After section 111—
insert—
'(1) The lease holder may do each of the following in the area of the lease—
(a) carry out the processing of produced water;
(b) construct and operate a facility for the processing and storage of produced water.
'(2) Subsection (1) applies for produced water—
(a) produced in or outside the area of the lease; and
(b) whether or not it is produced by the lease holder.
'(3) In this section—
processing of produced water includes—
(a) treating produced water; and
(b) applying mechanical or chemical processes, or energy, to produced water.'.