(225 ILCS 725/1) (from Ch. 96 1/2, par. 5401)
Sec. 1.
Unless the context otherwise requires, the words defined in this
Section have the following meanings as used in this Act.
"Person" means any natural person, corporation, association,
partnership, governmental agency or other legal entity, receiver, trustee,
guardian, executor, administrator, fiduciary or representative of any kind.
"Oil" means natural crude oil or petroleum and other hydrocarbons,
regardless of gravity, which are produced at the well in liquid form by
ordinary production methods or by the use of an oil and gas separator and
which are not the result of condensation of gas after it leaves the
underground reservoir.
"Gas" means all natural gas, including casinghead gas, and all other
natural hydrocarbons not defined above as oil.
"Pool" means a natural, underground reservoir containing in whole or in
part, a natural accumulation of oil or gas, or both. Each productive zone
or stratum of a general structure, which is completely separated from any
other zone or stratum in the structure, is deemed a separate "pool" as used
herein.
"Field" means the same general surface area which is underlaid or
appears to be underlaid by one or more pools.
"Permit" means the Department's written authorization allowing a well
to be drilled, deepened, converted, or operated by an owner.
"Permittee" means the owner holding or required to hold the
permit, and
who is also responsible for paying assessments in accordance with Section
19.7 of this Act and, where applicable, executing and filing the bond
associated with the well as principal and who is responsible for compliance
with all statutory and regulatory requirements pertaining to the well.
When the right and responsibility for operating a well is vested in a
receiver or trustee appointed by a court of competent jurisdiction, the
permit shall be issued to the receiver or trustee.
"Orphan Well" means a well for which: (1) no fee assessment under
Section 19.7 of this Act has been paid or no other bond coverage has been
provided for 2 consecutive years; (2) no oil or gas has been produced from
the well or from the lease or unit on which the well is located for 2
consecutive years; and (3) no permittee or owner can be identified or
located by the Department. Orphaned wells include wells that may have been
drilled for purposes other than those for which a permit is required under
this Act if the well is a conduit for oil or salt water intrusions into
fresh water zones or onto the surface which may be caused by oil and gas
operations.
"Owner" means the person who has the right to drill into and produce
from any pool, and to appropriate the production either for the person or for
the person and another, or others, or solely for others, excluding the
mineral owner's royalty if
the right to drill and produce has been granted under an oil and gas lease.
An owner may also be a person granted the right to drill and operate an
injection (Class II UIC) well independent of the right to drill for and produce
oil or gas. When the right to drill, produce, and appropriate production is
held by more than one person, then all persons holding these rights may
designate the owner by a written operating agreement or similar written
agreement. In the absence of such an agreement, and subject to the provisions
of Sections 22.2 and 23.1 through 23.16 of this Act, the owner shall be the
person designated in writing by a majority in interest of the persons holding
these rights.
"Department" means the Department of Natural Resources.
"Director" means the Director of Natural Resources.
"Mining Board" means the State Mining Board in the Department of Natural
Resources, Office of Mines
and Minerals.
"Mineral Owner's Royalty" means the share of oil and gas production
reserved in an oil and gas lease free of all costs by an owner of the
minerals whether denominated royalty or overriding royalty.
"Waste" means "physical waste" as that term is generally understood in
the oil and gas industry, and further includes:
(1) the locating, drilling, and producing of any oil |
| or gas well or wells drilled contrary to the valid order, rules and regulations adopted by the Department under the provisions of this Act;
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(2) permitting the migration of oil, gas, or water
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| from the stratum in which it is found, into other strata, thereby ultimately resulting in the loss of recoverable oil, gas or both;
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(3) the drowning with water of any stratum or part
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| thereof capable of producing oil or gas, except for secondary recovery purposes;
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(4) the unreasonable damage to underground, fresh or
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| mineral water supply, workable coal seams, or other mineral deposits in the operations for the discovery, development, production, or handling of oil and gas;
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(5) the unnecessary or excessive surface loss or
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| destruction of oil or gas resulting from evaporation, seepage, leakage or fire, especially such loss or destruction incident to or resulting from the escape of gas into the open air in excessive or unreasonable amounts, provided, however, it shall not be unlawful for the operator or owner of any well producing both oil and gas to burn such gas in flares when such gas is, under the other provisions of this Act, lawfully produced, and where there is no market at the well for such escaping gas; and where the same is used for the extraction of casinghead gas, it shall not be unlawful for the operator of the plant after the process of extraction is completed, to burn such residue in flares when there is no market at such plant for such residue gas;
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(6) permitting unnecessary fire hazards;
(7) permitting unnecessary damage to or destruction
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| of the surface, soil, animal, fish or aquatic life or property from oil or gas operations.
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"Drilling Unit" means the surface area allocated by an order or
regulation of the Department to the drilling of a single well for the
production of oil or gas from an individual pool.
"Enhanced Recovery Method" means any method used in an effort to
recover hydrocarbons from a pool by injection of fluids, gases or other
substances to maintain, restore or augment natural reservoir energy, or by
introducing immiscible or miscible gases, chemicals, other substances or
heat or by in-situ combustion, or by any combination thereof.
"Well-Site Equipment" means any production-related equipment or materials
specific to the well, including motors, pumps, pump jacks, tanks, tank
batteries, separators, compressors, casing, tubing, and rods.
"Temporary abandonment status" means a well that has received an authorization for temporary abandonment status from the Department.
(Source: P.A. 102-1017, eff. 1-1-23.)
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(225 ILCS 725/1.2) (from Ch. 96 1/2, par. 5403)
Sec. 1.2.
The Director shall appoint an Oil and Gas Board consisting of 7
members, 6 of whom shall be actively engaged in the oil and gas
industry. In
appointing the 6 members representing the oil and gas industry, the
Director shall give due consideration to the
recommendations of organizations and associations representing the various
interests of the oil and gas industry and shall appoint
individuals in such a manner as to assure representation of petroleum
engineering, petroleum geology, oil and gas operations and production, and
the servicing of oil and gas operations and production. The one remaining
member shall be appointed by the Director upon consultation with the Illinois
Farm Bureau and the member must be active in production agriculture. Members
shall be
appointed to 2 year terms commencing on the third Monday in January of odd
numbered years, and may be reappointed for additional terms provided that
no member may be reappointed for a term which would cause his continued
service to exceed 8 years. Any appointment to fill a vacancy shall be for
the unexpired portion of the term. The Director may remove any member who
fails to attend 2 consecutive meetings of the Board without sufficient
excuse or for any other good cause as determined by the Director.
