Louisiana House Bill HCR53

Louisiana 2016 Regular Session

• Introduced: 4/5/16
• Refer: 4/6/16

Caption

Suspends LAC 43:XIX.104 providing for financial security

Impact

The suspension of LAC 43:XIX.104 is expected to have significant implications for state environmental regulations and the operations of the oil and gas industry in Louisiana. By relieving operators of the heightened financial security requirements, the resolution recognizes the impending insolvency crisis that many small operators are facing. This could prevent an increase in orphaned wells, which pose risks to public health and safety, while also allowing these operators to maintain their production efforts. However, it also represents a potential rollback of regulatory protections that ensure environmental safety around abandoned wells.

Summary

HCR53 is a House Concurrent Resolution by Representatives Bishop, Chaney, and Jim Morris that aims to suspend the provisions of LAC 43:XIX.104. This rule requires oil and gas operators to provide financial security to ensure proper plugging and abandonment of orphaned wells and the restoration of associated sites. The resolution addresses concerns regarding the increasing financial security requirements which have become burdensome, particularly in light of the financial struggles faced by small operators and the significant drop in oil prices. The suspension is intended to alleviate some financial pressure on these operators to prevent further insolvency and the exacerbation of the orphaned wells issue.

Sentiment

The sentiment surrounding HCR53 appears to be cautiously supportive among operators who are at risk of insolvency. They have expressed concerns about the strict financial requirements threatening their viability and subsequently leading to higher instances of orphaned wells. However, this support is tempered by concerns from environmental advocates and other stakeholders who fear that the suspension of financial security requirements could lead to negative consequences for public health and the environment. The discussion highlights a tension between economic interests and environmental safeguards.

Contention

One notable point of contention in the discussions around HCR53 is the balance between ensuring the operational sustainability of small oil and gas operators and maintaining adequate protections against environmental hazards posed by orphaned wells. Critics of the current financial security requirements argue that they are too stringent and threaten the survival of small businesses, while proponents of strict environmental regulations warn that suspending such requirements may lead to an increase in abandoned wells that could compromise public safety and environmental quality. The debate encapsulates broader themes of regulation, economic feasibility, and environmental responsibility.