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2018 Regular Session
SENATE BILL NO. 377
BY SENATOR ALLAIN
MINERALS. Establishes procedures for review of future utility of well sites that have been
inactive for more than ten years. (8/1/18)
1 AN ACT
2 To amend and reenact R.S. 30:21(B)(2)(a) and (b) and to enact R.S. 30:9.3, relative to the
3 office of conservation; to establish procedures for review of future utility of well
4 sites that have been inactive for more than ten years; to provide for procedures,
5 terms, rules, conditions, and requirements; to provide an exception to time
6 requirements; and to provide for related matters.
7 Be it enacted by the Legislature of Louisiana:
8 Section 1. R.S. 30:21(B)(2)(a) and (b) are hereby amended and reenacted and R.S.
9 30:9.3 is hereby enacted to read as follows:
10 §9.3. Plugging of inactive wells; appeal
11 A. For the purposes of this Section, the following terms shall have the
12 following meanings:
13 (1) "Inactive well" means an unplugged well that has been spud or has
14 been equipped with cemented casing and that has had no reported production,
15 disposal, injection, or other permitted activity for a period of greater than six
16 months and is not part of an approved production program.
17 (2) "Office" means the office of conservation.
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1 (3) "Operator" means the current operator of record for the inactive
2 well according to the office records.
3 (4) "Owner" means the owner, as listed on the parish tax roll, of the land
4 encompassing the surface location of the inactive well, or the owner's lessee.
5 B.(1) If an inactive well is designated as being inactive with future utility
6 by the operator for a period of ten years or more and that well is neither
7 scheduled to be plugged and abandoned on a plan approved by the
8 commissioner nor covered under an approved production program, then the
9 owner may request in writing that the office determine whether the inactive well
10 has future utility.
11 (2) Within thirty days of receipt of such a request, the commissioner
12 shall notify the operator of the request.
13 (3) The operator shall submit to the office a written justification
14 including any evidence he deems necessary to prove that the well has future
15 utility within ninety days of receipt of the notice from the office.
16 (4) The office shall review the operator's written justification and
17 determine whether the inactive well has future utility.
18 (5) The operator shall submit a plan to the office to plug the well within
19 ninety days after a final determination by the office that the well has no future
20 utility.
21 (6) The commissioner may approve the plan of plugging and
22 abandonment submitted by the operator that shall include any revisions the
23 commissioner deems necessary.
24 (7) The operator shall plug the well in accordance with and within the
25 time frame set forth in the plan of plugging and abandonment approved by the
26 commissioner.
27 (8) The operator or the owner may appeal the office's determination and
28 shall have the right to a public hearing if requested in writing within thirty days
29 of notification of the office's determination. The written request shall suspend
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1 the office's determination until after a hearing before an administrative law
2 judge or hearing officer. The hearing shall be in accordance with Part A of
3 Chapter 13-B of Title 49 of the Revised Statutes of 1950, comprised of R.S.
4 49:991 through 999.1, and the Administrative Procedure Act.
5 C.(1) If, in the determination of the commissioner, the office is unable to
6 carry out any of the responsibilities set forth in this Section within ninety days
7 of a request or submission due to lack of sufficient personnel or funding, then
8 the commissioner may delay such responsibilities. In such event the
9 commissioner shall notify the operator and owner of such a determination and
10 provide an estimate of when the office plans to carry out such responsibility.
11 (2) After notification described in Paragraph (1) of this Subsection, if the
12 owner insists on an expedited determination, he may donate an amount
13 determined by the commissioner to be placed in the Oil and Gas Regulatory
14 Fund to defray the costs of an expedited determination. The office shall follow
15 the procedure set forth in R.S. 30:4(Q) to expedite the determination.
16 D. The commissioner shall adopt rules and regulations in accordance
17 with the Administrative Procedure Act to implement the provisions of this
18 Section, including but not limited to defining the term "future utility" and
19 establishing the factors to be considered when making the determination of
20 future utility.
21 * * *
22 §21. Fees and charges of the commissioner of conservation; revisions; exceptions;
23 collections; Oil and Gas Regulatory Fund; creation; amounts;
24 requirements
25 B. * * *
26 (2)(a) There is hereby established a special fund in the state treasury to be
27 known as the Oil and Gas Regulatory Fund, hereafter referred to as the "fund". After
28 deposit in the Bond Security and Redemption Fund and after a sufficient amount is
29 allocated from that fund to pay all the obligations secured by the full faith and credit
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1 of the state that become due and payable within each fiscal year, the treasurer shall
2 pay into the fund an amount equal to the monies generated from collection of the
3 fees provided for in this Title, R.S. 40:1749.11 et seq., or Title 47 of the Louisiana
4 Revised Statutes of 1950, the rules and regulations promulgated thereunder, any
5 fines and civil penalties or any other provision of law relative to fees, fines, or civil
6 penalties attributable to the office of conservation, donations, and fifty percent of
7 any annual assessment paid by an operator who chooses not to plug a well classified
8 as inactive with the remainder being deposited into the Oilfield Site Restoration