Members of the Oil and Gas Board shall be reimbursed for all reasonable
and necessary expenses incurred in attending Board meetings and may receive
a per diem stipend as determined by the Director from appropriations made
available for that purpose.
The Oil and Gas Board shall meet at least quarterly and at such other
times as the Department or the Board deems necessary to:
(1) Review all federal and State rules and laws |
| affecting the oil and gas industry in Illinois.
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(2) Advise and consult with the Director concerning
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| the adoption of rules pertaining to the conservation of oil and gas.
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(3) Review technical information and operations
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| concerning the improvement of methods, conditions, and equipment for the production of oil and gas.
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(4) Advise and consult with the Director concerning
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| the proper drilling, casing and plugging of oil wells.
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(5) Review the methods and procedures for the
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| issuance of proper permits to drill oil and gas wells.
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(6) Advise and consult with the Director in the
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| administration of the Oil and Gas Well Site Plugging and Restoration Program.
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(7) Advise and consult with the Director on any and
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| all other subjects about which the Department should seek information in relation to the oil and gas industry.
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The Oil and Gas Board, by a record vote of a majority of its
membership, may make specific recommendations to the Department on any of
the matters enumerated above, but the Board shall act solely as an advisory
body to the Department and its recommendations shall have no binding effect
on the Department.
Before proposing any new rule or any changes to existing rules
implementing the provisions of this Act under Section 5.01 of the Illinois
Administrative Procedure Act, and prior to adopting any new form or
changing any existing form required to be completed by a person regulated
under this Act, the Department shall first present the proposed rule or
form to the Oil and Gas Board for its review and recommendations. If the
Oil and Gas Board, by a unanimous record vote of its membership, makes
specific objection to a proposed new rule or proposed change to an existing
rule, the Department shall set forth the objection in its notice of
proposed rulemaking together with the reasons for proposing the rule
notwithstanding the objection of the Oil and Gas Board.
The Department shall annually publish and present to the Oil and Gas
Board a financial report describing the income, expenditures, and
obligations of the Underground Resources Conservation Enforcement Fund and
the Plugging and Restoration Fund. The annual report shall provide
information on the administration of the Oil and Gas Well Site Plugging and
Restoration Program, and shall include the number of orphan wells
identified and the status of closure of these wells.
In situations involving drilling or operations through veins or seams of
mineable coal, the entire authority and discretion of the Department shall
be vested in the Mining Board.
(Source: P.A. 91-81, eff. 7-9-99.)
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(225 ILCS 725/6) (from Ch. 96 1/2, par. 5409)
Sec. 6.
The Department shall have the authority to conduct hearings and
to make such reasonable rules as may be necessary from time to time in the
proper administration and enforcement of this Act, including the adoption
of rules and the holding of hearings for the following purposes:
(1) To require the drilling, casing and plugging of |
| wells to be done in such a manner as to prevent the migration of oil or gas from one stratum to another; to prevent the intrusion of water into oil, gas or coal strata; to prevent the pollution of fresh water supplies by oil, gas or salt water.
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(2) To require the person desiring or proposing to
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| drill, deepen or convert any well for the exploration or production of oil or gas, for injection or water supply in connection with enhanced recovery projects, for the disposal of salt water, brine, or other oil or gas field wastes, or for input, withdrawal, or observation in connection with the storage of natural gas or other liquid or gaseous hydrocarbons before commencing the drilling, deepening or conversion of any such well, to make application to the Department upon such form as the Department may prescribe and to comply with the provisions of this Section. The drilling, deepening or conversion of any well is hereby prohibited until such application is made and the applicant is issued a permit therefor as provided by this Act. Each application for a well permit shall include the following: (A) The exact location of the well, (B) the name and address of the manager, operator, contractor, driller, or any other person responsible for the conduct of drilling operations, (C) the proposed depth of the well, (D) lease ownership information, and (E) such other relevant information as the Department may deem necessary or convenient to effectuate the purposes of this Act.
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Additionally, each applicant who has not been issued
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| a permit that is of record on the effective date of this amendatory Act of 1991, or who has not thereafter made payments of assessments under Section 19.7 of this Act for at least 2 consecutive years preceding the application, shall execute, as principal, and file with the Department a bond, executed by a surety authorized to transact business in this State, in an amount estimated to cover the cost of plugging the well and restoring the well site, but not to exceed $5000, as determined by the Department for each well, or a blanket bond in an amount not to exceed $100,000 for all wells, before drilling, deepening, converting, or operating any well for which a permit is required that has not previously been plugged and abandoned in accordance with the Act. The Department shall release the bond if the well, or all wells in the case of a blanket bond, is not completed but is plugged and the well site restored in accordance with the Department's rules or is completed in accordance with the Department's rules and the permittee pays assessments to the Department in accordance with Section 19.7 of this Act for 2 consecutive years.
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In lieu of a surety bond, the applicant may provide
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| cash, certificates of deposit, or irrevocable letters of credit under such terms and conditions as the Department may provide by rule.
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The sureties on all bonds in effect on the effective
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| date of this amendatory Act of 1991 shall remain liable as sureties in accordance with their undertakings until released by the Department from further liability under the Act. The principal on each bond in effect on the effective date of this amendatory Act of 1991 shall be released from the obligation of maintaining the bond if either the well covered by a surety bond has been plugged and the well site restored in accordance with the Department's rules or the principal of the surety has paid the initial assessment in accordance with Section 19.7 and no well or well site covered by the surety bond is in violation of the Act.
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No permit shall be issued to a corporation
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| incorporated outside of Illinois until the corporation has been authorized to do business in Illinois.
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No permit shall be issued to an individual,
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| partnership, or other unincorporated entity that is not a resident of Illinois until that individual, partnership, or other unincorporated entity has irrevocably consented to be sued in Illinois.
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(3) To require the person assigning, transferring, or
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| selling any well for which a permit is required under this Act to notify the Department of the change of ownership. The notification shall be on a form prescribed by the Department, shall be executed by the current permittee and by the new permittee, or their authorized representatives, and shall be filed with the Department within 30 days after the effective date of the assignment, transfer or sale. Within the 30 day notification period and prior to operating the well, the new permittee shall pay the required well transfer fee and, where applicable, file with the Department the bond required under subsection (2) of this Section.
