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SENATE FLOOR VERSION
February 17, 2022
SENATE BILL NO. 1645 By: David
An Act relating to the Oklahoma Brine Development
Act; amending 17 O.S. 2021, Section 518, which
relates to evidence of financial ability to drill ,
operate, and plug wells; increasing dollar amount of
financial instrument required to drill and operate
certain wells and units; and providing an effective
date.
BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1. AMENDATORY 17 O.S. 2021, Section 518, is
amended to read as follows:
Section 518. A. Any person who drills or operates any well or
unit for the exploration, development or production of oil or brine,
or as an injection or disposal well, within this state, shall
furnish in writing, on forms approved by the Corporation Commission,
his or her agreement to drill, operate and plug wells in compliance
with the rules of the Commission and the laws of this state,
together with evidence of financial ability to comply with t he
requirements for plugging, closure of surface impoundments, removal
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of trash and equipment as established by the rules of the Commiss ion
and by law.
B. To establish evidence of financial ability, the Commission
shall require an irrevocable commercial l etter of credit, cash, a
cashier’s check, a Certificate of Deposit, Bank Joint Custody
Receipt, other negotiable instrument or a blanket surety bond. The
amount of such letter of credit, cash, cashier ’s check, certificate,
bond, receipt or other negotiabl e instrument shall be in the amount
of Twenty-five Thousand Dollars ($25,000.00) Fifty Thousand Dollars
($50,000.00) per well. If an operator operates more than four wells
subject to this requirement, the operator may file appropriate
evidence of financia l ability in a blanket amount of One Hundred
Thousand Dollars ($100,000.00) Two Hundred Thousand Dollars
($200,000.00). Any instrument shall constitute an unconditional
promise to pay and be in a form negotiable by the Commission.
C. The agreement provid ed for in subsection A of this section
shall provide that if the Commission determines that the person
furnishing the agreement has neglected, failed or refused to plug
and abandon, or cause to be plugged and abando ned, or replug any
well or has neglected, failed or refused to close any surface
impoundment or removed or cause to be removed trash and equipment in
compliance with the rules of the Commission, then the person shall
forfeit from his or her bond, letter of credit or negotiable
instrument or shall pay to this state, through the Commission, for
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deposit in the State Treasury, a sum equal to the cost of plugging
the well, closure of any su rface impoundment or removal of trash and
equipment. The Commission may cause the remedial work to be done,
issuing a warrant in payment of the cost thereof drawn against the
monies accruing in the State Treasury from the forfeiture or
payment. Any monies accruing in the State Treasury by reason of a
determination that there has been a noncompliance with the
provisions of the agreement or the rules of the Commission, in
excess of the cost of remedial action ordered by the Commission,
shall be credited to the Oil and Gas Revolving Fund. The Commission
shall also recover any co sts arising from litigation to enforce th is
provision. Provided, before a person is required to forfeit or pay
any monies to the state pursuant to this section, the Commission
shall notify the person at his or her last-known address of the
determination of neglect, failure or refusal to plug or replug any
well, or close any surface impoundment or remove trash and equipment
and such person shall have ten (10) days from the date of
notification within which to commence remedial operations. Failure
to commence remedial operations shall result in fo rfeiture or
payment as provided in this subsection.
D. If title to property or a well is transferred, the
transferee shall furnish the eviden ce of financial ability to plug
the well and close surface impoundments r equired by the provisions
of this section, prior to the transfer.
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SECTION 2. This act shall become effective November 1, 2022.
COMMITTEE REPORT BY: COMMITTEE ON ENERGY
February 17, 2022 - DO PASS