HLS 24RS-2505 REENGROSSED
2024 Regular Session
HOUSE BILL NO. 966 (Substitute for House Bill No. 696 by Representative Geymann)
BY REPRESENTATIVE GEYMANN
ENERGY/CONSERVATI ON: Authorizes unitization for carbon dioxide sequestration
1 AN ACT
2To amend and reenact R.S. 30:28(D)(2), (3), (4), and (7) and (E) and 1104(A)(1) and to
3 enact R.S. 30:1104.2 and 1113, relative to unitization for carbon dioxide
4 sequestration; to provide definitions; to provide for notification requirements; to
5 provide for the issuance of drilling permits; to provide for the authority of the
6 commissioner of conservation; to authorize unitization for carbon dioxide storage;
7 to provide for public hearings; to provide required findings; to provide for terms of
8 the unitization order and compensation for owners in interest; to require certain
9 determinations by the commissioner; to provide for a method for determining fair
10 and just compensation; to provide relative to venue; to provide relative to owners
11 rights; and to provide for related matters.
12Be it enacted by the Legislature of Louisiana:
13 Section 1. R.S. 30:28(D)(2), (3), (4) and (7) and (E) and 1104(A)(1) are hereby
14amended and reenacted and R.S. 30:1104.2 and 1113 are hereby enacted to read as follows:
15 §28. Drilling permits; issuance; fees; location plat; notice and hearing; funds from
16 drilling permit fees
17 * * *
18 D. The commissioner of conservation shall not issue a permit to drill a well
19 or a test well pursuant to Subsection A, B, or C of this Section until the provisions
20 of this Subsection have been satisfied:
21 * * *
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1 (2) The commissioner of conservation shall review the location plat and
2 make a determination as to whether any residential or commercial structure or area
3 of review for a carbon dioxide storage facility not owned by the applicant, his lessor,
4 or other predecessor in interest is situated within a five hundred foot radius of the
5 proposed drilling site. For purposes of this Section, "carbon dioxide storage facility"
6 shall include any current or proposed project for which a Class VI permit has been
7 applied or issued and "area of review" shall have the same meaning as that term is
8 defined in administrative rules regarding Class VI injection wells.
9 (3) Upon a determination by the commissioner that a residential or
10 commercial structure or area of review for a carbon dioxide storage facility is located
11 within five hundred feet of the proposed drilling site, he shall convey that
12 information, together with written notice of a public hearing thereon, by means of
13 an official notice delivered by first class mail, to any person owning a residential or
14 commercial structure within a five hundred foot radius of the proposed site, the
15 operator of a carbon dioxide storage facility whose area of review is within a five
16 hundred foot radius of the proposed site, and to the local governing authority in
17 whose jurisdiction the property is located.
18 (4) Any property owner, carbon dioxide storage facility operator, or local
19 governing authority so notified shall have the right within ten days of the mailing of
20 such notice to request a public hearing concerning the issuance of such permit.
21 * * *
22 (7) If the commissioner, in his review of the location plat required by
23 Paragraph (2) of this Subsection, determines that no residential or commercial
24 structure or area of review for a carbon dioxide storage facility not owned by the
25 applicant, his lessor, or other predecessor in interest falls within five hundred feet of
26 the proposed well site, he shall issue the permit required for such drilling in
27 accordance with the provisions of Subsections A, B, C, and F of this Section and any
28 rules and regulations issued thereunder.
29 * * *
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1 E. Any permit issued to drill an oil or gas well or test well to a depth of less
2 than ten thousand feet shall not be subject to the provisions of Subsection D of this
3 Section other than those requirements regarding carbon dioxide storage facilities.
4 * * *
5 §1104. Duties and powers of the commissioner; rules and regulations; permits
6 A. The office of conservation's actions under this Chapter shall be directed
7 and controlled by the commissioner. The commissioner shall have authority to:
8 (1) Regulate the development and operation of storage facilities and
9 pipelines transmitting transporting carbon dioxide to storage facilities, including
10 unitization in accordance with the provisions of R.S. 30:1107, 30:1104.2 and the
11 issuance of certificates of public convenience and necessity for storage facilities and
12 pipelines in accordance with the provisions of R.S. 30:1107 serving such projects
13 approved hereunder. Owners in interests' rights to compensation and to challenge
14 the public purpose of the exercise of eminent domain are reserved for the courts as
15 required by Article I, Section 4 of the Constitution of Louisiana.
16 * * *
17 §1104.2. Unitization
18 A. Upon the application of a proposed storage operator, the commissioner
19 is authorized and empowered to enter an order requiring the unit operation of a
20 reservoir or portion thereof, including any necessary and reasonable areal buffer and
21 subsurface monitoring zones, or portions thereof, as referenced in R.S. 30:1103(11),
22 for geologic storage, and in connection with such an order of unit operation, the
23 commissioner shall have the right to unitize, pool, and consolidate all separately
24 owned tracts and other property interests within such storage unit for geologic
25 storage.
