Senate panel sends oil and gas bill to the floor with a unanimous vote

The Senate Resources and Environment Committee voted unanimously to sen to the floor a rewrite of the state’s oil and gas regulations.

The Thursday morning vote sets up final passage of the law designed to protect royalty owners, provide transparency and encourage competition in the state’s nascent oil and gas industry.

The House 68-0 vote Thursday was a a remarkable margin for the bill that ended up a compromise engineered primarily by Rep. Judy Boyle, R-Midvale, who introduced it March 1. But a marathon meeting between landowners, lawmakers, several industry representatives and Idaho Gov. Butch Otter led to a revised bill.

That bill was sent to the amending order Tuesday by the House Resources and Conservation Committee after two days of hearings. Boyle said the amendments were written Tuesday night and met the approval of all the parties.

“We came to final resolution last night,” Boyle said Wednesday.

John Foster, a lobbyist for Alta Mesa and its subsidiaries in Idaho, said the company had no comment.

The main amendment eliminated the requirement that in leases with landowners, an oil company must pay the entire costs of marketing, transporting and processing oil, gas or natural gas plant liquids unless other arrangements are made. It also removes the requirement for contracts with landowners who are forced to sell their oil and gas by the state through a process called “forced pooling.”

The bill changes the makeup of the Idaho Oil and Gas Conservation Commission, putting three petroleum industry experts, the Department of Lands director and a county commissioner from an oil producing county on the commission.

The bill would open up to public review records that had been closed to the public and, for six months to a year, the state. To help other drillers compete, it would require the Idaho Department of Lands to post the records on its website and release them without first requiring a public records request.

The new bill also would allow operators to use default spacing for gas wells of one in 640 acres or one in 160 acres. The unit spacing can be changed and shaped to ensure that gas reservoirs are developed to best conserve the resource and ensure mineral rights holders are properly compensated. Alta Mesa wanted to keep the 640 acre spacing that’s in current law.

The bill would require operators to show that it has 67 percent of the royalty owners in a spacing unit in support of its application to force all owners in the pool to allow drilling. But after a period of time, that requirement could drop to 55 percent of royalty owners.

The bill authorizes the Department of Lands to share information with the Tax Commission.

This story was originally published March 22, 2017 at 6:20 PM with the headline "Senate panel sends oil and gas bill to the floor with a unanimous vote."