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(4) To require the filing with the State Geological
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| Survey of all geophysical logs, a well drilling report and drill cuttings or cores, if cores are required, within 90 days after drilling ceases; and to file a completion report with the Department within 30 days after the date of first production following initial drilling or any reworking, or after the plugging of the well, if a dry hole. A copy of each completion report submitted to the Department shall be delivered to the State Geological Survey. The Department and the State Geological Survey shall keep the reports confidential, if requested in writing by the permittee, for 2 years after the date the permit is issued by the Department. This confidentiality requirement shall not prohibit the use of the report for research purposes, provided the State Geological Survey does not publish specific data or identify the well to which the completion report pertains.
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(5) To prevent "blowouts", "caving" and "seepage" in
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| the same sense that conditions indicated by such terms are generally understood in the oil and gas business.
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(6) To prevent fires.
(7) To ascertain and identify the ownership of all
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| oil and gas wells, producing leases, refineries, tanks, plants, structures, and all storage and transportation equipment and facilities.
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(8) To regulate the use of any enhanced recovery
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| method in oil pools and oil fields.
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(9) To regulate or prohibit the use of vacuum.
(10) To regulate the spacing of wells, the issuance
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| of permits, and the establishment of drilling units.
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(11) To regulate directional drilling of oil or gas
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(12) To regulate the plugging of wells.
(13) To require that wells for which no logs or
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| unsatisfactory logs are supplied shall be completely plugged with cement from bottom to top.
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(14) To require a description in such form as is
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| determined by the Department of the method of well plugging for each well, indicating the character of material used and the positions and dimensions of each plug.
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(15) To prohibit waste, as defined in this Act.
(16) To require the keeping of such records, the
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| furnishing of such relevant information and the performance of such tests as the Department may deem necessary to carry into effect the purposes of this Act.
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(17) To regulate the disposal of salt or
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| sulphur-bearing water and any oil field waste produced in the operation of any oil or gas well.
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(18) To prescribe rules, conduct inspections and
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| require compliance with health and safety standards for the protection of persons working underground in connection with any oil and gas operations. For the purposes of this paragraph, oil and gas operations include drilling or excavation, production operations, plugging or filling in and sealing, or any other work requiring the presence of workers in shafts or excavations beneath the surface of the earth. Rules promulgated by the Department may include minimum qualifications of persons performing tasks affecting the health and safety of workers underground, minimum standards for the operation and maintenance of equipment, and safety procedures and precautions, and shall conform, as nearly as practicable, to corresponding qualifications, standards and procedures prescribed under the Coal Mining Act.
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(19) To deposit the amount of any forfeited surety
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| bond or other security in the Plugging and Restoration Fund, a special fund in the State treasury which is hereby created; to deposit into the Fund any amounts collected, reimbursed or recovered by the Department under Sections 19.5, 19.6 and 19.7 of this Act; to accept, receive, and deposit into the Fund any grants, gifts or other funds which may be made available from public or private sources and all earnings received from investment of monies in the Fund; and to make expenditures from the Fund for the purposes of plugging, replugging or repairing any well, and restoring the site of any well, determined by the Department to be abandoned or ordered by the Department to be plugged, replugged, repaired or restored under Sections 8a, 19 or 19.1 of this Act, including expenses in administering the Fund.
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For the purposes of this Act, the State Geological Survey shall
co-operate with the Department in making available its scientific and
technical information on the oil and gas resources of the State, and the
Department shall in turn furnish a copy to the State Geological Survey
of all drilling permits as issued, and such other drilling and operating
data received or secured by the Department which are pertinent to
scientific research on the State's mineral resources.
(Source: P.A. 86-205; 86-364; 86-1177; 87-744.)
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(225 ILCS 725/7.5) Sec. 7.5. Natural gas storage field; natural gas incident; public notice. In addition to the requirements of this Section and any applicable State and federal law, an operator of a natural gas storage field that lies on the footprint of a Sole Source Aquifer designated as such in 2015 by the United States Environmental Protection Agency must immediately notify the following parties located within 5 miles of the boundaries of a natural gas incident: (1) The Illinois Emergency Management Agency and all |
| municipalities and counties.
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(2) All emergency service agencies serving that area.
(3) All owners and operators of public water
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| supplies, community water supplies, and non-community water supplies.
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As soon as practicable, but no later than 3 months after the effective date of this amendatory Act of the 100th General Assembly, the Department shall adopt rules establishing the minimum criteria for an unintentional release of natural gas that would constitute an incident for purposes of this Section. In determining what constitutes an incident, the Department shall consider, but is not limited to, the following criteria:
(1) the amount of natural gas or other substances
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| that were released as a result of the incident;
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(2) the duration of the natural gas incident before
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(3) whether there is an imminent threat of danger to
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| property or public safety.
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The rules shall be at least as stringent as the definition of "incident" as promulgated by the United States Secretary of Transportation under 49 CFR 191.3(1)(iii). The Department shall maintain the rules so that the rules are at least as stringent as the definition of "incident" from time to time in effect under 49 CFR 191.3(1)(iii).
In addition, all private residents, owners and operators of private water systems, or businesses, including agricultural operations, located within one and a half miles of the boundaries of the natural gas incident must be notified as soon as practically possible.
Notices to private residents and businesses must be attempted through verbal communication, whether in person or by telephone. If verbal communication cannot be established, a physical notice must be posted on the premises of the private residence or business in a conspicuous location where it is easily seen by the inhabitants of the private residence or employees at the business. The physical notice shall carry the following text in at least 18-point font: "NATURAL GAS INCIDENT NOTICE - READ IMMEDIATELY". Notices required under this Section shall be provided whether or not the threat of exposure has been eliminated. Both verbal and physical notices shall include the location of the natural gas incident, the date and time that the natural gas incident was discovered, contact information of the operator of the natural gas storage field, and any applicable safety information.
The operator of a natural gas storage field has a continuous and ongoing obligation to further notify the affected parties as necessary if it is determined that the boundaries of the natural gas incident have increased, moved, or shifted. This notice requirement shall be construed as broadly as possible.
(Source: P.A. 100-896, eff. 1-1-19.)
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(225 ILCS 725/8a) (from Ch. 96 1/2, par. 5413)
Sec. 8a.
