INTRODUCTION OF THE WESTERN WATERS AND SURFACE OWNERS PROTECTION ACT
(Extensions of Remarks - December 09, 2003)

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[Extensions of Remarks]
[Pages E2533-E2534]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




  INTRODUCTION OF THE WESTERN WATERS AND SURFACE OWNERS PROTECTION ACT

                                 ______
                                 

                            HON. MARK UDALL

                              of colorado

                    in the house of representatives

                        Monday, December 8, 2003

  Mr. UDALL of Colorado. Mr. Speaker, today I am joining with my 
colleague from New Mexico, Representative Tom Udall, in introducing the 
Western Waters and Surface Owners Protection Act.
  The western United States is blessed with significant energy 
resources. In appropriate places, an 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 our bill responds to 
this need. It has three primary purposes. The first is to assure that 
the development of those energy resources in the West will not mean 
destruction of precious water resources. The second is 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 the third is 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 the development of this gas.
  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 on the surface and allowed to flow into streams or 
other water bodies, including ditches used for irrigation.
  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 New Mexico 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 we 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 our bill.
  Our 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. Our 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, our 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 farming and ranching.
  This split-estate situation can lead to conflicts. And while we 
support development of energy resources where appropriate, we 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 our 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:
  We believe 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, our 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.
  We think that most energy companies want to avoid harming the surface 
owners, so we expect that it will usually be possible for them to reach 
such agreements. However, we 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

[[Page E2534]]

major difference--namely, while current law allows a surface owner to 
effectively veto development of coal resources, under our bill a 
surface owner ultimately could not block development of oil or gas 
underlying his or her lands. This difference reflects our belief 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 we support their development in appropriate areas and in 
responsible ways. We 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:

                            Outline of Bill

       SECTION ONE--This section provides a short title (``Western 
     Waters and Surface Owners Protection Act''), makes several 
     findings about the need for the legislation, and states the 
     bill's purpose, which is ``to provide for the protection of 
     water resources and surface estate owners in the development 
     of oil and gas resources, including coalbed methane.''
       TITLE I--This title deals with the protection of water 
     resources. It includes three sections:
       Section 101 amends current law to specify that an operator 
     producing oil or gas under a Federal lease must: (1) replace 
     a water supply that is contaminated or interrupted by 
     drilling operations; (2) assure any reinjected water goes 
     only to the same aquifer from which it was extracted or an 
     aquifer of no better water quality; and (3) to develop a 
     proposed water management plan before obtaining a lease
       Section 102 amends current law to make clear that 
     extraction of water in connection with development of oil or 
     gas (including coalbed methane) is subject to an appropriate 
     permit and requirement to minimize adverse effects on 
     affected lands or waters.
       Section 103 provides that nothing in the bill will: (1) 
     affect any State's right or jurisdiction with respect to 
     water; or (2) limit, alter, modify, or amend any interstate 
     compact or judicial rulings that apportion water among and 
     between different States.
       Title II--This title deals with the protection of surface 
     owners. It includes four sections:
       Section 201 provides definitions for several terms used in 
     Title II.
       Section 202 requires a party seeking to develop federal oil 
     or gas in a split-estate situation to first seek to reach an 
     agreement with the surface owner or owners that spells out 
     how the energy development will be carried out, how the 
     affected lands will be reclaimed, and that compensation will 
     be made for damages. It provides that if no such agreement is 
     reached within 90 days after the start of negotiations the 
     matter will be referred to arbitration by a neutral party 
     identified by the Interior Department.
       Section 203 provides that if no agreement under section 202 
     is reached within 90 days after going to arbitration, the 
     Interior Department can permit energy development to proceed 
     under an approved plan of operations and posting of an 
     adequate bond. This section also requires the Interior 
     Department to provide surface owners with an opportunity to 
     comment on proposed plans of operations, participate in 
     decisions regarding the amount of the bonds that will be 
     required, and to participate in on-site inspections if the 
     surface owners have reason to believe that plans of 
     operations are not being followed. In addition, this section 
     allows surface owners to petition the Interior Department for 
     payments under bonds to compensate for damages and authorizes 
     the Interior Department to release bonds after the energy 
     development is completed and any damages have been 
     compensated.
       Section 204 requires the Interior Department to notify 
     surface owners about lease sales and subsequent decisions 
     involving federal oil or gas resources in their lands.
       Title III--This title amends current law to require parties 
     producing oil or gas under a Federal lease to restore 
     affected lands and to post bonds to cover reclamation costs. 
     It also requires the GAO to review Interior Department 
     implementation of this part of the bill and to report to 
     Congress about the results of that review and any 
     recommendations for legislative or administrative changes 
     that would improve matters.
       Title IV--This title deals with abandoned oil or gas wells. 
     It includes three sections:
       Section 401 defines the wells that would be covered by the 
     title.
       Section 402 requires the Interior Department, in 
     cooperation with the Department of Agriculture, to establish 
     a program for reclamation and closure of abandoned wells on 
     federal lands or that were drilled for development of 
     federally-owned minerals in split-estate situations. It 
     authorizes appropriations of $5 million in fiscal years 2005 
     and 2006.
       Section 403 requires the Interior Department, in 
     consultation with the Energy Department, to establish a 
     program to assist states and tribes to remedy environmental 
     problems caused by abandoned oil or gas wells on non-federal 
     and Indian lands. It authorizes appropriations of $5 million 
     in fiscal years 2005, 2006, and 2007.

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