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State
Oregon
ORS 520 - Conservation of Gas and Oil

Chapter 520 — Conservation of Gas and Oil



2003 EDITION



CONSERVATION OF GAS AND OIL



MINERAL RESOURCES



GENERAL PROVISIONS



520.005 Definitions



520.015 “Waste” defined



520.025 Permit for drilling well or using well for storage; application form; extension; grounds for granting or denying permit; fees; disposition of fees



520.035 Waste of oil and gas prohibited



520.045 Determination of waste of oil or gas



520.055 General jurisdiction and authority of board; tidal lands; rules



520.095 Rules and orders; confidentiality of logs; notice and hearing; fees; bond



520.105 Administrative procedure; rules



520.115 Board may act on own motion; filing petition with board; notice; hearing; orders



520.125 Authority of board to compel giving of testimony and production of evidence



520.135 Application for rehearing by person adversely affected by order of board



520.145 Judicial review of board actions



520.155 Records, accounts, reports and writings not to be falsified, altered, destroyed or removed from state



520.165 Aiding or abetting in a violation of chapter prohibited



520.175 Injunctions to restrain violation or threatened violation of chapter

GENERAL PROVISIONS



520.005 Definitions. As used in this chapter, unless the context requires otherwise:

(1) “And” includes “or” and “or” includes “and.”

(2) “Board” means the governing board of the State Department of Geology and Mineral Industries.

(3) “Condensate” means liquid hydrocarbons that were originally in the gaseous phase in the reservoir.

(4) “Field” means the general area underlaid by one or more pools.

(5) “Gas” means all natural gas and all other fluid hydrocarbons not defined as oil in subsection (6) of this section, including condensate originally in the gaseous phase in the reservoir.

(6) “Oil” means crude petroleum oil and all other hydrocarbons, regardless of gravity, which are produced in liquid form by ordinary production methods, but does not include liquid hydrocarbons that were originally in a gaseous phase in the reservoir.

(7) “Person” means any natural person, partnership, corporation, association, receiver, trustee, guardian, fiduciary, executor, administrator, representative of any kind, or the State of Oregon and any of its political subdivisions, boards, agencies or commissions.

(8) “Pool” means an underground reservoir containing a common accumulation of oil and natural gas. A zone of a structure which is completely separated from any other zone in the same structure is a pool.

(9) “Owner” means a person who has the right to drill into and to produce from any pool and to appropriate the oil or gas produced therefrom either for others, for the person or for the person and others.

(10) “Producer” means the owner of one or more wells capable of producing oil or gas or both.

(11) “Protect correlative rights” means that the action or regulation by the board affords a reasonable opportunity to each person entitled thereto to recover or receive the oil or gas in the tract or tracts of the person or the equivalent thereof, without being required to drill unnecessary wells or to incur other unnecessary expense to recover or receive such oil or gas or its equivalent.

(12) “Unit area” means one or more pools or parts thereof under unit operation pursuant to ORS 520.260 to 520.330 and 520.230 (2).

(13) “Well” means a well drilled in search of oil or gas, but shall not include core test wells, stratigraphic test wells, seismic test wells or wells drilled for information purposes only as distinguished from wells drilled for the purpose of producing oil or gas if found.

(14) “Underground reservoir” means any subsurface sand, strata, formation, aquifer, cavern or void whether natural or artificially created, suitable for the injection and storage of natural gas therein and the withdrawal of natural gas therefrom, but excluding a “pool.”

(15) “Underground storage” means the process of injecting and storing natural gas within and withdrawing natural gas from an underground reservoir. [1953 c.667 §1; 1961 c.671 §15; 1973 c.276 §1; 1977 c.296 §1]



520.010 [Repealed by 1953 c.667 §21]



520.015 “Waste” defined. “Waste,” in addition to its ordinary meaning, means “physical waste” as that term is generally understood in the petroleum industry. It includes:

(1) Underground waste and the inefficient, excessive or improper use or dissipation of reservoir energy, including gas energy and water drive, of any pool, and the locating, spacing, drilling, equipping, operating or producing of any oil well or gas well in a manner that results or tends to result in reducing the quantity of oil or gas ultimately recoverable from any pool; and

(2) Surface waste and the inefficient storing of oil and the locating, spacing, drilling, equipping, operating or producing of oil wells or gas wells in a manner causing or tending to cause unnecessary or excessive surface loss or destruction of oil or gas. [1953 c.667 §2; 1999 c.59 §164]



520.020 [Repealed by 1953 c.667 §21]



520.025 Permit for drilling well or using well for storage; application form; extension; grounds for granting or denying permit; fees; disposition of fees. (1) No person proposing to drill any well for oil or gas or proposing to drill or use any well for underground storage of gas in an underground reservoir shall commence the drilling or use until the person has applied to the State Geologist upon a form prescribed by the State Geologist for a permit to operate the well, paid to the governing board of the State Department of Geology and Mineral Industries a nonrefundable fee set by the board not to exceed $250 for each such application, posted any bond that may be required pursuant to ORS 520.095 (1) and obtained the permit to drill the well pursuant to subsection (5) of this section. A permit shall remain valid for one year from the date it is issued.