When an inspector or other authorized employee or agent of the
Department determines that any permittee, or any person engaged in conduct
or activities required to be permitted under this Act, is in violation of
any requirement of this Act or the rules adopted hereunder or any permit
condition,
or has falsified or otherwise misstated any information on or relative to any application, permit, required record, or other document required to be submitted to the Department by this Act or any rules or procedures adopted under this Act,
a notice of violation shall be completed and delivered to the
Director or his designee.
The notice shall contain:
1. the nature of the violation;
2. the action needed to abate the violation, |
| including any appropriate remedial measures to prevent future violation such as replacement, repair, testing and reworking a well and any appurtenances and equipment;
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3. the time within which the violation is to be
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4. any factors known to the person completing the
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| notice of violation in aggravation or mitigation and the existence of any factors indicating that the permit should be conditioned or modified.
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Upon receipt of a notice of violation, the Director shall conduct his
investigation and may affirm, vacate or modify the notice of violation. In
determining whether to take actions in addition to remedial action
necessary to abate a violation, the Director shall consider the person's or
permittee's history of previous violations including violations at other
locations and under other permits, the seriousness of the violation
including any irreparable harm to the environment or damage to property,
the degree of culpability of the person or permittee and the existence of
any additional conditions or factors in aggravation or mitigation including
information provided by the person or permittee.
The Director shall serve the person or permittee with his decision
at the conclusion of the investigation.
Modification of the notice
of violation may include:
1. any different or additional remedial action
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| required to abate the violation and the time within which the violation must be abated;
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2. the assessment of civil penalties not to exceed
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| $5,000 for each and every falsification or misstatement of information and $1,000 a day for each and every act of violation not including a falsification or misstatement of information;
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3. probationary or permanent modification or
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| conditions on the permit which may include special monitoring or reporting requirements; and
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4. revocation of the permit.
The Director's decision shall provide that the person or permittee has
the right to request a hearing.
The Director's decision affirming, vacating or modifying the notice of
violation shall be considered served when mailed by first class mail to the person or permittee at his
last known address.
A person or permittee shall have 30 days from the date of service of the
Director's decision to request a hearing. If the Director's decision
includes the assessment of a civil penalty, the person or permittee charged
with the penalty shall pay the penalty in full or, if the person or
permittee wishes to contest either the amount of the penalty or the fact of
the violation, submit the assessed amount, with the request for a hearing,
to be held in escrow. The filing of a request for a hearing shall not
operate as a stay of the Director's decision. All civil penalties finally
assessed and paid to the Department shall be deposited in the Underground
Resources Conservation Enforcement Fund.
Any person who willfully or knowingly authorized, ordered, or carried out
any violation cited in the Director's decision shall be subject to the same
actions, including civil penalties, which may be imposed on the person or
permittee under this Section.
Upon receipt of a request, the Department shall provide an
opportunity for a formal hearing upon not less than 5 days notice. The
hearing shall be conducted by the Director or anyone designated by him for
such purpose, and shall be located and conducted in accordance with the rules
of the
Department. Failure of the person or permittee to timely request a hearing
or, if a civil penalty has been assessed, to timely tender the assessed civil
penalty,
shall constitute a waiver of all legal rights to contest the Director's
decision, including the amount of any civil penalty. Within 30 days of
the close of the hearing record or expiration of the time to request a
hearing, the Department shall issue a final administrative order.
If, at the expiration of the period of time originally fixed in the
Director's decision or in any subsequent extension of time granted by the
Department, the Department finds that the violation has not been abated, it
may immediately order the cessation of operations
or the portions thereof relevant to the violation. Such cessation order
shall be served in the manner and within the time prescribed in Section
19.1 of this Act.
Pending the holding of any hearing or entry of a final administrative
order under this Section, the person or permittee to whom the cessation
order was issued may file a written request for temporary relief subject to
the same terms and conditions as are provided for in Section 19.1 of this Act.
If the Department finds that a person or permittee has failed to comply
with a final administrative order, the Department may immediately order the
cessation of operations or the portions thereof relevant to the final
administrative order. Such cessation order shall be served in the manner
and within the time prescribed in Section 19.1 of this Act. The
Department shall commence a hearing within 5 days after issuance of a
cessation order and shall conclude such hearing without appreciable delay.
At the hearing the Department shall have the burden of proving that the
person or permittee has not complied with the final administrative order.
A cessation order issued under this paragraph shall continue in effect
until modified, vacated, or terminated by the Department.
The Department shall refuse to issue a permit or permits,
and shall revoke any permit or permits previously issued
if:
(1) the applicant has falsified or otherwise
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| misstated any information on or relative to the permit application;
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(2) the applicant has failed to abate a violation of
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| the Act specified in a final administrative decision of the Department;
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(3) an officer, director, partner, or person with an
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| interest in the applicant exceeding 5% failed to abate a violation of the Act specified in a final administrative decision of the Department; or
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(4) the applicant is an officer, director, partner,
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| or person with an interest exceeding 5% in another entity that has failed to abate a violation of the Act specified in a final administrative decision of the Department.
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(Source: P.A. 99-137, eff. 1-1-16.)
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(225 ILCS 725/8c) (from Ch. 96 1/2, par. 5414.1)
Sec. 8c.
(a) No person shall operate a liquid oil field
waste transportation system without a liquid oil field waste transportation
permit. The liquid oil field waste transporter assumes legal
responsibility for the liquid oil field waste when it first enters the
liquid oil field waste transportation system, until it is disposed of in a
manner authorized and approved by the Department.
(b) No person shall engage, employ or contract with any other person
except a permittee under this Section, to remove liquid oil field
waste from his premises.
(c) Every person who engages, employs or contracts with any other person
to remove liquid oil field waste from his premises shall maintain detailed
records of all such liquid oil field waste removal effectuated on forms
provided by the Department and shall submit such information in such
detail and with such frequency, as the Department may require.
(d) Before engaging in the business of removing liquid oil field
waste from the on-site collection point, a person shall apply for and
obtain a permit from the Department. The application shall be accompanied
by a permit fee of $150 and by a surety bond covering the period and any
renewal thereof for which the permit is issued by a surety company
registered in the State, to indemnify the Department for the abatement of
pollution of waters which result from any improper disposal of liquid oil
field waste by the permittee. The bonds shall be $10,000. The Department
shall be the obligee and the bond shall be for the benefit and purpose to
indemnify the State for the elimination of harmful or nuisance conditions
and for the abatement of any pollution of waters which result from the
improper disposal of liquid oil field waste by the permittee.
