ORS Chapter 520
Chapter 520 — Conservationof Gas and Oil
2009 EDITION
CONSERVATIONOF GAS AND OIL
MINERALRESOURCES
GENERALPROVISIONS
520.005 Definitions
520.017 Fees;rules; disposition of fees
520.025 Permitfor drilling well or using well; extension; annual report; grounds for grantingor denying permit
520.027 Informationholes; holes drilled as part of seismic program; trade secrets
520.035 Wasteof oil or gas prohibited
520.045 Determinationof waste of oil or gas
520.055 Generaljurisdiction and authority of board; tidal lands; rules
520.095 Rulesand orders; bond
520.097 Abandonmentor completion of well; well logs and records; trade secrets
520.125 Authorityof board to summon witnesses and require production of evidence
520.145 Judicialreview of board or department actions
520.155 Records,accounts, reports and writings not to be falsified, altered, destroyed orremoved from state
520.165 Aidingor abetting in violation of chapter prohibited
520.175 Injunctionsto restrain violation or threatened violation of chapter
SPACINGUNITS
520.210 Establishmentof spacing units for pool or field; purpose; scope; effect
520.220 Integratinginterests or tracts within spacing unit
UNITOPERATIONS
520.230 Approvedagreement for cooperative or unit development of pool not to be construed asviolating certain regulatory laws
520.240 Voluntaryunitization of operations by lessees of tidal or submersible lands; Departmentof State Lands’ function
520.260 Hearingto determine need for unitization of operations; required findings; order
520.270 Planfor unit operations
520.280 Allocationof production under plan; ownership
520.290 Whenunitization order to become effective; supplemental hearings
520.300 Amendingunitization order
520.310 Unitizationof area including area previously unitized; partial unitization of pool
520.320 Unitizationorder does not terminate prior agreements or affect oil and gas rights;acquisition of property during unit operations
520.330 Effectof operations in unit area
UNDERGROUNDRESERVOIRS
520.340 Legislativefindings
520.350 Propertyrights in underground reservoirs for natural gas storage
PENALTIES
520.991 Penalties
GENERALPROVISIONS
520.005Definitions.As used in this chapter, unless the context requires otherwise:
(1)“Condensate” means liquid hydrocarbons that were originally in the gaseousphase in the reservoir.
(2)“Field” means the general area underlaid by one or more pools.
(3)“Gas” means all natural gas and all other fluid hydrocarbons not defined as oilin subsection (5) of this section, including condensate originally in thegaseous phase in the reservoir.
(4)“Information hole” means a hole drilled for information purposes only,including but not limited to core holes, stratigraphic holes or other testholes.
(5)“Oil” means crude petroleum oil and all other hydrocarbons, regardless ofgravity, that are produced in liquid form by ordinary production methods, butdoes not include liquid hydrocarbons that were originally in a gaseous phase inthe reservoir.
(6)“Person” means any natural person, partnership, corporation, association,receiver, guardian, fiduciary, administrator, representative of any kind, orthe State of Oregon and any public body as defined in ORS 174.109.
(7)“Pool” means an underground reservoir containing a common accumulation of oiland natural gas. A zone of a structure that is completely separated from anyother zone in the same structure is a pool.
(8)“Owner” means a person who has the right to drill into and to produce from anypool and to appropriate the oil or gas produced therefrom either for others,for the person or for the person and others.
(9)“Protect correlative rights” means that the action or regulation by the boardaffords a reasonable opportunity to each person entitled thereto to recover orreceive the oil or gas in the tract or tracts of the person or the equivalentthereof, without being required to drill unnecessary wells or to incur otherunnecessary expense to recover or receive such oil or gas or its equivalent.
(10)“Seismic program” means the collection of seismic exploration data through acontinuous field operation.
(11)“Sidetrack” means to reenter a well from the well’s surface location withdrilling equipment for the purpose of deviating from the existing well bore toachieve production from an alternate zone or bottom hole location, or to remedyan engineering problem encountered in the existing well bore.
(12)“Unit area” means one or more pools or parts thereof under unit operationpursuant to ORS 520.260 to 520.330 and 520.230 (2).
(13)“Underground reservoir” means any subsurface sand, strata, formation, aquifer,cavern or void whether natural or artificially created, suitable for theinjection and storage of natural gas therein and the withdrawal of natural gastherefrom, but excluding a pool.
(14)“Underground storage” means the process of injecting and storing natural gaswithin and withdrawing natural gas from an underground reservoir.
(15)“Waste of oil or gas” means:
(a)The inefficient, excessive or improper use or dissipation of reservoir energyof any pool, or the locating, spacing, drilling, equipping, operating orproducing of any oil well or gas well in a manner that results or may result inreducing the quantity of oil or gas ultimately recoverable from any pool; or
(b)The inefficient storing of oil and the locating, spacing, drilling, equipping,operating or producing of oil wells or gas wells in a manner that causes or maycause unnecessary or excessive surface loss or destruction of oil or gas.
