Provides relative to financial security for duty to plug dry or abandoned wells and perform certain site cleanups. (8/15/10)
Impact
The implementation of SB 655 is expected to significantly strengthen the regulatory framework surrounding abandoned wells in Louisiana. By mandating financial security in the form of bonds, the bill aims to mitigate potential environmental hazards that arise from improperly abandoned wells. This financial assurance not only emphasizes the importance of responsible well management but also protects the state's interests by ensuring that operators possess the necessary resources to address site cleanups, thereby reducing the risk of environmental contamination and protecting public safety.
Summary
Senate Bill 655, proposed by Senator Hebert, focuses on enhancing financial security requirements for operators responsible for plugging dry or abandoned wells and performing necessary site cleanups. The bill amends existing law to specify the bond amounts that operators must secure based on the number of wells they manage. The financial requirements establish a tiered system where operators are obligated to post a bond varying from $25,000 for one to ten wells, up to $250,000 for those operating more than one hundred wells. This measure aims to ensure that operators are accountable for environmental responsibilities associated with well abandonment and cleanup efforts.
Sentiment
The sentiment regarding SB 655 appears to lean towards optimism among environmental advocates and regulatory bodies, who see the bill as a proactive measure to enhance accountability within the oil and gas industry. Many stakeholders believe this will foster better environmental stewardship and encourage operators to maintain higher standards for well management. However, there may be concerns from smaller operators about the financial burden of the increased bond requirements, which could potentially impact their operational viability and financial planning.
Contention
Despite the overall positive sentiment, some points of contention arise around the perceived financial burden on smaller operators. Critics argue that the increased bond amounts could deter local businesses from operating or lead to financial instability for those already facing economic challenges. Additionally, there might be discussions regarding the sufficiency of the bond amounts set forth in the bill; while proponents view them as necessary for ensuring responsible practices, opponents may argue that they could be excessively prohibitive, necessitating a balance between sufficient financial security and operational feasibility.
Urges and requests the commissioner of conservation to develop and implement a pilot program to reduce the cost of plugging orphaned wells and decrease the number of wells on the orphan wells list