In lieu of the surety bond, the applicant may provide cash,
certificates of deposit, or irrevocable letters of credit under such terms
and conditions as the Department may provide by rule.
The surety of any bond posted for the issuance of a liquid oil
field waste transportation permit, upon 30 days notice in writing to the
Department and to the permittee, may cancel any such bond, but such
cancellation shall not affect any rights which shall have accrued on the
bond before the effective date of the cancellation.
(e) If the Department, after such investigation as it deems necessary,
is satisfied that the applicant has the qualifications, experience,
reputation, and equipment to perform the services in a manner not
detrimental to the public interest, in a way that will not cause unlawful
pollution of the waters of the State and meets the bonding requirements of
subsection (d), it shall issue a permit to the applicant.
(f)(1) All trucks or other vehicles used to transport or carry liquid
oil field waste shall carry a permit issued by the Department for
inspection by its representative or any law enforcement agent. The
application for the vehicle permit shall state the make, model and year of
the vehicle as well as the capacity of the tank used in transporting liquid
oil field waste and such other information as the Department requires. Each
application shall be accompanied by a biennial permit fee of $150
for each vehicle sought to be licensed, payable to the State, and if the
Department, after such investigation as it deems necessary, finds the truck
or vehicle and equipment is proper and adequate for the purpose, it shall
issue a permit for the use of the vehicle. The permit is not transferable
from one vehicle to another. The vehicle permit number shall be printed on
a decal furnished by the Department which shall designate the years for
which the permit was issued. This decal shall be affixed to the upper
right hand corner of the inside of the windshield.
(2) All vehicle permits shall be valid for 2 years. Application for
renewal of a permit must be made 30 days prior to the expiration date of
the permit. The fee for renewal shall be the same as for the original permit.
(g)(1) The tank shall be kept tightly closed in transit, to prevent
the escape of contents.
(2) The permittee shall dispose of all liquid oil field waste
in conformance with the provisions of this Section.
(3) The permittee shall not dispose of liquid oil field waste
onto or into the ground except at locations specifically approved
and permitted by the Department. No liquid oil field waste shall
be placed in a location where it could enter any public or
private drain, pond, stream or other body of surface or ground water.
(h) Any person who violates or refuses to comply with any of the provisions
of this Section shall be subject to the provisions of Sections 8a and
19.1 of this Act. In addition, any person who gathers, handles, transports,
or disposes of liquid oil field waste without a liquid oil field waste
transportation permit or utilizes the services of an unpermitted person
shall upon conviction thereof by a court of competent jurisdiction be fined
not less than $2,000 for a violation and costs of prosecution, and in
default of payment of fine and costs, imprisoned for not less than 10 days
nor more than 30 days. When the violation is of a continuing nature, each
day upon which a violation occurs is a separate offense.
(i) For the purposes of this Section:
(1) "Liquid oil field waste" means oil field brines, |
| tank and pit bottom sediments, and drilling and completion fluids, to the extent those wastes are now or hereafter exempt from the provisions of Subtitle C of the federal Resource Conservation and Recovery Act of 1976.
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(2) "Liquid oil field waste transportation system"
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| means all trucks and other motor vehicles used to gather, handle or transport liquid oil field waste from the point of any surface on-site collection to any subsequent off-site storage, utilization or disposal.
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(Source: P.A. 102-1017, eff. 1-1-23.)
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(225 ILCS 725/19.6) (from Ch. 96 1/2, par. 5430.1)
Sec. 19.6.
The Department has the following specific powers and duties
in administering the Oil and Gas Well Site Plugging and Restoration Program,
Landowner Grant Program, and
the Plugging and Restoration Fund:
(a) To adopt rules in conformity with this Act, including rules
establishing priorities for well site plugging, repair, and restoration
consistent with this Act.
(b) To adopt rules necessary to implement
the Oil and Gas Well Site Plugging and Restoration Program and Landowner
Grant Program.
(c) To collect the fees assessed by the Department under this Act
and to make deposits into the Plugging and Restoration Fund.
(d) To deposit the amount of any forfeited surety bond or other security
in the Plugging and Restoration Fund.
(e) To recover well site plugging, repair, and restoration costs from
permittees who fail to reimburse the Plugging and Restoration Fund for
expenses attributable to those permittees and to deposit any amounts
reimbursed or collected into the Plugging and Restoration Fund.
(f) To accept, receive, and deposit into the Plugging and Restoration
Fund any grants, gifts, or other funds that may be made available from
public or private sources.
(g) To make expenditures of amounts appropriated from the Plugging and
Restoration Fund, as it may deem appropriate in its sole discretion, for
the sole purposes of plugging, replugging, or repairing any well,
restoring the site of any well, including but not limited to removal of well
site equipment or
production facilities, and for reimbursement to landowners for plugging a well
and restoring the site of a well, including but not limited to removal of well
site equipment
located on the landowner's property, for which the landowner has no legal
obligation to plug the wells or remove the well site equipment, if the well
is determined by the
Department to be
abandoned or ordered by the Department to be plugged, replugged, repaired,
or restored under Section 8a, 19, 19.1, or 19.8 of this Act including the
costs of administering the Oil and Gas Well Site Plugging and Restoration
Program, the Plugging and Restoration Fund, and the Landowner
Grant
Program.
(h) To sell or assign any lien arising under Section 19.5 of this Act to
the highest and best bidder who may agree to perform the necessary plugging or corrective work as
prescribed by the Department and to deposit the proceeds of such sale in
the Plugging and Restoration Fund or to offset Department plugging costs.
(i) To enter into contracts in accordance with the Illinois Purchasing
Act and to administer the Landowner Grant Program. In contracts or
grants
for the plugging, replugging, repairing or restoration
of a well, well site, or an associated tank battery or production facility,
the consideration paid by the Department may include the sale
and assignment of any lien arising under Section 19.5 of this Act.
(j) To dispose in a commercially reasonable manner, at generally
recognized market value, well site equipment, including an associated tank
battery and production facility equipment, and any amount of hydrocarbons from
the well that is stored on the lease, by either or both of the following
methods after it has been determined to be abandoned by the Department through
inclusion of the well in the Oil and Gas Well Site Plugging and Restoration
Program:
(1) a plugging contract may provide that the person |
| plugging the well or remediating oil field waste pollution, or both, will have clear title, subject to any perfected, prior legal or equitable claim, on all well site equipment and hydrocarbons from the well that are stored on the lease, or hydrocarbons recovered during the plugging operation in exchange for a sum of money deducted as a credit from the contract price; or
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(2) the well site equipment, including but not
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| limited to an associated tank battery and production facility equipment, hydrocarbons from the well that are stored on the lease, and hydrocarbons recovered during the plugging operation may be sold at a public auction or a public or private sale. All well site equipment and hydrocarbons acquired by a person by sale shall be acquired under clear title, subject to any perfected prior legal or equitable claims.