(16)(a)“Well” means a well drilled for the purpose of producing or storing oil or gasor other gaseous substances, reservoir pressure maintenance, disposal ofproduced fluids, and injection of water as part of a water flood.
(b)“Well” includes a well drilled in search of a new or undiscovered pool, or withthe intent of extending the limits of a developed pool.
(c)“Well” does not include an information hole or a hole drilled as part of aseismic program. [1953 c.667 §1; 1961 c.671 §15; 1973 c.276 §1; 1977 c.296 §1;2007 c.672 §1; 2009 c.294 §18]
520.010 [Repealed by1953 c.667 §21]
520.015 [1953 c.667 §2;1999 c.59 §164; repealed by 2007 c.672 §24]
520.017Fees; rules; disposition of fees. (1) The following fees are establishedunder this chapter:
(a)The application fee for a permit to drill a well, $2,000.
(b)The fee for a request to extend the period for completion of drilling, $500.
(c)The fee to modify operations at a well, $1,500.
(d)The fee to sidetrack a well, $500.
(e)The fee to plug and abandon a well, $1,000.
(f)The annual renewal fee for operation and maintenance of a well, $1,500 thefirst renewal year and $500 for each subsequent year.
(g)The application fee for a permit to drill an information hole is to bedetermined by the State Department of Geology and Mineral Industries based onthe estimated cost of review and approval, and the number and location of holesto be drilled. The fee may not exceed $1,000 per information hole.
(h)The fee for approval of a seismic program shall be determined by the departmentbased on the estimated cost of review and approval, but may not exceed $1,000.
(2)The governing board of the State Department of Geology and Mineral Industriesby rule may specify a schedule of fees for costs incurred by the department foractivities related to field designation for purposes of this section.
(3)All moneys received by the State Department of Geology and Mineral Industriesunder this section shall be paid into the State Treasury and deposited in theGeneral Fund to the credit of the Geology and Mineral Industries Accountestablished in ORS 516.070. [2007 c.672 §3]
520.020 [Repealed by1953 c.667 §21]
520.025Permit for drilling well or using well; extension; annual report; grounds for grantingor denying permit.(1) A person may not drill or use a well without first obtaining a permit fromthe State Department of Geology and Mineral Industries and posting any bondthat may be required pursuant to ORS 520.095 (1). Drilling must be completedwithin one year from the date the permit is issued unless an extension isgranted under subsection (2) of this section. When drilling has been completed,the well must be maintained under a permit until it is properly plugged and thesite is reclaimed.
(2)An unused permit may be extended by the department for a reasonable period uponreceipt of a written request from the permittee before the expiration date ofthe permit. The request shall be accompanied by a nonrefundable fee establishedunder ORS 520.017.
(3)A permittee maintaining or operating a well shall provide the department withan annual report on a form provided by the department. Subject to thedeterminations in subsection (4) of this section, a permittee shall renew the permitfor a well by paying the fee established under ORS 520.017.
(4)(a)If upon receipt of the application the department determines that the methodand equipment to be used by the applicant in drilling or operating the wellcomply with applicable laws and rules, the department shall issue the permit.
(b)The department may refuse to issue, refuse to renew or revoke a permit issuedpursuant to this section if the department determines that methods or equipmentto be used or being used in drilling or operating the well do not comply withapplicable laws or rules, or that the well will not be operated and maintainedor is not being operated or maintained in compliance with the permit andapplicable laws or rules. [1953 c.667 §5; 1973 c.276 §2; 1977 c.296 §3; 1981c.146 §1; 1991 c.526 §1; 2007 c.672 §4]
520.027Information holes; holes drilled as part of seismic program; trade secrets. (1) A personmay not drill an information hole or a hole drilled as part of a seismicprogram without first applying for approval from the State Department ofGeology and Mineral Industries and paying the fee established in ORS 520.017.The application must be submitted on a form provided by the department and mustinclude all information requested by the department.
(2)A person issued an approval under this section shall comply with all terms ofthe department’s approval and any other applicable law or rule. The departmentmay not require the person receiving approval under this section to provideinformation from seismic programs. The department may require the submittal ofinformation from information holes, but the information is a trade secret underORS 192.501 and is not subject to public disclosure under ORS 192.410 to192.505. [2007 c.672 §6]
520.030 [Repealed by1953 c.667 §21]
520.035Waste of oil or gas prohibited. The waste of oil or gas, as defined inORS 520.005, is prohibited. [1953 c.667 §3; 2007 c.672 §7]
520.040 [Repealed by1953 c.667 §21]
520.045Determination of waste of oil or gas. The State Department of Geology andMineral Industries may determine whether waste of oil or gas over which it hasjurisdiction exists or is imminent. In the exercise of such power thedepartment may:
(1)Collect data.
(2)Make investigations and inspections.
(3)Examine properties, leases, papers, books and records, including drillingrecords and logs.
(4)Examine, check, test and gauge oil and gas wells and tanks.
