Full Text of SB3456 98th General Assembly
SB3456sam001 98TH GENERAL ASSEMBLY | Sen. William E. Brady Filed: 4/4/2014
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| 1 | | AMENDMENT TO SENATE BILL 3456
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 3456 by replacing | 3 | | everything after the enacting clause with the following:
| 4 | | "Section 5. The Illinois Oil and Gas Act is amended by | 5 | | changing 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 | 8 | | hearings and
to make such reasonable rules as may be necessary | 9 | | from time to time in the
proper administration and enforcement | 10 | | of this Act, including the adoption
of rules and the holding of | 11 | | hearings 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 |
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| 1 | | oil, gas or salt
water.
| 2 | | (2) To require the person desiring or proposing to | 3 | | drill, deepen or
convert any well for the exploration or | 4 | | production of
oil or gas, for injection or water supply in | 5 | | connection with
enhanced recovery projects, for the | 6 | | disposal of salt water, brine, or other
oil or gas field | 7 | | wastes, or for input, withdrawal, or observation in
| 8 | | connection with the storage of natural gas or other liquid | 9 | | or gaseous
hydrocarbons before commencing the drilling, | 10 | | deepening or
conversion of any such well, to make | 11 | | application to the Department upon
such form as the | 12 | | Department may prescribe and to comply with the provisions
| 13 | | of this Section. The drilling, deepening or conversion of | 14 | | any well is
hereby prohibited until such application is | 15 | | made and the applicant is
issued a permit therefor as | 16 | | provided by this Act. Each application for a
well permit | 17 | | shall include the following: (A) The exact location of the
| 18 | | well, (B) the name and address of the manager, operator, | 19 | | contractor,
driller, or any other person responsible for | 20 | | the conduct of drilling
operations, (C) the proposed depth | 21 | | of the well, (D) lease ownership
information, and (E) such | 22 | | other relevant information as the Department may
deem | 23 | | necessary or convenient to effectuate the purposes of this | 24 | | Act.
| 25 | | Additionally, each applicant who has not been issued a | 26 | | permit that is
of record on the effective date of this |
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| 1 | | amendatory Act of 1991, or who has
not thereafter made | 2 | | payments of assessments under Section 19.7 of this Act
for | 3 | | at least 2 consecutive years preceding the application, | 4 | | shall execute,
as principal, and file with the Department a | 5 | | bond, executed by a surety
authorized to transact business | 6 | | in this State, in an amount estimated to
cover the cost of | 7 | | plugging the well and restoring the well site, but not to
| 8 | | exceed $5000, as determined by the Department for each | 9 | | well, or a blanket
bond in an amount not to exceed $100,000 | 10 | | for all wells, before drilling,
deepening, converting, or | 11 | | operating any well for which a permit is required
that has | 12 | | not previously been plugged and abandoned in accordance | 13 | | with the
Act. The Department shall release the bond if the | 14 | | well, or all wells in the
case of a blanket bond, is not | 15 | | completed but is plugged and the well site
restored in | 16 | | accordance with the Department's rules or is completed in
| 17 | | accordance with the Department's rules and the permittee | 18 | | pays assessments
to the Department in accordance with | 19 | | Section 19.7 of this Act for 2
consecutive years.
| 20 | | In lieu of a surety bond, the applicant may provide | 21 | | cash,
certificates of deposit, or irrevocable letters of | 22 | | credit under such terms
and conditions as the Department | 23 | | may provide by rule.
| 24 | | The sureties on all bonds in effect on the effective | 25 | | date of this
amendatory Act of 1991 shall remain liable as | 26 | | sureties in accordance with
their undertakings until |
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| 1 | | released by the Department from further liability
under the | 2 | | Act. The principal on each bond in effect on the effective | 3 | | date
of this amendatory Act of 1991 shall be released from | 4 | | the obligation of
maintaining the bond if either the well | 5 | | covered by a surety bond has been
plugged and the well site | 6 | | restored in accordance with the Department's
rules or the | 7 | | principal of the surety has paid the initial assessment in
| 8 | | accordance with Section 19.7 and no well or well site | 9 | | covered by the surety
bond is in violation of the Act.
| 10 | | No permit shall be issued to a corporation incorporated | 11 | | outside of
Illinois until the corporation has been | 12 | | authorized to do business in Illinois.
