BILL REQ. #:  Z-0979.2 

Read first time 01/19/2006.   Referred to Committee on Natural Resources, Ecology & Parks.

     AN ACT Relating to the study of state programs affecting exploration, development, production, and storage of oil and gas; creating new sections; and making an appropriation.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF WASHINGTON:

NEW SECTION.  Sec. 1   The legislature finds that the passage of the oil and gas conservation act in 1951 established a regulatory framework for the oil and gas industry in Washington, and that subsequent amendments in 1971, 1983, and 1994 have maintained the original framework and that the integration of the state environmental policy act and administrative procedure act is needed to strengthen the existing framework.
     The legislature further finds that since the last amendment in 1994, there is increasing interest in oil and natural gas resources and the underground storage of natural gas. The legislature further finds that the absence of a modern, comprehensive financial and regulatory approach to these related issues has placed Washington at a disadvantage in ensuring environmental protection and realizing appropriate economic benefits from this activity.
     The legislature further finds that it is in the state's interest to foster oil and natural gas resources-related activities in an appropriate regulatory, technical, environmental, and financial framework, and that the existing framework does not adequately allow the state to respond to potential discoveries.

NEW SECTION.  Sec. 2   The commissioner of public lands shall develop recommendations to improve the regulatory, technical, environmental, and financial framework of the oil and gas industry as specified in section 1 of this act by December 30, 2006. In developing statewide recommendations, the commissioner shall assemble and consult the work group created in section 3 of this act.

NEW SECTION.  Sec. 3   (1) A work group is created to study current state regulation of the oil and gas industry and opportunities to improve the oil and gas financial and regulatory program as specified in section 1 of this act and to help the commissioner of public lands develop recommendations under section 2 of this act.
     (2) The work group is comprised of individuals selected on the basis of their knowledge of regulatory, technical, environmental, and financial issues related to oil and natural gas resources and, if determined by the commissioner of public lands to be necessary, should represent a mix of individuals with knowledge regarding specific regions of the state. Members of the work group must be appointed by the commissioner of public lands, unless otherwise specified, and must include:
     (a) The commissioner of public lands or the commissioner's designee, who shall serve as chair of the work group;
     (b) A representative of the water quality program in the department of ecology;
     (c) A representative of the state environmental policy act program in the department of ecology;
     (d) A representative of the department of community, trade, and economic development;
     (e) A representative of the department of revenue;
     (f) A representative of the Washington farm bureau;
     (g) A representative of the Washington cattlemen's association;
     (h) A representative of the Washington independent producers and royalty owners association;
     (i) A representative of a statewide environmental group;
     (j) A representative of the utility industry with experience in the operation of underground natural gas storage;
     (k) A representative of the oil and gas industry with interest in conventional oil and gas exploration and development;
     (l) A representative of the oil and gas industry with interest in coal bed methane exploration and development; and
     (m) Representatives of two counties appointed by the Washington state association of counties, one from east of the crest of the Cascade mountains and one from west of the crest of the Cascade mountains.
     (3) The work group must assist the commissioner of public lands in developing recommendations as specified under section 2 of this act and shall consider:
     (a) Existing financial and regulatory programs affecting the oil and gas industry in Washington;
     (b) Funding amounts and sources necessary for an effective and efficient oil and gas regulatory program;
     (c) Current and foreseeable activities related to oil and gas exploration, development, and underground storage of natural gas in the state;
     (d) Adequacy of current programs to address the technical, environmental, and financial aspects of oil and gas-related activities such as exploration wells, field development, underground natural gas storage, coal bed methane development, and conservation of the resources; and
     (e) Other related matters that may come to the work group's attention regarding current and foreseeable activities related to oil and gas exploration, development, and underground storage of natural gas in the state.
     (4) By December 30, 2006, the commissioner of public lands must submit the work group's findings, and recommendations for legislation that is necessary to implement the findings, to the appropriate standing committees of the legislature. The department of natural resources must provide technical and staff support from existing staff for the work group created by this section.

NEW SECTION.  Sec. 4   The sum of two hundred thousand dollars, or as much thereof as may be necessary, is appropriated for the fiscal year ending June 30, 2007, from the general fund to the department of natural resources for the purposes of this act.