Full Text of SB1095 102nd General Assembly
SB1095sam001 102ND GENERAL ASSEMBLY | Sen. Rachelle Crowe Filed: 4/16/2021
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| 1 | | AMENDMENT TO SENATE BILL 1095
| 2 | | AMENDMENT NO. ______. Amend Senate Bill 1095 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 Sections 1 and 6 as follows:
| 6 | | (225 ILCS 725/1) (from Ch. 96 1/2, par. 5401)
| 7 | | Sec. 1.
Unless the context otherwise requires, the words | 8 | | defined in this
Section have the following meanings as used in | 9 | | this Act.
| 10 | | "Person" means any natural person, corporation, | 11 | | association,
partnership, governmental agency or other legal | 12 | | entity, receiver, trustee,
guardian, executor, administrator, | 13 | | fiduciary or representative of any kind.
| 14 | | "Oil" means natural crude oil or petroleum and other | 15 | | hydrocarbons,
regardless of gravity, which are produced at the | 16 | | well in liquid form by
ordinary production methods or by the |
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| 1 | | use of an oil and gas separator and
which are not the result of | 2 | | condensation of gas after it leaves the
underground reservoir.
| 3 | | "Gas" means all natural gas, including casinghead gas, and | 4 | | all other
natural hydrocarbons not defined above as oil.
| 5 | | "Pool" means a natural, underground reservoir containing | 6 | | in whole or in
part, a natural accumulation of oil or gas, or | 7 | | both. Each productive zone
or stratum of a general structure, | 8 | | which is completely separated from any
other zone or stratum | 9 | | in the structure, is deemed a separate "pool" as used
herein.
| 10 | | "Field" means the same general surface area which is | 11 | | underlaid or
appears to be underlaid by one or more pools.
| 12 | | "Permit" means the Department's written authorization | 13 | | allowing a well
to be drilled, deepened, converted, or | 14 | | operated by an owner.
| 15 | | "Permittee" means the owner holding or required to hold | 16 | | the
permit, and
who is also responsible for paying assessments | 17 | | in accordance with Section
19.7 of this Act and, where | 18 | | applicable, executing and filing the bond
associated with the | 19 | | well as principal and who is responsible for compliance
with | 20 | | all statutory and regulatory requirements pertaining to the | 21 | | well.
| 22 | | When the right and responsibility for operating a well is | 23 | | vested in a
receiver or trustee appointed by a court of | 24 | | competent jurisdiction, the
permit shall be issued to the | 25 | | receiver or trustee.
| 26 | | "Orphan Well" means a well for which: (1) no fee |
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| 1 | | assessment under
Section 19.7 of this Act has been paid or no | 2 | | other bond coverage has been
provided for 2 consecutive years; | 3 | | (2) no oil or gas has been produced from
the well or from the | 4 | | lease or unit on which the well is located for 2
consecutive | 5 | | years; and (3) no permittee or owner can be identified or
| 6 | | located by the Department. Orphaned wells include wells that | 7 | | may have been
drilled for purposes other than those for which a | 8 | | permit is required under
this Act if the well is a conduit for | 9 | | oil or salt water intrusions into
fresh water zones or onto the | 10 | | surface which may be caused by oil and gas
operations.
| 11 | | "Owner" means the person who has the right to drill into | 12 | | and produce
from any pool, and to appropriate the production | 13 | | either for the person or for
the person and another, or others, | 14 | | or solely for others, excluding the
mineral owner's royalty if
| 15 | | the right to drill and produce has been granted under an oil | 16 | | and gas lease.
An owner may also be a person granted the right | 17 | | to drill and operate an
injection (Class II UIC) well | 18 | | independent of the right to drill for and produce
oil or gas. | 19 | | When the right to drill, produce, and appropriate production | 20 | | is
held by more than one person, then all persons holding these | 21 | | rights may
designate the owner by a written operating | 22 | | agreement or similar written
agreement. In the absence of such | 23 | | an agreement, and subject to the provisions
of Sections 22.2 | 24 | | and 23.1 through 23.16 of this Act, the owner shall be the
| 25 | | person designated in writing by a majority in interest of the | 26 | | persons holding
these rights.
