Bill Text: MI HB4202 | 2017-2018 | 99th Legislature | Introduced
Bill Title: Natural resources; gas and oil; oil and gas commission; establish to oversee issuance of permits and promulgation of rules. Amends secs. 61501, 61503, 61510, 61517, 61701, 61730, 61731, 61732, 61733, 62501, 62504 & 62514 of 1994 PA 451 (MCL 324.61501 et seq.) & adds secs. 61502b, 61502d, 61702b & 62503b.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2017-02-15 - Bill Electronically Reproduced 02/14/2017 [HB4202 Detail]
Download: Michigan-2017-HB4202-Introduced.html
HOUSE BILL No. 4202
February 14, 2017, Introduced by Reps. Moss, Lasinski, LaGrand, Ellison, Chang, Lucido, Pagan, Faris, Neeley, Love, Santana, Hertel, Hoadley, Phelps, Elder, Sowerby, Hammoud, Gay-Dagnogo, Rabhi, Sneller, Wittenberg, Yanez, Durhal, Peterson and Robinson and referred to the Committee on Natural Resources.
A bill to amend 1994 PA 451, entitled
"Natural resources and environmental protection act,"
by amending sections 61501, 61503, 61510, 61517, 61701, 61730,
61731, 61732, 61733, 62501, 62504, and 62514 (MCL 324.61501,
324.61503, 324.61510, 324.61517, 324.61701, 324.61730, 324.61731,
324.61732, 324.61733, 324.62501, 324.62504, and 324.62514), section
61501 as amended by 1998 PA 303, sections 61503, 61510, 61701,
61730, 61731, 61732, 61733, 62504, and 62514 as added by 1995 PA
57, section 61517 as amended by 1998 PA 115, and section 62501 as
amended by 1998 PA 467, and by adding sections 61502b, 61502d,
61702b, and 62503b.
THE PEOPLE OF THE STATE OF MICHIGAN ENACT:
Sec. 61501. Unless the context requires a different meaning,
the
words defined in this section have the following meanings when
as used in this part:
(a) "Commission" means the oil and gas commission created in
section 61502b.
(b) (a)
"Department" means the
department of environmental
quality.
(c) (b)
"Field" means an
underground reservoir or reservoirs
containing oil or gas, or both. Field also includes the same
general surface area that is underlaid or appears to be underlaid
by at least 1 pool. Field and pool have the same meaning if only 1
underground reservoir is involved. However, field, unlike pool, may
relate to 2 or more pools.
(d) (c)
"Fund" means the oil and
gas regulatory fund created
in section 61525b.
(e) (d)
"Gas" means a mixture of
hydrocarbons and varying
quantities of nonhydrocarbons in a gaseous state which may or may
not be associated with oil, and includes those liquids resulting
from condensation.
(f) (e)
"Illegal container" means
a receptacle that contains
illegal oil or gas or illegal products.
(g) (f)
"Illegal conveyance"
means a conveyance by or through
which illegal oil or gas or illegal products are being transported.
(h) (g)
"Illegal oil or gas"
means oil or gas that has been
produced by an owner or producer in violation of this part, a rule
promulgated under this part, or an order of the supervisor issued
under this part.
(i) (h)
"Illegal product" means a
product of oil or gas or any
part of a product of oil or gas that was knowingly processed or
derived in whole or in part from illegal oil or gas.
(j) (i)
"Market demand" means the
actual demand for oil or gas
from any particular pool or field for current requirements for
current
consumption and use within or outside the this state,
together with the demand for such amounts as are necessary for
building up or maintaining reasonable storage reserves of oil or
gas or the products of oil or gas.
(k) (j)
"Oil" means natural crude
oil or petroleum and other
hydrocarbons, regardless of gravity, that are produced at the well
in liquid form by ordinary production methods and that are not the
result of condensation of gas after it leaves the underground
reservoir.
(l) (k)
"Owner" means the person
who has the right to drill a
well into a pool, to produce from a pool, and to receive and
distribute the value of the production from the pool for himself or
herself either individually or in combination with others.
(m) (l) "Pool"
means an underground reservoir containing a
common accumulation of oil or gas, or both. Pool includes a
productive zone of a general structure that is completely separated
from any other zone in the structure, or is declared to be a pool
by the supervisor of wells.
