Board: means the Board of Oil, Gas, and Mining. See Utah Code 40-6-2
Contract: A legal written agreement that becomes binding when signed.
Crude oil: means hydrocarbons, regardless of gravity, that:
(a)
are produced at the wellhead in liquid form; and
(b)
(i)
occur naturally in the liquid phase in the reservoir; or
(ii)
are produced through enhanced recovery operations authorized by the board in accordance with Subsection 40-6-5(3)(c). See Utah Code 40-6-2
Division: means the Division of Oil, Gas, and Mining. See Utah Code 40-6-2
Gas: means natural gas, as defined in Subsection (10), natural gas liquids, as defined in Subsection (11), other gas, as defined in Subsection (17), or any mixture of them. See Utah Code 40-6-2
Jurisdiction: (1) The legal authority of a court to hear and decide a case. Concurrent jurisdiction exists when two courts have simultaneous responsibility for the same case. (2) The geographic area over which the court has authority to decide cases.
Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
Oil: includes tar sands produced at the wellhead in liquid form through enhanced recovery operations authorized by the board in accordance with Subsection 40-6-5(3)(c). See Utah Code 40-6-2
Oil and gas operations: means to explore for, develop, or produce oil and gas. See Utah Code 40-6-2
Operator: means a person who has been designated by the owners or the board to operate a well or unit. See Utah Code 40-6-2
Owner: means a person who has the right:
(a)
to drill into and produce from a reservoir; and
(b)
to appropriate the oil and gas produced for that person or for that person and others. See Utah Code 40-6-2
State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
Surface land: means privately owned land:
(a)
overlying privately owned oil and gas resources;
(b)
upon which oil and gas operations are conducted; and
Surface land owner: means a person who owns, in fee simple absolute, all or part of the surface land as shown by the records of the county where the surface land is located. See Utah Code 40-6-2
Surface use agreement: means an agreement between an owner or operator and a surface land owner addressing:
(a)
the use and reclamation of surface land owned by the surface land owner; and
(b)
compensation for damage to the surface land caused by oil and gas operations that result in:
(i)
loss of the surface land owner's crops on the surface land;
(ii)
loss of value of existing improvements owned by the surface land owner on the surface land; and
the inefficient, excessive, or improper use or the unnecessary dissipation of oil or gas or reservoir energy;
(b)
the inefficient storing of oil or gas;
(c)
the locating, drilling, equipping, operating, or producing of any oil or gas well in a manner that causes:
(i)
a reduction in the quantity of oil or gas ultimately recoverable from a reservoir under prudent and economical operations;
(ii)
unnecessary wells to be drilled; or
(iii)
the loss or destruction of oil or gas either at the surface or subsurface; or
(d)
the production of oil or gas in excess of:
(i)
transportation or storage facilities; or
(ii)
the amount reasonably required to be produced as a result of the proper drilling, completing, testing, or operating of a well or otherwise utilized on the lease from which it is produced. See Utah Code 40-6-2
(2)
The board shall make rules and orders as necessary to administer the following provisions:
(a)
Ownership of all facilities for the production, storage, treatment, transportation, refining, or processing of oil and gas shall be identified.
(b)
Well logs, directional surveys, and reports on well location, drilling, and production shall be made and filed with the division. Logs of wells marked “confidential” shall be kept confidential for one year after the date on which the log is required to be filed, unless the operator gives written permission to release the log at an earlier date. Production reports shall be:
(i)
filed monthly;
(ii)
accurate; and
(iii)
in a form that reasonably serves the needs of state agencies and private fee owners.
(c)
Monthly reports from gas processing plants shall be filed with the division.
(d)
Wells shall be drilled, cased, cemented, operated, and plugged in such manner as to prevent:
(i)
the escape of oil, gas, or water out of the reservoir in which they are found into another formation;
(ii)
the detrimental intrusion of water into an oil or gas reservoir;
(iii)
the pollution of fresh water supplies by oil, gas, or salt water;
(iv)
blowouts;
(v)
cavings;
(vi)
seepages;
(vii)
fires; and
(viii)
unreasonable:
(A)
loss of a surface landowner‘s crops on surface land;
(B)
loss of value of existing improvements owned by a surface land owner on surface land; and
(C)
permanent damage to surface land.
