SLS 18RS-463 REENGROSSED
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) Within ten days of a final determination by the office, the office shall
19 submit the operator's written justification and the office's final determination
20 to the owner. If the office determines the well has no future utility, the owner
21 shall have ten days from receipt of the justification and determination to
22 request in writing the well be plugged and abandoned.
23 (6) If the owner requests the well be plugged and abandoned, then within
24 ninety days from the owner request, the operator shall submit a plan to the
25 office to plug and abandon the well.
26 (7) The commissioner may approve the plan of plugging and
27 abandonment submitted by the operator that shall include any revisions the
28 commissioner deems necessary.
29 (8) The operator shall plug the well in accordance with and within the
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1 time frame set forth in the plan of plugging and abandonment approved by the
2 commissioner.
3 (9) The operator or the owner may appeal the office's determination and
4 shall have the right to a public hearing if requested in writing within thirty days
5 of notification of the office's determination. The written request shall suspend
6 the office's determination until after a hearing before an administrative law
7 judge or hearing officer. The hearing shall be in accordance with Part A of
8 Chapter 13-B of Title 49 of the Revised Statutes of 1950, comprised of R.S.
9 49:991 through 999.1, and the Administrative Procedure Act.
10 C.(1) If, in the determination of the commissioner, the office is unable to
11 carry out any of the responsibilities set forth in this Section within ninety days
12 of a request or submission due to lack of sufficient personnel or funding, then
13 the commissioner may delay such responsibilities. In such event, the
14 commissioner shall notify the operator and owner of such a determination and
15 provide an estimate of when the office plans to carry out such responsibility.
16 (2) After notification described in Paragraph (1) of this Subsection, if the
17 owner insists on an expedited determination, he may donate or any person on
18 the owner's behalf may donate an amount determined by the commissioner to
19 be placed in the Oil and Gas Regulatory Fund to defray the costs of an
20 expedited determination. The office shall follow the procedure set forth in R.S.
21 30:4(Q) to expedite the determination.
22 D. The provisions of this Section shall not preclude an operator from
23 pursuing a contractual claim for reimbursement of costs of the plugging and
24 abandonment of the well from any owner as defined in R.S. 30:3.
25 E. The commissioner shall adopt rules and regulations in accordance
26 with the Administrative Procedure Act to implement the provisions of this
27 Section, including but not limited to defining the term "future utility" and
28 establishing the factors to be considered when making the determination of
29 future utility.
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1 * * *
2 §21. Fees and charges of the commissioner of conservation; revisions; exceptions;
3 collections; Oil and Gas Regulatory Fund; creation; amounts;
4 requirements
5 B. * * *
6 (2)(a) There is hereby established a special fund in the state treasury to be
7 known as the Oil and Gas Regulatory Fund, hereafter referred to as the "fund". After
8 deposit in the Bond Security and Redemption Fund and after a sufficient amount is
9 allocated from that fund to pay all the obligations secured by the full faith and credit
10 of the state that become due and payable within each fiscal year, the treasurer shall
11 pay into the fund an amount equal to the monies generated from collection of the
12 fees provided for in this Title, R.S. 40:1749.11 et seq., or Title 47 of the Louisiana
13 Revised Statutes of 1950, the rules and regulations promulgated thereunder, any
14 fines and civil penalties or any other provision of law relative to fees, fines, or civil
15 penalties attributable to the office of conservation, donations, and fifty percent of
16 any annual assessment paid by an operator who chooses not to plug a well classified
17 as inactive with the remainder being deposited into the Oilfield Site Restoration
18 Fund.
19 (b) The monies credited to the fund shall be appropriated by the legislature
20 and dedicated solely to the use of the office of conservation for the regulation of the
21 oil and gas industry and other industries under the jurisdiction of the office of
22 conservation and shall be used solely for the purposes of that program. The monies
23 credited to the fund generated from donations shall be used to determine future
24 utility in accordance with the rules and regulations adopted by the
25 commissioner pursuant to R.S. 30:9.3. The monies credited to the fund
26 generated from the annual assessment paid by an operator who chooses not to
27 plug a well classified as inactive shall be used to fund those employees of the
28 department tasked for activities associated with monitoring inactive wells,
29 inspecting inactive wells, determining future utility of inactive wells, ensuring
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1 the proper plugging of inactive wells, or preventing inactive wells from being
2 declared orphaned without being covered by financial security or a site-specific
3 trust fund. Any monies remaining in the fund at the end of any fiscal year shall
4 remain with the fund and shall not revert to the state general fund. All interest or
5 earnings of the fund shall be credited to the fund. All fees and self-generated revenue
6 remaining on deposit for the office of conservation at the end of any fiscal year shall
7 be deposited into the fund. The amount appropriated from the fund to the office of
8 conservation shall be subject to appropriation by the legislature.
9 * * *
The original instrument was prepared by Alan Miller. The following digest,
which does not constitute a part of the legislative instrument, was prepared
by Linda Nugent.
DIGEST
SB 377 Reengrossed 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
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)Within 10 days of a final determination by the office, the office submits the
operator's written justification and the office's final determination to the owner. If
the office determines the well has no future utility, the owner has 10 days from
receipt of the justification and determination to request in writing that the well be
plugged and abandoned.
(6)If the owner requests the well be plugged and abandoned, then within 90 days the
operator submits a plan to the office to plug and abandon the well.
(7)The commissioner may approve the plan of plugging and abandonment submitted
by the operator that shall include any revisions the commissioner deems necessary.
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(8)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.
(9)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
forth in 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 or anyone on
his behalf 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 shall not preclude an operator from pursuing a contractual claim for
reimbursement of costs of the plugging and abandonment of the well from any owner.
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 to be used to determine future utility pursuant to proposed law. Provides that
monies credited to the fund from the annual assessment paid by an operator who chooses not
to plug a well classified as inactive shall be used to fund department employees who are
tasked for activities associated with monitoring inactive wells, ensuring the proper plugging
of inactive wells, or preventing such wells from being declared orphaned without being
covered by financial security or a site-specific trust fund.
Effective August 1, 2018.
(Amends R.S. 30:21(B)(2)(a) and (b); adds R.S. 30:9.3)
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.
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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.
Senate Floor Amendments to engrossed bill
1. Provides that in 10 days of a final determination by the office, the office
submits the operator's written justification and the office's final determination
to the owner. If the office determines the well has no future utility, the owner
has 10 days to request that the well be plugged and abandoned.
2. If the owner requests the well be plugged and abandoned, then within 90
days the operator submits a plan to the office to do so.
3. Provides that proposed law shall not preclude an operator from pursuing a
contractual claim for reimbursement of costs of the plugging and
abandonment of the well from any owner.
4. Requires the monies credited to the Oil and Gas Regulatory Fund generated
from donations to be used to determine future utility pursuant to proposed
law.
5. Provides that monies credited to the fund from the annual assessment paid by
an operator who chooses not to plug a well classified as inactive shall be used
to fund department employees who are tasked for activities associated with
monitoring inactive wells, ensuring the proper plugging of inactive wells, or
preventing such wells from being declared orphaned without being covered
by financial security or a site-specific trust fund.
6. Makes technical changes.
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