(n) (m)
"Producer" means the
operator, whether owner or not,
of a well or wells capable of producing oil or gas or both in
paying quantities.
(o) (n)
"Product" means any
commodity or thing made or
manufactured from oil or gas, and all derivatives of oil or gas,
including refined crude oil, crude tops, topped crude, processed
crude petroleum, residue treated crude oil, residuum, gas oil,
naphtha, distillate, gasoline, casing-head gasoline, natural gas
gasoline, kerosene, benzine, wash oil, waste oil, lubricating oil,
and blends or mixtures of oil or gas or any derivatives of oil or
gas whether enumerated or not.
(p) (o)
"Supervisor" or
"supervisor of wells" means the
department.
(q) (p)
"Tender" means a permit
or certificate of clearance,
approved and issued or registered under the authority of the
supervisor, for the transportation of oil or gas or products.
(r) (q)
"Waste" in addition to
its ordinary meaning includes
all of the following:
(i) "Underground waste", as those words are generally
understood in the oil business, and including all of the following:
(A) The inefficient, excessive, or improper use or dissipation
of the reservoir energy, including gas energy and water drive, of
any pool, and the locating, spacing, drilling, equipping,
operating, or producing of a well or wells in a manner to reduce or
tend to reduce the total quantity of oil or gas ultimately
recoverable from any pool.
(B) Unreasonable damage to underground fresh or mineral
waters, natural brines, or other mineral deposits from operations
for the discovery, development, and production and handling of oil
or gas.
(ii) "Surface waste", as those words are generally understood
in the oil business, and including all of the following:
(A) The unnecessary or excessive surface loss or destruction
without beneficial use, however caused, of gas, oil, or other
product,
but including the loss or destruction, without beneficial
use, resulting from evaporation, seepage, leakage, or fire,
especially a loss or destruction incident to or resulting from the
manner of spacing, equipping, operating, or producing a well or
wells, or incident to or resulting from inefficient storage or
handling of oil.
(B) The unnecessary damage to or destruction of the surface;
soils; animal, fish, or aquatic life; property; or other
environmental values from or by oil and gas operations.
(C) The unnecessary endangerment of public health, safety, or
welfare from or by oil and gas operations.
(D) The drilling of unnecessary wells.
(iii) "Market waste", which includes the production of oil or
gas in any field or pool in excess of the market demand as defined
in this part.
Sec. 61502b. (1) The oil and gas commission is created within
the department.
(2) The commission consists of the following members:
(a) The director of the department.
(b) The following members, appointed by the governor by and
with the advice and consent of the senate, representing diverse
geographic areas of this state:
(i) Two individuals representing commerce and industry in this
state.
(ii) Two individuals representing local units of government in
this state.
(iii) Two health professionals with academic and technical
expertise in the toxicology of air or water contaminants.
(iv) Two individuals with academic and technical expertise in
water resources.
(v) Two individuals with academic and technical expertise in
geology or hydrology.
(vi) Two individuals representing private environmental
protection organizations.
(vii) Three individuals representing the general public.
(3) The governor shall appoint the first members to the
commission within 30 days after the effective date of this section.
(4) Members of the commission appointed under subsection
(2)(b) serve for terms of 3 years or until a successor is
appointed, whichever is later, except that of the members first
appointed 5 shall serve for 1 year and 5 shall serve for 2 years.
(5) If a vacancy occurs in an appointed seat on the
commission, the governor shall make an appointment for the
unexpired term in the same manner as the original appointment.
(6) The governor may remove a member of the commission for
incompetence, dereliction of duty, malfeasance, misfeasance, or
nonfeasance in office, or any other good cause.
(7) The director of the department shall call the first
meeting of the commission not more than 60 days after the effective
date of this section. At the first meeting, the commission shall
elect from among its members a chairperson and other officers as it
considers necessary or appropriate. After the first meeting, the
commission shall meet at least quarterly, or more frequently at the
call of the chairperson or if requested by 3 or more members.
(8) A majority of the members of the commission constitute a
quorum for the transaction of business at a meeting of the
commission. A majority of the members present and serving are
required for official action of the commission.