(5)Hold hearings.
(6)Provide for the keeping of records and the making of reports.
(7)Take such action as may be reasonably necessary to enforce this chapter. [1953c.667 §6; 2007 c.672 §8]
520.050 [Repealed by1953 c.667 §21]
520.055General jurisdiction and authority of board; tidal lands; rules. (1) Thegoverning board of the State Department of Geology and Mineral Industries hasjurisdiction and authority over all persons and property, including tidalsubmerged and submersible lands of this state under ORS 274.705 to 274.860,necessary to enforce effectively this chapter and all other laws relating tothe conservation of oil and gas.
(2)In addition to and not in lieu of any other powers granted under this chapter,the board may adopt rules and issue orders necessary to regulate geological,geophysical and seismic surveys on, and operations to remove sulfur from, thetidal submerged and submersible lands of this state under ORS 274.705 to274.860. [1953 c.667 §4; subsection (2) enacted as 1961 c.619 §40; 1969 c.594 §57;2007 c.672 §9]
520.060 [Repealed by1953 c.667 §21]
520.065 [1953 c.667 §8;renumbered 520.210]
520.070 [Repealed by1953 c.667 §21]
520.075 [1953 c.667 §9;1961 c.671 §16; renumbered 520.220]
520.080 [Repealed by1953 c.667 §21]
520.085 [1953 c.667 §10;1961 c.671 §17; renumbered 520.230]
520.090 [Repealed by1953 c.667 §21]
520.095Rules and orders; bond. The governing board of the State Department ofGeology and Mineral Industries may adopt rules and issue orders, and thedepartment may issue orders, as may be necessary in the proper administrationand enforcement of this chapter, including but not limited to rules and ordersfor the following purposes:
(1)To require the drilling, casing and plugging of wells to be done in such amanner as to prevent the escape of oil or gas out of one stratum to another; toprevent the intrusion of water into oil or gas strata; to prevent the pollutionof fresh water supplies by oil, gas or salt water; and to require reasonablebond conditioned upon compliance with applicable laws and rules and upon theperformance of the duty to plug each dry or abandoned well.
(2)To compel the filing of logs from wells, including electrical logs, if any aretaken, drilling records, typical drill cuttings or cores, if cores are taken,with the office of the State Geologist.
(3)To prevent wells from being drilled, operated and produced in such a manner asto cause injury to neighboring leases or property.
(4)To prevent the drowning by water of any stratum or part thereof capable ofproducing oil or gas in paying quantities, and to prevent the premature andirregular encroachment of water that reduces, or tends to reduce, the totalultimate recovery of oil or gas from any pool.
(5)To require the operation of wells with efficient gas-oil ratios, and to fixratios.
(6)To prevent blowouts, caving and seepage in the same sense that conditionsindicated by such terms are generally understood in the oil and gas business.
(7)To prevent fires.
(8)To identify the ownership of all oil and gas wells, producing leases, tanks,plants, structures and all storage equipment and facilities.
(9)To regulate the stimulation and chemical treatment of wells.
(10)To regulate secondary recovery methods, including the introduction of gas, air,water or other substance into producing formations.
(11)To require the filing currently of information as to the volume of oil and gas,or either of them, produced and saved from the respective properties.
(12)To require the protection of ground water.
(13)To require the disposal of salt water and oil field waste so as not to damageland or property unnecessarily.
(14)To require that wells drilled for oil or gas be logged adequately enough toidentify the geologic formations penetrated by the wells.
(15)To regulate the underground storage of natural gas and the drilling andoperation of any wells required therefor.
(16)To require the mitigation of off-site impacts of drilling and to requirereclamation for subsequent beneficial use of drill sites and adjacent areasadversely affected by drilling or use of the well and the filling of sumps.
(17)To require performance bonds or other forms of financial security forcompliance with the requirements of this chapter and rules adopted or ordersissued under this chapter.
(18)To regulate exploratory wells, including stratigraphic wells and seismicprogram test wells, subject to the limitations in ORS 520.027.
(19)To regulate geological, geophysical and seismic surveys on, and operations toremove oil, gas and sulfur from, the tidal submerged and submersible lands ofthis state under ORS 274.705 to 274.860. [1953 c.667 §7; 1961 c.671 §18; 1973c.276 §3; 1977 c.296 §2; 1981 c.146 §2; 1989 c.365 §1; 2007 c.672 §10]
520.097Abandonment or completion of well; well logs and records; trade secrets. (1) For aperiod of two years from the date of abandonment or completion of a well, allwell logs and records and well reports submitted to the State Department ofGeology and Mineral Industries are trade secrets under ORS 192.501 and are notsubject to public disclosure under ORS 192.410 to 192.505, and all drillcuttings and cores may not be disclosed to the public unless such protection iswaived by the permittee or disclosure is required by a court order.
(2)The department may extend the period under subsection (1) of this section up toan additional five years on the request of the permittee or the permittee’ssuccessor in interest. [2007 c.672 §12]