(2) An unused permit may be extended by the State Geologist for a reasonable period not to exceed one additional year beyond the initial one-year period, upon receipt of a written request from the permittee before the expiration date of the permit. The request shall be accompanied by a nonrefundable fee set by the board not to exceed $250.

(3) The permittee shall provide an annual nonrefundable fee set by the board not to exceed $500 on or before the anniversary of the issuance date of each active permit.

(4) The State Geologist shall require that the form indicate:

(a) The location of the well.

(b) The name and address of the mineral owner, surface owner, operator and any other person responsible for the conduct of the drilling operations.

(c) The elevation of the well above sea level.

(d) Such information as is necessary to determine whether the method of drilling and equipment to be used in drilling the well comply with applicable laws and rules.

(e) Such other relevant information as the State Geologist deems reasonably necessary to effectuate the purpose of this chapter.

(5)(a) If upon receipt of the application the State Geologist determines that the method and equipment to be used by the applicant in drilling or using the well comply with applicable laws and rules, the State Geologist shall issue the permit.

(b) The State Geologist may refuse to issue a permit or revoke a permit issued pursuant to this subsection if the State Geologist determines that methods or equipment to be used or being used in drilling or using the well do not comply with applicable laws or rules.

(6) All moneys paid to the department under this section shall be deposited with the State Treasurer and are continuously appropriated to the department for the administration of ORS 520.025, 520.095, 520.145 and 520.210. [1953 c.667 §5; 1973 c.276 §2; 1977 c.296 §3; 1981 c.146 §1; 1991 c.526 §1]



520.030 [Repealed by 1953 c.667 §21]



520.035 Waste of oil and gas prohibited. The waste of oil and gas, as defined in ORS 520.015, hereby is prohibited. [1953 c.667 §3]



520.040 [Repealed by 1953 c.667 §21]



520.045 Determination of waste of oil or gas. The governing board of the State Department of Geology and Mineral Industries shall make such inquiries as it may think proper to determine whether or not waste over which it has jurisdiction exists or is imminent. In the exercise of such power the board may:

(1) Collect data.

(2) Make investigations and inspections.

(3) Examine properties, leases, papers, books and records, including drilling records 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. [1953 c.667 §6]



520.050 [Repealed by 1953 c.667 §21]



520.055 General jurisdiction and authority of board; tidal lands; rules. (1) The governing board of the State Department of Geology and Mineral Industries has jurisdiction and authority over all persons and property necessary to enforce effectively this chapter and all other laws relating to the conservation of oil and gas.

(2) In addition to and not in lieu of any other powers granted under this chapter, the State Department of Geology and Mineral Industries and its governing board may in compliance with ORS 520.105 promulgate reasonable rules, regulations and orders necessary to regulate geological, geophysical and seismic surveys on, and operations to remove oil, gas and sulphur from the tidal submerged and submersible lands of this state under ORS 274.705 to 274.860. [1953 c.667 §4; subsection (2) enacted as 1961 c.619 §40; 1969 c.594 §57]



520.060 [Repealed by 1953 c.667 §21]



520.065 [1953 c.667 §8; renumbered 520.210]



520.070 [Repealed by 1953 c.667 §21]



520.075 [1953 c.667 §9; 1961 c.671 §16; renumbered 520.220]



520.080 [Repealed by 1953 c.667 §21]



520.085 [1953 c.667 §10; 1961 c.671 §17; renumbered 520.230]



520.090 [Repealed by 1953 c.667 §21]



520.095 Rules and orders; confidentiality of logs; notice and hearing; fees; bond. The governing board of the State Department of Geology and Mineral Industries may make, in compliance with ORS chapter 183, such reasonable rules and orders as may be necessary in the proper administration and enforcement of this chapter, including rules and orders for the following purposes:

(1) To require the drilling, casing and plugging of wells to be done in such a manner as to prevent the escape of oil or gas out of one stratum to another; to prevent the intrusion of water into oil or gas strata; to prevent the pollution of fresh water supplies by oil, gas or salt water; and to require reasonable bond conditioned upon compliance with applicable laws and rules and upon the performance of the duty to plug each dry or abandoned well.

