Illinois General Assembly - Full Text of HB0282
Illinois General Assembly

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Full Text of HB0282  101st General Assembly




State of Illinois
2019 and 2020


Introduced , by Rep. Emanuel Chris Welch


225 ILCS 725/1  from Ch. 96 1/2, par. 5401
225 ILCS 725/6  from Ch. 96 1/2, par. 5409
225 ILCS 725/6.1  from Ch. 96 1/2, par. 5410
225 ILCS 725/6.3 new

    Amends the Illinois Oil and Gas Act. Defines terms. Specifies information to be included in an application for a well permit. Provides that horizontal wells or wells drilled using directional drilling are prohibited from classification as confidential. Provides that the Department of Natural Resources shall post a weekly notice on its website indicating all permits issued during the preceding week. Specifies information to be included in a well drilling and completion report for horizontal wells or wells drilled using directional drilling. Provides that, subject to specified provisions, the Illinois State Geological Survey and the Department shall make public well drilling and completion reports for horizontal wells or wells drilled using directional drilling by posting the information on their websites. Sets forth requirements relating to the furnishing of chemical disclosure information to the Survey or Department under a claim of trade secret. Sets forth appeal procedures for the denial of a trade secret request. Provides that information furnished under a claim of trade secret is protected from disclosure if the Survey or Department determines that it has not been published or disseminated or become public knowledge and the information has competitive value. Requires the Survey or Department to adopt rules concerning information furnished under a claim of trade secret to a health professional who states a need for the information and articulates why the information is needed. Provides that the Survey or Department shall disclose information furnished under a claim of trade secret to specified personnel when there is a release of a chemical or additive used for drilling or completing a well and it is necessary to protect public health or the environment. Makes other changes.

LRB101 04038 JRG 49046 b





HB0282LRB101 04038 JRG 49046 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 Sections 1, 6, and 6.1 and by adding Section 6.3 as
7    (225 ILCS 725/1)  (from Ch. 96 1/2, par. 5401)
8    Sec. 1. Unless the context otherwise requires, the words
9defined in this Section have the following meanings as used in
10this Act.
11    "Person" means any natural person, corporation,
12association, partnership, governmental agency or other legal
13entity, receiver, trustee, guardian, executor, administrator,
14fiduciary or representative of any kind.
15    "Oil" means natural crude oil or petroleum and other
16hydrocarbons, regardless of gravity, which are produced at the
17well in liquid form by ordinary production methods or by the
18use of an oil and gas separator and which are not the result of
19condensation of gas after it leaves the underground reservoir.
20    "Gas" means all natural gas, including casinghead gas, and
21all other natural hydrocarbons not defined above as oil.
22    "Pool" means a natural, underground reservoir containing
23in whole or in part, a natural accumulation of oil or gas, or



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1both. Each productive zone or stratum of a general structure,
2which is completely separated from any other zone or stratum in
3the structure, is deemed a separate "pool" as used herein.
4    "Field" means the same general surface area which is
5underlaid or appears to be underlaid by one or more pools.
6    "Permit" means the Department's written authorization
7allowing a well to be drilled, deepened, converted, or operated
8by an owner.
9    "Permittee" means the owner holding or required to hold the
10permit, and who is also responsible for paying assessments in
11accordance with Section 19.7 of this Act and, where applicable,
12executing and filing the bond associated with the well as
13principal and who is responsible for compliance with all
14statutory and regulatory requirements pertaining to the well.
15    When the right and responsibility for operating a well is
16vested in a receiver or trustee appointed by a court of
17competent jurisdiction, the permit shall be issued to the
18receiver or trustee.
19    "Orphan Well" means a well for which: (1) no fee assessment
20under Section 19.7 of this Act has been paid or no other bond
21coverage has been provided for 2 consecutive years; (2) no oil
22or gas has been produced from the well or from the lease or
23unit on which the well is located for 2 consecutive years; and
24(3) no permittee or owner can be identified or located by the
25Department. Orphaned wells include wells that may have been
26drilled for purposes other than those for which a permit is



