RÉSUMÉ DIGEST
ACT 526 (SB 427) 2016 Regular Session Allain
Prior law granted the commissioner of conservation the discretionary authority to require
reasonable bond with security for the performance of the duty to plug wells and to perform
site cleanup.
New law removes this authority and authorizes transferrable plugging credits in lieu of the
bond with security required by prior 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.
New law requires that the regulations 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.
New law requires the commissioner to make, after notice and public hearings 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
as required. The rules, regulations, and orders may classify based on location of well and
shall not provide for the following exceptions from the reasonable bond with security
requirement:
(1)Wells exempt prior to September 1, 2015, that remain with the operator of record as
of that date.
(2)Wells utilizing plugging credits pursuant to new law.
(3)Wells exempt due to having provided the required financial security in order to
obtain a drilling permit (as contained in HB 632 of the 2016 R.S.)
Effective upon signature of the governor (June 13, 2016).
(Amends R.S. 30:4(C)(1)(a); adds R.S. 30:4(R))