(2) To compel the filing of logs, including electrical logs, if any are taken, drilling records, typical drill cuttings or cores, if cores are taken, in the office of the State Geologist within 20 days from the date of completion or abandonment of any well. For a period of two years from the date of abandonment or completion, such logs or other records or drill cuttings or cores shall be kept confidential and shall not be accessible to public inspection. However, the two-year confidentiality period may be extended for such time as the State Geologist determines is necessary for the reasonable protection of the economic interests of the person who has engaged in the drilling activity.

(3) To prevent wells from being drilled, operated and produced in such a manner as to cause injury to neighboring leases or property.

(4) To prevent the drowning by water of any stratum or part thereof capable of producing oil or gas in paying quantities, and to prevent the premature and irregular encroachment of water which reduces, or tends to reduce, the total ultimate recovery of oil or gas from any pool.

(5) To require the operation of wells with efficient gas-oil ratios, and to fix ratios.

(6) To prevent blowouts, caving and seepage in the same sense that conditions indicated 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 “shooting” 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 regulate the spacing of wells.

(12) 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.

(13) To require a permit issued by the State Geologist for the drilling of stratigraphic test wells, core test wells, seismic test wells or other wells drilled only for information purposes, giving the location thereof, and to require the filing with the State Geologist of a plugging report within 90 days after completion of such well. A reasonable fee, not to exceed $100, set by rule may be required in connection with the filing of an application for a permit. The State Geologist may require reasonable bond or other financial assurance acceptable to the State Geologist and conditioned upon compliance with applicable laws and rules and upon the performance of the duty to reasonably protect ground water. The board shall consult with the Water Resources Commission when developing rules for drilling and abandonment of stratigraphic test wells, core test wells, seismic test wells or other wells as described in this subsection. Wells included in this subsection may be converted to water wells, provided the conversion conforms with ORS 537.747 to 537.780.

(14) To require the disposal of salt water and oil field waste so as not to damage land or property unnecessarily.

(15) To require that wells drilled for oil or gas be logged adequately enough to identify the geologic formations penetrated by the wells.

(16) To regulate the underground storage of natural gas and the drilling and operation of any wells required therefor.

(17) To require the reclamation of drill sites and the filling of sumps for beneficial subsequent use. [1953 c.667 §7; 1961 c.671 §18; 1973 c.276 §3; 1977 c.296 §2; 1981 c.146 §2; 1989 c.365 §1]



520.100 [Repealed by 1953 c.667 §21]



520.105 Administrative procedure; rules. (1) The governing board of the State Department of Geology and Mineral Industries shall, in accordance with ORS chapter 183, from time to time prescribe reasonable rules governing practice and procedure before it.

(2) No rule, regulation or order, except in emergency, shall be made by the board without a prior public hearing upon at least 10 days’ notice. Such public hearings shall be held at such times and places as may be designated by the board. However, in respect to matters of local interest such hearings shall be held at the county seat of the county wherein the greater part of real or personal property affected is situated. Any interested person shall be entitled to be heard at such hearings.

(3) When an emergency requiring immediate action is found to exist, the board may in compliance with ORS chapter 183 issue an emergency order without notice or hearing, effective upon promulgation. However, no emergency order shall remain effective for more than 15 days.

(4) Notice as required by this chapter shall be given in compliance with ORS chapter 183, except as follows:

(a) In respect to matters of statewide interest, by publication in a newspaper of general circulation in Multnomah, Harney, Jackson and Marion Counties.

(b) In respect to matters of local interest, by publication in a newspaper of general circulation in the county or counties wherein the affected lands are located.

(c) In respect to proceedings before the board where persons are named therein, by personal service upon such persons thereto. Personal service may be made by any agent of the board or by any officer authorized by law to serve process and shall be made in the manner provided by law for the service of summons in civil actions in the courts of this state. Proof of service by an agent of the board shall be made by such person’s affidavit and by an officer authorized by law to serve process by the lawful certificate of the officer.

