In a state where water historically has dominated the energy discussion, there is more talk of oil and natural gas development, following the state’s adoption of new rules and regulations governing the expected increase in exploration and production (E&P) activity.

With the state brought into the 21st Century with rules that fit the industry’s latest technology, Idaho Department of Lands (IDL) Director Tom Schultz said he plans to hire a petroleum engineer to oversee stepped-up seismic testing for exploration of oil and gas in the western sector of the state.

As part of the new oil/gas rules, the state Oil and Gas Conservation Commission (OGCC) has updated the fee amounts to be charged E&P operators, said Schultz, who is the secretary to the five-member OGCC, which includes the governor and four other statewide elected officeholders.

Idaho’s legislature in January passed a new set of rules for the oil/gas industry (see Shale Daily, Jan. 23). The rules were hammered out with the industry and other stakeholders, replacing temporary ones adopted by the OGCC unanimously for hydraulic fracturing (fracking) for natural gas (see Shale Daily, April 21, 2011).

The unanimous move by the state’s rarely convened OGCC was prompted by natural gas drilling in a single county, Payette. The commission rejected an attempt to include a ban on the use of alleged cancer-causing chemicals.

Schultz said this year’s action responds to the gas reserves discovered three years ago in western Idaho. “Idaho’s laws and rules regulating the exploration and extraction of oil and natural gas were nearly two decades old,” he said. Industry practices and expectations had changed considerably in the past 20 years.”

As the end of IDL’s original efforts to update the state’s legal and oil/gas regulatory framework, Schultz said protections are now in place for the state’s water resources, including periodic testing of well integrity and modifications to the well drilling and plugging rules to prevent waste and protect fresh water. He said surface owner protections were added, along with basic emergency response requirements.

The rules further address: active and inactive wells, defining them to discourage improper well abandonment; fracking as part of requirements for applications operating and reporting; and new bonding requirements.

Idaho has issued 14 oil and gas drilling permits since 2007 and three other permits are pending, according to the state’s Department of Lands. Seven of the wells permitted in the state are shut in awaiting a pipeline.