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(Source: P.A. 90-260, eff. 7-30-97.)
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(225 ILCS 725/21.1) (from Ch. 96 1/2, par. 5433)
Sec. 21.1.
(a) The Department is authorized to issue permits for the
drilling of wells and to regulate the spacing of wells for oil and gas
purposes. For the prevention of waste, to protect and enforce the
correlative rights of owners in the pool, and to prevent the drilling of
unnecessary wells, the Department shall, upon application of any
interested person and after notice and hearing, establish a drilling unit
or units for the production of oil and gas or either of them for each pool,
provided that no spacing regulation shall be adopted nor drilling unit
established which requires the allocation of more than 40 acres of surface
area nor less than 10 acres of surface area to an individual well for
production of oil from a pool the top of which lies less than 4,000 feet
beneath the surface (as determined by the original or discovery well in the
pool), provided, however, that the Department may
permit the allocation
of greater acreage to an individual well than that above specified, and
provided further that the spacing of wells in any pool the top of which
lies less than 4,000 feet beneath the surface (as determined by the
original or discovery well in the pool) shall not include the fixing of a
pattern except with respect to the 2 nearest external boundary lines of
each drilling unit, and provided further that no acreage allocation shall
be required for input or injection wells nor for producing wells lying
within a secondary recovery unit as now or hereafter established.
(b) Drilling units shall be of approximately uniform size and shape for
each entire pool, except that where circumstances reasonably require, the
Department may grant exceptions to the size or shape
of any drilling unit
or units. Each order establishing drilling units shall specify the size and
shape of the unit, which shall be such as will result in the efficient and
economical development of the pool as a whole, and subject to the
provisions of subsection (a) hereof the size of no drilling unit shall be
smaller than the maximum area that can be efficiently and economically
drained by one well. Each order establishing drilling units for a pool
shall cover all lands determined or believed to be underlaid by such pool,
and may be modified by the Department from time to time to include
additional lands determined to be underlaid by such pool. Each order
establishing drilling units may be modified by the Department to change
the size thereof, or to permit the drilling of additional wells.
(b-2) Any petition requesting a drilling unit exception shall be accompanied by a non-refundable application fee in the amount of $1,500 for a Modified Drilling Unit or Special Drilling Unit or a non-refundable application fee in the amount of $2,500 for a Pool-Wide Drilling Unit. (c) Each order establishing drilling units shall prohibit the drilling
of more than one well on any drilling unit for the production of oil or gas
from the particular pool with respect to which the drilling unit is
established and subject to the provisions of subsection (a) hereof shall
specify the location for the drilling of such well thereon, in accordance
with a reasonably uniform spacing pattern, with necessary exceptions for
wells drilled or drilling at the time of the application. If the Department
finds, after notice and hearing, that surface conditions would
substantially add to the burden or hazard of drilling such well at the
specified location, or for some other reason it would be inequitable or
unreasonable to require a well to be drilled at the specified location, the
Department may issue an order permitting the well to be drilled at a
location other than that specified in the order establishing drilling
units.
(d) After the date of the notice for a hearing called to establish
drilling units, no additional well shall be commenced for production from
the pool until the order establishing drilling units has been issued,
unless the commencement of the well is authorized by order of the Department.
(e) After an order establishing a drilling unit or units has been issued
by the Department, the commencement of drilling of any
well or wells into
the pool with regard to which such unit was established for the purpose of
producing oil or gas therefrom, at a location other than that authorized by
the order, or by order granting exception to the original spacing order, is
hereby prohibited. The operation of any well drilled in violation of an
order establishing drilling units is hereby prohibited.
(f) Any application or petition by any interested person for a drilling unit as provided in this Section shall be accepted and filed or not accepted and filed by the Department within 10 business days after receipt by the Department. If the petition is accepted and filed, a public hearing on the petition shall be scheduled not less than 30 days, but not more than 60 days, after the acceptance and filing by the Department. If not accepted, and filed, the Department shall provide specific requirements for additional information or documentation needed for the petition to be considered, accepted, and filed. Upon submission of the required information and documentation, the same process and timeframe as provided in this subsection (f) shall continue until the petition has been accepted and filed at which time a hearing shall be scheduled as previously stated in this subsection (f). The petition shall not be accepted and filed if it is determined by the Department that, under any circumstance, legal or regulatory impediments would prevent such acceptance and filing. If the Department does not timely respond to any petition or the submission of additional information or documentation after initial submission, then the petition shall be deemed to be in sufficient form for acceptance and filing and the Department shall proceed with the scheduling of a public hearing. The Department, after public hearing, shall either grant or deny the petition within 20 working days after the conclusion of the hearing. (g) Any petition by an interested person to establish drilling units for a pool as provided in this Section shall be accepted and filed or not accepted and filed by the Department within 10 business days after receipt by the Department. If the petition is accepted and filed, a public hearing on the petition shall be scheduled not less than 30 days, but not more than 60 days, after the acceptance and filing by the Department. If not accepted and filed, the Department shall provide specific requirements for additional information or documentation needed for the petition to be considered, accepted, and filed. Upon submission of the required information and documentation, the same process and timeframe as provided in this subsection (g) shall continue until the petition has been accepted and filed at which time a hearing shall be scheduled as previously stated in this subsection (g). The petition shall not be accepted and filed if it is determined by the Department that, under any circumstance, legal or regulatory impediments would prevent such acceptance and filing. If the Department does not timely respond to any petition or the submission of additional information or documentation after initial submission, then the petition shall be deemed to be in sufficient form for acceptance and filing and the Department shall proceed with the scheduling of a public hearing. The Department, after public hearing, shall either grant or deny the petition within 20 working days after the conclusion of the hearing. (Source: P.A. 97-1136, eff. 1-1-13; 98-926, eff. 9-1-14.)
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(225 ILCS 725/22.2) (from Ch. 96 1/2, par. 5436)
Sec. 22.2. Integration of interests in drilling unit.
