First Regular Session
              Sixty-ninth General Assembly
                    STATE OF COLORADO
                                                 INTRODUCED
                                                           
                                                           
 LLS NO. 13-1014.01 Thomas Morris x4218  HOUSE BILL 13-1322
                    HOUSE SPONSORSHIP
 Young,
 
                   SENATE SPONSORSHIP
 (None),
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 House Committees
 Senate Committees
 
 
 Agriculture, Livestock, & Natural Resources
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                         A BILL FOR AN ACT
       Concerning the treatment of natural gas recovered from
            oil storage tanks.
       
       
                           Bill Summary
       
            (Note: This summary applies to this bill as introduced and does
       not reflect any amendments that may be subsequently adopted. If this bill
       passes third reading in the house of introduction, a bill summary that
       applies to the reengrossed version of this bill will be available at
       http://www.leg.state.co.us/billsummaries.)
       
            After petroleum is pumped from an oil and gas well, the oil, gas,
       and water are separated. The oil and water are usually stored in tanks.
       After the initial phase of separation, some entrained gas remains in the
       oil, which then separates from the oil when the pressure subsequently
       drops. This is commonly referred to as flash gas. Depending on the
       amount, this gas may be vented or must be captured and controlled, often
       by flaring. The gas that has not yet passed through a sales meter can
       typically be used pursuant to the lease to run processing equipment
       on-site; neither severance taxes nor royalties are paid on this so-called
       "lease gas".
            Available technology allows for the recovery of flash gas vapors.
       Using this technology reduces potential air emissions when compared to
       venting or flaring, increases the supply of lease gas, increases the amount
       of gas that passes through sale meters, and thereby increases both royalty
       payments and severance taxes. Occasionally, the amount of recovered gas
       may exceed the amount needed to run processing equipment on-site.
            The bill defines lease gas to include recovered gas and gives the
       Colorado oil and gas conservation commission rule-making authority to
       approve a method to allocate recovered gas that would otherwise be
       vented or flared as waste.
       
       
       
       Be it enacted by the General Assembly of the State of Colorado:
            SECTION 1.  Legislative declaration. (1)  The general assembly:
            (a)  Finds that, depending on the amount of production, varying
       amounts of lease gas may be captured and controlled, by regulation, at oil
       and gas sites, which results in the reduction of air emissions;
            (b)  Determines that technologies are available to recover and use
       much of this gas, which should result in less pollution, more severance
       taxes, higher royalties, and increased supplies of domestic energy; and
            (c)  Declares that this act is necessary to encourage deployment of
       technologies that will protect the environment while stimulating the
       economy.
            SECTION 2.  In Colorado Revised Statutes, 34-60-103, add (5.3)
       and (10.3) as follows:
            34-60-103.  Definitions. As used in this article, unless the context
       otherwise requires:
            (5.3)  "Lease gas" means gas that has not yet passed
       through a sale meter and that can be used pursuant to a lease
       to run processing equipment at an oil and gas location. "Lease
       gas" includes recovered gas.
            (10.3)  "Recovered gas" means recovered gas vapors that
       have flashed from produced oil that would otherwise be vented
       or flared.
            SECTION 3.  In Colorado Revised Statutes, 34-60-106, add (11)
       (b) (III) as follows:
            34-60-106.  Additional powers of commission - rules.
       (11) (b) (III)  The commission may promulgate rules to allocate
       recovered gas that would otherwise be lost as waste, as defined
       in section 34-60-103 (11).
            SECTION 4.  Applicability. This act applies to acts occurring on
       or after the effective date of this act.
            SECTION 5.  Safety clause. The general assembly hereby finds,
       determines, and declares that this act is necessary for the immediate
       preservation of the public peace, health, and safety.