(9) The commission shall conduct its business at a public
meeting held in compliance with the open meetings act, 1976 PA 267,
MCL 15.261 to 15.275.
(10) A writing prepared, owned, used, in the possession of, or
retained by the commission in the performance of an official
function is subject to the freedom of information act, 1976 PA 442,
MCL 15.231 to 15.246.
(11) The appointed members of the commission serve without
compensation, and the director of the department shall serve
without additional compensation. Members of the commission may be
reimbursed for their actual and necessary expenses incurred in the
performance of their official duties as members of the commission.
Sec. 61502d. (1) Notwithstanding any other provision of this
part, the commission shall exercise supervisory authority over all
of the following under this part:
(a) Issuing, denying, revoking, suspending, or modifying
permits.
(b) Promulgating rules.
(c) Developing department policies.
(2) Notwithstanding any other provision of this part, the
supervisor of wells shall not exercise the powers listed in
subsection (1) without the approval of the commission.
(3) The commission shall receive complaints of alleged
violations of this part, rules promulgated under this part, or
determinations made or permits or orders issued under this part.
(4) In response to a complaint under subsection (3), the
commission may do any of the following:
(a) Require the supervisor of wells to take investigatory or
enforcement action as provided in this part.
(b) Request the attorney general to commence an action in
court as provided in this part.
Sec. 61503. (1) The supervisor of wells shall designate
suitable assistants as are required to implement this part.
(2) The commission shall act as an appeal board regarding the
issuance, denial, suspension, revocation, annulment, withdrawal,
recall, cancellation, or amendment of a permit under this part.
When
If a producer or owner considers an order, action,
inaction,
or procedure as proposed, initiated, or made by the supervisor to
be burdensome, inequitable, unreasonable, or unwarranted, the
producer or owner may appeal to the commission or the court for
relief from the order, action, inaction, or procedure as provided
in this act. The chairperson of the commission shall set a date and
place to hear the appeal, which may be at a regular meeting of the
commission or a special meeting of the commission called for that
purpose.
(3) The supervisor and employees, in addition to their
salaries, shall receive their reasonable expenses while away from
their
homes traveling on business connected with their duties. A
member
of the commission shall not receive compensation for
discharging
duties under this part; however, a member is entitled
to
reasonable expenses while traveling in the performance of a duty
imposed
by this part. Salaries and expenses
authorized in this part
shall be paid out of the state treasury in the same manner as the
salaries and expenses of other officers and employees of the
department are paid.
(4) The department of technology, management, and budget shall
furnish
suitable offices for the use of the supervisor and his or
her
employees.in implementing
this part.
Sec. 61510. (1) If a person fails or refuses to comply with a
subpoena issued by the supervisor under section 61509, or if a
witness refuses to testify as to any matters regarding which he or
she may be lawfully interrogated, any circuit court in this state,
or
any circuit court judge, on
application of the commission or
supervisor, respectively, may issue an attachment for the person
and compel that person to comply with the subpoena and to attend a
hearing before the commission or supervisor and produce documents,
and
testify upon matters, as may be lawfully required. , and the
The court or judge has the power to may punish
that person for
contempt in the same manner as if the person had disobeyed the
subpoena of the court or refused to testify in that court.
(2) A witness summoned by subpoena or by written request of
the commission or supervisor and attending a hearing called by the
commission or supervisor is entitled to the same fees and mileage
as
are or may be provided by law for attending the circuit court in
a civil matter or proceeding. The fees and mileage of witnesses
subpoenaed at the instance of the commission or supervisor shall be
paid out of the general funds of the state treasury upon proper
voucher approved by the commission or supervisor, respectively. The
fees and mileage of witnesses subpoenaed at the instance of any
other interested party shall be paid by that party.
Sec. 61517. (1) Except as provided in subsection (2), the
circuit court of Ingham county has exclusive jurisdiction over all
suits
brought against the department, commission,
the supervisor,
or
any agent or employee of the department commission or
supervisor, by or on account of any matter or thing arising under
this part. A court shall not grant a temporary restraining order or
injunction
shall not be granted in any suit described in this
section except after due notice and for good cause shown.
