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Idaho Revises Oil, Gas Laws to Prepare For Increased Activity

In response to proposals from state lands officials, the Idaho legislature recently passed three measures to update oversight of oil and natural gas development.

The measures (HB 48, 49 and 50) have updated state rules regarding fees, permitting processes and operating regulations, according to Tom Schultz, director of the Idaho Department of Lands (IDL), who proposed some of the changes.

“The changes better align Idaho's oil and gas laws with industry best practices, and prevent waste and protect mineral owners during oil and gas development,” Schultz said. “The IDL looked to other states with more mature oil and gas industries in coming up with recommendations that work best for Idaho.”

The legislature's House Resources and Conservation Committee moved the bills earlier this year to expand and clarify the role of the state's Oil and Gas Conservation Commission (OGCC) (see Shale Daily, Feb. 6; Jan. 28).

HB 50 gives OGCC clearer authority over common pools of oil and gas that extend through areas of multiple mineral rights owners. Under the new rules, exploration and production (E&P) companies can work together to develop oil and gas field pools, which are designed to allow fewer wells to be drilled to promote efficiency and prevent waste, according to IDL.

HB 48 will allow E&Ps to wait six months to disclose their production records and another six months for those records to be made public. HB 49 sets application fees that will cover the IDL's administrative costs for processing applications.

There has been increased interest in possible plays in southwest Idaho. At least one E&P tracked the new oil/gas legislation, Alta Mesa Holdings LP, a Houston-based privately held company with stakes in Payette, Washington and Gem counties. Alta Mesa supported the new rules as an offshoot of a negotiated settlement already approved by the OGCC.

Alta Mesa expects in May to finish an 11-mile natural gas pipeline in southwestern Idaho to transport production from more than a dozen wells.

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