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Montana LawsThis section includes links to Montana statutes, regulations, guidelines, and policies related to oil and gas surface operations. Oil and gas development in Montana is governed primarily by state constitutional provisions (art. II, § 3, art. IX, §§ 1-2), statutory provisions of the Montana Code (Mont. Code Ann. § 82-10-101, et seq. - § 82-11-101, et seq.), and rules promulgated by the Montana Board of Oil and Gas Conservation (MBOGC) (ARM 36.22.101, et seq.). The MBOGC also issues drilling permits, oversees industry activity, and implements Montana’s oil and gas laws in a manner consistent with the goals of conservation, efficient resource development, waste prevention, and protection of surface owner rights and subsurface mineral rights. Montana’s Environmental Policy Act (§ 75-1-101, et seq.), Clean Air Act (§ 75-2-101, et seq.), and Water Quality Act (§75-5-101, et seq.) also play significant roles in regulating the environmental impacts of oil and gas development in Montana. These Acts are administered by the Montana Department of Environmental Quality (MDEQ) and are supplemented by MDEQ-issued rules and regulations pertaining to air and water quality. Additionally, the MBOGC and the MDEQ issue a variety of policy statements and guidance documents to guide the future of oil and gas development in Montana in an environmentally conscious manner. See the following for more information and links to the above. Montana ConstitutionAlthough the Montana Constitution does not contain any provisions specific to oil and gas, it does include general environmental protection language: Art. II, § 3 Inalienable Rights: All persons have the right to "a clean and healthful environment…" Art. IX, § 1 Protection and Improvement: "The state and each person shall maintain and improve a clean and healthful environment in Montana for present and future generations… and the legislature shall provide adequate remedies for the protection of the environmental life support system from degradation and provide adequate remedies to prevent unreasonable depletion and degradation of natural resources." Art. IX, § 2 Reclamation: "All lands disturbed by the taking of natural resources shall be reclaimed… [and] the legislature shall provide effective requirements and standards for the reclamation of lands disturbed." Article IX, § 4 Cultural Resources: “The legislature shall provide for the identification, acquisition, restoration, enhancement, preservation, and administration of scenic, historic, archeologic, scientific, cultural, and recreational areas, sites, records and objects and for their use and enjoyment by the people.” Title 82-10-103, et seq. Obligation to pay royalties as essence of contract interest Requires an oil and gas lease to include an obligation to pay oil and gas royalties to the royalty owners so long as the royalty owner has not elected to take a share of the production. Oil and gas producer must include a form with royalty payment specifying specific details of the production and producers contact information. Also specified are mandates concerning division orders. Title 82-10-200, et seq. Lease of Local Government Land Stipulates the terms by which land owned by a governing body of a county, city, town, school district, or incorporated subdivision may be leased for oil and gas development. Montana StatutesOil and gas development in Montana is governed primarily by provisions in Title 82 Minerals, Oil, and Gas, Chapters 10-11 of the Montana Code. Relevant sections of these chapters include: Chapter 10 Oil and Gas Generally:
Chapter 11 Conservation:
Oil and gas development on state lands in Montana is subject to additional regulations pursuant to § 77-3-400, et seq., which contains provisions authorizing the MBOGC to lease state lands for oil and gas exploration, mining, and drilling and establishes the applicable requirements and limitations of those leases. Montana Oil and Gas RegulationsThe Montana Board of Oil and Gas Conservation (MBOGC) is the state agency responsible for implementing Montana’s oil and gas laws in a manner consistent with the goals of conservation and efficient resource development, waste prevention, and protection of surface owner rights and subsurface mineral rights. The MBOGC also issues drilling permits, administers bonds (required to guarantee the eventual proper plugging of wells and restoration of surface land), classifies wells, repairs abandoned wells, and promulgates rules consistent with applicable oil and gas statutes. Current MBOGC Rules can be found in Title 36, Chapter 22 of the Administrative Rules of Montana Rules of particular interest include:
Montana Oil and Gas Policy and GuidanceThe following are various guidelines and policy statements issued by the MBOGC and other state agencies aimed at guiding oil and gas development throughout Montana in an environmentally conscious manner and at increasing understanding of and compliance with current oil and gas laws and regulations. Open
Letter About Oil and Gas Development from the Montana State Director
– Issued by the Montana State Director of the Bureau of Land Management,
the Open Letter recognizes the adverse impacts of oil and gas development
on the environment, wildlife, and natural resources of the state and
urges responsible energy development and cooperation between industry,
state agencies, and interested parties. Guide
to Split Estates in Oil and Gas Development for Surface and Mineral
Owners – The Guide to Split Estates is a user-friendly
document intended to assist surface owners understand their legal responsibilities
as well as their legal protections in connection with the development
of oil and gas resources beneath their property. The MBOGC has identified the development
of coal bed methane as an issue of substantial interest in Montana,
and, in an effort to make pertinent data on Montana’s coal bed methane
issues available to the public, has devoted a portion of its website
to this topic. Some relevant documents from the website include: Coal
Bed Methane Frequently Asked Questions – The FAQs were
compiled by the Montana State University Department of Land Resources
and Environmental Sciences to provide background information about coal
bed methane development and related environmental impacts. Montana
Department of Environmental Quality Coal Bed Methane (CBM) web site
– Provides information on laws,
regulations, and permits, water
quality issues, and other CBM topics in Wyoming. Montana Environmental StatutesConsistent with its constitutional obligations to "maintain and improve a clean and healthful environment in Montana," the Montana legislature has enacted several statutes aimed at environmental protection and conservation that include: § 75-1-101, et seq. Montana Environmental Policy Act – In recognition of the "profound impact of human activity on the interrelations of all components of the natural environment…and the critical importance of restoring and maintaining environmental quality," the Environmental Policy Act is aimed at the development and implementation of statewide policy and procedure to ensure that environmental attributes are fully considered in state actions and agency decisions. The Act provides for the use of "all practicable means consistent with other essential considerations of state policy" to improve and coordinate state plans, functions, programs, and resources so that the state may:
§ 76-7-101, et seq. Environmental Control Easement Act – provides for the creation and enforcement of use restrictions applicable to sites throughout the state that contain or may contain hazardous wastes or substances that threaten the public health, safety, or welfare or the environment § 76-15-901, et seq. Coal Bed Methane Protection Program – creates a compensation program for landowners and water rights holders for damage to land and water quality attributable to the impacts of coal bed methane extraction Montana Air Quality Statutes and RegulationsAir quality in Montana is provided for by the Clean Air Act of Montana (Mont. Code Ann. § 75-2-101, et seq.) . The Act is administered by the Montana Department of Environmental Quality (MDEQ) through its Air Quality Program and seeks "to achieve and maintain levels of air quality that will protect human health and safety and, to the greatest degree possible, prevent injury to plant and animal life…" The MDEQ is responsible for developing emissions standards, issuing permits, and promulgating rules consistent with the Clean Air Act. Current Air Quality Rules can be found in Title 17, Chapter 8 of the Administrative Rules of Montana or on the MDEQ website. Rules of particular interest include:
Montana Water Quality Statutes and RegulationsMontana’s Water Quality Act (Mon. Code Ann. §75-5-101, et seq.) (http://data.opi.mt.gov/bills/mca_toc/75_5.htm) aims to "conserve water by protecting, maintaining, and improving the quality of water" throughout the state and to "provide a comprehensive program for the prevention, abatement, and control of water pollution." The MDEQ administers the Act with the assistance of the Water Pollution Control Advisory Council. Current Water Quality Rules can be found in Title 17, Chapter 30 of the Administrative Rules of Montana. Water quality rules of interest include:
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