26 B. An order for unit operation shall be issued only after notice, public
27 hearing, and a finding by the commissioner that at least three-fourths of the owners
28 in interest within the storage unit have consented in writing to geologic storage. The
29 required three-fourths of the owners in interest shall be on the basis of, and in
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1 proportion to, the surface acreage content of the entire storage unit and, if a tract
2 within the storage unit is subject to ownership in indivision, credited by multiplying
3 the acreage of the tract by the undivided ownership interest of the parties who have
4 consented in writing to geologic storage.
5 C. An order for unit operation shall provide for just and equitable
6 compensation to all owners in interest within the storage unit, including the storage
7 operator, other owners in interest who consented in writing to geologic storage, and
8 owners in interest who did not consent in writing to geologic storage, except that the
9 order shall not vary or alter the terms of any contracts between the storage operator
10 and an owner in interest. Owners in interests' rights to compensation and to
11 challenge the public purpose of the exercise of eminent domain are reserved for the
12 courts as required by Article I, Section 4 of the Constitution of Louisiana.
13 D. Judicial review of orders, rules, and regulations issued by the
14 commissioner pursuant to this Section shall be conducted pursuant to the same
15 provisions and requirements as R.S. 30:12, except that the venue for those
16 proceedings required to be heard originally in the courts by Article I, Section 4 of the
17 Constitution of Louisiana and appeals of the commissioner's orders, shall only be
18 proper in a parish where the storage unit is located.
19 E. Upon application by the storage operator or at the commissioner's
20 discretion and after notice, public hearing, and consideration of available geological,
21 engineering, and other relevant evidence, the commissioner, to the extent required
22 by such evidence, may by order revise, amend, enlarge, reduce, confirm or dissolve
23 any storage unit provided for under this Section or modify any provision of any order
24 issued pursuant to this Section, without the consent required by Subsection B of this
25 Section. An order enlarging or reducing the areal extent of an existing storage unit
26 shall provide for just and equitable compensation to all owners in interest as to any
27 acreage added to the storage unit and may also provide for compensation adjustments
28 as are just and equitable for all owners in interest as to the area encompassed by the
29 enlarged or reduced storage unit. However, no order issued pursuant to this
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1 Subsection shall vary or alter the terms of any contracts between the storage operator
2 and any owner in interest. Owners in interests' rights to compensation and to
3 challenge the public purpose of the exercise of eminent domain are reserved for the
4 courts as required by Article I, Section 4 of the Constitution of Louisiana.
5 F. Operations on or injection in the storage unit for geologic storage shall be
6 considered operations on or injection in each separate tract in the storage unit.
7 G. The commissioner shall prescribe, issue, amend, and rescind such orders,
8 rules, and regulations as he may find necessary or appropriate to carry out the
9 provisions of this Section, including establishing the methodology for determining
10 or adjusting just and equitable compensation to owners in interest that have not
11 entered into a contract with the storage operator, including the storage operator, other
12 owners in interest who consented in writing to geologic storage and owners in
13 interest who did not consent in writing to geologic storage, including in the event a
14 storage unit is enlarged or reduced. Owners in interests' rights to compensation and
15 to challenge the public purpose of the exercise of eminent domain are reserved for
16 the courts as required by Article I, Section 4 of the Constitution of Louisiana.
17 H. For the purposes of this Section, the following terms shall have the
18 following meanings:
19 (1) "Owner in interest" shall mean any party who owns or otherwise has the
20 right to use the subsurface of a tract within the storage unit for geologic storage,
21 regardless of whether such party is the surface owner of the tract or has acquired the
22 right from the surface owner, or is a successor or assign of such right.
23 (2) "Storage unit" shall mean a reservoir or portion thereof, including any
24 necessary and reasonable areal buffer and subsurface monitoring zones or portions
25 thereof, as referenced in R.S. 30:1103(11), as designated, enlarged, or reduced by the
26 commissioner in accordance with this Section.
27 I. Except as provided in R.S. 30:1108(B)(2), nothing in this Section shall
28 prevent persons having the right to do so from drilling through the storage unit in
29 such manner as shall comply with the rules of the commissioner issued for the
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1 purpose of protecting the storage unit or an associated storage facility against
2 pollution or invasion and against the escape or migration of carbon dioxide.
3 J. No Class VI injection well shall be located within five hundred feet of any
4 residential or commercial structure.
5 * * *
6 §1113. Notifications regarding applications
7 A. Within ten days of filing an application with the commissioner for a Class
8 VI injection well, the owner or operator shall make a good faith effort to provide
9 notice of the submission of the application via United States mail to all of the
10 following:
11 (1) The last operator of record for any oil or gas well located within the area
12 of review delineated in the application.
