HOUSE BILL No. 5316 October 23, 1997, Introduced by Reps. Lowe, Cropsey, Bodem, Goschka, DeVuyst, Voorhees, Bobier, McNutt, Horton and Raczkowski and referred to the Committee on Forestry and Mineral Rights. A bill to amend 1994 PA 451, entitled "Natural resources and environmental protection act," by amending sections 61501 and 61517 (MCL 324.61501 and 324.61517), as added by 1995 PA 57. THE PEOPLE OF THE STATE OF MICHIGAN ENACT: 1 Sec. 61501. Unless the context requires a different mean- 2 ing, the words defined in this section have the following mean- 3 ings when used in this part: 4 (A) "DEPARTMENT" MEANS THE DEPARTMENT OF ENVIRONMENTAL 5 QUALITY. 6 (B)(a)"Field" means an underground reservoir or reser- 7 voirs containing oil or gas, or both. Field also includes the 8 same general surface area that is underlaid or appears to be 9 underlaid by at least 1 pool. Field and pool have the same 03258'97 JCB 2 1 meaning if only 1 underground reservoir is involved. However, 2 field, unlike pool, may relate to 2 or more pools. 3 (C)(b)"Gas" means a mixture of hydrocarbons and varying 4 quantities of nonhydrocarbons in a gaseous state which may or may 5 not be associated with oil, and includes those liquids resulting 6 from condensation. 7 (D)(c)"Illegal container" means a receptacle that con- 8 tains illegal oil or gas or illegal products. 9 (E)(d)"Illegal conveyance" means a conveyance by or 10 through which illegal oil or gas or illegal products are being 11 transported. 12 (F)(e)"Illegal oil or gas" means oil or gas that has 13 been produced by an owner or producer in violation of this part, 14 a rule promulgated under this part, or an order of the supervisor 15 issued under this part. 16 (G)(f)"Illegal product" means a product of oil or gas or 17 any part of a product of oil or gas that was knowingly processed 18 or derived in whole or in part from illegal oil or gas. 19 (H)(g)"Market demand" means the actual demand for oil or 20 gas from any particular pool or field for current requirements 21 for current consumption and use within or outside the state, 22 together with the demand for such amounts as are necessary for 23 building up or maintaining reasonable storage reserves of oil or 24 gas or the products of oil or gas. 25 (I)(h)"Oil" means natural crude oil or petroleum and 26 other hydrocarbons, regardless of gravity, that are produced at 27 the well in liquid form by ordinary production methods and that 03258'97 3 1 are not the result of condensation of gas after it leaves the 2 underground reservoir. 3 (J)(i)"Owner" means the person who has the right to 4 drill a well into a pool, to produce from a pool, and to receive 5 and distribute the value of the production from the pool for him- 6 self or herself either individually or in combination with 7 others. 8 (K)(j)"Person" means any natural person, corporation, 9 association, partnership, receiver, trustee, so-called common law 10 or statutory trust, guardian, executor, administrator, and a 11 fiduciary of any kind. 12 (l)(k)"Pool" means an underground reservoir containing a 13 common accumulation of oil or gas, or both. Pool includes a pro- 14 ductive zone of a general structure that is completely separated 15 from any other zone in the structure, or is declared to be a pool 16 by the supervisor of wells. 17 (M)(l)"Producer" means the operator, whether owner or 18 not, of a well or wells capable of producing oil or gas or both 19 in paying quantities. 20 (N)(m)"Product" means any commodity or thing made or 21 manufactured from oil or gas, and all derivatives of oil or gas, 22 including refined crude oil, crude tops, topped crude, processed 23 crude petroleum, residue from crude petroleum, cracking stock, 24 uncracked fuel oil, fuel oil, treated crude oil, residuum, gas 25 oil, naphtha, distillate, gasoline, casing-head gasoline, natural 26 gas gasoline, kerosene, benzine, wash oil, waste oil, lubricating 03258'97 4 1 oil, and blends or mixtures of oil or gas or any derivatives of 2 oil or gas whether enumerated or not. 3 (O)(n)"Supervisor" or "supervisor of wells" means the 4 department. 5 (P)(o)"Tender" means a permit or certificate of clear- 6 ance, approved and issued or registered under the authority of 7 the supervisor, for the transportation of oil or gas or 8 products. 9 (Q)(p)"Waste" in addition to its ordinary meaning 10 includes all of the following: 11 (i) "Underground waste", as those words are generally under- 12 stood in the oil business, and including all of the following: 13 (A) The inefficient, excessive, or improper use or dissipa- 14 tion of the reservoir energy, including gas energy and water 15 drive, of any pool, and the locating, spacing, drilling, equip- 16 ping, operating, or producing of a well or wells in a manner to 17 reduce or tend to reduce the total quantity of oil or gas ulti- 18 mately recoverable from any pool. 19 (B) Unreasonable damage to underground fresh or mineral 20 waters, natural brines, or other mineral deposits from operations 21 for the discovery, development, and production and handling of 22 oil or gas. 23 (ii) "Surface waste", as those words are generally under- 24 stood in the oil business, and including all of the following: 25 (A) The unnecessary or excessive surface loss or destruction 26 without beneficial use, however caused, of gas, oil, or other 27 product, but including the loss or destruction, without 03258'97 5 1 beneficial use, resulting from evaporation, seepage, leakage, or 2 fire, especially a loss or destruction incident to or resulting 3 from the manner of spacing, equipping, operating, or producing a 4 well or wells, or incident to or resulting from inefficient stor- 5 age or handling of oil. 6 (B) The unnecessary damage to or destruction of the surface; 7 soils; animal, fish, or aquatic life; property; or other environ- 8 mental values from or by oil and gas operations. 9 (C) The drilling of unnecessary wells. 10 (iii) "Market waste", which includes the production of oil 11 or gas in any field or pool in excess of the market demand as 12 defined in this part. 13 Sec. 61517. (1)TheEXCEPT AS PROVIDED IN SUBSECTION (2), 14 THE circuit court of Ingham county has exclusive jurisdiction 15 over all suits brought against thecommissionDEPARTMENT, the 16 supervisor, or any agent or employee of thecommission17 DEPARTMENT or supervisor, by or on account of any matter or thing 18 arising under this part. A temporary restraining order or 19 injunction shall not be granted in any suit described in this 20 section except after due notice and for good cause shown. 21 (2) AN ACTION WITH REGARD TO POOLING OF PROPERTIES UNDER 22 SECTION 61513 MAY BE BROUGHT IN THE CIRCUIT COURT FOR THE COUNTY 23 IN WHICH THE OIL OR GAS RIGHTS ARE LOCATED OR IN THE CIRCUIT 24 COURT OF INGHAM COUNTY. 03258'97 Final page. JCB