Water Conservation In Oil And Gas Operations

The act requires an oil and gas operator in the state (operator), on or before September 1, 2023, on a monthly basis, with respect to each oil and gas well, and on or before January 1, 2024, and quarterly thereafter, with respect to the operator's oil and gas operations generally, to report information to the Colorado oil and gas conservation commission (commission) regarding the operator's use of water entering, utilized at, or exiting each of the operator's wells or oil and gas locations, including information on the recycling and reuse of produced water.

The act also requires the commission to adopt rules, on or before December 31, 2024, requiring a statewide reduction in usage of fresh water and a corresponding increase in usage of recycled or reused water in oil and gas operations.

From the information reported to the commission under the act, the commission is required to:

• Include the information as part of the commission's annual reporting on cumulative impacts of oil and gas operations; and
• Report to the legislative energy committees a summary of the reported information on or before April 1, 2025.

The act creates the Colorado produced water consortium in the department of natural resources (department) to make recommendations to state agencies and the general assembly regarding the recycling and reuse of produced water, develop guidance documents to promote best practices for in-field recycling and reuse of produced water, and analyze and report on:

• Existing produced water infrastructure, storage, and treatment facilities;
• The volume of produced water in different oil and gas basins available for recycling and reuse; and
• Additional infrastructure, storage, and technology needed to achieve different levels of recycling and reuse of produced water throughout the state.

Annually starting in 2024, the consortium is required to update the legislative energy committees on the consortium's work, and the executive director of the department is required to report on the consortium's recommendations as part of the department's annual "SMART Act" presentation to a joint committee of the general assembly.

The act repeals the consortium on September 1, 2030, subject to a sunset review by the department of regulatory agencies.

The act appropriates:

• $464,512 from the oil and gas conservation and environmental response fund to the department of natural resources for use by the commission for program costs; and
• $30,169 from the perfluoroalkyl and polyfluoroalkyl substances cash fund to the department of public health and environment for use by the water quality control division for personal services related to the drinking water program.

APPROVED by Governor June 7, 2023

EFFECTIVE June 7, 2023
(Note: This summary applies to this bill as enacted.)