| 13 | | No permit shall be issued to an individual, | 14 | | partnership, or other
unincorporated entity that is not a | 15 | | resident of Illinois until that individual,
partnership, | 16 | | or other unincorporated entity has irrevocably consented | 17 | | to be
sued in Illinois.
| 18 | | (3) To require the person assigning, transferring, or | 19 | | selling any well
for which a permit is required under this | 20 | | Act to notify the Department of
the change of ownership. | 21 | | The notification shall be on a form prescribed by
the | 22 | | Department, shall be executed by the current permittee and | 23 | | by the new
permittee, or their authorized representatives, | 24 | | and shall be filed with the
Department within 30 days after | 25 | | the effective date of the assignment,
transfer or sale. | 26 | | Within the 30 day notification period and prior to
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| 1 | | operating the well, the new permittee shall pay the | 2 | | required well transfer
fee and, where applicable, file with | 3 | | the Department the bond required under
subsection (2) of | 4 | | this Section.
| 5 | | (4) To require the filing with the State Geological | 6 | | Survey
of all geophysical logs, a well drilling
report and | 7 | | drill cuttings or cores, if cores are required,
within 90 | 8 | | days after drilling ceases; and to file a completion report
| 9 | | with the Department within 30 days after the date of first | 10 | | production
following initial drilling or any reworking, or | 11 | | after the plugging of the
well, if a dry hole. A copy of | 12 | | each completion report submitted to the
Department shall be | 13 | | delivered to the State Geological Survey. The
Department | 14 | | and the State Geological Survey shall keep the reports
| 15 | | confidential, if requested in writing by the permittee, for | 16 | | 2 years after
the date the permit is issued by the | 17 | | Department. This confidentiality
requirement shall not | 18 | | prohibit the use of the report for research purposes,
| 19 | | provided the State Geological Survey does not publish | 20 | | specific data or
identify the well to which the completion | 21 | | report pertains.
| 22 | | (5) To prevent "blowouts", "caving" and "seepage" in | 23 | | the same sense that
conditions indicated by such terms are | 24 | | generally understood in the oil and
gas business.
| 25 | | (6) To prevent fires.
| 26 | | (7) To ascertain and identify the ownership of all oil |
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| 1 | | and gas wells,
producing leases, refineries, tanks, | 2 | | plants, structures, and all storage
and transportation | 3 | | equipment and facilities.
| 4 | | (8) To regulate the use of any enhanced recovery method | 5 | | in oil pools
and oil fields.
| 6 | | (9) To regulate or prohibit the use of vacuum.
| 7 | | (10) To regulate the spacing of wells, the
issuance of | 8 | | permits, and the establishment of drilling units.
| 9 | | (11) To regulate directional drilling of oil or gas | 10 | | wells.
| 11 | | (12) To regulate the plugging of wells.
| 12 | | (13) To require that wells for which no logs or
| 13 | | unsatisfactory logs are supplied shall be completely | 14 | | plugged with cement
from bottom to top.
| 15 | | (14) To require a description in such form as is
| 16 | | determined by the Department of the method of well plugging | 17 | | for each
well, indicating the character of material used | 18 | | and the positions and
dimensions of each plug.
| 19 | | (15) To prohibit waste, as defined in this Act.
| 20 | | (16) To require the keeping of such records, the | 21 | | furnishing of such
relevant information and the | 22 | | performance of such tests as the Department
may deem | 23 | | necessary to carry into effect the purposes of this Act.
| 24 | | (17) To regulate the disposal of salt or | 25 | | sulphur-bearing water and any
oil field waste produced in | 26 | | the operation of any oil or gas well.
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| 1 | | (18) To prescribe rules, conduct inspections and | 2 | | require compliance with
health and safety standards for the | 3 | | protection of persons working
underground in connection | 4 | | with any oil and gas operations. For the
purposes of this | 5 | | paragraph, oil and gas operations include drilling or
| 6 | | excavation, production operations, plugging or filling in | 7 | | and sealing, or
any other work requiring the presence of | 8 | | workers in shafts or excavations
beneath the surface of the | 9 | | earth. Rules promulgated by the Department may
include | 10 | | minimum qualifications of persons performing tasks | 11 | | affecting the
health and safety of workers underground, | 12 | | minimum standards for the
operation and maintenance of | 13 | | equipment, and safety procedures and
precautions, and | 14 | | shall conform, as nearly as practicable, to corresponding
| 15 | | qualifications, standards and procedures prescribed under | 16 | | The Coal Mining Act.