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1required under this Act if the well is a conduit for oil or
2salt water intrusions into fresh water zones or onto the
3surface which may be caused by oil and gas operations.
4    "Owner" means the person who has the right to drill into
5and produce from any pool, and to appropriate the production
6either for the person or for the person and another, or others,
7or solely for others, excluding the mineral owner's royalty if
8the right to drill and produce has been granted under an oil
9and gas lease. An owner may also be a person granted the right
10to drill and operate an injection (Class II UIC) well
11independent of the right to drill for and produce oil or gas.
12When the right to drill, produce, and appropriate production is
13held by more than one person, then all persons holding these
14rights may designate the owner by a written operating agreement
15or similar written agreement. In the absence of such an
16agreement, and subject to the provisions of Sections 22.2 and
1723.1 through 23.16 of this Act, the owner shall be the person
18designated in writing by a majority in interest of the persons
19holding these rights.
20    "Department" means the Department of Natural Resources.
21    "Director" means the Director of Natural Resources.
22    "Mining Board" means the State Mining Board in the
23Department of Natural Resources, Office of Mines and Minerals.
24    "Mineral Owner's Royalty" means the share of oil and gas
25production reserved in an oil and gas lease free of all costs
26by an owner of the minerals whether denominated royalty or



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1overriding royalty.
2    "Waste" means "physical waste" as that term is generally
3understood in the oil and gas industry, and further includes:
4        (1) the locating, drilling, and producing of any oil or
5    gas well or wells drilled contrary to the valid order,
6    rules and regulations adopted by the Department under the
7    provisions of this Act;
8        (2) permitting the migration of oil, gas, or water from
9    the stratum in which it is found, into other strata,
10    thereby ultimately resulting in the loss of recoverable
11    oil, gas or both;
12        (3) the drowning with water of any stratum or part
13    thereof capable of producing oil or gas, except for
14    secondary recovery purposes;
15        (4) the unreasonable damage to underground, fresh or
16    mineral water supply, workable coal seams, or other mineral
17    deposits in the operations for the discovery, development,
18    production, or handling of oil and gas;
19        (5) the unnecessary or excessive surface loss or
20    destruction of oil or gas resulting from evaporation,
21    seepage, leakage or fire, especially such loss or
22    destruction incident to or resulting from the escape of gas
23    into the open air in excessive or unreasonable amounts,
24    provided, however, it shall not be unlawful for the
25    operator or owner of any well producing both oil and gas to
26    burn such gas in flares when such gas is, under the other



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1    provisions of this Act, lawfully produced, and where there
2    is no market at the well for such escaping gas; and where
3    the same is used for the extraction of casinghead gas, it
4    shall not be unlawful for the operator of the plant after
5    the process of extraction is completed, to burn such
6    residue in flares when there is no market at such plant for
7    such residue gas;
8        (6) permitting unnecessary fire hazards;
9        (7) permitting unnecessary damage to or destruction of
10    the surface, soil, animal, fish or aquatic life or property
11    from oil or gas operations.
12    "Directional drilling" means controlled directional
13drilling where the bottom of the wellbore is intentionally
14directed away from the vertical position.
15    "Drilling Unit" means the surface area allocated by an
16order or regulation of the Department to the drilling of a
17single well for the production of oil or gas from an individual
19    "Enhanced Recovery Method" means any method used in an
20effort to recover hydrocarbons from a pool by injection of
21fluids, gases or other substances to maintain, restore or
22augment natural reservoir energy, or by introducing immiscible
23or miscible gases, chemicals, other substances or heat or by
24in-situ combustion, or by any combination thereof.
25    "Horizontal well" means a well with a wellbore drilled
26laterally at an angle of at least 80 degrees to the vertical



