Saturday, October 29, 2011
Yet More on Water For Oil & Gas Drilling
In Kansas every non-domestic use of water requires a water right - regardless of the quantity of water needed. There is no argument that oil well drilling is NOT a domestic use, so there is no question that such a use needs a water right. There is also no question that the only water right these folks have is a domestic right for their household and landscape needs, so there is no argument that additional water rights need to be obtained.
Well, there are several options in this case.
1) Either the oil & gas company, drilling company or the landowner could obtain a temporary water right for drilling an oil & gas well. Once the temporary permit is obtained the water could be withdrawn from any specified water source, be it an existing well, a new well, a surface water supply as specified in the permit. NOTES: 1) The temporary water right is NOT a permanent right and is active for only 6 months, so this process would have to be done each time a new supply of water is needed; 2) If a new well is drilled, the disposition of that well when the permit runs out needs to be pre-determined. If the landowner is going to take it over, they then assume all ownership and responsibility for the well and its plugging when no longer useful. It's a good idea to cover this issue in the lease up front if not already covered.
2) The landowner could file for a new water right for industrial use (oil & gas recovery) on their land provided water is available for appropriation. They can do this from any source of water, again, on an existing well or a new well or a stream channel or surface pond. This results in a permanent water right for that use. Notes: 1) New water may not be available to appropriate.
3) If the landowner has a non-domestic water right on the land (most typically in our area this would be an irrigation water right) they can convert a portion of the non-domestic water use to "industrial" use. This would be a permanent change and would allow water to be provided for oil & gas purposes up to the extent of the change approved. NOTES: 1) This is a permanent change that will reduce the former right by the quantity changed to industrial use; 2) It provides for a dependable water supply to the oil & gas industry for any wells within about a 10 mile radius.
Each approach has advantages and disadvantages, but one of these three options must be taken to stay within the law. When sales of water are made informally and without a water right it really upsets those who have formally converted part of their existing water rights to service this demand, or have bothered to otherwise arrange to provide this water to the industry legally.