(2) A suit brought against the supervisor pertaining to an
order of the supervisor requiring the pooling of properties or
parts of properties under section 61513(4) may be brought in the
circuit court for the county in which the oil or gas rights are
located
or in the circuit court of Ingham county. County. A suit
brought
in the circuit court of Ingham county County against the
supervisor pertaining to an order of the supervisor requiring the
pooling of properties or parts of properties under section 61513(4)
may be removed to the circuit court for the county in which the oil
or gas rights are located upon petition by a majority of the owners
of the oil and gas rights who are subject to the order.
Additionally, if all of the owners of the oil and gas interests
being
pooled reside in a county in Michigan this state other than
the county in which the oil and gas rights are located, the suit
may be brought in, or removed to, the circuit court for the county
in which the owners reside. A petition for removal under this
subsection
shall must be filed within 28 days after filing and
service of the complaint in circuit court.
Sec. 61701. As used in this part, unless the context otherwise
requires:
(a) "Commission" means the oil and gas commission created in
section 61502b.
(b) (a)
"Field" means an
underground reservoir or reservoirs
containing oil or gas, or both. Field also includes the same
general surface area that is underlaid or appears to be underlaid
by at least 1 pool. Field and pool have the same meaning if only 1
underground reservoir is involved. However, field, unlike pool, may
relate to 2 or more pools.
(c) (b)
"Lessee" means lessees
under oil and gas leases and
also the owners of unleased lands or mineral rights having the
right to develop them for oil and gas.
(d) (c)
"Oil and gas" means oil
and gas as such in combination
one with the other and also means oil, gas, casinghead gas,
casinghead gasoline, gas distillate, or other hydrocarbons, or any
combination or combinations of these substances, which may be found
in or produced from a common source of supply of oil, gas, oil and
gas, or gas distillate.
(e) (d)
"Pool" or "common
source of supply" means a natural
underground reservoir containing or appearing to contain a common
accumulation of oil and gas. Each productive zone of a general
structure that is completely separate from any other zone in the
structure, or that may for the purposes of this part be declared by
the supervisor to be completely separate, is included in the term
pool or common source of supply. Any reference to a separately
owned tract, although in general terms broad enough to include the
surface and all underlying common sources of supply of oil and gas,
shall
have reference thereto refers
only in relation to the common
source of supply or portion thereof included within the unit area
of a particular unit.
(f) (e)
"Supervisor" or
"supervisor of wells" means the
department. as
provided in part 615.
(g) (f)
"Unit area" means the
formation or formations that are
unitized and surface acreage that is a part of the unitized lands,
as described in the plan for unit operations that is the subject of
the supervisor's order as provided in section 61706.
(h) (g)
"Unit expense" means any
and all cost, expense, or
indebtedness incurred by the unit in the establishment of its
organization or incurred in the conduct and management of its
affairs or the operations conducted by it.
(i) (h)
"Unit production" means
all indigenous oil and gas
produced and saved from a unit area after the effective date of the
order of the supervisor creating the unit, regardless of the well
or tract within the unit area from which that oil and gas is
produced.
(j) (i)
"Waste", in addition to
its ordinary meaning, means
physical waste as that term is generally understood in the oil and
gas industry. Waste includes all of the following:
(i) The inefficient, excessive, or improper use or dissipation
of reservoir energy and the locating, spacing, drilling, equipping,
operating, producing, or plugging of any oil and gas well or wells
in a manner that results or tends to result in reducing the
quantity of oil and gas ultimately recoverable from any pool in the
state under good oil and gas field practice.
(ii) The inefficient production of oil and gas in a manner
that causes or tends to cause unnecessary or excessive surface loss
or destruction of oil and gas.
(iii) The locating, spacing, drilling, equipping, operating,
producing, or plugging of a well or wells in a manner that causes
or tends to cause unnecessary or excessive loss or destruction of
oil and gas.
Sec. 61702b. (1) Notwithstanding any other provision of this
part, the commission shall exercise supervisory authority over all
of the following under this part:
(a) Making findings that plans for unit operations have been
approved.
(b) Promulgating rules and issuing regulations.
(c) Developing department policies.