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1and with a horizontal projection exceeding 100 feet measured
2from the initial point of penetration into the productive
3formation through the terminus of the lateral in the same
4common source of hydrocarbon supply.
5    "Survey" means the Illinois State Geological Survey.
6    "Well-Site Equipment" means any production-related
7equipment or materials specific to the well, including motors,
8pumps, pump jacks, tanks, tank batteries, separators,
9compressors, casing, tubing, and rods.
10(Source: P.A. 99-78, eff. 7-20-15.)
11    (225 ILCS 725/6)  (from Ch. 96 1/2, par. 5409)
12    Sec. 6. The Department shall have the authority to conduct
13hearings and to make such reasonable rules as may be necessary
14from time to time in the proper administration and enforcement
15of this Act, including the adoption of rules and the holding of
16hearings for the following purposes:
17        (1) To require the drilling, casing and plugging of
18    wells to be done in such a manner as to prevent the
19    migration of oil or gas from one stratum to another; to
20    prevent the intrusion of water into oil, gas or coal
21    strata; to prevent the pollution of fresh water supplies by
22    oil, gas or salt water.
23        (2) To require the person desiring or proposing to
24    drill, deepen or convert any well for the exploration or
25    production of oil or gas, for injection or water supply in



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1    connection with enhanced recovery projects, for the
2    disposal of salt water, brine, or other oil or gas field
3    wastes, or for input, withdrawal, or observation in
4    connection with the storage of natural gas or other liquid
5    or gaseous hydrocarbons before commencing the drilling,
6    deepening or conversion of any such well, to make
7    application to the Department upon such form as the
8    Department may prescribe and to comply with the provisions
9    of this Section. The drilling, deepening or conversion of
10    any well is hereby prohibited until such application is
11    made and the applicant is issued a permit therefor as
12    provided by this Act. Each application for a well permit
13    shall include the following: (A) The exact location of the
14    well, (B) the name and address of the manager, operator,
15    contractor, driller, or any other person responsible for
16    the conduct of drilling operations, (C) the proposed depth
17    of the well, (D) lease ownership information, and (E)
18    Global Positioning System (GPS) surface and bottom hole
19    locations for all wells drilled utilizing directional or
20    horizontal drilling techniques, (F) a list of chemicals and
21    additives intended to be used in the drilling or completion
22    operations as identified in Section 6.3, and (G) (E) such
23    other relevant information as the Department may deem
24    necessary or convenient to effectuate the purposes of this
25    Act.
26        Additionally, each applicant who has not been issued a



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1    permit that is of record on the effective date of this
2    amendatory Act of 1991, or who has not thereafter made
3    payments of assessments under Section 19.7 of this Act for
4    at least 2 consecutive years preceding the application,
5    shall execute, as principal, and file with the Department a
6    bond, executed by a surety authorized to transact business
7    in this State, in an amount estimated to cover the cost of
8    plugging the well and restoring the well site, but not to
9    exceed $5000, as determined by the Department for each
10    well, or a blanket bond in an amount not to exceed $100,000
11    for all wells, before drilling, deepening, converting, or
12    operating any well for which a permit is required that has
13    not previously been plugged and abandoned in accordance
14    with the Act. The Department shall release the bond if the
15    well, or all wells in the case of a blanket bond, is not
16    completed but is plugged and the well site restored in
17    accordance with the Department's rules or is completed in
18    accordance with the Department's rules and the permittee
19    pays assessments to the Department in accordance with
20    Section 19.7 of this Act for 2 consecutive years.
21        In lieu of a surety bond, the applicant may provide
22    cash, certificates of deposit, or irrevocable letters of
23    credit under such terms and conditions as the Department
24    may provide by rule.
25        The sureties on all bonds in effect on the effective
26    date of this amendatory Act of 1991 shall remain liable as



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1    sureties in accordance with their undertakings until
2    released by the Department from further liability under the
3    Act. The principal on each bond in effect on the effective
4    date of this amendatory Act of 1991 shall be released from
5    the obligation of maintaining the bond if either the well
6    covered by a surety bond has been plugged and the well site
7    restored in accordance with the Department's rules or the
8    principal of the surety has paid the initial assessment in
9    accordance with Section 19.7 and no well or well site
10    covered by the surety bond is in violation of the Act.
11        No permit shall be issued to a corporation incorporated
12    outside of Illinois until the corporation has been
13    authorized to do business in Illinois.
14        No permit shall be issued to an individual,
15    partnership, or other unincorporated entity that is not a
16    resident of Illinois until that individual, partnership,
17    or other unincorporated entity has irrevocably consented
18    to be sued in Illinois.
19        (3) To require the person assigning, transferring, or
20    selling any well for which a permit is required under this
21    Act to notify the Department of the change of ownership.
22    The notification shall be on a form prescribed by the
23    Department, shall be executed by the current permittee and
24    by the new permittee, or their authorized representatives,
25    and shall be filed with the Department within 30 days after
26    the effective date of the assignment, transfer or sale.



