Vermont oil and gas laws can be found in Chapter 14, Title 29 of Vermont Statutes.  Pursuant to 29 V.S.A. § 502, the purposes of the statute is to encourage oil and gas exploration and production; protect property rights and interests of all citizens; prevent long-term harm to the environment and other resources that might occur through oil and gas activities; protect correlative rights; prevent undue waste of oil and gas; promote greatest ultimate recovery of oil and gas, consistent with technology and economic conditions.

Powers and Jurisdiction of the Board

Pursuant to 29 V.S.A. § 504, the board consists of five members who will be appointed by the governor with the advice and consent of the senate.  The board has authority over all lands and over all oil and gas resources.  The board is to prevent the waste of oil and gas, promote conservation, and protect correlative rights.  In the event of a conflict, the duty to prevent waste is paramount.

Pursuant to 29 V.S.A. § 505, the board can:

• require identification of ownership of oil and gas wells, producing leases, tanks, processing plants, structures, and facilities for the transportation or refining of oil and gas;
• require the testing of wells used in connection with the production of oil and gas including, but not limited to, production, injection, and disposal wells;
• require the licensing of oil and gas well drillers and the furnishing of a reasonable performance bond or other good and sufficient surety, conditioned for the performance of the duty to plug and restore the drilling site of each dry or abandoned well, and to repair each well causing waste or pollution if repair will prevent the waste or pollution;
• require that wells be operated at efficient gas-oil or water-oil ratios or that production be limited from wells with inefficient gas-oil or water-oil ratios;
• require certificates of clearance in connection with the transportation or delivery of oil, gas, or product;
• require the metering or other measuring of oil, gas, or product;
• require that every person who produces, sells, purchases, acquires, stores, transports, refines, or processes oil or gas in the state keep complete and accurate records of their quantities, which records will be available for examination by the board or its agents at all reasonable times.

Regulation

Pursuant to 29 V.S.A. § 505, the board regulates the following:

• regulate the drilling, testing, equipping, completing, operating, producing, and plugging of wells, and all other operations for the production of oil or gas;
• regulate the stimulation and treatment of wells;
• regulate the spacing or locating of wells;
• regulate operations to increase ultimate recovery, such as cycling of gas, the maintenance of pressure, and the introduction of gas, water or other substances into a reservoir;
• regulate the disposal of salt water and oil field wastes;
• determine the amount of oil or gas that may be produced without waste from any unit, reservoir, or field, and allocate the allowed production to and among the wells in such fields or reservoirs;
• permit by rule or order the flaring of gas produced from an oil well, pending the time when, with reasonable diligence, the gas can be sold or otherwise utilized on terms identify reservoirs and classify or reclassify them as oil or gas reservoirs, and classify or reclassify wells as oil or gas wells;
• adopt rules and make and enforce orders reasonably necessary to prevent waste, to protect correlative rights, to govern the practice and procedure before the board;
• implement state responsibility under the National Gas Policy Act of 1978 for determining the statutory maximum lawful price for sales of natural gas.

Civil Actions

Pursuant to 29 V.S.A. § 551, the production, sale, acquisition, transportation, refining, processing, or handling of illegal oil, gas or product is prohibited.  Pursuant to 29 V.S.A. § 552, illegal oil, gas and product are declared to be contraband and are subject to seizure and sale.  Whenever the board believes that any oil, gas or product is illegal, the board may bring a civil action in the superior court of the county where the oil, gas or product is found, to seize and sell the same.  The board may also include such an action in any suit brought for an injunction or penalty.

Penalties

• Pursuant to 29 V.S.A. § 554(a), any person who violates any provision of the statute or the rules or orders of the board will be fined upto $ 5,000.00 or imprisoned upto two years, or both.  In the case of a continuing violation, each day’s continuance may be deemed a separate offense for the purpose of the fine.
• Any person who knowingly makes a false statement, representation, or certification in any application, record, report, plan or other document filed or required to be maintained under this chapter or the rules, regulations, or orders of the board will be upto $ 5,000.00 or be imprisoned upto two years, or both[i].
• Any person who unlawfully discloses or knowingly uses for his/her own purpose information made confidential under the statute will be fined upto $ 5,000.00 or imprisoned upto two years, or both[ii].
• Any person knowingly aiding or abetting any other person in the violation of the statute or any rule, or order of the board, will be subject to the same penalties prescribed for the violation of that other person[iii].

Leases

• Pursuant to 29 V.S.A. § 561(a), after the expiration, cancellation, surrender, or relinquishment of an oil and gas lease, upon written request of the lessor, the lessee must file a release or discharge of the lease in the land records of the town or towns where the lands described in the lease are located.  The filing will be in recordable form and includes any fees.
• If any lessee, his/her personal representative, successor or assign fails or refuses to record a release for a period of 30 days after being so requested, s/he will be liable for all damages caused including costs and reasonable attorney fees[iv].
• A lessor’s request for release or discharge will be in writing and delivered to the lessee by personal service or registered mail at his/her last known address[v].

[i] 29 V.S.A. § 554(b).

[ii] 29 V.S.A. § 554(c).

[iii] 29 V.S.A. § 554(d).

[iv] 29 V.S.A. § 561(b).

[v] 29 V.S.A. § 561(c).