SB1562 EngrossedLRB099 06087 MLM 26142 b


  
1    AN ACT concerning regulation.
  
 
2    Be it enacted by the People of the State of Illinois,
 
3represented in the General Assembly:
  



 
 
4    Section 5. The Illinois Oil and Gas Act is amended  by 
5changing Section 6 as follows:
 



6    (225 ILCS 725/6)  (from Ch. 96 1/2, par. 5409)



7    Sec. 6. 
The Department shall have the authority to conduct 
8hearings and
to make such reasonable rules as may be necessary 
9from time to time in the
proper administration and enforcement 
10of this Act, including the adoption
of rules and the holding of 
11hearings for the following purposes:


12        (1) To require the drilling, casing and plugging of 
13    wells to be done in
such a manner as to prevent the 
14    migration of oil or gas from one stratum to
another; to 
15    prevent the intrusion of water into oil, gas or coal 
16    strata;
to prevent the pollution of fresh water supplies by 
17    oil, gas or salt
water.


18        (2) To require the person desiring or proposing to 
19    drill, deepen or
convert any well for the exploration or 
20    production of
oil or gas, for injection or water supply in 
21    connection with
enhanced recovery projects, for the 
22    disposal of salt water, brine, or other
oil or gas field 
23    wastes, or for input, withdrawal, or observation in

 
 
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1    connection with the storage of natural gas or other liquid 
2    or gaseous
hydrocarbons before commencing the drilling, 
3    deepening or
conversion of any such well, to make 
4    application to the Department upon
such form as the 
5    Department may prescribe and to comply with the provisions

6    of this Section. The drilling, deepening or conversion of 
7    any well is
hereby prohibited until such application is 
8    made and the applicant is
issued a permit therefor as 
9    provided by this Act. Each application for a
well permit 
10    shall include the following: (A) The exact location of the

11    well, (B) the name and address of the manager, operator, 
12    contractor,
driller, or any other person responsible for 
13    the conduct of drilling
operations, (C) the proposed depth 
14    of the well, (D) lease ownership
information, and (E) such 
15    other relevant information as the Department may
deem 
16    necessary or convenient to effectuate the purposes of this 
17    Act.


18        Additionally, each applicant who has not been issued a 
19    permit that is
of record on the effective date of this 
20    amendatory Act of 1991, or who has
not thereafter made 
21    payments of assessments under Section 19.7 of this Act
for 
22    at least 2 consecutive years preceding the application, 
23    shall execute,
as principal, and file with the Department a 
24    bond, executed by a surety
authorized to transact business 
25    in this State, in an amount estimated to
cover the cost of 
26    plugging the well and restoring the well site, but not to

 
 
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1    exceed $5000, as determined by the Department for each 
2    well, or a blanket
bond in an amount not to exceed $100,000 
3    for all wells, before drilling,
deepening, converting, or 
4    operating any well for which a permit is required
that has 
5    not previously been plugged and abandoned in accordance 
6    with the
Act. The Department shall release the bond if the 
7    well, or all wells in the
case of a blanket bond, is not 
8    completed but is plugged and the well site
restored in 
9    accordance with the Department's rules or is completed in

10    accordance with the Department's rules and the permittee 
11    pays assessments
to the Department in accordance with 
12    Section 19.7 of this Act for 2
consecutive years.


13        In lieu of a surety bond, the applicant may provide 
14    cash,
certificates of deposit, or irrevocable letters of 
15    credit under such terms
and conditions as the Department 
16    may provide by rule.


17        The sureties on all bonds in effect on the effective 
18    date of this
amendatory Act of 1991 shall remain liable as 
19    sureties in accordance with
their undertakings until 
20    released by the Department from further liability
under the 
21    Act.  The principal on each bond in effect on the effective 
22    date
of this amendatory Act of 1991 shall be released from 
23    the obligation of
maintaining the bond if either the well 
24    covered by a surety bond has been
plugged and the well site 
25    restored in accordance with the Department's
rules or the 
26    principal of the surety has paid the initial assessment in

 
 
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1    accordance with Section 19.7 and no well or well site 
2    covered by the surety
bond is in violation of the Act.