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| 1 | | "Department" means the Department of Natural Resources.
| 2 | | "Director" means the Director of Natural Resources.
| 3 | | "Mining Board" means the State Mining Board in the | 4 | | Department of Natural
Resources, Office of Mines
and Minerals.
| 5 | | "Mineral Owner's Royalty" means the share of oil and gas | 6 | | production
reserved in an oil and gas lease free of all costs | 7 | | by an owner of the
minerals whether denominated royalty or | 8 | | overriding royalty.
| 9 | | "Coal mine gas well" means a well drilled into a mine void | 10 | | for the production of gas from an abandoned coal mine. | 11 | | "Waste" means "physical waste" as that term is generally | 12 | | understood in
the oil and gas industry, and further includes:
| 13 | | (1) the locating, drilling, and producing of any oil | 14 | | or gas well or wells
drilled contrary to the valid order, | 15 | | rules and regulations adopted by the
Department under the | 16 | | provisions of this Act;
| 17 | | (2) permitting the migration of oil, gas, or water | 18 | | from the stratum in
which it is found, into other strata, | 19 | | thereby ultimately resulting in the
loss of recoverable | 20 | | oil, gas or both;
| 21 | | (3) the drowning with water of any stratum or part | 22 | | thereof capable of
producing oil or gas, except for | 23 | | secondary recovery purposes;
| 24 | | (4) the unreasonable damage to underground, fresh or | 25 | | mineral water
supply, workable coal seams, or other | 26 | | mineral deposits in the operations
for the discovery, |
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| 1 | | development, production, or handling of oil and gas;
| 2 | | (5) the unnecessary or excessive surface loss or | 3 | | destruction of oil or
gas resulting from evaporation, | 4 | | seepage, leakage or fire, especially such
loss or | 5 | | destruction incident to or resulting from the escape of | 6 | | gas into
the open air in excessive or unreasonable | 7 | | amounts, provided, however,
it shall not be unlawful for | 8 | | the operator
or owner of any well producing both oil and | 9 | | gas to burn such gas in flares
when such gas is, under the | 10 | | other provisions of this Act, lawfully
produced, and where | 11 | | there is no market at the well for such escaping gas;
and | 12 | | where the same is used for the extraction of casinghead | 13 | | gas, it shall
not be unlawful for the operator of the plant | 14 | | after the process of
extraction is completed, to burn such | 15 | | residue in flares when there is no
market at such plant for | 16 | | such residue gas;
| 17 | | (6) permitting unnecessary fire hazards;
| 18 | | (7) permitting unnecessary damage to or destruction of | 19 | | the surface,
soil, animal, fish or aquatic life or | 20 | | property from oil or gas operations.
| 21 | | "Drilling Unit" means the surface area allocated by an | 22 | | order or
regulation of the Department to the drilling of a | 23 | | single well for the
production of oil or gas from an individual | 24 | | pool.
| 25 | | "Enhanced Recovery Method" means any method used in an | 26 | | effort to
recover hydrocarbons from a pool by injection of |
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| 1 | | fluids, gases or other
substances to maintain, restore or | 2 | | augment natural reservoir energy, or by
introducing immiscible | 3 | | or miscible gases, chemicals, other substances or
heat or by | 4 | | in-situ combustion, or by any combination thereof.
| 5 | | "Well-Site Equipment" means any production-related | 6 | | equipment or materials
specific to the well, including motors, | 7 | | pumps, pump jacks, tanks, tank
batteries, separators, | 8 | | compressors, casing, tubing, and rods.
| 9 | | (Source: P.A. 99-78, eff. 7-20-15.)
| 10 | | (225 ILCS 725/6) (from Ch. 96 1/2, par. 5409)
| 11 | | Sec. 6.
The Department shall have the authority to conduct | 12 | | hearings and
to make such reasonable rules as may be necessary | 13 | | from time to time in the
proper administration and enforcement | 14 | | of this Act, including the adoption
of rules and the holding of | 15 | | hearings for the following purposes:
| 16 | | (1) To require the drilling, casing and plugging of | 17 | | wells to be done in
such a manner as to prevent the | 18 | | migration of oil or gas from one stratum to
another; to | 19 | | prevent the intrusion of water into oil, gas or coal | 20 | | strata;
to prevent the pollution of fresh water supplies | 21 | | by oil, gas or salt
water.
| 22 | | (2) To require the person desiring or proposing to | 23 | | drill, deepen or
convert any well for the exploration or | 24 | | production of
oil or gas, for injection or water supply in | 25 | | connection with
enhanced recovery projects, for the |
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| 1 | | disposal of salt water, brine, or other
oil or gas field | 2 | | wastes, or for input, withdrawal, or observation in
| 3 | | connection with the storage of natural gas or other liquid | 4 | | or gaseous
hydrocarbons before commencing the drilling, | 5 | | deepening or
conversion of any such well, to make | 6 | | application to the Department upon
such form as the | 7 | | Department may prescribe and to comply with the provisions
| 8 | | of this Section. The drilling, deepening or conversion of | 9 | | any well is
hereby prohibited until such application is | 10 | | made and the applicant is
issued a permit therefor as | 11 | | provided by this Act. Each application for a
well permit | 12 | | shall include the following: (A) The exact location of the
| 13 | | well, (B) the name and address of the manager, operator, | 14 | | contractor,
driller, or any other person responsible for | 15 | | the conduct of drilling
operations, (C) the proposed depth | 16 | | of the well, (D) lease ownership
information, and (E) such | 17 | | other relevant information as the Department may
deem | 18 | | necessary or convenient to effectuate the purposes of this | 19 | | Act.
