RULES AND REGULATIONS
What laws apply to oil and gas development in South Dakota?
The Oil and Gas Conservation Act, SDCL 45-9, contains the laws that apply to oil and gas development in the state. The Board of Minerals and Environment (board) and the department implement the requirements of the Act.
What requirements apply to me if I want to drill for oil and gas?
Drilling for oil and gas is regulated under SDCL 45-9 and the Administrative Rules of South Dakota (ARSD) Article 74:12. Underground injection for the purpose of enhanced oil recovery or the disposal of exploration and production wastes is regulated by the same statute and rules. The requirements of ARSD 74:09, which pertain to board hearings and petitions, also apply to oil and gas operations.
Revisions to Oil and Gas Bonding Requirements
NEW BOND REQUIREMENTS EFFECTIVE 07/01/2020- House Bill 1025 was signed into law on March 9, 2020. HB 1025 eliminates tiered bonding based on well depth. Under the new law, all wells are subject to a $50,000 per well bond or a $100,000 statewide blanket bond. Operators may be required to post a lower bond amount equivalent to actual plugging and reclamation costs if the department determines actual site restoration cost is less than the standard $50,000 or $100,000 blanket bond amounts. In addition, HB 1025 gives the Department of Environment and Natural Resources and the Board of Minerals and Environment the authority to require an additional $20,000 in surety for each well that is idle or inactive for more than six months.