Oil & Gas

Laws and Rules

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.

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.