| 20 | | Additionally, each applicant who has not been issued a | 21 | | permit that is
of record on the effective date of this | 22 | | amendatory Act of 1991, or who has
not thereafter made | 23 | | payments of assessments under Section 19.7 of this Act
for | 24 | | at least 2 consecutive years preceding the application, | 25 | | shall execute,
as principal, and file with the Department | 26 | | a bond, executed by a surety
authorized to transact |
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| 1 | | business in this State, in an amount estimated to
cover | 2 | | the cost of plugging the well and restoring the well site, | 3 | | but not to
exceed $5000, as determined by the Department | 4 | | for each well, or a blanket
bond in an amount not to exceed | 5 | | $100,000 for all wells, before drilling,
deepening, | 6 | | converting, or operating any well for which a permit is | 7 | | required
that has not previously been plugged and | 8 | | abandoned in accordance with the
Act. The Department shall | 9 | | release the bond if the well, or all wells in the
case of a | 10 | | blanket bond, is not completed but is plugged and the well | 11 | | site
restored in accordance with the Department's rules or | 12 | | is completed in
accordance with the Department's rules and | 13 | | the permittee pays assessments
to the Department in | 14 | | accordance with Section 19.7 of this Act for 2
consecutive | 15 | | years.
| 16 | | In lieu of a surety bond, the applicant may provide | 17 | | cash,
certificates of deposit, or irrevocable letters of | 18 | | credit under such terms
and conditions as the Department | 19 | | may provide by rule.
| 20 | | The sureties on all bonds in effect on the effective | 21 | | date of this
amendatory Act of 1991 shall remain liable as | 22 | | sureties in accordance with
their undertakings until | 23 | | released by the Department from further liability
under | 24 | | the Act. The principal on each bond in effect on the | 25 | | effective date
of this amendatory Act of 1991 shall be | 26 | | released from the obligation of
maintaining the bond if |
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| 1 | | either the well covered by a surety bond has been
plugged | 2 | | and the well site restored in accordance with the | 3 | | Department's
rules or the principal of the surety has paid | 4 | | the initial assessment in
accordance with Section 19.7 and | 5 | | no well or well site covered by the surety
bond is in | 6 | | violation of the Act.
| 7 | | No permit shall be issued to a corporation | 8 | | incorporated outside of
Illinois until the corporation has | 9 | | been authorized to do business in Illinois.
| 10 | | No permit shall be issued to an individual, | 11 | | partnership, or other
unincorporated entity that is not a | 12 | | resident of Illinois until that individual,
partnership, | 13 | | or other unincorporated entity has irrevocably consented | 14 | | to be
sued in Illinois.
| 15 | | (3) To require the person assigning, transferring, or | 16 | | selling any well
for which a permit is required under this | 17 | | Act to notify the Department of
the change of ownership. | 18 | | The notification shall be on a form prescribed by
the | 19 | | Department, shall be executed by the current permittee and | 20 | | by the new
permittee, or their authorized representatives, | 21 | | and shall be filed with the
Department within 30 days | 22 | | after the effective date of the assignment,
transfer or | 23 | | sale. Within the 30 day notification period and prior to
| 24 | | operating the well, the new permittee shall pay the | 25 | | required well transfer
fee and, where applicable, file | 26 | | with the Department the bond required under
subsection (2) |
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| 1 | | of this Section.
| 2 | | (4) To require the filing with the State Geological | 3 | | Survey
of all geophysical logs, a well drilling
report and | 4 | | drill cuttings or cores, if cores are required,
within 90 | 5 | | days after drilling ceases; and to file a completion | 6 | | report
with the Department within 30 days after the date | 7 | | of first production
following initial drilling or any | 8 | | reworking, or after the plugging of the
well, if a dry | 9 | | hole. A copy of each completion report submitted to the
| 10 | | Department shall be delivered to the State Geological | 11 | | Survey. The
Department and the State Geological Survey | 12 | | shall keep the reports
confidential, if requested in | 13 | | writing by the permittee, for 2 years after
the date the | 14 | | permit is issued by the Department. This confidentiality
| 15 | | requirement shall not prohibit the use of the report for | 16 | | research purposes,
provided the State Geological Survey | 17 | | does not publish specific data or
identify the well to | 18 | | which the completion report pertains.
| 19 | | (5) To prevent "blowouts", "caving" and "seepage" in | 20 | | the same sense that
conditions indicated by such terms are | 21 | | generally understood in the oil and
gas business.
| 22 | | (6) To prevent fires.
| 23 | | (7) To ascertain and identify the ownership of all oil | 24 | | and gas wells,
producing leases, refineries, tanks, | 25 | | plants, structures, and all storage
and transportation | 26 | | equipment and facilities.
