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This section includes links to Montana statutes, regulations, guidelines, and policies related to oil and gas surface operations.
Oil and gas development in Montana is governed primarily by state constitutional provisions (art. II, § 3, art. IX, §§ 1-2), statutory provisions of the Montana Code (Mont. Code Ann. § 82-10-101, et seq. - § 82-11-101, et seq.), and rules promulgated by the Montana Board of Oil and Gas Conservation (MBOGC) (ARM 36.22.101, et seq.). The MBOGC also issues drilling permits, oversees industry activity, and implements Montana’s oil and gas laws in a manner consistent with the goals of conservation, efficient resource development, waste prevention, and protection of surface owner rights and subsurface mineral rights. Montana’s Environmental Policy Act (§ 75-1-101, et seq.), Clean Air Act (§ 75-2-101, et seq.), and Water Quality Act (§75-5-101, et seq.) also play significant roles in regulating the environmental impacts of oil and gas development in Montana. These Acts are administered by the Montana Department of Environmental Quality (MDEQ) and are supplemented by MDEQ-issued rules and regulations pertaining to air and water quality. Additionally, the MBOGC and the MDEQ issue a variety of policy statements and guidance documents to guide the future of oil and gas development in Montana in an environmentally conscious manner. See the following for more information and links to the above.
Although the Montana Constitution does not contain any provisions specific to oil and gas, it does include general environmental protection language:
Art. II, § 3 Inalienable Rights:
All persons have the right to "a clean and healthful environment…"
Art. IX, § 1 Protection and Improvement:
"The state and each person shall maintain and improve a clean and healthful environment in Montana for present and future generations… and the legislature shall provide adequate remedies for the protection of the environmental life support system from degradation and provide adequate remedies to prevent unreasonable depletion and degradation of natural resources."
Art. IX, § 2 Reclamation:
"All lands disturbed by the taking of natural resources shall be reclaimed… [and] the legislature shall provide effective requirements and standards for the reclamation of lands disturbed."
Article IX, § 4 Cultural Resources:
“The legislature shall provide for the identification, acquisition, restoration, enhancement, preservation, and administration of scenic, historic, archeologic, scientific, cultural, and recreational areas, sites, records and objects and for their use and enjoyment by the people.
Oil and gas development in Montana is governed primarily by provisions in Title 82 Minerals, Oil, and Gas, Chapters 10-11 of the Montana Code. Relevant sections of these chapters include:
Chapter 10 Oil and Gas Generally:
§ 82-10-400, et seq. Abandoned Oil and Gas Wells – Reclamation – requires surface owner notification regarding abandoned wells, the implementation of proper plugging and reclamation procedures, and the recording of all abandoned wells that disturb land, water, or wildlife resources to a degree not in compliance with applicable rules
§ 82-10-500, et seq. Surface Owner Damage and Disruption Compensation – establishes requirements for surface owner notification of oil and gas operations, reasonable attempts at negotiation between the operator and the surface owner in the event of surface disturbance, and payment of damages for surface disturbances, including lost agricultural production and income, lost land value, and lost value of improvements.
Chapter 11 Conservation:
§ 82-11-100, et seq. Regulation by Board of Oil and Gas Conservation – establishes the jurisdiction, powers, and duties of the Montana Board of Oil and Gas Conservation (MBOGC)
§ 82-11-123 Requirements for Oil and Gas Operations – establishes general requirements for oil and gas operations, including procedures for drilling, plugging, and restoration of surface lands
§ 82-11-161 Oil and Gas Production Damage Mitigation Account – creates a source of funding to cover the reasonable costs of properly plugging wells and either reclaiming or restoring a drill site or other production area damaged by oil and gas operations if the MBOGC determines that the site has been abandoned and the responsible party cannot be identified or located or refuses to take proper action
§ 82-11-172, et seq. Coal Bed Methane Production Offset Act – authorizes the MBOGC to encourage and expedite the development of coal bed methane wells in Montana in an effort to offset the development of the state’s coal bed methane resources by other agencies at the federal, state, and tribal level
Oil and gas development on state lands in Montana is subject to additional regulations pursuant to § 77-3-400, et seq., which contains provisions authorizing the MBOGC to lease state lands for oil and gas exploration, mining, and drilling and establishes the applicable requirements and limitations of those leases.
