- Associated Press - Tuesday, January 27, 2015

BOISE, Idaho (AP) - Idaho lawmakers on a House committee have approved new rules involving the state’s nascent oil and gas industry even as the industry itself continues to surge ahead.

One of the most significant rules approved Tuesday by the House Resources and Conservation Committee requires 55 percent of mineral interest owners in a given area to support a process called integration before drilling can begin.

The Idaho Department of Lands sought the change that will generally require more mineral interest owners to approve of drilling before those who don’t approve can be forced into the process.

“The authority already exists to do the integration, but the process wasn’t clear,” said Tom Schultz, director of the Idaho Department of Lands.

He noted that among other states, 55 percent puts Idaho “on the more stringent end.” In 26 states, he said, one or two interested parties can force integration.

Integration involves people with mineral rights in an area of land where there might be profitable fields of oil or natural gas. Once integration is ordered under the new rules, mineral interest owners in the designated area will have three options. They can choose to lease rights to an oil company, they can become a working interest owner by sharing the costs, or they can become a nonconsenting working interest owner. The nonconsenting option avoids costs but results in having to pay a much larger portion of profits compared with working interest owners.

Jim Plucinski, who said he was a land owner and mineral rights owner in Payette County where much of the state’s oil and gas industry is focused, asked the committee to reject the proposed rules because he objected to being forced into the integration process.

“I think I should have the right to choose when I sell (mineral rights),” Plucinski told the committee. “I’m concerned about not having that right as a property owner. I’m concerned about having to sell during low prices.”

Alta Mesa, an oil company based in Houston, is building a pipeline in western Idaho that is expected to be finished in the spring and will deliver natural gas from more than a dozen wells the company has in the area. The company backed the new rules created in negotiated rule-making that also included citizens and that were ultimately approved by the Idaho Oil and Gas Conservation Commission, which itself wasn’t created until July 2013.

Rep. Fred Wood, R-Burley, voted for the new rules on Tuesday.

“Idaho is now in the oil and gas industry,” he said. “The Department of Lands has done a pretty good job of going to other states and trying to figure out what may well work and what may not work.”

Rep. Mat Erpelding, D-Boise, moved to have the portion of the new rules involving the 55 percent removed, but the motion was voted down.

Two other significant rules approved by the committee included rules intended to protect water quality and another that increases the distance between production facilities and structures. The committee approved a little more than 20 rules in all.

The Senate Resources and Environment Committee is scheduled to consider the new rules Wednesday.

Schultz, the director at the Department of Lands, said that if that committee approves, the state will start putting the rules into practice.


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