(2) Notwithstanding any other provision of this part, the
supervisor of wells shall not exercise the powers listed in
subsection (1) without the approval of the commission.
(3) The commission shall receive complaints of alleged
violations of this part, rules promulgated or regulations issued
under this part, or determinations made or orders issued under this
part.
(4) In response to a complaint under subsection (3), the
commission may do any of the following:
(a) Require the supervisor of wells to take investigatory or
enforcement action as provided in this part.
(b) Direct the supervisor of wells to commence an action in
court as provided in this part.
Sec. 61730. The action of the supervisor shall be
is final
with respect to jurisdiction for an appeal before any regulatory
agency of this state, but any person may seek relief before the
commission
or in the courts as provided under the laws of the this
state,
and the taking of an appeal as provided in this part is not
a
prerequisite to seeking relief in the courts. The place of
initiation
of proceedings for review shall be limited to the
circuit
court of the county of Ingham , which shall have has
exclusive jurisdiction of all suits brought against the commission,
the supervisor, or any agent or employee of the commission or
supervisor, on account of any matter arising under this part. A
court shall not grant a temporary restraining order or injunction
shall
not be granted in any such suit
except after due notice and
upon a showing of irreparable harm by the appealing party.
Sec. 61731. The commission or supervisor may compel by
subpoena the attendance of witnesses or the production of books,
papers, records, or articles necessary in any proceeding before the
commission
or supervisor, respectively. A person shall is
not be
excused
from obeying any subpoena for the reason that because the
testimony or evidence, documentary or otherwise, may tend to
incriminate him or her or subject him or her to a penalty or
forfeiture.
Nothing in this part shall be construed as requiring
This part does not require any person to produce anything or to
testify in response to an inquiry not pertinent to some question
lawfully before the commission or the supervisor or any court for
determination within the purposes of this part. Any incriminating
evidence, documentary or otherwise, shall not thereafter be used
against the witness in a prosecution or action for forfeiture. A
person testifying is not exempt from prosecution and punishment for
perjury in so testifying.
Sec. 61732. In case of failure or refusal on the part of any
person to comply with any subpoena issued by the commission or
supervisor, or the refusal of any witness to testify or answer as
to any matters regarding which he or she may be lawfully
interrogated,
any circuit court in this state, or any circuit court
judge
on application of the commission or supervisor, respectively,
may issue an attachment for the person and compel him or her to
comply
with such the subpoena and to attend before the commission
or
supervisor or any court and produce such
documents and give his
or
her testimony upon such matters as may be lawfully required. ,
and
the The court or judge may punish that person for contempt as
in
case of disobedience of a like subpoena issued by or from such
court
or a refusal for disobeying
the subpoena in the same manner
as
if the person had refused to testify before
or produce documents
in that court.
Sec. 61733. Any witness summoned by subpoena or by written
request of the commission or supervisor and attending any hearing
called by the commission or supervisor is entitled to the same fees
and travel expense as provided by law for attending the circuit
court in any civil matter or proceeding. The fees and travel
expense of witnesses subpoenaed at the instance of the commission
or supervisor shall be paid by the persons filing the petition.
Sec. 62501. As used in this part:
(a) "Artificial brine" means mineralized water formed by
dissolving rock salt or other readily soluble rocks or minerals.
(b) "Brine well" means a well drilled or converted for the
purpose of producing natural or artificial brine.
(c) "Commission" means the oil and gas commission created
under section 61502b.
(d) (c)
"Department" means the
department of environmental
quality.
(e) (d)
"Disposal well" means a
well drilled or converted for
subsurface disposal of waste products or processed brine and its
related surface facilities.
(f) (e)
"Exploratory purposes"
means test well drilling for
the specific purpose of discovering or outlining an orebody or
mineable mineral resource.
(g) (f)
"Fund" means the mineral
well regulatory fund created
in section 62509b.
(h) (g)
"Mineral well" means any
well subject to this part.
(i) (h)
"Natural brine" means
naturally occurring mineralized
water other than potable or fresh water.
(j) (i)
"Operator" means the
person, whether owner or not,
supervising or responsible for the drilling, operating, repairing,
abandoning, or plugging of wells subject to this part.
