IDAHO DEPARTMENT OF LANDSDirector Tom Schultz

Oil & Gas in Idaho

OIL AND GAS CONSERVATION COMMISSION

Oil and Gas Conservation Act administration

Five-member citizen commission appointed by

Governor and confirmed by Senate

IDL is the administrative arm of the commission

Monthly meetings

ONCE UPON A TIME…

11 to 10 million years ago, the Western Snake

River Plain formed.

9 to 2 million years ago, Lake Idaho occupied

much of this area.

About 2 million years ago the lake drained to

the north, likely through Hells Canyon.

152 oil and gas wells drilled through late

1980s. No commercial production occurred.

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Number of Wells by Year

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Wells by County

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Western

Idaho

Overthrust Albion Rocky

Mountain

Lewiston

Embayment

Purcell

Trench

Misc.

Wells by Geologic Province

RECENT HISTORY OF DRILLING

Drilling permits issued in late 2009

Drilling started in early 2010

Gas discovery announced in 2010

2D Seismic Survey

EXPLORATION: 2012 - PRESENT

2012-2014 Three 3D seismic explorations

completed

3D Seismic Survey

26 Well

Permits

Since 2007

5 Permits

Not

Drilled

2 Out-

standing

3 Expired21

Permits

Drilled

4 Wells

P&A’d

8 Wells

Producing

9 Wells

Shut In

MOST ACTIVITY IS IN WESTERN IDAHO

Leasing activity extends from Washington

County to Gem, Canyon, and Ada Counties.

Willow Field, roughly north of the Payette River

at the lower ends of Big and Little Willow

Creeks

Hamilton Field, centered on New Plymouth

Both fields may expand with more drilling and

exploration

SEISMIC MAP

Seismic Surveys Western

Idaho

WELLS IN PAYETTE COUNTY

FIRST COMMERCIALLY PRODUCED GAS

Seismic Surveys Eastern Idaho

PERMIT IN EASTERN IDAHO

OIL AND GAS WELL CONSTRUCTION

Shallow Sands to ~270 ft

Silty Sands to ~550 ft

Shale to ~4500 ft

Sand lenses 1800+ ft

Volcanics 4500+ ft

Shale to ~4500 ft

12” Conductor Casing

to ~100 ft

8 5/8” Surface Casing

to ~800 ft

4 5/8” Production

Casing to ~4000 ft

ESTIMATED PRODUCTION

Bridge Energy estimated from 5.1 to 35.6

billion cubic feet of gas.

Gross value of $15.3 to $107 million.

Local severance taxes of $153,000 to $1.07

million.

Oil and gas commission tax revenue of

$230,000 to $1.6 million.

WHAT IS BEING PRODUCED?

Mostly natural gas

Some condensate (very light oil)

Natural gas liquids (propane,

butane, etc.)

Oil (currently from just one well)

Drill rig working on Idaho well

MAIN CONCERNS

1. Allowing Responsible Resource Extraction

2. Protecting Water Quality

Well Integrity

Fluid Containment on Surface

Disclosure of Fluids

Proper Disposal of Fluids

TAX COMMISSION INVOLVEMENT

$ - Collects 2.5% severance tax

$ - Audits

$ - Enforces collections

$ - Inter-accounts 60% of proceeds to IDL for

use by the Oil and Gas Conservation

Commission

OTHER 40% OF SEVERANCE TAX

$ - 28% to Counties with production

$ - 28% to Cities in these counties

$ - 28% to Public School Income Fund

$ - 16% to Local Economic Development

Account

CURRENT TAX COLLECTIONS TO IDL

As of May 11, 2016, about $42,000 received

by IDL FY2016

Depressed commodity prices mean less tax

revenue, and less development and investment

by industry

PUBLIC UTILITIES COMMISSION

Regulates intrastate gathering lines

Federal Energy Regulatory Commission

Regulates interstate pipe lines (e.g. WilliamsPipeline)

DEQ INVOLVEMENT

Sets water quality standards

Classifies ground water resources

Regulates air permitting

Petroleum spill and release response

Determines Ground Water Protection Area for

public drinking water supplies

Engineering review of water evaporation

(disposal) pits

IDWR INVOLVEMENT

Inventory of water wells

Review of drilling permits

Water rights

Regulation of geothermal wells

WHAT IS FRESH WATER?

Fresh Water is defined in the rules to include all

surface and ground waters.

Default classification of all groundwater is a

“General Resource Aquifer”, and water quality

standards must be maintained.

IDEQ can set alternate points of compliance,

and can undertake rulemaking to reclassify an

aquifer to an “Other Resource Aquifer”.

BONDS

Active Wells

Individual well bond of $10,000 plus $1/foot of

well length.

Blanket bonds: Up to 10 wells - $50,000

11 to 30 wells - $100,000

Over 30 wells - $150,000

BONDS

Inactive Wells

Individual well bond of $10,000 plus $8/foot of

well length.