3        No permit shall be issued to a corporation incorporated 
4    outside of
Illinois until the corporation has been 
5    authorized to do business in Illinois.


6        No permit shall be issued to an individual, 
7    partnership, or other
unincorporated entity that is not a 
8    resident of Illinois until that individual,
partnership, 
9    or other unincorporated entity has irrevocably consented 
10    to be
sued in Illinois.


11        (3) To require the person assigning, transferring, or 
12    selling any well
for which a permit is required under this 
13    Act to notify the Department of
the change of ownership.  
14    The notification shall be on a form prescribed by
the 
15    Department, shall be executed by the current permittee and 
16    by the new
permittee, or their authorized representatives, 
17    and shall be filed with the
Department within 30 days after 
18    the effective date of the assignment,
transfer or sale. 
19    Within the 30 day notification period and prior to

20    operating the well, the new permittee shall pay the 
21    required well transfer
fee and, where applicable, file with 
22    the Department the bond required under
subsection (2) of 
23    this Section.


24        (4) To require the filing with the State Geological 
25    Survey
of all geophysical logs, a well drilling
report and 
26    drill cuttings or cores, if cores are required,
within 90 
 
 
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1    days after drilling ceases; and to file a completion report

2    with the Department within 30 days after the date of first 
3    production
following initial drilling  or any reworking, or 
4    after the plugging of the
well, if a dry hole.  A copy of 
5    each completion report submitted to the
Department shall be 
6    delivered to the State Geological Survey.  The
Department 
7    and the State Geological Survey shall keep the reports

8    confidential, if requested in writing by the permittee, for 
9    2 years after
the date the permit is issued by the 
10    Department.  This confidentiality
requirement shall not 
11    prohibit the use of the report for research purposes,

12    provided the State Geological Survey does not publish 
13    specific data or
identify the well to which the completion 
14    report pertains.


15        (5) To prevent "blowouts", "caving" and "seepage" in 
16    the same sense that
conditions indicated by such terms are 
17    generally understood in the oil and
gas business.


18        (6) To prevent fires.


19        (7) To ascertain and identify the ownership of all oil 
20    and gas wells,
producing leases, refineries, tanks, 
21    plants, structures, and all storage
and transportation 
22    equipment and facilities.


23        (8) To regulate the use of any enhanced recovery method 
24    in oil pools
and oil fields.


25        (9) To regulate or prohibit the use of vacuum.


26        (10) To regulate the spacing of wells, the
issuance of 
 
 
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1    permits, and the establishment of drilling units.


2        (11) To regulate directional drilling of oil or gas 
3    wells.


4        (12) To regulate the plugging of wells.


5        (13) To require that wells for which no logs or

6    unsatisfactory logs are supplied shall be completely 
7    plugged with cement
from bottom to top.


8        (14) To require a description in such form as is

9    determined by the Department of the method of well plugging 
10    for each
well, indicating the character of material used 
11    and the positions and
dimensions of each plug.


12        (15) To prohibit waste, as defined in this Act.


13        (16) To require the keeping of such records, the 
14    furnishing of such
relevant information and the 
15    performance of such tests as the Department
may deem 
16    necessary to carry into effect the purposes of this Act.


17        (17) To regulate the disposal of salt or 
18    sulphur-bearing water and any
oil field waste produced in 
19    the operation of any oil or gas well.


20        (18) To prescribe rules, conduct inspections and 
21    require compliance with
health and safety standards for the 
22    protection of persons working
underground in connection 
23    with any oil and gas operations.  For the
purposes of this 
24    paragraph, oil and gas operations include drilling or

25    excavation, production operations, plugging or filling in 
26    and sealing, or
any other work requiring the presence of 
 
 
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1    workers in shafts or excavations
beneath the surface of the 
2    earth.  Rules promulgated by the Department may
include 
3    minimum qualifications of persons performing tasks 
4    affecting the
health and safety of workers underground, 
5    minimum standards for the
operation and maintenance of 
6    equipment, and safety procedures and
precautions, and 
7    shall conform, as nearly as practicable, to corresponding

8    qualifications, standards and procedures prescribed under 
9    The Coal Mining Act.