9 Fund.
10 (b) The monies credited to the fund shall be appropriated by the legislature
11 and dedicated solely to the use of the office of conservation for the regulation of the
12 oil and gas industry and other industries under the jurisdiction of the office of
13 conservation and shall be used solely for the purposes of that program. The monies
14 credited to the fund generated from donations and any annual assessment paid
15 by an operator who chooses not to plug a well classified as inactive shall be used
16 to monitor and determine future utility of inactive wells. Any monies remaining
17 in the fund at the end of any fiscal year shall remain with the fund and shall not
18 revert to the state general fund. All interest or earnings of the fund shall be credited
19 to the fund. All fees and self-generated revenue remaining on deposit for the office
20 of conservation at the end of any fiscal year shall be deposited into the fund. The
21 amount appropriated from the fund to the office of conservation shall be subject to
22 appropriation by the legislature.
23 * * *
The original instrument and the following digest, which constitutes no part
of the legislative instrument, were prepared by Alan Miller.
DIGEST
SB 377 Engrossed 2018 Regular Session Allain
Proposed law provides definitions.
Proposed law provides that if an inactive well has been designated as being inactive with
future utility by the operator for a period of 10 years or more and that well is neither
scheduled to be plugged and abandoned on a plan approved by the commissioner nor
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covered under an approved production plan, then the owner may request in writing that the
office of conservation determine whether the inactive well has future utility.
Proposed law provides the following procedure to determine whether the inactive well
should be plugged:
(1)Within 30 days of receipt of such a request, the commissioner notifies the operator
of the request.
(2)The operator submits to the office a written justification including any evidence he
deems necessary to prove that the well has future utility within 90 days of receipt of
the notice from the office.
(3)The office reviews the operator's written justification and determines whether the
inactive well in question has future utility.
(4)The operator submits a plan to the office to plug the well within 90 days after a final
determination by the office that the well has no future utility has been made.
(5)The commissioner may approve the plan of plugging and abandonment submitted
by the operator that shall include any revisions the commissioner deems necessary.
(6)The operator plugs the well in accordance with and within the time frame set forth
in the plan of plugging and abandonment approved by the commissioner.
(7)The operator or the owner may appeal the office's determination to the division of
administrative law.
Proposed law provides that if the office is unable to carry out any of the responsibilities set
proposed law within 90 days of a request or submission due to lack of sufficient personnel
or funding, then the commissioner may delay such responsibilities and notify the operator
and owner of such a delay and provide an estimate of when the office plans to carry out its
responsibility.
Proposed law provides that after notification that the commissioner has delayed the
determination, and the owner insists on an expedited determination, the owner may donate
an amount determined by the commissioner to be placed in the Oil and Gas Regulatory Fund
to defray the costs of an expedited determination. Proposed law requires the office to follow
the procedure set forth in present law to expedite the determination.
Proposed law requires the commissioner to adopt rules and regulations in accordance with
the APA to implement the provisions of proposed law, including but not limited to defining
the term "future utility" and establishing the factors to be considered when making the
determination of future utility.
Proposed law requires the monies credited to the Oil and Gas Regulatory Fund generated
from donations and any annual assessment paid by an operator who chooses not to plug a
well classified as inactive to be used to monitor and determine future utility of inactive
wells.
Effective August 1, 2018.
(Amends R.S. 30:21(B)(2)(a) and (b); adds R.S. 30:9.3)
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Summary of Amendments Adopted by Senate
Committee Amendments Proposed by Senate Committee on Natural Resources to
the original bill
1. Defines the term "inactive well".
2. Changes appeals of a determination from district court to division of
administrative law.
3. Adds provision that if after notification that the commissioner has delayed
the determination, and the owner insists on an expedited determination, the
owner may donate an amount determined by the commissioner to be placed
in the Oil and Gas Regulatory Fund to defray the costs of an expedited
determination.
4. Requires the commissioner to adopt rules and regulations in accordance with
the APA.
5. Requires the monies credited to the Oil and Gas Regulatory Fund generated
from donations and any annual assessment paid by an operator who chooses
not to plug a well classified as inactive to be used to monitor and determine
future utility of inactive wells.
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Coding: Words which are struck through are deletions from existing law;
words in boldface type and underscored are additions.