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1    Within the 30 day notification period and prior to
2    operating the well, the new permittee shall pay the
3    required well transfer fee and, where applicable, file with
4    the Department the bond required under subsection (2) of
5    this Section.
6        (4) To require the filing with the State Geological
7    Survey of all geophysical logs, a well drilling report and
8    drill cuttings or cores, if cores are required, within 90
9    days after drilling ceases; and to file a completion report
10    with the Department within 30 days after the date of first
11    production following initial drilling or any reworking, or
12    after the plugging of the well, if a dry hole. A copy of
13    each completion report submitted to the Department shall be
14    delivered to the State Geological Survey. The Department
15    and the State Geological Survey shall keep the reports
16    confidential, if requested in writing by the permittee, for
17    2 years after the date the permit is issued by the
18    Department. Horizontal wells or wells drilled utilizing
19    directional drilling, including, but not limited to, oil
20    and gas wells, coalbed methane wells, and coal mine methane
21    wells, shall be prohibited from classification as
22    confidential. This confidentiality requirement shall not
23    prohibit the use of the report for research purposes,
24    provided the State Geological Survey does not publish
25    specific data or identify the well to which the completion
26    report pertains. Well drilling reports and completion



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1    reports for horizontal wells or wells drilled utilizing
2    directional drilling shall be subject to the requirements
3    of Section 6.3.
4        (5) To prevent "blowouts", "caving", "frac hits", and
5    "seepage" in the same sense that conditions indicated by
6    such terms are generally understood in the oil and gas
7    business.
8        (6) To prevent fires.
9        (7) To ascertain and identify the ownership of all oil
10    and gas wells, producing leases, refineries, tanks,
11    plants, structures, and all storage and transportation
12    equipment and facilities.
13        (8) To regulate the use of any enhanced recovery method
14    in oil pools and oil fields.
15        (9) To regulate or prohibit the use of vacuum.
16        (10) To regulate the spacing of wells, the issuance of
17    permits, and the establishment of drilling units.
18        (11) To regulate directional drilling of oil or gas
19    wells.
20        (12) To regulate the plugging of wells.
21        (13) To require that wells for which no logs or
22    unsatisfactory logs are supplied shall be completely
23    plugged with cement from bottom to top.
24        (14) To require a description in such form as is
25    determined by the Department of the method of well plugging
26    for each well, indicating the character of material used



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1    and the positions and dimensions of each plug.
2        (15) To prohibit waste, as defined in this Act.
3        (16) To require the keeping of such records, the
4    furnishing of such relevant information and the
5    performance of such tests as the Department may deem
6    necessary to carry into effect the purposes of this Act.
7        (17) To regulate the disposal of salt or
8    sulphur-bearing water and any oil field waste produced in
9    the operation of any oil or gas well.
10        (18) To prescribe rules, conduct inspections and
11    require compliance with health and safety standards for the
12    protection of persons working underground in connection
13    with any oil and gas operations. For the purposes of this
14    paragraph, oil and gas operations include drilling or
15    excavation, production operations, plugging or filling in
16    and sealing, or any other work requiring the presence of
17    workers in shafts or excavations beneath the surface of the
18    earth. Rules promulgated by the Department may include
19    minimum qualifications of persons performing tasks
20    affecting the health and safety of workers underground,
21    minimum standards for the operation and maintenance of
22    equipment, and safety procedures and precautions, and
23    shall conform, as nearly as practicable, to corresponding
24    qualifications, standards and procedures prescribed under
25    the Coal Mining Act.
26        (19) To deposit the amount of any forfeited surety bond