10        (19) To deposit the amount of any forfeited surety bond 
11    or other
security in the Plugging and Restoration Fund, a 
12    special fund in the State
treasury which is hereby created; 
13    to deposit into the Fund any amounts
collected, reimbursed 
14    or recovered by the Department under Sections 19.5,
19.6 
15    and 19.7 of this Act; to accept, receive, and
deposit into 
16    the Fund any grants, gifts or other funds which may be made

17    available from public or private sources and all earnings 
18    received from
investment of monies in the Fund; and to make 
19    expenditures from the Fund
for the purposes of plugging, 
20    replugging or repairing any well, and
restoring the site of 
21    any well, determined by the Department to be
abandoned or 
22    ordered by the Department to be plugged, replugged, 
23    repaired
or restored under Sections 8a, 19 or 19.1 of this 
24    Act, including
expenses in administering the Fund.

25        (20) To determine if oil and gas leases submitted with 
26    an application for a permit or transfer of a permit for a 
 
 
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1    well are operative on the basis that prior oil and gas 
2    leases covering the same lands have terminated due to 
3    non-development or non-production. Department 
4    determinations under this paragraph may be based upon 
5    affidavits of non-development or non-production from 
6    knowledgeable individuals familiar with the history of 
7    development and production of oil or gas as to such lands, 
8    together with other evidence, which create a rebuttable 
9    presumption that the prior oil and gas leases have 
10    terminated and are of no further force and effect and that 
11    the submitted oil and gas leases are operative and 
12    effective. To create a rebuttable presumption, such 
13    affidavits, together with other evidence provided to or 
14    available from the Department, shall reasonably indicate 
15    that there has been no development, operations, or 
16    production of oil and gas on the lands described in the 
17    prior leases for at least 24 consecutive months subsequent 
18    to the expiration of the primary term or any extension of 
19    the primary term as set forth in the leases, or the period 
20    of time of no development or production after expiration of 
21    the primary term as provided in the leases. A court order 
22    or judgment declaring the prior leases terminated is not 
23    required for determinations under this paragraph, except 
24    in extraordinary circumstances where such determinations 
25    cannot reasonably be concluded from the affidavits or 
26    evidence submitted to or available from the Department. 
 
 
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1    Upon the Department's determination of a rebuttable 
2    presumption under this paragraph, the Department shall 
3    provide the current permittee with notice and a 30-day 
4    opportunity to request a hearing to rebut the presumption 
5    before a final determination on a lease is made. Upon the 
6    Department's determination of a rebuttable presumption 
7    under this paragraph, if the applicant is not requesting a 
8    transfer of any existing permit as to a well located on the 
9    lands, but is requesting a new permit, the permit shall be 
10    issued to the applicant. Any determination made by the 
11    Department under this paragraph shall not diminish the 
12    rights or obligations of any current permittee of a well 
13    that are otherwise provided by statute or regulation of the 
14    Department. Any request for a determination under this 
15    paragraph shall require the payment of a nonrefundable fee 
16    of $1000 by the applicant. All determinations on leases by 
17    the Department under this paragraph shall be made no later 
18    than 90 days after the Department's receipt of a valid 
19    request for such determination. 
20    For the purposes of this Act, the State Geological Survey 
21shall
co-operate with the Department in making available its 
22scientific and
technical information on the oil and gas 
23resources of the State, and the
Department shall in turn 
24furnish a copy to the State Geological Survey
of all drilling 
25permits as issued, and such other drilling and operating
data 
26received or secured by the Department which are pertinent to

 
 
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1scientific research on the State's mineral resources.

2(Source: P.A. 86-205; 86-364; 86-1177; 87-744.)

 
 
3    Section 99. Effective date. This Act takes effect upon 
4becoming law.