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| 1 | | (8) To regulate the use of any enhanced recovery | 2 | | method in oil pools
and oil fields.
| 3 | | (9) To regulate or prohibit the use of vacuum. The | 4 | | rules shall, at a minimum, ensure that an applicant for a | 5 | | permit for use of a vacuum on a coal mine gas well, prior | 6 | | to the issuance of any such permit: (A) provides a mine map | 7 | | of the abandoned coal mine to which the vacuum is to be | 8 | | applied; (B) demonstrates that notice of the proposed | 9 | | vacuum has been provided to all owners and permittees of | 10 | | the abandoned coal mine; (C) demonstrates that owners and | 11 | | permittees have had an opportunity to object to the use of | 12 | | the proposed vacuum; and (D) demonstrates that the | 13 | | applicant is the owner of a minimum of 51% of the mapped | 14 | | surface area of the abandoned coal mine into which the | 15 | | coal mine gas well is drilled.
| 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 | 26 | | plugging for each
well, indicating the character of |
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| 1 | | material used and the positions and
dimensions of each | 2 | | plug.
| 3 | | (15) To prohibit waste, as defined in this Act.
| 4 | | (16) To require the keeping of such records, the | 5 | | furnishing of such
relevant information and the | 6 | | performance of such tests as the Department
may deem | 7 | | necessary to carry into effect the purposes of this Act.
| 8 | | (17) To regulate the disposal of salt or | 9 | | sulphur-bearing water and any
oil field waste produced in | 10 | | the operation of any oil or gas well.
| 11 | | (18) To prescribe rules, conduct inspections and | 12 | | require compliance with
health and safety standards for | 13 | | the protection of persons working
underground in | 14 | | connection with any oil and gas operations. For the
| 15 | | purposes of this paragraph, oil and gas operations include | 16 | | drilling or
excavation, production operations, plugging or | 17 | | filling in and sealing, or
any other work requiring the | 18 | | presence of workers in shafts or excavations
beneath the | 19 | | surface of the earth. Rules promulgated by the Department | 20 | | may
include minimum qualifications of persons performing | 21 | | tasks affecting the
health and safety of workers | 22 | | underground, minimum standards for the
operation and | 23 | | maintenance of equipment, and safety procedures and
| 24 | | precautions, and shall conform, as nearly as practicable, | 25 | | to corresponding
qualifications, standards and procedures | 26 | | prescribed under the Coal Mining Act.
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| 1 | | (19) To deposit the amount of any forfeited surety | 2 | | bond or other
security in the Plugging and Restoration | 3 | | Fund, a special fund in the State
treasury which is hereby | 4 | | created; to deposit into the Fund any amounts
collected, | 5 | | reimbursed or recovered by the Department under Sections | 6 | | 19.5,
19.6 and 19.7 of this Act; to accept, receive, and
| 7 | | deposit into the Fund any grants, gifts or other funds | 8 | | which may be made
available from public or private sources | 9 | | and all earnings received from
investment of monies in the | 10 | | Fund; and to make expenditures from the Fund
for the | 11 | | purposes of plugging, replugging or repairing any well, | 12 | | and
restoring the site of any well, determined by the | 13 | | Department to be
abandoned or ordered by the Department to | 14 | | be plugged, replugged, repaired
or restored under Sections | 15 | | 8a, 19 or 19.1 of this Act, including
expenses in | 16 | | administering the Fund.
| 17 | | For the purposes of this Act, the State Geological Survey | 18 | | shall
co-operate with the Department in making available its | 19 | | scientific and
technical information on the oil and gas | 20 | | resources of the State, and the
Department shall in turn | 21 | | furnish a copy to the State Geological Survey
of all drilling | 22 | | permits as issued, and such other drilling and operating
data | 23 | | received or secured by the Department which are pertinent to
| 24 | | scientific research on the State's mineral resources.
| 25 | | (Source: P.A. 86-205; 86-364; 86-1177; 87-744 .)".
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