(a) As used in
this Section, "owner" means any person
having an interest in the right to drill into and produce oil or gas from
any pool, and to appropriate the production for such owner or others.
(b) Except as provided in subsection (b-5), when 2 or more separately
owned tracts of land are embraced
within an established drilling unit, or when there are separately owned
interests in all or a part of such units, the owners of all oil and gas
interests therein may validly agree to integrate their interests and to
develop their lands as a drilling unit.
Where, however, such owners have
not agreed to integrate their interests and where no action has been
commenced seeking permission to drill pursuant to the provisions of "An Act
in relation to oil and gas interests in land", approved July 1, 1939, and
where at least one of the owners has drilled or has proposed to drill a
well on an established drilling unit the Department on the application of
an owner shall, for the prevention of waste or to avoid the drilling of
unnecessary wells, require such owners to do so and to develop their lands
as a drilling unit. The Department, as a part of the order integrating
interests, may prescribe the terms and conditions upon which the royalty
interests in the unit or units shall, in the absence of voluntary
agreement, be determined to be integrated without the necessity of a
subsequent separate order integrating the royalty interests. Each such
integration order shall be upon terms and conditions that are just and
reasonable.
(b-5) When 2 or more separately owned tracts of land are embraced within
an established drilling unit, or when there are separately owned interests in
all or a part of the unit, and one of the owners is the Department of
Natural Resources, integration of the separate tracts shall be allowed only
if, following a comprehensive environmental impact review performed by the
Department, the Department determines that no substantial or irreversible
detrimental harm will occur on Department lands as a result of any proposed
activities relating to mineral extraction. The environmental impact review
shall include but shall not be
limited to an assessment of the potential destruction or depletion of flora and
fauna, wildlife and its supporting habitat, surface and subsurface water
supplies, aquatic life, and recreational activities located on the land
proposed to be integrated. The Department shall adopt rules necessary to
implement this subsection.
(b-6) All proceeds, bonuses, rentals, royalties, and other inducements and
considerations received from the integration of Department of Natural Resources
lands that have not been purchased by the Department of Natural Resources with
moneys appropriated from the Wildlife and Fish Fund shall be deposited as
follows: at least 50% of the amounts received shall be deposited into the
State Parks Fund and not more than 50% shall be deposited into the Plugging and
Restoration Fund.
(c) All orders requiring such integration shall be made after notice and
hearing and shall be upon terms and conditions that are just and reasonable
and will afford to the owners of all oil and gas interests in each tract in
the drilling unit the opportunity to recover or receive their just and
equitable share of oil or gas from the drilling unit without unreasonable
expense and will prevent or minimize reasonably avoidable drainage from
each integrated drilling unit which is not equalized by counter drainage,
but the Department may not limit the production from any well under this
provision. The request shall be made by petition accompanied by a non-refundable application fee of $1,500. The fee shall be deposited into the Underground Resources Conservation Enforcement Fund. The monies deposited into the Underground Resources Conservation Enforcement Fund under this subsection shall not be subject to administrative charges or chargebacks unless otherwise authorized by this Act.
(d) All operations, including, but not limited to, the commencement,
drilling, or operation of a well upon any portion of a drilling unit shall
be deemed for all purposes the conduct of such operations upon each
separately owned tract in the drilling unit by the several owners thereof.
That portion of the production allocated to a separately owned tract
included in a drilling unit shall, when produced, be deemed, for all
purposes, to have been actually produced from such tract by a well drilled
thereon.
(e) In making the determination of integrating separately owned
interests, and determining to whom the permit should be issued, the
Department may consider:
(1) the reasons requiring the integration of separate |
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(2) the respective interests of the parties in the
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| drilling unit sought to be established, and the pool or pools in the field where the proposed drilling unit is located;
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(3) any parties' prior or present compliance with the
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| Act and the Department's rules; and
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(4) any other information relevant to protect the
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| correlative rights of the parties sought to be affected by the integration order.
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(f) Each such integration order shall authorize the drilling, testing,
completing, equipping, and operation of a well on the drilling unit;
provide who may drill and operate the well; prescribe the time and manner
in which all the owners in the drilling unit may elect to participate
therein; and make provision for the payment by all those who elect to
participate therein of the reasonable actual cost thereof, plus a
reasonable charge for supervision and interest. Should an owner not elect
to voluntarily participate in the risk and costs of the drilling, testing,
completing and operation of a well as determined by the Department, the
integration order shall provide either that:
(1) the nonparticipating owner shall surrender a
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| leasehold interest to the participating owners on a basis and for such terms and consideration the Department finds fair and reasonable; or
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(2) the nonparticipating owner shall share in a
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| proportionate part of the production of oil and gas from the drilling unit determined by the Department, and pay a proportionate part of operation cost after the participating owners have recovered from the production of oil or gas from a well all actual costs in the drilling, testing, completing and operation of the well plus a penalty to be determined by the Department of not less than 100% nor more than 300% of such actual costs.
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(g) For the purpose of this Section, the owner or owners of oil and gas
rights in and under an unleased tract of land shall be regarded as a lessee
to the extent of a 7/8 interest in and to said rights and a lessor to the
extent of the remaining 1/8 interest therein.
(h) In the event of any dispute relative to costs and expenses of
drilling, testing, equipping, completing and operating a well, the
Department shall determine the proper costs after due notice to interested
parties and a hearing thereon. The operator of such unit, in addition to
any other right provided by the integration order of the Department, shall
have a lien on the mineral leasehold estate or rights owned by the other
owners therein and upon their shares of the production from such unit to
the extent that costs incurred in the development and operation upon said
unit are a charge against such interest by order of the Department or by
operation of law. Such liens shall be separable as to each separate owner
within such unit, and shall remain liens until the owner or owners drilling
or operating the well have been paid the amount due under the terms of the
integration order. The Department is specifically authorized to provide
that the owner or owners drilling, or paying for the drilling, or for the
operation of a well for the benefit of all shall be entitled to production
from such well which would be received by the owner or owners for whose
benefit the well was drilled or operated, after payment of royalty, until
the owner or owners drilling or operating the well have been paid the
amount due under the terms of the integration order settling such dispute.
(Source: P.A. 97-1136, eff. 1-1-13.)
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(225 ILCS 725/23.3) (from Ch. 96 1/2, par. 5440)
Sec. 23.3.
