The Senate passed SB 165 35-0 this week. Don’t let anyone tell you that Democrats and Republicans can’t work together to solve problems.
SB 165 is a bill that deals with the water that comes up with natural gas in natural gas wells. The water is called produced water and except for produced water from a separate kind of natural gas wells, coal bed methane wells, this produced water will not be regulated by the state in most cases.
Here’s what happened: some senior water rights holders filed a suit against gas producers from coal bed methane (CBM) wells saying that the water that was pumped up with the natural gas was tributary to a river and since that water was taken out of the ground and moved somewhere else, it didn’t seep out into the river and the senior water rights holders didn’t get as much water as they would have so they were “injured”. The Supreme Court agreed with the water rights holders and the gas companies were told they had to be regulated and would have to replace the water they took. This decision threw every natural gas well that pumps up water into jeopardy. Would all gas wells have to replace that produced water? There are tens of thousands of them and if so, it was going to be very expensive.
Everyone went to work to prove that all or almost all of the non-CBM wells were non-tributary, meaning that the water that was pumped up with the gas would never enter into our river or surface water network. Almost all of the water used for agriculture and drinking comes from this surface water network, rivers and shallow wells, so protecting it is a big deal.
After spending millions on engineers, the state and the gas companies agreed that the water that is with the gas is non-tributary in almost all cases.
As a side note, you should know that water lawyers who make their living suing people for injuring senior water rights holders hate this decision. They might have completely pure motives and think that the water that is 2000-10,000 feet deep is part of the surface water system or they might just want to retain the ability to make a boat load of money suing natural gas corporations. Could go either way.
Then the state, which means Governor Ritter’s Department of Natural Resources, did something really unusual. They decided to reward natural gas companies who use this produced water to offset the use of other surface water.
That’s right; Governor Ritter actually did something good for the oil and gas industry.
Some of the natural gas companies effectively recycle this produced water and offset the need for water from another source, mainly surface water. Doing this reduces the amount of water they would use from the river systems, it reduces truck traffic that would be needed to haul the water and it’s responsible. Now the state is actually rewarding companies for doing this.
The only case in which this produced water will be regulated by the state is when the water is used for some other purpose; in that case, the use will be treated just like every other instance where non-tributary water is put to beneficial use.
I worked a lot behind the scenes on this issue. It is really nice to see everyone’s efforts rewarded with common sense legislation.
Budget Balancing bills
The Senate this week will pass 30 some bills to bring the budget into balance for the current fiscal year.
Most of the bills are just minor adjustments to each department of state government that reduces spending to reflect the money saved by furloughing state employees.
There are no bills that truly seek to reform government by controling the growth of spending on Medicaid or revamping our educational system into something that works better, smarter and faster.
Mostly business as usual and a continued lack of leadership during these tough times by the Governor and the majority party.
There are a couple of bills that are really offensive: one that transfers $87 million in cash funds to the general fund – a common occurrence during tough economic times and one that establishes a new bed tax on nursing homes to raise money that will be used to seek a match of federal funds for those same nursing homes.
The cash fund raid takes money from a dozen other areas of state government, most of the $87 million comes from severance taxes on oil, gas and coal. The same industries demonized by many of the Democrats voting to raid the funds. How ironic.
The nursing home bed tax will be used to offset a cut in funding to the same nursing homes. The money raised from the bed tax will be sent right back to the nursing homes so that the state will qualify for a federal match in funding for those nursing homes. Man, that’s creative!
I’ll end up voting for the bills that really reduce spending even though I am disappointed that no real creative thinking is going into solving the budget problem by reforming government in a way that permanently reduces spending.
I will vote against the cash fund raids and nursing home bed tax.