|University of Colorado at Boulder|
In most states, water is legally owned by the State. To use water, it is therefore necessary to acquire a water right. In some states water rights will be acquired by co-operatives, municipalities, or other group entities, which then issue water shares for purchase by potential water users. Depending on the source of the water used in oil and gas development, different state water laws, agency regulation, and local authority will apply. Although, the laws governing ground and surface water use and production vary across the United States, all states in the Intermountain West region follow the Prior Appropriation Doctrine:
The Prior Appropriation Doctrine historically derives from water conflicts between mining operators. The doctrine generally follows the principle of "first in time, first in right." Under this doctrine the first person to develop a water resource in an area stakes first claim to the amount of water that is used for beneficial purposes. Later users are entitled to any remaining resources in the order that they claim a right for use.