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NEBRASKA LEGISLATURE

LINCOLN — No one called for a dictionary during a legislative committee hearing Wednesday, but one may be cracked open yet.

The Natural Resources Committee heard conflicting testimony on the need to revise the policy and purpose of the Nebraska Oil and Gas Conservation Commission.

Legislative Bill 1082 would, in part, eliminate the statutory encouragement that the commission promote the oil industry.

The bill is the result of a committee study of the commission in the aftermath of the agency's decision to grant a permit for an oil company to develop a commercial disposal well in Sioux County last year.

Those who say the agency's preamble doesn't need to be changed note the commission has worked fine since 1959, when the Legislature created it "to foster, to encourage and to promote the development, production and utilization of ... oil and gas in the state.''

Advocates for the change say the commission should not be charged with promoting and regulating the oil industry.

Janece Mollhoff of Lincoln read a statement from psychologist and author Mary Pipher, also of Lincoln, calling for the change. Pipher said the commission has a "mixed-up mission'' to both regulate and promote the industry. She said the dual roles could lead to "shenanigans'' and create a situation primed for "confusion and corruption.''

Petroleum engineer Dana Wreath of Berexco LLC of Wichita, Kansas, the largest oil producer in Nebraska, said the commission doesn't foster or promote oil and gas development by contacting operators and telling them where to drill.

Rather, he said, the commission fosters and promotes only in the manner that orderly, competently administered regulations provide an environment for investment in the state.

The bill calls for new language that supports the development of the industry in a responsible manner while promoting the health, safety and environment of Nebraska residents.

Bill Sydow of Sidney, the commission director, testified neither for nor against the bill. He said development of oil and natural gas resources has provided hundreds of millions of dollars to Nebraskans and state and local governments.

The bill also would change procedures governing the permitting and testing of injection and disposal wells.

Jane Kleeb of Hastings, director of Bold Nebraska, said the bill was a step in the right direction for the disclosure and accountability for wells.

State Sen. Ken Schilz of Ogallala, committee chairman, said the bill is close to advancing to the floor of the Legislature and will be tweaked if necessary.

The committee also heard testimony on Sen. Ken Haar's LB 1070, which calls for requiring at least $1 million liability insurance for certain permit applicants, who already are required to be bonded.

Schilz said afterward that the committee "has no appetite'' for requiring liability insurance on companies in an industry struggling to survive low crude oil prices.

The bill also would prohibit injection wells in areas in which underground water begins 50 feet or less below the surface or if the saturated thickness of the aquifer extends more than 100 feet below the surface. After hearing arguments that the limitations would ban wells across most of Nebraska, Haar said he would scratch the section.

Schilz said he introduced a third bill, LB 1100, to start a conversation on how to market state oil and gas with a "petroleum checkoff'' similar to the corn or soybean checkoffs.

Contact the writer: 402-444-1127, david.hendee@owh.com

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