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1    or other security in the Plugging and Restoration Fund, a
2    special fund in the State treasury which is hereby created;
3    to deposit into the Fund any amounts collected, reimbursed
4    or recovered by the Department under Sections 19.5, 19.6
5    and 19.7 of this Act; to accept, receive, and deposit into
6    the Fund any grants, gifts or other funds which may be made
7    available from public or private sources and all earnings
8    received from investment of monies in the Fund; and to make
9    expenditures from the Fund for the purposes of plugging,
10    replugging or repairing any well, and restoring the site of
11    any well, determined by the Department to be abandoned or
12    ordered by the Department to be plugged, replugged,
13    repaired or restored under Sections 8a, 19 or 19.1 of this
14    Act, including expenses in administering the Fund.
15    For the purposes of this Act, the State Geological Survey
16shall co-operate with the Department in making available its
17scientific and technical information on the oil and gas
18resources of the State, and the Department shall in turn
19furnish a copy to the State Geological Survey of all drilling
20permits as issued, and such other drilling and operating data
21received or secured by the Department which are pertinent to
22scientific research on the State's mineral resources.
23(Source: P.A. 86-205; 86-364; 86-1177; 87-744.)
24    (225 ILCS 725/6.1)  (from Ch. 96 1/2, par. 5410)
25    Sec. 6.1. When the applicant has complied with all



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1applicable provisions of this Act and the rules of the
2Department, the Department shall issue the permit. All
3applications for a permit submitted to the Department shall
4either be granted, denied, or a deficiency letter issued in
5writing within 20 business days after the date of receipt by
6the Department, unless the applicant and Department mutually
7agree to extend the 20-day period. If granted, the written
8permit shall be issued. If a deficiency letter is issued, the
9Department shall provide specific requirements for additional
10information or documentation needed for the application to be
11considered and the permit issued. Upon submission of the
12required information and documentation, the same process and
13timeframe as provided in this Section shall continue until
14either the permit is issued or it is determined that the permit
15cannot be issued because of legal or regulatory impediments.
16The Department shall respond in a timely manner to any
17application or submission of additional information and
18documentation after initial submission.
19    On a weekly basis, the Department shall post on its website
20a notice indicating all permits issued during the preceding
21week. The weekly permit notice shall include the surface and
22bottom hole locations for all wells drilled utilizing
23directional or horizontal drilling techniques in Global
24Positioning System (GPS) decimal degree format.
25(Source: P.A. 98-926, eff. 9-1-14; 99-131, eff. 1-1-16.)



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1    (225 ILCS 725/6.3 new)
2    Sec. 6.3. Horizontal and directional well; drilling and
3completion reports; trade secret.
4    (a) Well drilling and completion reports for horizontal
5wells or wells drilled using directional drilling shall contain
6the following information:
7        (1) the permittee's name as listed in the permit
8    application;
9        (2) the dates of the drilling or completion operations;
10        (3) the county where the well is located;
11        (4) the well name and Department reference number;
12        (5) the Global Positioning System (GPS) surface and
13    bottom hole locations for the well;
14        (6) a chemical disclosure report identifying each
15    chemical and additive used during drilling or completion
16    operations that includes the following information:
17            (A) the total volume of water used in the drilling
18        or completion of the well or the type and total volume
19        of the base fluid used, if the base fluid used is
20        something other than water;
21            (B) each additive used during the drilling or
22        completion of the well, including the trade name,
23        vendor, a brief descriptor of the intended use or
24        function of each additive, and the Material Safety Data
25        Sheet, if applicable;
26            (C) each chemical intentionally added to any base



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1        fluid used during the drilling or completion of the
2        well, including the Chemical Abstracts Service number
3        for each chemical, if applicable; and
4            (D) the actual concentration in the base fluid, in
5        percent by mass, of each chemical intentionally added
6        to the base fluid.
7    (b) The Survey and the Department shall make all well
8drilling and completion reports subject to this Section public
9by posting them on their respective websites within 30 days
10after receipt of the reports.
11    (c) When an applicant, permittee, or a person subject to
12this Act furnishes chemical disclosure information to the
13Survey or Department under this Section under a claim of trade
14secret, the person shall submit redacted and un-redacted copies
15of the documents containing the information to the Survey or
16Department, and the Survey or Department shall use the redacted
17copies when posting materials on its website.
18    (d) Upon submission or within 5 calendar days after
19submission of chemical disclosure information to the Survey or
20Department under this Section under a claim of trade secret,
21the person claiming trade secret protection shall provide a
22statement of justification of the claim that contains the
23following: (i) a detailed description of the procedures used by
24the person to safeguard the information from becoming available
25to persons other than those selected by the person to have
26access to the information for limited purposes; (ii) a detailed