Montana Oil and Gas Regulations
The Montana Board of Oil and Gas Conservation (MBOGC) is the state agency responsible for implementing Montana’s oil and gas laws in a manner consistent with the goals of conservation and efficient resource development, waste prevention, and protection of surface owner rights and subsurface mineral rights. The MBOGC also issues drilling permits, administers bonds (required to guarantee the eventual proper plugging of wells and restoration of surface land), classifies wells, repairs abandoned wells, and promulgates rules consistent with applicable oil and gas statutes.
Current MBOGC Rules can be found in Title 36, Chapter 22 of the Administrative Rules of Montana
Rules of particular interest include:
36.22.502 Plugging and Abandonment - Sets forth the rules for plugging and abandoning seismic shot holes by the company, firm, corporation, or individual responsible for the drilling of the shot holes.
36.22.601 – 607 – Permit to Drill – establishes application and issuance requirements for drilling permits
36.22.1005 – Drilling Waste Disposal and Surface Restoration – requires operators to contain and dispose of all solid waste and produced water from drilling operations so as not to degrade surface water, groundwater, or cause harm to soils, and establishes procedures for construction and abandonment of pits so as to prevent contamination of water and soil
36.22.1104 – Control and Cleanup – requires the prompt cleanup of any leak, spill, escape, or discharge, regardless of the amount of oil or produced water
36.22.1207 – Earthen Pits and Open Vessels – prohibits the storage, disposal, or retention of waste oil, oil sludge, and other hazardous wastes in earthen storage pits or open vessels, with the exception of the temporary use of an unlined pit to retain oil or water in the event of an emergency
36.22.1223 – Fencing, Screening, and Netting of Pits – requires open storage vessels, earthen pits, or ponds that contain oil to be fenced, screened, and netted, with the exception of earthen pits used solely for drilling, completing, recompleting, working over, or plugging a well
36.22.1226 – Disposal of Water – provides for the disposal of water produced from oil and gas operations in a manner that does not degrade surface waters or groundwater or cause harm to soils
36.22.1227 – Earthen Pits and Ponds – establishes permit requirements and construction procedures for earthen pits and ponds
36.22.1301 – 1309 – Abandonment, Plugging, and Restoration – establishes requirements for providing notice of the abandonment of wells and the proper procedures for plugging and restoration of surface lands
36.22.1308 – Plugging and Restoration Bond – establishes bond requirements for oil and gas operators.
Montana Oil and Gas Policy and Guidance
The following are various guidelines and policy statements issued by the MBOGC and other state agencies aimed at guiding oil and gas development throughout Montana in an environmentally conscious manner and at increasing understanding of and compliance with current oil and gas laws and regulations.
Open Letter About Oil and Gas Development from the Montana State Director – Issued by the Montana State Director of the Bureau of Land Management, the Open Letter recognizes the adverse impacts of oil and gas development on the environment, wildlife, and natural resources of the state and urges responsible energy development and cooperation between industry, state agencies, and interested parties.
Guide to Split Estates in Oil and Gas Development for Surface and Mineral Owners – The Guide to Split Estates is a user-friendly document intended to assist surface owners understand their legal responsibilities as well as their legal protections in connection with the development of oil and gas resources beneath their property.
The MBOGC has identified the development of coal bed methane as an issue of substantial interest in Montana, and, in an effort to make pertinent data on Montana’s coal bed methane issues available to the public, has devoted a portion of its website to this topic. Some relevant documents from the website include:
Montana Statewide Oil and Gas Environmental Impact Statement – The Environmental Impact Statement was compiled in 2003 by the Bureau of Land Management, the Montana Board of Oil and Gas Conservation, and the Montana Department of Environmental Quality and documents and discloses the results of environmental analysis of anticipated coal bed methane and traditional oil and gas development in the state of Montana.
Coal Bed Methane Frequently Asked Questions – The FAQs were compiled by the Montana State University Department of Land Resources and Environmental Sciences to provide background information about coal bed methane development and related environmental impacts.
Montana Department of Environmental Quality Coal Bed Methane (CBM) web site – Provides information on laws, regulations, and permits, water quality issues, and other CBM topics in Wyoming.
