Louisiana Senate Bill SB425

Louisiana 2016 Regular Session

• Introduced: 4/5/16
• Refer: 4/6/16
• Report Pass: 4/11/16
• Engrossed: 4/13/16
• Refer: 4/14/16
• Report Pass: 5/23/16
• Enrolled: 6/3/16
• Chaptered: 6/17/16
• Passed: 6/17/16

Caption

Dedicates the annual assessment on an operator who chooses not to plug an inactive well. (gov sig) (EN INCREASE SD RV See Note)

Impact

The bill will directly impact state laws by increasing the financial obligations of operators who do not plug inactive wells, thereby providing a source of funding intended for oilfield site restoration efforts. This new regulatory framework aims to ensure that funds are available for the remediation of sites that otherwise pose environmental hazards due to neglected or inactive oil wells. The allocation of fees collected will help mitigate potential costs to taxpayers by ensuring that operators bear responsibility for their wells.

Summary

Senate Bill 425 aims to amend the laws concerning the management of inactive wells in Louisiana by establishing a contribution mechanism for operators who choose not to plug these wells. Specifically, the bill creates an Oil and Gas Regulatory Fund and an Oilfield Site Restoration Fund, into which operators will pay fees based on their inactive well classifications. This represents a legislative step towards encouraging the responsible management of oil and gas resources and addressing environmental concerns associated with inactive wells.

Sentiment

General sentiment surrounding SB 425 appears to be supportive among legislators concerned with environmental issues and regulatory oversight of the oil and gas industry. The bill received a unanimous vote in the House, indicating a strong bipartisan agreement on the importance of addressing the problem of inactive wells and ensuring proper funds for restoration. However, opposition may arise from industry stakeholders who feel that increased fees could burden operators and impact economic activities in the region.

Contention

Notable points of contention regarding SB 425 may relate to the balance between regulatory responsibilities and economic impacts on the oil and gas industry. While the intent is to hold operators accountable for inactive wells, potential concerns about the financial implications of increased assessments on these operators could lead to discussions about the viability of their operational strategies. Legislators and stakeholders may continue to debate the effectiveness of such measures in achieving environmental protection without overregulating the industry.