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1statement identifying the persons or class of persons to whom
2the information has been disclosed; (iii) a certification
3indicating that the person has no knowledge that the
4information has ever been published or disseminated or has
5otherwise become a matter of general public knowledge; (iv) a
6detailed discussion of why the person believes that the
7information has competitive value; and (v) any other
8information that shall support the claim.
9    (e) Chemical disclosure information furnished under this
10Section under a claim of trade secret shall be protected from
11disclosure as a trade secret if the Survey or Department
12determines that the statement of justification demonstrates
14        (1) the information has not been published,
15    disseminated, or otherwise become a matter of general
16    public knowledge; and
17        (2) the information has competitive value.
18    There is a rebuttable presumption that the information has
19not been published, disseminated, or otherwise become a matter
20of general public knowledge if the person has taken reasonable
21measures to prevent the information from becoming available to
22persons other than those selected by the person to have access
23to the information for limited purposes, and the statement of
24justification contains a certification indicating that the
25person has no knowledge that the information has ever been
26published, disseminated, or otherwise become a matter of



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1general public knowledge.
2    (f) Denial of a trade secret request under this Section
3shall be appealable under the Administrative Review Law.
4    (g) A person whose request to inspect or copy a public
5record is denied, in whole or in part, because of a grant of
6trade secret protection, may file a request for review with the
7Public Access Counselor under Section 9.5 of the Freedom of
8Information Act or for injunctive or declaratory relief under
9Section 11 of the Freedom of Information Act for the purpose of
10reviewing whether the Survey or Department properly determined
11that the trade secret protection should be granted.
12    (h) Except as otherwise provided in subsections (i) and (j)
13of this Section, the Survey or Department must maintain the
14confidentiality of chemical disclosure information furnished
15under this Section until the Survey or Department receives
16official notification of a final order by a reviewing body with
17proper jurisdiction that is not subject to further appeal
18rejecting a grant of trade secret protection for that
20    (i) The Survey or Department shall adopt rules for the
21provision of information furnished under a claim of trade
22secret to a health professional who states a need for the
23information and articulates why the information is needed. The
24health professional may share that information with other
25persons as may be professionally necessary, including, but not
26limited to, the affected patient, other health professionals



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1involved in the treatment of the affected patient, the affected
2patient's family members if the affected patient is unconscious
3or a minor who is unable to make medical decisions, the Centers
4for Disease Control and Prevention, and other government public
5health agencies. Except as otherwise provided in this Section,
6any recipient of the information shall not use the information
7for purposes other than the health needs asserted in the
8request and shall otherwise maintain the information as
9confidential. Information so disclosed to a health
10professional shall not be construed as publicly available. The
11holder of the trade secret may request a confidentiality
12agreement consistent with the requirements of this Section from
13all health professionals to whom the information is disclosed
14as soon as circumstances permit. The rules adopted by the
15Survey or Department shall also establish procedures for
16providing the information in both emergency and non-emergency
18    (j) When there is a release of a chemical or additive used
19for drilling or completing a well and it is necessary to
20protect public health or the environment, the Survey or
21Department shall disclose information furnished under a claim
22of trade secret to the relevant county public health director
23or emergency manager, the relevant fire department chief, the
24Director of Public Health, the Director of Agriculture, and the
25Director of the Illinois Environmental Protection Agency upon
26request by that individual. The Director of Public Health, the



HB0282- 20 -LRB101 04038 JRG 49046 b

1Director of the Illinois Environmental Protection Agency, and
2the Director of Agriculture may disclose this information to
3staff members under the same terms and conditions as apply to
4the Survey and Director of Natural Resources. Except as
5otherwise provided in this Section, any recipient of the
6information shall not use the information for purposes other
7than to protect public health or the environment and shall
8otherwise maintain the information as confidential.
9Information disclosed to staff members shall not be construed
10as publicly available. The holder of the trade secret
11information may request a confidentiality agreement consistent
12with the requirements of this Section from all persons to whom
13the information is disclosed as soon as circumstances permit.