On May 19, 2020, Governor Stitt of Oklahoma signed Senate Bill 1875, the Oil and Gas Produced Water and Waste Recycling and Reuse Act. This is important legislation that opens the door to recycling for operators and service providers, and anyone else. As with legislation which clarified ownership and liabilities in Texas in 2015, Oklahoma legislation now allows produced water to change ownership, with liabilities transferring along with ownership. Great news for Recyclers and the State of Oklahoma!
SB 1875 states that operators or nonoperators, defined as anyone other than the operator contributing to the cost and expense of drilling and completing or operating a well for the intended development and production of hydrocarbons, has “the right to use, possess, handle, dispose of, transfer, sell, covey, transport, process, recycle, reuse, or treat the produced water and waste and shall have the exclusive right to obtain proceeds for any of the uses of the oil and gas produced water and waste or some portion thereof, including recycled water and treated constituents”.
Long story short, SB 1875 gives oil and gas operators ownership of produced water until it is transferred to another person or entity. Thus, when produced water or waste is transferred to someone else for the purpose of recycling and beneficial reuse, the produced water then becomes the property of the person handling the waste. The bill also shields liability from those who plan of processing wastewater into recycled water and transport the recycled water for further use in oil and gas operations. Lawmakers believe that this will turn produced water into a resource and commodity, instead of a material with previously no economic value.
State Senator Dave Rader, who authored the bill, believes that by clarifying ownership and liability, “the measure aims to attract entrepreneurs to innovate and invest in technology to process and treat oil and gas produced water and waste, resulting in a beneficial resource and a reduction in wastewater injection.”
Beginning in 2009, Oklahoma has experienced swaths of earthquakes largely linked to high volume produced water injection and disposal. SB 1875 encourages and incentivizes recycling and reusing produced water, minimizing freshwater demand for drilling purposes and reducing saltwater disposal volumes.