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Due to the COVID-19 emergency, the Oil & Gas Division Administrator has vacated and continued the April 2, 2020 prehearing conference and the April 9, 2020 evidentiary hearing to later dates.  Please see the Order Vacating & Continuing Hearing or the Administrative Hearings page for more information.

Mick Thomas

Division Administrator – Minerals, Public Trust, and Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Friday, March 6.

Current Items:
Spacing Application Received
Pipeline / Gathering Line
Class II Application
Official Transfer of Wells to Snake River Oil & Gas
Extension of Active Status for Barlow #1-14 and Fallon #1-10
Bond Acceptance
4th Quarter 2019 Commission Report
News Article(s) of Interest

Spacing Application Received
On Monday, February 24, 2020, the Department received an application from Snake River Oil & Gas for a spacing order consisting of the E ½ of the SE ¼ of Section 9, SW ¼ Section 10, N ½ of the N ½ of the NW ¼ of Section 15, and the N ½ of the NE ¼ of the NE ¼ of Section 16, N Township 8 North, Range 5 West, Boise Meridian, Payette County, Idaho. The application and other supplemental information are posted to the OGCC Website on the Administrative Hearings page under Docket No. CC-2020-OGR-01-001.

Pipeline / Gathering Line
Gathering lines continue to be installed and the borings are underway in preparation for the development of wells in the Harmon field. In recent conversations with the operator it appears that initial construction may be completed by early summer. These lines will not be operational until construction is finished and the necessary testing is completed in coordination with the Public Utilities Commission.

Class II Application
Snake River Oil & Gas is in the process of transferring the Class II application from the prior operator. I will keep the Commission updated as this progresses.

Official Transfer of Wells to Snake River Oil & Gas
The Department recognizes the transfer of the operations to SROG as well as the well permits. (PDF 1, PDF 2, PDF 3)

Extension of Active Status for Barlow #1-14 and Fallon #1-10
In light of infrastructure development in the field, the Department has granted a 12-month extension for the Barlow and Fallon wells. (PDF)

Bond Acceptance
The Department has received and accepted surety bonds for the listed wells. Note that the Tracy Trust is on an individual bond since it is inactive. (PDF)

4th Quarter 2019 Commission Report
Since we do not have a scheduled Commission meeting this month, we’ve attached the 4th quarter report for 2019. Please contact me or James Thum with any questions. (PDF)

News Article(s) of Interest
Alta Mesa closes Texas Headquarters:
https://www.rigzone.com/news/alta_mesa_laying_off_91_employees_closing_headquarters-25-feb-2020-161186-article/

Oil and gas executives respond to Democratic presidential candidates using full page ad in NY times.
http://www.okenergytoday.com/2020/03/oil-and-gas-leaders-challenge-democratic-presidential-candidates-in-new-york-times-ad/

Commissioner Renee Love to run for Idaho District 5 seat.
https://dnews.com/local/ui-instructor-to-run-for-idaho-district-seat/article_7446a142-200b-57a3-a1b8-a269bfd78b71.html

Judge Cancels Oil and Gas Leases on some sage grouse lands.

The December 2019 monthly report is now available. Please see the Monthly and Annual Reports page for more information.

Mick Thomas

Division Administrator – Minerals, Public Trust, and Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, February 22.

Current Items:
OGCC Special Meeting
Snake River Oil and Gas as new Operator
Pipeline / Gathering Line
Oil & Gas Division Relocation
News Article(s) of Interest

OGCC Special Meeting
At the OGCC special meeting held this past Tuesday, the Commission voted to approve the Adoption of IDAPA 20.07.02 Rules Governing Conservation of Oil and Natural Gas in the State of Idaho as a temporary rule. These rules were previously adopted by the Commission in 2019 and submitted to the 2020 Legislature. This conditional approval is only effective if the rules are not otherwise approved or extended by the 2020 Legislature. The Commission also authorized the Department to submit a Notice of Adoption of Temporary Rule consistent with that adoption.

Snake River Oil and Gas as new Operator
On January 22nd Snake River Oil and Gas assumed operational ownership of the field. As you may recall, the field was temporary shut in as a safety precaution while new bonding was established. That bonding has been approved and is in place, and wells were turned back on last week. Products from those wells are flowing again to the facility and updates are being provided to the Department regularly. We will continue to keep the Commission updated as new information and data become available.

Pipeline / Gathering Line
Gathering lines continue to be installed and the borings are underway in preparation for the development of wells in the Harmon field. These lines will not be operational until construction is finished and the necessary testing is completed in coordination with the PUC. The Department is not aware of a target completion date at this time.

Oil & Gas Division Relocation
As a result of the reorganization of the Idaho Department of Lands the Oil & Gas Division has grown to include Mineral Regulatory and Public Trust programs. To enable better communication across this new group, the O&G Division is in the process of moving upstairs to the main level within the Boise office. We anticipate the relocation will be complete within the next few weeks. Emails and phone extensions will remain the same. Please feel free to give me a call if you have any questions.

