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Montana County and Municipal Law
A few Montana counties and municipalities have enacted laws relating to oil and natural gas development. These local provisions supplement state and federal law and include permitting programs and best management practices. They vary in both the stringency of their requirements and in what they actually require. Many Montana counties and municipalities have not enacted any additional laws, and rely on the state and federal framework to regulate development.
Montana law does not allow local governments to make resolutions or rules that prevent the complete use, development, or recovery of any mineral, forest or agricultural resource. While this does not preclude all local regulation of mineral processing or extraction—local governments can impose reasonable conditions on application approvals—land use and zoning ordinances must allow effective utilization of mineral resources. Mont. Code Ann. § 76-2-209.
Under Mont. Code Ann. § 7-1-113, "a local government with self-government powers is prohibited the exercise of any power in a manner inconsistent with state law or administrative regulation in any area affirmatively subjected by law to state regulation or control." No local standards or requirements can be lower or less stringent than the equivalent state standards.
Montana has also passed the Coal Bed Methane Protection Program, Mont. Code Ann. § 76-15-901, et seq., which established a long-term coal bed methane protection account for "the purpose of compensating private landowners and water right holders for damage to land and to water quality and availability that is attributable to the development of coal bed methane wells." Mont. Code Ann. § 76-15-902 (4). These funds are to be allocated to conservation districts that have coal beds. The Montana Department of Natural Resources and Conservation has to approve the criteria that the local Conservation Districts adopt to assess property holder damages.
Mont. Code Ann. § 82-10-201 establishes that the "governing body of any county, city, town, school district, or incorporated political subdivision within the state of Montana may, if in the best interests of the county, city, town, school district, or incorporated political subdivision, lease any real property owned by the county, city, town, school district, or incorporated political subdivision for oil and gas development purposes." The leases shall be made upon the best terms obtainable and shall provide for such terms considered to be for the best interests of the local government.
The following is a non-exhaustive list of provisions of particular interest, intended to demonstrate the various ways in which local governments regulate oil and gas surface operations. Links are provided to city and county codes.
For more information on individual counties, please visit the Montana Association of Counties. For more information on Montana oil and gas development, please visit the Montana Board of Oil and Gas Conservation or the Montana Association of Oil, Gas and Coal Counties.
Cascade County is located in the central part of Montana, and is the location of Great Falls. There is no oil or gas development in the county. While Cascade County has no oil and gas development regulations as yet, there appears to be an intention to add a regulation at § 220.127.116.11 in the future.
Fallon County is located in southeastern Montana. Natural gas in Fallon County is produced from the Eagle Formation, while oil is produced from the Red River Formation and the Siluro-Ordivician. The county produced over 6.6 million barrels of oil in 2008, and over 29 million cubic feet of gas.
§ 3.04.040 of the Fallon County Industrial District Zoning Regulations exempts from review normal oil and gas production activities, including drilling or re-working wells, laying of pipelines, and construction of well sites and access roads, if the same are duly approved and permitted by the appropriate state or federal agency.
Gallatin County is located in the southwestern part of Montana. Bozeman, among other cities, is located in the county. Although there is no oil or gas production in the county, a number of different zoning districts within Gallatin county have adopted zoning provisions involving oil and gas development. See the Red Lodge Clearinghouse State and Local Processes page for a brief summary of J.M. Huber's attempt to drill exploratory coalbed methane wells in the county.
South Cottonwood Zoning District has as a detailed Natural Resources Conditional Use Permitting (NRCUP) system at § 4.05. The commission may grant a Natural Resources Conditional Use permit to oil and gas development activities only if it is found that: the use conforms to the objectives of the Gallatin County Growth Policy and the intent of the zoning regulation; the use will not adversely affect nearby properties, residents, groundwater, streams and wetlands; that nonrenewable resource exploration and development occurs in a responsible manner; the use contributes and guarantees payment of an appropriate share of the costs for public services and facilities; that financial security has been provided to mitigate any such adverse effect; the use meets density, coverage, yard, height, and all other regulations of the district in which it is located, unless otherwise provided in zoning regulations; the use meets all other applicable regulations; a public hearing, after notice has been given, has been held.
Reese Creek Zoning District has a detailed Natural Resources Conditional Use Permitting system very similar to that of the South Cottonwood Zoning District.
Bridger Canyon Zoning District: Like Reese Creek and South Cottonwood, Bridger Canyon has an extensive Natural Resources Conditional Use Permitting system.
Trail Creek Zoning District, Spring Hill Zoning District, South Gallatin Zoning District, Big Sky Zoning District, and the Hyalite Zoning District all classify oil and gas wells as a conditional use in their zoning codes.
Park County, Upper O'Rea Zoning District: Park County is located in southwestern Montana. It has no oil or gas production. The Upper O'Rea Creek Zoning Regulation § 7(C)(3) makes drilling or exploring for oil and gas a conditional use.
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