(e)
The drilling of wells may not commence without an adequate and approved supply of water as required by Title 73, Chapter 3, Appropriation. This Subsection (2)(e) is not intended to impose additional legal requirements, but to assure that existing legal requirements concerning the use of water have been met before the commencement of drilling.
(f)
Subject to Subsection (9), an operator shall furnish a reasonable performance bond or other good and sufficient surety, conditioned for the performance of the duty to:
(i)
plug each dry or abandoned well;
(ii)
repair each well causing waste or pollution;
(iii)
maintain and restore the well site; and
(iv)
except as provided in Subsection (8), protect a surface land owner against unreasonable:
(A)
loss of a surface land owner’s crops on surface land;
(B)
loss of value of existing improvements owned by a surface land owner on surface land; and
(C)
permanent damage to surface land.
(g)
Production from wells shall be separated into oil and gas and measured by means and upon standards that are prescribed by the board and reflect current industry standards.
(h)
Crude oil obtained from any reserve pit, disposal pond or pit, or similar facility, and any accumulation of nonmerchantable waste crude oil shall be treated and processed, as prescribed by the board.
(i)
Any person who produces, sells, purchases, acquires, stores, transports, refines, or processes oil or gas or injects fluids for cycling, pressure maintenance, secondary or enhanced recovery, or salt water disposal in this state shall maintain complete and accurate records of the quantities produced, sold, purchased, acquired, stored, transported, refined, processed, or injected for a period of at least six years. The records shall be available for examination by the board or the board’s agents at any reasonable time. Rules enacted to administer this Subsection (2)(i) shall be consistent with applicable federal requirements.
(j)
Any person with an interest in a lease shall be notified when all or part of that interest in the lease is sold or transferred.
(k)
The assessment and collection of administrative penalties is consistent with Section 40-6-11.
(3)
The board has the authority to regulate:
(a)
all operations for and related to the production of oil or gas including:
(i)
drilling, testing, equipping, completing, operating, producing, and plugging of wells; and
(ii)
reclamation of sites;
(b)
the spacing and location of wells;
(c)
operations to increase ultimate recovery, such as:
(i)
cycling of gas;
(ii)
the maintenance of pressure; and
(iii)
the introduction of gas, water, or other substances into a reservoir;
(d)
the disposal of salt water and oil-field wastes;
(e)
the underground and surface storage of oil, gas, or products; and
(f)
the flaring of gas from an oil well.
(4)
For the purposes of administering this chapter, the board may designate:
(a)
wells as:
(i)
oil wells; or
(ii)
gas wells; and
(b)
pools as:
(i)
oil pools; or
(ii)
gas pools.
(5)
The board has exclusive jurisdiction over:
(a)
class II injection wells, as defined by the federal Environmental Protection Agency or a successor agency;
(b)
pits and ponds in relation to these injection wells;
(c)
when granted primacy by the Environmental Protection Agency, class VI injection wells, as defined by the Environmental Protection Agency or a successor agency; and
(d)
storage facilities, as that term is defined in Section 40-11-1.
(6)
The board has jurisdiction:
(a)
to hear questions regarding multiple mineral development conflicts with oil and gas operations if there:
(i)
is potential injury to other mineral deposits on the same lands; or
(ii)
are simultaneous or concurrent operations conducted by other mineral owners or lessees affecting the same lands; and
(b)
to enter the board’s order or rule with respect to those questions.
(7)
The board has enforcement powers with respect to operators of minerals other than oil and gas as are set forth in Section 40-6-11, for the sole purpose of enforcing multiple mineral development issues.
(8)
Subsection (2)(f)(iv) does not apply if the surface land owner is a party to, or a successor of a party to:
(a)
a lease of the underlying privately owned oil and gas;
(b)
a surface use agreement applicable to the surface land owner’s surface land; or
(c)
a contract, waiver, or release addressing an owner’s or operator’s use of the surface land owner’s surface land.
(9)
(a)
The board shall review rules made under Subsection (2)(f) to determine whether the rules provide adequate fiscal security for the fiscal risks to the state related to oil and gas operations.
(b)
During the board’s review under this Subsection (9), the board may consider the bonding schemes of other states.