(5) Notice shall issue in the name of the state and shall be signed by the chairperson or secretary of the board. It shall specify the style and number of the proceeding, the time and place of hearing and the purpose of the proceeding. [1953 c.667 §11; 1961 c.671 §19]



520.110 [Repealed by 1953 c.667 §21]



520.115 Board may act on own motion; filing petition with board; notice; hearing; orders. The governing board of the State Department of Geology and Mineral Industries may act upon its own motion or upon the verified written petition of any interested person. Upon the filing with the board of such a petition, which shall state in substance the matter involved, the reasons for and the nature of the relief requested, concerning any matter within its jurisdiction, the board shall promptly fix a date for a hearing thereon, and shall cause due notice thereof to be given as prescribed by ORS 520.105. Such hearing shall be held without undue delay and the board shall enter its order within 30 days thereafter. [1953 c.667 §12]



520.120 [Repealed by 1953 c.667 §21]



520.125 Authority of board to compel giving of testimony and production of evidence. (1) The governing board of the State Department of Geology and Mineral Industries may summon witnesses, administer oaths and require the production of records, books and documents for examination at any hearing or investigation conducted before it. No person shall be excused from attending and testifying or from producing books, papers and records before the board or a court or from obedience to the subpoena of the board or a court on the grounds that such testimony or evidence required of the person may tend to incriminate the person or subject the person to any penalty or forfeiture; provided, however, that nothing contained in this section shall be construed as requiring any person to produce any books, papers or records or to testify in response to any inquiry not pertinent to some question lawfully before such board or court for determination. No natural person shall be subjected to criminal prosecution or to any penalty or forfeiture for or on account of any transaction, matter or thing concerning which, in spite of the objection of the person, the person may be required to testify or produce evidence before the board or a court; provided, however, no person so testifying shall be exempted from prosecution and punishment for perjury in so testifying.

(2) In case of failure or refusal on the part of any person to comply with the subpoena issued by the board or in the case of the refusal of any witness to testify as to any matter regarding which the witness may lawfully be interrogated it shall be the duty of the circuit court of any county or any judge thereof, upon application of the board, to issue an order to show cause why such person should not be held for contempt as in the case of disobedience of the requirements of a subpoena issued from such court or a refusal to testify therein.

(3) The board or any party may, in any matter before the board, cause the depositions of witnesses residing within or without the state to be taken in the manner prescribed by law for like depositions in civil suits in the circuit courts of this state. [1953 c.667 §13]



520.130 [Repealed by 1953 c.667 §21]



520.135 Application for rehearing by person adversely affected by order of board. Any person adversely affected by any rule, regulation or order of the governing board of the State Department of Geology and Mineral Industries may within 30 days after its entry apply to the board for a rehearing. Such application shall be acted upon by the board within 30 days from its filing date and if granted such rehearing shall be held without undue delay. [1953 c.667 §14]



520.145 Judicial review of board actions. Any person adversely affected by any rule, regulation or an order entered by the governing board of the State Department of Geology and Mineral Industries may obtain judicial review thereof pursuant to ORS chapter 183. [1953 c.667 §15; 1961 c.671 §20; 1979 c.562 §15; 1981 c.146 §3]



520.155 Records, accounts, reports and writings not to be falsified, altered, destroyed or removed from state. No person shall, for the purpose of evading the provisions of this chapter or any rule, regulation or order of the governing board of the State Department of Geology and Mineral Industries, make or cause to be made any false entry or statement in a report required by this chapter or by any rule, regulation or order of the board or make or cause to be made any false entry in any record, account or other writing required by this chapter or by any rule, regulation or order of the board or omit or cause to be omitted from any such record, account or writing, full, true and correct entries as required by this chapter or any rule, regulation or order of the board or remove from this state, or destroy, mutilate, alter or falsify any such record, account or writing. [1953 c.667 §16]



520.165 Aiding or abetting in a violation of chapter prohibited. No person shall knowingly aid or abet any other person in the violation of any provision of this chapter or of any rule, regulation or order of the governing board of the State Department of Geology and Mineral Industries. [1953 c.667 §17]



520.175 Injunctions to restrain violation or threatened violation of chapter. (1) Whenever it appears that any person is violating or threatening to violate any provision of this chapter or any rule, regulation or order of the governing board of the State Department of Geology and Mineral Industries, the board shall bring an action against such person in the circuit court of any county where the violation occurs or is threatened, to restrain such person from continuing such violation. In any such action, the court shall have jurisdiction to grant to the board, without bond or other undertaking, such temporary restraining orders or final prohibitory and mandatory injunctions as the facts may warrant, including any such orders restraining the movement or disposition of oil or gas.

(2) If the board fails to bring an action to enjoin a violation or threatened violation of any provision of this chapter or of any rule, regulation or order of the board, within 15 days after receipt of a written request to do so by any person who is or will be adversely affected by such violation, then the person making such request may bring an action to restrain such violation or threatened violation in any court in which the board might have brought such action. The board shall be made a party defendant in such action in addition to the person or persons bringing the action and the action shall proceed and injunctive relief may be granted without bond in the same manner as if the action had been brought by the board. [1953 c.667 §18; 1979 c.284 §162]