[Congressional Record (Bound Edition), Volume 150 (2004), Part 4]
[Extensions of Remarks]
[Pages 4965-4967]
[From the U.S. Government Publishing Office, www.gpo.gov]




    INTRODUCTION OF THE WESTERN WATERS AND FARM LANDS PROTECTION ACT

                                 ______
                                 

                            HON. MARK UDALL

                              of colorado

                    in the house of representatives

                        Tuesday, March 23, 2004

  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

[[Page 4966]]

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:

                            Outline of Bill

       Section One--This section provides a short title (``Western 
     Waters and Farm Lands 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 the 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

[[Page 4967]]

     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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