News Article(s) of Interest
Oregon: GOP flip, confusion stall decision on Oregon export terminal (PDF)

North Dakota: State issues letters to collect million in unpaid gas royalties
https://bismarcktribune.com/bakken/state-issues-letters-to-collect-millions-in-unpaid-gas-royalties/article_384568c1-8263-592e-b36a-b7aec7140e3a.html

The OGCC special meeting will be held on Tuesday, February 18, 2020 at 1:00pm (MT).  The meeting will be held at the Idaho Department of Lands Boise Staff Office. Please see the Commission Meetings page for more information.

Mick Thomas

Division Administrator – Minerals, Public Trust, and Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, February 8.

Current Items:
OGCC Regular Meeting
Chapter 7 Bankruptcy
Class II Injection Well
Pipeline / Gathering Line
News Article(s) of Interest

OGCC Regular Meeting
Our winter meeting was February 5 at the Boise City Council Chambers. The Commission voted on two items – continuing the S.T.R.O.N.G.E.R. review and the Roles of the Commission. Those votes will be finalized at the next regular Commission meeting. There was also a technical presentation by Mark Barton with the Idaho Geological Survey. As a reminder, the Survey is the lead state agency for the collection, interpretation, and dissemination of geologic and mineral data for Idaho, while the Commission and IDL serve a regulatory role. The material is posted on the OGCC website and was well received by the Commission and many in attendance.

Chapter 7 Bankruptcy
The Department received written notice from Snake River Oil & Gas LLC on January 21, 2020 (revised January 24, 2020) that they would be assuming operations for properties listing AM Idaho LLC as operator. On January 24, 2020 High Mesa Inc. and its subsidiaries (including AM Idaho, LLC) filed for Chapter 7 Bankruptcy in the United States Bankruptcy Court, Southern District of Texas.

As of this update, Snake River Oil & Gas has submitted its Organization Report and Designation of Agent form with the Department, along with a list of wells and Gathering Facility equipment for which it would be assuming operations. Snake River Oil & Gas is in the process of finalizing bonding for the wells being transferred. The bond submitted by AM Idaho LLC is still being held by the Department, and no immediate plans for release are planned at this point. Snake River proactively shut the field in as a safety precaution until their bonding is finalized.

Class II injection well
Through email communication the EPA has shared that the Class II permit material can be used by the new majority owner Snake River Oil &Gas. There will likely be a new application filed, or at the least a transfer of applicant with the existing application.

Snake River O&G indicates they have contacted the Region 10 EPA office in Seattle to apply for a transfer of applicant for the DJS 2-14 Class II Injection Well application from AM Idaho to Snake River O&G. EPA indicated that they were preparing a list of conditions for the applicant regarding the permit.

Pipeline / Gathering Line
Installation of the lines connecting the Fallon & Barlow wells to the LW gathering facility continues. Commissioner Shigeta was in the field yesterday and confirmed that boring under 95 is likely done. The Department has also had communication with the Public Utilities Commission and their inspector continues to monitor operations. The company doing the work is Performance Energy Services out of Colorado (https://performanceenergy.net/), and local coordination is provided by HTI (Bob Hatfield). There are 40 bores anticipated under waterways, roadways as they connect the new wells to existing facilities.

News Article(s) of Interest
Idaho:
Texas court finds that midstream operations are real property that cannot be excluded in Alta Mesa bankruptcy:
https://www.jdsupra.com/legalnews/keeping-score-in-midstream-dedications-79360/

Alta Mesa sites “weakness in our internal controls over financial reporting” as reason for 500% oversell in its initial stock price.
https://pubs.spe.org/en/jpt/jpt-article-detail/?art=6560

Lawsuit planned to stop Idaho-Wyo. natural gas pipeline (PDF)

Oregon:
Permit withdrawn for 229 mile natural gas pipeline across southwest Oregon. Oregon environmental laws cited as reason for withdrawl.

Wyoming:
Trump administration approves Keystone pipeline through Montana
https://billingsgazette.com/news/state-and-regional/govt-and-politics/trump-administration-approves-keystone-pipeline-through-montana/article_6db3bd6d-b31b-5941-8b27-a683203a04af.html

Wyoming lawmakers push legislation to use states coal for alternative products rather than for energy (PDF).

On February 4, 2020, for Docket No. CC-2019-OGR-01-002, the Division Administrator issued an order to vacate the February 12, 2020 evidentiary spacing hearing and stay the proceedings (PDF) . Please see Docket No. CC-2019-OGR-01-002 on the Administrative Hearings page for more information.

Mick Thomas

Division Administrator – Minerals, Public Trust, and Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, January 25.

Current Items:
Land Board approves IDL Organizational Restructure
2020 Legislative Session
Tax Commission
WSLCA Conference
OGCC Regular Meeting
News Article(s) of Interest

Land Board approves IDL Organizational Restructure
At the Land Board meeting this past Tuesday, the organizational restructure of the Idaho Department of Lands was approved. This restructure included combining the Resource Protection and Assistance Bureau which includes the mineral regulatory and public trust programs with the oil & gas regulatory program under one new division. I will be the Division Administrator over this new division.

