Nebraska Administrative Code Topic - OIL AND GAS CONSERVATION COMMISSION
Overview: Nebraska Administrative Code – Oil and Gas Conservation Commission
The Nebraska Oil and Gas Conservation Commission (NOGCC) oversees the exploration, drilling, production, and conservation of oil and natural gas in the state. Key responsibilities include:
Issuing permits for drilling and operation of wells
Regulating spacing, pooling, and production practices
Ensuring environmental protection and safety
Handling plugging, abandonment, and reclamation of wells
Monitoring compliance and enforcing penalties
The goal is to balance energy production with public safety, environmental protection, and resource conservation.
Case 1: Drilling Without a Permit
Situation
An energy company begins drilling a new oil well without obtaining a permit from the NOGCC.
Relevant NAC Rules
All wells must have valid permits before drilling begins.
Unauthorized drilling is strictly prohibited.
Board Analysis
Drilling without a permit risks environmental damage, public safety, and legal violations.
Compliance ensures proper review of site conditions, safety protocols, and spacing regulations.
Outcome
Immediate halt of drilling operations.
Monetary fines imposed.
Permit application may be required retroactively or denied, depending on the severity.
Purpose
Ensures oversight and safe, legal operation of oil and gas wells.
Case 2: Violation of Well Spacing Rules
Situation
A company drills a new gas well too close to an existing well, violating mandated spacing regulations designed to prevent reservoir damage.
Relevant NAC Rules
Wells must comply with minimum spacing requirements to prevent overproduction and resource waste.
Board Analysis
Improper spacing can reduce recovery efficiency and damage subsurface reservoirs.
Violates conservation and production rules.
Outcome
Commission may require the well to be shut in or relocated.
Fines and administrative penalties may be imposed.
Future permits reviewed with stricter scrutiny.
Purpose
Preserves oil and gas reservoirs and ensures efficient production.
Case 3: Improper Pooling of Resources
Situation
Several operators in a field fail to pool leases properly, resulting in overproduction from one operator’s well while neighboring leases are underutilized.
Relevant NAC Rules
NOGCC may require pooling agreements to maximize resource recovery and prevent waste.
Board Analysis
Lack of proper pooling can lead to inequitable resource extraction and legal disputes.
Ensures all leaseholders receive fair production allocation.
Outcome
Commission may mandate formal pooling agreements.
Operators may be fined for non-compliance.
Production adjustments enforced retroactively.
Purpose
Balances interests of multiple operators and protects the resource.
Case 4: Environmental and Safety Violations
Situation
A well operator fails to properly manage produced water and spills hydrocarbons, contaminating nearby soil and groundwater.
Relevant NAC Rules
Operators must follow environmental protection and safety regulations, including proper waste handling and spill containment.
Board Analysis
Violations endanger public health and environmental resources.
Commission requires remediation and may impose penalties.
Outcome
Immediate shutdown of operations until compliance is achieved.
Fines and required cleanup.
Ongoing monitoring by environmental inspectors.
Purpose
Protects the environment and ensures safe oil and gas operations.
Case 5: Failure to Plug Abandoned Wells
Situation
An operator abandons a well without properly plugging and capping it, leaving it as a potential hazard.
Relevant NAC Rules
All abandoned wells must be plugged according to prescribed procedures to prevent contamination or accidents.
Board Analysis
Open or improperly abandoned wells can contaminate groundwater or cause safety hazards.
Commission requires corrective action.
Outcome
Operator mandated to plug the well under supervision.
Fines assessed for failure to comply.
If the operator cannot pay, state funds may be used and lien placed on the operator.
Purpose
Ensures public safety and environmental protection.
Case 6: Inaccurate Reporting of Production
Situation
An operator submits false production data to NOGCC to reduce royalty payments or evade regulatory scrutiny.
Relevant NAC Rules
Operators must accurately report production volumes.
Misreporting is considered a serious violation.
Board Analysis
Misreporting undermines regulatory oversight and royalty distribution.
Can lead to legal and financial penalties.
Outcome
Operator fined and required to submit corrected reports.
License to operate may be suspended.
Potential referral for criminal investigation.
Purpose
Ensures accurate monitoring, royalty payments, and regulatory compliance.
Case 7: Noncompliance with Commission Orders
Situation
The Commission issues a directive to modify production techniques to prevent waste, but the operator ignores it.
Relevant NAC Rules
All operators must comply with NOGCC orders.
Failure to follow directives is a regulatory violation.
Board Analysis
Noncompliance jeopardizes resource conservation and regulatory authority.
Persistent violations can escalate enforcement actions.
Outcome
Administrative penalties or fines.
Suspension of operations until compliance is achieved.
License revocation for repeated violations.
Purpose
Ensures the Commission can enforce conservation and safety measures.
Key Takeaways from Nebraska Oil and Gas Commission Cases
Permits are mandatory before drilling or operating wells.
Spacing and pooling rules prevent resource waste and legal disputes.
Environmental and safety compliance is essential to protect people and land.
Abandoned wells must be properly plugged to prevent hazards.
Accurate production reporting ensures fair royalty distribution and regulatory monitoring.
Operators must comply with all Commission orders; failure can lead to fines, shutdown, or license revocation.
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