The Department, upon the petition of any
interested person,
shall hold a public hearing to consider the need for operating a pool, pools,
or any portion thereof, as a unit to enable, authorize and require operations
which will increase the ultimate recovery of oil and gas, prevent the waste
of oil and gas, and protect correlative rights of the owners of
the oil and gas.
(1) Such petition shall contain the following:
(a) A description of the land and pool, pools, or |
| parts thereof, within the proposed unit area.
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(b) The names of all persons owning or having an
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| interest in the oil and gas rights in the proposed unit area as of the date of filing the petition, as disclosed by the records in the office of the recorder for the county or counties in which the unit area is situated, and their addresses, if known. If the address of any person is unknown, the petition shall so indicate.
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(c) A statement of the type of operations
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| contemplated for the unit area.
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(d) A copy of a proposed plan of unitization signed
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| by persons owning not less than 51% of the working interest underlying the surface within the area proposed to be unitized, which the petitioner considers fair, reasonable and equitable; said plan of unitization shall include (or provide in a separate unit operating agreement, if there be more than one working interest owner, a copy of which shall accompany the petition) the following:
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(i) A plan for allocating to each separately
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| owned tract in the unit area its share of the oil and gas produced from the unit area and not required or consumed in the conduct of the operation of the unit area or unavoidably lost.
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(ii) A provision indicating how unit expense
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| shall be determined and charged to the several owners, including a provision for carrying or otherwise financing any working interest owner who has not executed the proposed plan of unitization and who elects to be carried or otherwise financed, and allowing the unit operator, for the benefit of those working interest owners who have paid the development and operating costs, the recovery of not more than 150% of such person's actual share of development costs of the unit plus operating costs, with interest. Recovery of the money advanced to owners wishing to be financed, for development and operating costs of the unit, together with such other sums provided for herein, shall only be recoverable from such owner's share of unit production from the unit area.
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(iii) A procedure and basis upon which wells,
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| equipment, and other properties of the several working interest owners within the unit area are to be taken over and used for unit operations, including the method of arriving at the compensation therefor.
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(iv) A plan for maintaining effective supervision
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| and conduct of unit operations, in respect to which each working interest owner shall have a vote with a value corresponding to the percentage of unit expense chargeable against the interest of such owner.
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(e) A non-refundable application fee in the amount of
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(2) Concurrently with the filing of the petition with the
Department,
the petitioner may file or cause to be filed, in the office of the recorder
for the county or counties in which the affected lands sought to be unitized
are located, a notice setting forth:
(a) The type of proceedings before the Department and
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| a general statement of the purpose of such proceedings.
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(b) A legal description of the lands, oil and gas
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| lease or leases, and other oil and gas property interests, which may be affected by the proposed unitization.
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(3) Upon the filing of such notice:
(a) All transfers of title to oil and gas rights
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| shall thereafter be subject to the final order of the Department in such proceedings, and
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(b) Such notice shall be constructive notification to
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| every person subsequently acquiring an interest in or a lien on any of the property affected thereby, and every person whose interest or lien is not shown of record at the time of filing such notice shall, for the purpose of this Act, be deemed a subsequent purchaser and shall be bound by the proceedings before the Department to the same extent and in the same manner as if he were a party thereto.
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(Source: P.A. 97-1136, eff. 1-1-13.)
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(225 ILCS 725/23.15) (from Ch. 96 1/2, par. 5452)
Sec. 23.15.
(1) Property rights, leases, contracts and all
other rights and obligations affecting oil and gas rights within the
unit area shall be regarded as amended and modified to the extent necessary to
conform to the provisions and requirements of this Act and to any valid
and applicable plan of unitization or order of the Department made
and adopted pursuant hereto, but otherwise remain in full force
and effect, provided always that plans of unitization, including unit
operating agreements, shall not provide, constitute or be
construed as an exchange or transfer of real property or mineral interests
in the respective separately owned tracts included within the unit.
(2) Nothing contained in this Act shall be construed to require a transfer
to or vesting in the unit of title to the separately owned tracts or
leases within the unit area, other than the right to use and operate the
same to the extent set out in the plan of unitization; nor shall
the unit be regarded as owning the unit production. The unit
production and the proceeds from the sale thereof shall be
owned by the several persons to whom the same is allocated
under the plan of unitization. All property, whether real or
personal, which the unit may in any way acquire, hold or possess, shall not be
acquired, held or possessed by the unit for its own account but shall be so
acquired, held and possessed by the unit for the account of,
and as agent for, the several working interest owners, and shall be the
property of such working interest owners as their interests may appear
under the plan of unitization, subject, however, to the right
of the unit to the possession, management, use or disposal of the
same in the proper conduct of its affairs, and subject to the lien
the unit may have thereon to secure the payment of unit expense.
(3) The amount of the unit production allocated to each
separately owned tract within the unit, and only that amount,
regardless of the well or wells in the unit area from which
it may be produced, and regardless of whether it be more or
less than the amount of production from the well or wells, if any,
or any such separately owned tract, shall for all intents,
uses and purposes be regarded and considered as production
from such separately owned tract, and except as otherwise
authorized in this Act, or in the plan of unitization
approved by the Department, shall be distributed among or
the proceeds thereof paid to the several persons entitled to
share in the production from such separately owned tract
in the same manner, in the same proportions, and upon the same
conditions they would have participated and shared in
the production or proceeds thereof from such separately owned tract
had not said unit been organized, and with the same legal force and effect.
If adequate provisions are made for the receipt thereof, the share
of the unit production allocated to each separately owned tract shall be
delivered in kind to the persons entitled thereto by virtue
of ownership of oil and gas rights therein or by purchase
from such owners subject to the rights of the unit operator to
withhold and sell the same in payment of unit expense pursuant
to the plan of unitization, and subject further to the call of the unit
operator on such portions of the unit production for operating
purposes as may be provided in the plan of unitization.
(4) Operations conducted under and in accordance with the plan
of unitization shall be regarded and considered a fulfillment of and
compliance with all of the provisions, covenants and conditions,
express or implied, of the several oil and gas leases upon lands
included within the unit, or other contracts pertaining to the
development thereof. Wells drilled or operated on any part
of the unit, no matter where located, shall for all purposes be
regarded as wells drilled on each separately owned tract within such unit.
(5) Nothing herein or in any plan of unitization shall be construed as
increasing or decreasing the implied covenants of a lease with
respect to a pool or lands not included within the unit area.
(Source: P.A. 85-1334.)
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