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Arizona Oil and Gas Laws

Arizona oil and gas laws can be found in Chapter 4, Title 27 of Arizona Revised Statutes.  Pursuant to A.R.S. § 27-514, an oil and gas conservation commission is established.  The commission should consist of the state land commissioner ex officio and five members to be appointed by the governor, no more than three of whom should be of the same political party.  The appointive members should be U.S. citizens and should have been residents of Arizona for not less than the five years immediately preceding their appointment.  Three members of the commission constitute a quorum for the transaction of business.

Powers and Jurisdiction of the Commission

Pursuant to A.R.S. § 27-515, the commission administers and enforces the provisions of this statute and other laws relating to conservation of oil and gas.  The commission and administrative staff may, at any time, enter upon property and inspect wells drilled for oil or gas, and well records, and controls property, machinery and appliances necessary to gauge the wells.  The Arizona geological survey provides staff support to the commission to administer the provisions of this statute.

The commission may[i]:

  • Administer oaths to a witness in any hearing, investigation, or proceeding held under this statute or other law relating to conservation of oil and gas.
  • Issue subpoenas requiring attendance and testimony of witnesses and production of books, papers and records deemed material or necessary and direct service of subpoenas by a sheriff or other officer authorized by law to serve process.
  • Prescribe rules and do all acts necessary or advisable to carry out the provisions of this statute.
  • Collect such fees as will cover the costs of such services as, but not limited to, reproduction of records or any portion thereof and copies of rules.
  • Publish technical maps, cross sections, and reports and sell these materials for such fees as will cover the costs incurred in their preparation, reproduction, and distribution.
  • The commission may enter into cooperative agreements with agencies of the U.S. government, with agencies of state or local government or with Indian tribes for the purpose of protecting the fresh water supplies of the state from contamination or pollution brought about by the drilling of any well or for any other purpose.
  • The commission may apply for and accept gifts, devises and donations of books, well records, maps or other materials.  All donated materials should become public records.
  • Monies collected should be deposited in the geological survey fund and should be used to prepare, reproduce, and distribute further publications.

Regulation of Production

An owner or operator of an oil or gas well should, before connecting with an oil or gas pipe line, secure from the commissioner a certificate showing compliance with the conservation laws of the state and the conservation rules, regulations and orders of the commissioner[ii].  No operator of a pipe line should connect with a well until the owner or operator furnishes a certificate of compliance.

The sale, purchase or acquisition, or the transportation, refining, processing or handling of illegal oil or gas or illegal product is unlawful, but until the commissioner provides for certificates of clearance or some other method affording an opportunity to determine whether a contemplated transaction involves illegal oil or gas or illegal product[iii].

Civil Actions

Pursuant to A.R.S. § 27-524, when it appears that a person is violating or threatening to violate any provision of this statute, or a rule, regulation or order made and such person fails or refuses, on notice by the commissioner, to desist from such violation or threat of violation, the commissioner may bring an action in the superior court where the offending person resides, or in the county in which violation is alleged to have occurred or is threatened, to restrain the person from continuing the violation or from carrying out a threat of violation.

The commissioner may without bond obtain a prohibitory or mandatory injunction, including a temporary restraining order and preliminary injunction, and, where appropriate, an injunction restraining defendant from moving or disposing of illegal oil or gas or illegal product. Upon filing the action, summons directed to such person may be delivered to the sheriff of any county in the state of Arizona for service.

If a person fails or refuses to comply with a subpoena issued by the commissioner, or if a witness refuses to testify or answer to a matter regarding which s/he may be lawfully interrogated, the judge of the superior court of the county where such person resides, if a resident of the state, or the judge of the superior court of the county in which the land or any part thereof lies out of which the controversy arises, if the person is not a resident of the state, may, on application of the commissioner, issue an attachment for such person and compel him/her to comply with the subpoena and appear before the commissioner and produce such documents and give testimony upon such matters as required[iv].

Appeals

Pursuant to A.R.S. § 27-526, in an action brought under this statute, or an action which involves any rule, regulation or order made under this statute, any party to the action has the right to appeal from the superior court to the supreme court as provided by law or rules of court relating to appeals in civil actions.

Penalties

A.R.S. § 27-527 provides that any person who violates any provision of this statute, or any rule, regulation or order of the commission, is subject to a civil penalty of not more than one thousand dollars for each violation and for each day the violation continues.

Any person who, with the intent to evade this statute, or any rule, regulation or order of the commission, knowingly makes or causes to be made a false entry in any application, report, record, account or memorandum or by any such rule, regulation or order, or who knowingly omits or causes to be omitted from any application, report, record, account or memorandum, full, true and correct entries as required by this statute, or by any such rule, regulation or order, or who knowingly removes from this state, or destroys, mutilates, alters or falsifies any such application, record, account or memorandum or knowingly makes any false statement to the commission or any member, officer, or employee of the commission concerning any matter within the jurisdiction of the commission is guilty of a class two misdemeanor[v].

Leases

The department may lease state lands for oil and gas and the department may prescribe rules and regulations necessary and appropriate to carry out leases[vi].  When state lands are not located within any known geological structure of a producing oil and gas field, the person making the first application for the lease should be issued a lease covering the lands without competitive bidding[vii].

When state lands are located within a known geological structure of a producing oil or gas field, the lands should be leased only by sealed bids[viii].

Arizona Oil and Gas Laws

[i] A.R.S. § 27-515.

[ii] A.R.S. § 27-509.

[iii] A.R.S. § 27-510.

[iv] A.R.S. § 27-519.

[v] A.R.S. § 27-527.

[vi] A.R.S. § 27-552.

[vii] A.R.S. § 27-555.

[viii] A.R.S. § 27-556.


Inside Arizona Oil and Gas Laws