| 17 | | (19) To deposit the amount of any forfeited surety bond | 18 | | or other
security in the Plugging and Restoration Fund, a | 19 | | special fund in the State
treasury which is hereby created; | 20 | | to deposit into the Fund any amounts
collected, reimbursed | 21 | | or recovered by the Department under Sections 19.5,
19.6 | 22 | | and 19.7 of this Act; to accept, receive, and
deposit into | 23 | | the Fund any grants, gifts or other funds which may be made
| 24 | | available from public or private sources and all earnings | 25 | | received from
investment of monies in the Fund; and to make | 26 | | expenditures from the Fund
for the purposes of plugging, |
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| 1 | | replugging or repairing any well, and
restoring the site of | 2 | | any well, determined by the Department to be
abandoned or | 3 | | ordered by the Department to be plugged, replugged, | 4 | | repaired
or restored under Sections 8a, 19 or 19.1 of this | 5 | | Act, including
expenses in administering the Fund.
| 6 | | (20) To determine if oil and gas leases submitted with | 7 | | an application for a permit or
transfer of a permit for a | 8 | | well are operative on the basis that prior oil and gas | 9 | | leases
covering the same lands have terminated due to | 10 | | non-development or non-production.
Determinations made by | 11 | | the Department under this paragraph may be based upon | 12 | | affidavits of non-development
or non-production from | 13 | | knowledgeable individuals familiar with the history
of | 14 | | development and production of oil or gas as to such lands, | 15 | | together with other
evidence, which create a rebuttable | 16 | | presumption that the prior oil and gas leases have
| 17 | | terminated and are of no further force and effect and that | 18 | | the submitted oil and gas leases are operative and | 19 | | effective. To create a rebuttable presumption, such | 20 | | affidavits, together
with other evidence provided to or | 21 | | available from the Department, shall reasonably
indicate | 22 | | that there has been no development, operations, or | 23 | | production of oil and gas on
the lands described in the | 24 | | prior leases for at least 24 consecutive months subsequent | 25 | | to the
expiration of the primary term or any extension of | 26 | | the primary term as set forth in the leases or the
period |
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| 1 | | of time of no development, operations, or production after | 2 | | expiration of the primary
term as provided in the leases. A | 3 | | court order or judgment declaring the prior leases
| 4 | | terminated is not required for determinations under this | 5 | | paragraph except in extraordinary
circumstances where such | 6 | | determinations cannot reasonably be concluded from the
| 7 | | affidavits or evidence submitted to or available from the | 8 | | Department. Upon the
Department's determination of a | 9 | | rebuttable presumption under this paragraph and if the
| 10 | | application is requesting a transfer of an existing permit | 11 | | of a well located on the lands, the
current permittee shall | 12 | | be provided notice and opportunity for a hearing to rebut | 13 | | the
presumption before a final determination is made. If | 14 | | the presumption is not rebutted
within 10 days after | 15 | | service of notice, the existing permit shall be transferred | 16 | | to the
applicant. Upon the Department's determination of a | 17 | | rebuttable presumption under this
paragraph and if the | 18 | | applicant is not requesting a transfer of any existing | 19 | | permit as to a well
located on the lands, but is requesting | 20 | | a new permit, the permit shall be issued to the applicant.
| 21 | | Any determination made by the Department under this | 22 | | paragraph shall not diminish the
rights or obligations of | 23 | | any current permittee of a well that are otherwise provided | 24 | | by statute or regulation of the Department. Any
request for | 25 | | a determination concerning the transfer of an existing | 26 | | permit and any subsequent
request for a hearing made by the |
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| 1 | | existing permittee shall require the payment of a | 2 | | nonrefundable
fee of $500 by the applicant. | 3 | | For the purposes of this Act, the State Geological Survey | 4 | | shall
co-operate with the Department in making available its | 5 | | scientific and
technical information on the oil and gas | 6 | | resources of the State, and the
Department shall in turn | 7 | | furnish a copy to the State Geological Survey
of all drilling | 8 | | permits as issued, and such other drilling and operating
data | 9 | | received or secured by the Department which are pertinent to
| 10 | | scientific research on the State's mineral resources.
| 11 | | (Source: P.A. 86-205; 86-364; 86-1177; 87-744.)
| 12 | | Section 99. Effective date. This Act takes effect upon | 13 | | becoming law.".
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