This restructuring will improve operational efficiency by enabling both divisions to collaborate on achieving Department goals. Some of the key benefits are:
• Inspection needs of the department can be better met with the newly combined staff.
• Technical expertise currently devoted to the Oil & Gas program can be used by the mineral regulatory program.
• Greater administrative support and project coordination will be provided with the new structure.
• Increased operational efficiency using existing staff.

I will continue to serve as the secretary to the Commission. If you have any questions please reach out. I’m happy to discuss further.

2020 Legislative Session
Deputy Director David Groeschl presented the Idaho Department of Lands Omnibus Rules which includes the IDAPA 20.07.02 Oil and Gas Rules to the House Resources & Conservation Committee this past Tuesday and to the Senate Resources & Environment Committee this past Wednesday. The updating of the Oil & Gas rules in 20.07.02 provided significant reductions in wording of IDL related rules in compliance with the Red Tape Reduction Act of 2019. The House and Senate both approved the changes as written.

The 2020 Legislative Rules Review Books can be found on the Office of the Administrative Rules Coordinator website at: https://adminrules.idaho.gov/legislative_books/2020/

Tax Commission
I met with the Tax Commission last week to discuss Oil & Gas severance tax revenues to the state over the past few years. There continues to be excellent communication between the Tax Commission and the Oil & Gas division. The Department has provided the new allocation data as well as the Oil & Gas audit to the tax commission, and we are providing technical expertise as requested.

WSLCA Conference
Last week I attended the Western States Land Commissioners Association in Austin, Texas. The agenda for this meeting was mainly focused on the oil and gas industry in Texas – specifically on how the Texas General Land Office is working with industry to improve revenue streams to the state. On Monday I spoke with GLO Commissioner George P. Bush. Mr. Bush shared that some of his major goals for the GLO were cooperation between programs (move away from the “silo” approach), and providing a level of predictability to industry. Overall it was an excellent conference.

OGCC Regular Meeting
The first OGCC meeting of 2020 will be held on Wednesday, February 5, 2020 at the Boise City Council Chambers, Boise City Hall, 3rd Floor, 150 N. Capitol Blvd., Boise. The meeting will begin at 9:30 am (MT). More information can be found on the OGCC Website on the Commission Meetings page.

News Article(s) of Interest
Mining our way to a low carbon future (video):
Excellent information on how a dramatic increase in mineral recovery is needed to reach the low carbon goal. https://www.youtube.com/watch?v=aWTkiQ64u_U

Controversy Stoking Idaho’s Oil & Gas Industry (audio):
https://www.boisestatepublicradio.org/post/controversy-stoking-idahos-oil-and-gas-industry#stream/0

Can troubled Idaho oil, gas industry have a return to transparency? Skepticism remains:

Oregon Dept. of State Lands rejects extension request on key permit for proposed Jordan Cove LNG project:
https://www.wweek.com/news/2020/01/21/the-oregon-department-of-state-lands-rejects-extension-request-on-key-permit-for-proposed-jordan-cove-lng-project/

The 2019 annual well report is now available. Please see the Monthly and Annual Reports page for more information.

Mick Thomas

Division Administrator, Oil & Gas

Secretary to the Oil & Gas Conservation Commission

This update was sent to the Commission on Saturday, January 11.

Current Items:
Trip to D.C.
2020 Legislative Session
News Article(s) of Interest

Trip to D.C.
This past week I was in Washington D.C. on behalf of the Groundwater Protection Council. During this trip I met with Idaho Senators Jim Risch and Mike Crapo as well as Representative Russ Fulcher and the office of Representative Mike Simpson.
We also met with senators and representatives from North Dakota, Oklahoma and Alabama along with numerous staffers and committees.
These Q&A sessions focused on the current status of the mineral and oil & gas industries in Idaho, as well as what steps Idaho has taken to ensure the transparency of ground water data associated with oil & gas.
Senator Crapo and Representative Fulcher were particularly interested in the future of the field. Idaho continues to be among the most transparent states regarding oil & gas operations.

2020 Legislative Session
The 2020 Legislative Session is underway. Deputy Director David Groeschl will present the Idaho Department of Lands Omnibus Rulemaking which includes the IDAPA 20.07.02 Oil and Gas Rules.
These rules can be viewed on the administrative rules page at https://adminrules.idaho.gov/bulletin/index.html.
I will keep the Commission updated as new information is available.

News Article(s) of Interest
Whitehouse announces intent to overhaul 40 year old environmental review process:
https://www.deseret.com/utah/2020/1/9/21058809/trump-white-house-sweeping-overhaul-of-environmental-reviews

Trump takes steps to update NEPA as a result of ongoing research (PDF)

American Petroleum Institute leads the way in modernizing the industry’s brand (PDF)

Oil market to remain static in 2020:

U.S. continues withdrawal process from Paris Climate Accord. The Accord has allowed a record increase of 1.6 billion tons of CO2 into the atmosphere since it was ratified:
https://www.worldoil.com/magazine/2019/december-2019/columns/oil-and-gas-in-the-capitals#.XgoMJ8dEWXc.linkedin