for any damages.

I am convinced that most energy companies want to avoid harming the surface owners, so I expect that it will usually be possible for them to reach such agreements. However, I recognize that this may not always be the case-and the bill includes two provisions that address this possibility: (1) if no agreement is reached within 90 days, the bill requires that the matter be referred to neutral arbitration; and (2) the bill provides that if even arbitration fails to resolve differences, the energy development can go forward, subject to Interior Department regulations that will balance the energy development with the interests of the surface owner or owners.

As I mentioned, these provisions are patterned on the current law dealing with development of federally-owned coal in split-estate situations. However, it is important to note one major difference-namely, while current law allows a surface owner to effectively veto development of coal resources, under the bill a surface owner ultimately could not block development of oil or gas underlying his or her lands. This difference reflects the fact that appropriate development of oil and natural gas is needed. Reclamation Requirements

The bill's third part (Titles III and IV) addresses reclamation of affected lands.

Title III would amend the Mineral Leasing Act by adding an explicit requirement that parties that produced oil or gas (including coalbed methane) under a federal lease must restore the affected land so it will be able to support the uses it could support before the energy development. Toward that end, this part of the bill requires development of reclamation plans and posting of reclamation bonds. In addition, so Congress can consider whether changes are needed, the bill requires the General Accounting Office to review how these requirements are being implemented and how well they are working.

And, finally, Title IV would require the Interior Department to--(1) establish, in cooperation with the Agriculture Department, a program for reclamation and closure of abandoned oil or gas wells located on lands managed by an Interior Department agency or the Forest Service or drilled for development of federal oil or gas in split-estate situations; and (2) establish, in consultation with the Energy Department, a program to provide technical assistance to state an tribal governments that are working to correct environmental problems cased by abandoned wells on other lands. The bill would authorize annual appropriations of $5 million in fiscal 2005 and 2006 for the federal program and annual appropriations of
$5 million in fiscal 2005, 2006, and 2007 for the program of assistance to the states and tribes.

Mr. Speaker, our country is overly dependent on a single energy source-fossil fuels-to the detriment of our environment, our national security, and our economy. To lessen this dependence and to protect our environment, we need to diversity our energy portfolio and increase the contributions of alternative energy sources to our energy mix. However, for the foreseeable future, petroleum and natural gas (including coalbed methane) will remain important parts of a diversified energy portfolio-and I support their development in appropriate areas and in responsible ways. I believe this legislation can move us closer toward this goal by establishing some clear, reasonable rules that will provide greater assurance and certainty for all concerned, including the energy industry and the residents of Colorado, New Mexico, and other Western states. Here is a brief outline of its major provisions:

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