AZ SB1688

Adds definition of "horizontal hydraulic fracturing" to Arizona oil and gas law as the technique of expanding rock fractures from substantially horizontal wellbores by injecting water, fluids, chemicals, and proppants under pressure to explore, drill, complete, or produce oil or natural gas.

Classifies oil or gas produced using horizontal hydraulic fracturing as "illegal oil" or "illegal gas" and prohibits the commissioner from allowing horizontal hydraulic fracturing in conservation operations.

Adds groundwater contamination prevention to the state's public policy on oil and gas production and expands the definition of "waste" to include injection of fracturing fluids and production of flowback water and drill cuttings from horizontal drilling operations.

Increases civil penalties for violations from a maximum of $1,000 per day to a minimum of $10,000 per day for any person who causes horizontal hydraulic fracturing to occur in the state.

Modifies various provisions in Arizona Revised Statutes sections 27-501, 27-502, 27-503, 27-516, and 27-527 to implement the prohibition and related regulatory changes.