13 (2) Any person known to the applicant after reasonable search, including
14 owners and operators, acting on behalf of the person, that presently has the right to
15 drill into and produce from a pool and to appropriate production either for himself
16 or others within the area of review delineated in the application.
17 B. Within ten days of filing an application with the commissioner for a Class
18 V stratigraphic test well, the owner or operator shall make a good faith effort to
19 provide notice of the submission of the application via United States mail to all of
20 the following:
21 (1) The last operator of record for any oil or gas well located within five
22 hundred feet of the proposed Class V stratigraphic test well location.
23 (2) Any person known to the applicant after reasonable search, including
24 owners and operators, acting on behalf of the person, that presently has the right to
25 drill into and produce from a pool and to appropriate production either for himself
26 or others within five hundred feet of the proposed Class V stratigraphic test well
27 location.
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DIGEST
The digest printed below was prepared by House Legislative Services. It constitutes no part
of the legislative instrument. The keyword, one-liner, abstract, and digest do not constitute
part of the law or proof or indicia of legislative intent. [R.S. 1:13(B) and 24:177(E)]
HB 966 Reengrossed 2024 Regular Session Geymann
Abstract: Authorizes the commissioner of conservation to order unitization for carbon
dioxide sequestration projects.
Present law authorizes the commissioner of conservation to perform any act necessary to
carry out the requirements of the federal Safe Drinking Water Act related to the state's
participation in the underground injection control program and the sequestration of carbon
dioxide, including the authority to promulgate administrative rules and issue permits and
orders.
Proposed law retains this authority and specifies that the commissioner is authorized to order
unitization of a reservoir for geologic storage upon the application of a proposed storage
facility operator after proper notice, public hearing, and a finding that least three-fourths of
the owners in interest within the storage unit have given written consent for geologic storage
and further provides a method for calculating three-fourths owners in interest.
Proposed law defines "carbon dioxide storage facility", "area of review", "owner in interest",
and "storage unit".
Proposed law provides that executed contracts will not be altered by a unitization order.
Proposed law requires the unitization order to provide for just and equitable compensation
for all owners in interest and the storage operator.
Present law prohibits the taking of property by a private entity authorized to expropriate
except for a public and necessary purpose and with just compensation to the owner. Present
law further provides that whether a purpose is public and necessary is a judicial question and
that a person is entitled to a trial by jury to determine whether the compensation is just.
Proposed law retains present law and reinforces that the right to compensation for an owner
in interest within a storage unit and challenges to the public purpose of the exercise of
eminent domain in relation to the unit are questions reserved the courts.
Present law establishes a process for judicial review of decisions, acts, and adjudications by
the commissioner of conservation. Present law requires that suits for judicial review of the
commissioner's acts be filed in the district court of the parish where the commissioner of
conservation's office is located.
Proposed law authorizes judicial review of unitization orders as provided under present law,
but provides that venue is proper in the parish where the storage unit is located for
proceedings regarding whether the purpose of an expropriation or taking in the unit is public
and necessary and for appeals of a commissioner's orders regarding unitization.
Proposed law authorizes the commissioner to revise the storage unit under certain
circumstances and following notice and public hearing. Further requires the commissioner
to provide for compensation adjustments.
Proposed law authorizes the commissioner to issue order and promulgate rules and
regulations as necessary to implement unitization for carbon dioxide sequestration.
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Proposed law prohibits a Class VI injection well within a unit to be drilled within 500 feet
of any residential or commercial structure.
Present law requires the commissioner to review the location plat of any drilling permit and
determine whether residential or commercial structures are situated within a 500 foot radius.
Proposed law further requires the commissioner to determine whether the area of review for
any carbon dioxide storage facility is within a 500 foot radius of the proposed drilling site.
Proposed law requires applicants for Class V and Class VI well permits to provide notice of
the submission of the application via U.S. mail to the following parties:
(1)The last operator of record for any oil or gas well located within the area of review
delineated in the application.
(2)Any person known to the applicant after reasonable search, including owners and
operators, acting on behalf of the person, that presently has the right to drill into and
produce from a pool and to appropriate production either for himself or others within
the area of review delineated in the application.
(Amends R.S. 30:28(D)(2), (3), (4) and (7) and (E) and 1104(A)(1); Adds R.S. 30:1104.2
and 1113)
Summary of Amendments Adopted by House
The House Floor Amendments to the engrossed bill:
1. Make technical changes.
2. Express that the right to compensation for an owner in interest within a storage
unit and challenges to the public purpose of the exercise of eminent domain in
relation to the unit are questions reserved for the courts.
3. Provide that for judicial review of orders of the commissioner of conservation
regarding unitization, venue is proper in the parish where the storage unit is
located.
4. Provide that for legal challenges to whether the purpose of an expropriation or
taking in the unit is public and necessary, venue is proper in the parish where the
storage unit is located.
5. Prohibit Class VI injection wells within a unit from being located within 500 feet
of a residential or commercial structure.
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