Colorado Water June 2006 - Laserfiche WebLink

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Regulatory and Legal Considerations The question has been raised several times, "Who owns treated produced water? Who has jurisdiction over treated produced water ?" In January of 2004, an engineering, legal, and logisti- cal study was prepared for the Lea and Carlsbad Soil and Water Conservation Districts in New Mexico. The study's purpose was to evaluate the feasibility of treating and using produced water in that region. Luebben Johnson & Young LLP in Albuquerque did the legal research and observed that "wastewater from oil and gas production is generally treated as part of the real property's mineral estate, which is originally owned by the landowner, conveyed to the producer in the oil and gas lease, and transferable by the producer as personal property." While there are no specific laws in New Mexico or other states directly dealing with the "appropriation" of waste- water found in conjunction with oil and natural gas (with the exception of shallow coal bed methane water), there are indications in statutory, administrative, and appellate law that produced water is not publicly owned water, but part of the privately owned mineral estate conveyed to the oil and gas operator. New Mexico law is quite clear with regard to the Oil Conservation Division's jurisdiction over produced water. OCD has the responsibility to hold producers accountable for the proper disposition of their wastes, which include produced water. In addition, the New Mexico legislature recognized the operator's ownership when it passed a tax credit bill of $1,000 per acre foot to operators who could deliver clean produced water to the Interstate Stream Com- mission at the Pecos River in SE New Mexico. The economic treatment of produced water is right around the corner from being widely utilized throughout the oil field. It will be a win -win for the oil and natural gas industry and the environment, especially in the and West. In order for this to happen, companies must overcome the current paradigm — the single - minded thinking — that any produced water requires a disposal well. Further, compa- nies must do a better job of quantifying their disposal costs: they must not assume the cost of owning and operating a disposal well is zero merely because the company has sunk capital into a well. The companies that overcome these hurdles will be the companies that will develop new oil and natural gas reserves in areas previously considered not economically feasible because the wells made too much water. This is actually a win - win -win scenario because it allows our country to produce more of our own domestic hydrocarbon resources. 31st Colorado Water Workshop Wednesday- Friday, July 26 -28 Gunnison, CO The Developed Resource Keynote: Patricia Limerick on "The Increasingly Finite West" Questions we will consider: Is there truly no more water to develop? Discussion moderated by Justice Greg Hobbs Implications and consequences Water as property, public good, commodity, commons, ecosystem base? Do we need to tend to shifting relationships between energy and water? Is augmentation water for the Colorado River Basin a realistic goal? Are the "1177 processes' helping to address allocation/ reallocation issues? Within basins? Between basins? For more information or to register, go to www.westem.edu /water or contact George Sibley at water@westem.edu.