(k) (j)
"Owner" means the person
who has the right to drill,
convert, or operate any well subject to this part.
(l) (k)
"Pollution" means damage
or injury from the loss,
escape, or unapproved disposal of any substance at any well subject
to this part.
(m) (l) "Storage
well" means a well drilled into a subsurface
formation to develop an underground storage cavity for subsequent
use in storage operations. Storage well does not include a storage
well drilled pursuant to part 615.
(n) (m)
"Supervisor of mineral
wells" means the state
geologist, as defined in section 60101.
(o) (n)
"Surface waste" means
damage to, injury to, or
destruction of surface waters, soils, animal, fish, and aquatic
life, or surface property from unnecessary seepage or loss
incidental to or resulting from drilling, equipping, or operating a
well or wells subject to this part.
(p) (o)
"Test well" means a well,
core hole, core test,
observation well, or other well drilled from the surface to
determine the presence of a mineral, mineral resource, ore, or rock
unit, or to obtain geological or geophysical information or other
subsurface data related to mineral exploration and extraction. Test
well does not include holes drilled in the operation of a quarry,
open pit, or underground mine, or any wells not related to mineral
exploration or extraction.
(q) (p)
"Underground storage
cavity" means a cavity formed by
dissolving rock salt or other readily soluble rock or mineral, by
nuclear explosion, or by any other method for the purpose of
storage or disposal.
(r) (q)
"Underground waste" means
damage or injury to potable
water, mineralized water, or other subsurface resources.
(s) (r)
"Waste product" means
waste or by-product resulting
from municipal or industrial operations or waste from any trade,
manufacture, business, or private pursuit that could cause
pollution and for which underground disposal may be feasible or
practical.
Sec. 62503b. (1) Notwithstanding any other provision of this
part, the commission shall exercise supervisory authority over all
of the following under this part:
(a) Issuing, denying, revoking, suspending, or modifying
permits.
(b) Promulgating rules.
(c) Developing policies by the supervisor of mineral wells.
(2) Notwithstanding any other provision of this part, the
director of the department or the supervisor of mineral wells shall
not exercise the powers listed in subsection (1) without the
approval of the commission.
(3) The commission shall receive complaints of alleged
violations of this part, rules promulgated under this part, or any
determination, permit, or order issued under this part.
(4) In response to a complaint under subsection (3), the
commission may do any of the following:
(a) Require the department or the supervisor of mineral wells
to take investigatory or enforcement action as provided in this
part.
(b) Request the attorney general to commence an action in
court as provided in this part.
Sec. 62504. The commission shall act as an appeal board
regarding the issuance, denial, suspension, revocation, annulment,
withdrawal, recall, cancellation, or amendment of a permit under
this part. If an owner or operator considers an order made by the
supervisor of mineral wells to be unduly burdensome, inequitable,
or unwarranted, the owner or operator may appeal to the commission
or
the court for relief as provided in this act, and shall give
with notice to the supervisor of mineral wells. The chairperson of
the commission shall set a date and place to hear the appeal, which
may be at any regular meeting or at any special meeting of the
commission duly called for that purpose. The supervisor of mineral
wells or any person interested in the matter has the right to be
heard
at such the hearing.
Sec. 62514. (1) The commission and supervisor of mineral wells
may summon witnesses, administer oaths, and, when necessary to
carry
out the provisions of this part, require the production of
appropriate records, books, and documents.
(2)
Upon failure or refusal of any person If a person fails or
refuses to comply with a subpoena issued by the commission or
supervisor
of mineral wells, or upon the refusal of any a witness
refuses
to testify as to any matter on which he
or she may be is
interrogated
as being that is pertinent to the hearing or
investigation, any circuit court in this state, on application of
the commission or supervisor of mineral wells, respectively, may
issue
an order compelling the person or
witness may be subject to a
court
order compelling him or her to
comply with such the subpoena,
and to appear before the commission or supervisor of mineral wells
and produce the records, books, and documents for examination and
to testify. The court may punish the person or witness for contempt
or
for refusal to testify.comply
with the subpoena.
Enacting section 1. This amendatory act takes effect 90 days
after the date it is enacted into law.