SLS 16RS-216 ENGROSSED
2016 Regular Session
SENATE BILL NO. 427
BY SENATOR ALLAIN
CONSERVATION. Provides for powers and duties of the commissioner of conservation.
(gov sig)
1 AN ACT
2 To amend and reenact R.S. 30:4(C)(1)(a)(iii) and (iv), to enact R.S. 30:4(R) and (S), and to
3 repeal R.S. 30:4(C)(1)(a)(v), relative to the office of conservation; to provide for
4 jurisdiction, duties, and powers of the commissioner; to provide for drilling, casing,
5 and plugging of wells; to allow for transferrable plugging credits in lieu of bond with
6 security; to require reasonable bond with security for plugging certain wells; to
7 require the plugging of certain wells; to provide for rule making authority; to provide
8 for terms, conditions, and requirements; and to provide for related matters.
9 Be it enacted by the Legislature of Louisiana:
10 Section 1. R.S. 30:4(C)(1)(a)(iii) and (iv) are hereby amended and reenacted and
11 R.S. 30:4(R) and (S) are hereby enacted to read as follows:
12 ยง4. Jurisdiction, duties, and powers of the assistant secretary; rules and regulations
13 * * *
14 C. The commissioner has authority to make, after notice and hearings as
15 provided in this Chapter, any reasonable rules, regulations, and orders that are
16 necessary from time to time in the proper administration and enforcement of this
17 Chapter, including rules, regulations, or orders for the following purposes:
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 427
SLS 16RS-216 ENGROSSED
1 (1)(a)(i) * * *
2 (iii) To prevent the pollution of fresh water supplies by oil, gas, or salt water;
3 and
4 (iv) To require the plugging of each dry and abandoned well and the closure
5 of associated pits, the removal of equipment, structures, and trash, and to otherwise
6 require a general site cleanup of such dry and abandoned wells; and To allow for
7 transferrable plugging credits in lieu of the bond with security required by
8 Subsection R of this Section in order to promote the plugging of orphaned
9 oilfield sites and oilfield sites that have been inactive for at least five years. A
10 plugging credit shall be issued for the plugging of orphaned oilfield sites and
11 oilfield sites that have been inactive for at least five years, with the specific
12 requirements and procedures for issuance, transfer, and acceptance of such
13 credits to be developed by the commissioner. The regulations shall, at a
14 minimum, provide criteria under which plugging credits may be earned, and
15 require approval by the commissioner for the earning, using, banking, or selling
16 of the plugging credits.
17 * * *
18 R. The commissioner shall make, after notice and public hearings as
19 provided in this Chapter, any rules, regulations, and orders that are necessary
20 to require reasonable bond with security for the performance of the duty to plug
21 each dry and abandoned well and the closure to perform the site cleanup
22 required by Subsection S of this Section. The rules, regulations, and orders may
23 classify based on location of well and shall not provide any exception from the
24 reasonable bond with security requirement but may allow for the use of
25 plugging credits.
26 S. The commissioner shall make, after notice and public hearings as
27 provided in this Chapter, any rules, regulations, and orders that are necessary
28 to require the plugging of each dry and abandoned well and the closure of
29 associated pits, the removal of equipment, structures, and trash, and to
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 427
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1 otherwise require a general site cleanup of such dry and abandoned well. The
2 rules, regulations, and orders shall include but not be limited to the following:
3 (1) Inactive wells classified as having future utility shall be plugged
4 within five years of being classified as inactive, be returned to a producing
5 oilfield site as defined in R.S. 30:82, or pay the annual assessment as provided
6 by rule.
7 (2) Inactive wells classified as having no future utility shall be plugged
8 within ninety days of being classified as inactive.
9 Section 2. R.S. 30:4(C)(1)(a)(v) is hereby repealed.
10 Section 3. This Act shall become effective upon signature by the governor or, if not
11 signed by the governor, upon expiration of the time for bills to become law without signature
12 by the governor, as provided by Article III, Section 18 of the Constitution of Louisiana. If
13 vetoed by the governor and subsequently approved by the legislature, this Act shall become
14 effective on the day following such approval.
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Alan Miller.
DIGEST
SB 427 Engrossed 2016 Regular Session Allain
Proposed law authorizes transferrable plugging credits in lieu of the bond with security
required by present law in order to promote the plugging of orphaned oilfield sites and
oilfield sites that have been inactive for at least five years. A plugging credit shall be issued
for the plugging of orphaned oilfield sites and oilfield sites that have been inactive for at
least five years, with the specific requirements and procedures for issuance, transfer, and
acceptance of such credits to be developed by the commissioner.
Proposed law requires that the regulations will provide criteria under which plugging credits
may be earned, and approval by the commissioner for the earning, using, banking, or selling
of the plugging credits.
Present law grants the commissioner the discretionary authority to require reasonable bond
with security for the performance of the duty to plug wells and to perform site cleanup.
Proposed law repeals present law.
Proposed law requires the commissioner to make, after notice and public hearings as
provided in present law, any rules, regulations, and orders that are necessary to require
reasonable bond with security for the performance of the duty to plug each dry or abandoned
well and to perform the site cleanup required by proposed law. The rules, regulations, and
orders may classify based on location of well and shall not provide any exception from the
reasonable bond with security requirement, but may allow for the use of plugging credits.
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions. SB NO. 427
SLS 16RS-216 ENGROSSED
Proposed law requires the commissioner to make, after notice and public hearings as
provided in present law, any rules, regulations, and orders that are necessary to require the
plugging of each dry or abandoned well and to perform site cleanup. The rules, regulations,
and orders shall include but not be limited to the following:
(1)Inactive wells classified as having future utility must be plugged within five years
of being classified as inactive, be returned to a producing oilfield site as defined in
present law, or pay the annual assessment as provided by rule.
(2)Inactive wells classified as having no future utility must be plugged within 90 days
of being classified as inactive.
Effective upon signature of the governor or lapse of time for gubernatorial action.
(Amends R.S. 30:4(C)(1)(a)(iii) and (iv); adds R.S. 30:4(R) and (S); repeals R.S.
30:4(C)(1)(a)(v))
Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Natural Resources to
the original bill
1. Technical changes.
2. Adds provision that operators of inactive wells classified as having future
utility may pay an annual assessment in lieu of plugging the well or returning
it to a producing site.
3. Deletes provision requiring financial security on all inactive wells, even if no
financial security was previously required.
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.