Montana Environmental Statutes
Consistent with its constitutional obligations to "maintain and improve a clean and healthful environment in Montana," the Montana legislature has enacted several statutes aimed at environmental protection and conservation that include:
§ 75-1-101, et seq. Montana Environmental Policy Act – In recognition of the "profound impact of human activity on the interrelations of all components of the natural environment…and the critical importance of restoring and maintaining environmental quality," the Environmental Policy Act is aimed at the development and implementation of statewide policy and procedure to ensure that environmental attributes are fully considered in state actions and agency decisions. The Act provides for the use of "all practicable means consistent with other essential considerations of state policy" to improve and coordinate state plans, functions, programs, and resources so that the state may:
§ 75-1-201 – Environmental Impact Statements – requires that all state agencies develop and use a "systematic, interdisciplinary approach" so as to ensure that environmental impacts are fully analyzed and considered in agency actions and decisions
§ 75-1-301, et seq. – Environmental Quality Council – created the Environmental Quality Council to gather timely and authoritative information concerning the conditions and trends of environmental quality throughout Montana and to assist and consult with state agencies and the legislature to ensure compliance and consistency with the Environmental Policy Act
§ 75-1-1101 – Environmental Contingency Account – creates an environmental contingency account under the control of the governor to be a source of funding for unexpected environmental emergencies
§ 76-7-101, et seq. Environmental Control Easement Act – provides for the creation and enforcement of use restrictions applicable to sites throughout the state that contain or may contain hazardous wastes or substances that threaten the public health, safety, or welfare or the environment
§ 76-15-901, et seq. Coal Bed Methane Protection Program – creates a compensation program for landowners and water rights holders for damage to land and water quality attributable to the impacts of coal bed methane extraction
Montana Air Quality Statutes and Regulations
Air quality in Montana is provided for by the Clean Air Act of Montana (Mont. Code Ann. § 75-2-101, et seq.). The Act is administered by the Montana Department of Environmental Quality (MDEQ) through its Air Quality Program and seeks "to achieve and maintain levels of air quality that will protect human health and safety and, to the greatest degree possible, prevent injury to plant and animal life…" The MDEQ is responsible for developing emissions standards, issuing permits, and promulgating rules consistent with the Clean Air Act.
Current Air Quality Rules can be found in Title 17, Chapter 8 of the Administrative Rules of Montana or on the MDEQ website.
Rules of particular interest include:
17.8.701, et seq. – Permit, Construction, and Operation of Air Contaminant Sources – establishes general permitting requirements and procedures for the construction of facilities that emit air contaminants
17.8.1201, et seq. – Operating Permit Program – establishes general permitting requirements and procedures for the operation of facilities that emit air contaminants
17.8.1601, et seq. – Emission Control Requirements for Oil and Gas Well Facilities Operating Prior to Issuance of a Montana Air Quality Permit – establishes emission requirements and permitting procedures for oil and gas well facilities in operation prior to implementation of the current permitting system
17.8.1701, et seq. – Registration of Air Contaminant Sources – provides for the registration, inspection, and monitoring of facilities designated as air contaminant sources
17.8.1710 – Oil or Gas Well Facilities General Requirements – requires the owner or operator of a registered oil or gas facility to operate all emissions control equipment to provide the maximum air pollution control for which it was designed
17.8.1711 – Oil or Gas Well Facilities Emission Control Requirements – provides for the installation and operation of required air pollution control equipment and compliance with specified air pollution control practices
17.8.1712 – Oil or Gas Well Facilities Inspection and Repair Requirements – establishes inspection and repair requirements for specified piping equipment used in oil or gas well facilities
17.8.1713 – Oil and Gas Well Facilities Recordkeeping and Reporting Requirements – establishes recordkeeping requirements for inspections and repairs at registered facilities
Montana Water Quality Statutes and Regulations
Montana’s Water Quality Act (Mon. Code Ann. §75-5-101, et seq.) (http://data.opi.mt.gov/bills/mca_toc/75_5.htm) aims to "conserve water by protecting, maintaining, and improving the quality of water" throughout the state and to "provide a comprehensive program for the prevention, abatement, and control of water pollution." The MDEQ administers the Act with the assistance of the Water Pollution Control Advisory Council.
Current Water Quality Rules can be found in Title 17, Chapter 30 of the Administrative Rules of Montana.
Water quality rules of interest include:
17.30.601, et seq. – Surface Water Quality Standards and Procedures – establishes statewide surface water quality standards
17.30.107, et seq. – Nondegradation of Water Quality – implemented "to prohibit degradation of high quality state waters," these rules apply to new and increased sources of contaminants and establish requirements for the application and issuance of permits, facility reviews, and implementation of water quality protection practices
17.30.1101, et seq. – Storm Water Discharges – establishes permit requirements and operating procedures for industries, including the oil and gas industry, that discharge storm water
17.30.1201, et seq. and 17.30.1301, et seq. – Montana Pollutant Discharge Elimination System (MPDES) Standards and Permits – establishes effluent limitations, treatment standards, permitting procedures, and other requirements for point sources, including oil and gas operations, discharging wastes into state waters
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