04/29/2022 01:00 PM House RESOURCES

        HB 349-HEARING ESTABLISH DRILLING UNITS/SPACING                                                                     
                                                                                                                                
1:50:00 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK announced  that the final order  of business would                                                               
be HOUSE BILL  NO. 349, "An Act relating to  the establishment of                                                               
oil and gas drilling units  and patterns."  [Before the committee                                                               
was CSHB 349(CRA).]                                                                                                             
                                                                                                                                
1:50:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER, prime sponsor  of HB 349, recounted that                                                               
the  bill proposes  to  change the  antiquated  process for  well                                                               
spacing  to  a  more  efficient   process  for  [today's]  active                                                               
drilling.                                                                                                                       
                                                                                                                                
1:51:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HANNAN  moved  to   adopt  Amendment  1  to  CSHB
(CRA), labeled 32-LS1542\B.1, Nauman, 4/28/22, which read:                                                                   
                                                                                                                                
     Page 1, line 1, following "units":                                                                                       
          Insert ", spacing,"                                                                                                 
                                                                                                                                
     Page 2, line 12:                                                                                                           
          Delete "in a pool without a drilling unit or                                                                          
     units established under this section"                                                                                      
                                                                                                                                
1:51:17 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK objected for discussion purposes.                                                                                
                                                                                                                                
REPRESENTATIVE  HANNAN explained  that Amendment  1 would  delete                                                               
the  final clause  in  the sentence  on  page 2,  line  12.   She                                                               
recounted that the House Community  and Regional Affairs Standing                                                               
Committee amended the  bill to include an  explicit protection of                                                               
correlative  rights and  suggested draft  language from  both the                                                               
AOGCC and Legislative Legal Services.   However, she noted, [CSHB
(CRA)  appears  to  read that  correlative  rights  cannot  be                                                               
protected  unless there  is a  defined pool  already established.                                                               
If that final  clause is deleted, she stated,  the language would                                                               
say,  "The  commission  may  adopt  well  spacing  regulation  to                                                               
protect  correlative rights."    She  explained that  correlative                                                               
rights are  when there  are different  lease holders  adjoining a                                                               
section line and  once a pool has been defined  it becomes clear.                                                               
She  said the  amendment makes  it cleaner  and makes  the intent                                                               
clear  that   correlative  rights  should  always   be  protected                                                               
regardless of whether the pool is defined.                                                                                      
                                                                                                                                
1:52:44 PM                                                                                                                    
                                                                                                                                
CHAIR PATKOTAK removed his objection to Amendment 1.                                                                            
                                                                                                                                
1:52:52 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  objected.   He offered  his appreciation                                                               
for  Amendment 1  and said  he  considers it  a helpful  friendly                                                               
amendment.                                                                                                                      
                                                                                                                                
REPRESENTATIVE  RAUSCHER removed  his objection  to Amendment  1.                                                               
There being no further objection, Amendment 1 was adopted.                                                                      
                                                                                                                                
CHAIR  PATKOTAK noted  that Representative  Fields had  questions                                                               
during  the  bill's first  hearing.    He  said he  presumes  the                                                               
department  followed up  with specifics  and that  Representative                                                               
Fields' questions were answered.                                                                                                
                                                                                                                                
1:53:44 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE RAUSCHER  stated that this legislation  is needed,                                                               
and the  industry looks  forward to its  passage because  it will                                                               
improve the turnaround time for permitting.                                                                                     
                                                                                                                                
1:54:11 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HOPKINS   moved  to  report  CSHB   349(CRA),  as                                                               
amended,  with individual  recommendations  and the  accompanying                                                               
fiscal  notes.   There  being  no  objection, CSHB  349(RES)  was                                                               
reported out of the House Resources Standing Committee.                                                                         
                                                                                                                                
CHAIR  PATKOTAK stated  that Legislative  Legal Services  is able                                                               
make any needed conforming or technical changes to the bill.