Bill Text: TX HB3134 | 2011-2012 | 82nd Legislature | Engrossed
NOTE: There are more recent revisions of this legislation. Read Latest Draft
Bill Title: Relating to the plugging of inactive oil and gas wells.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2011-06-17 - Effective immediately [HB3134 Detail]
Download: Texas-2011-HB3134-Engrossed.html
Bill Title: Relating to the plugging of inactive oil and gas wells.
Spectrum: Partisan Bill (Republican 2-0)
Status: (Passed) 2011-06-17 - Effective immediately [HB3134 Detail]
Download: Texas-2011-HB3134-Engrossed.html
82R19156 TRH-D | ||
By: Crownover | H.B. No. 3134 |
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relating to the plugging of inactive oil and gas wells. | ||
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF TEXAS: | ||
SECTION 1. Section 89.022, Natural Resources Code, is | ||
amended by amending Subsection (b) and adding Subsections (d), (e), | ||
(f), and (g) to read as follows: | ||
(b) Notwithstanding Subsection (a), a person who assumes | ||
responsibility for the physical operation and control of an | ||
existing inactive well must satisfy the requirements of Sections | ||
89.023(a)(1) and (3) [ |
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the commission approves the initial form described by Section | ||
89.002(a)(2) and filed with the commission under which the person | ||
assumes responsibility for the well. | ||
(d) Before the commission issues an order refusing to renew | ||
an operator's organization report under Subsection (c), an | ||
authorized commission employee or a person designated by the | ||
commission for that purpose must determine whether the operator has | ||
failed to comply with the requirements of this subchapter. If the | ||
authorized commission employee or designated person determines | ||
that the organization report does not qualify for renewal on that | ||
ground, the authorized commission employee or designated person | ||
must: | ||
(1) notify the operator of the determination; | ||
(2) provide the operator with a written statement of | ||
the reasons the organization report does not qualify for renewal; | ||
and | ||
(3) notify the operator that the operator has 90 days | ||
to comply with the requirements of this subchapter. | ||
(e) The authorized commission employee or designated person | ||
may grant the operator an additional 45 days to comply with the | ||
requirements of this subchapter for good cause shown. | ||
(f) After the expiration of the period specified by | ||
Subsection (d)(3) as extended under Subsection (e), if applicable, | ||
the authorized commission employee or designated person shall | ||
determine whether the organization report qualifies for renewal and | ||
notify the operator of the determination. If the authorized | ||
commission employee or designated person determines that the | ||
organization report does not qualify for renewal because the | ||
operator has continued to fail to comply with the requirements of | ||
this subchapter, the operator, not later than the 30th day after the | ||
date of the determination, may request a hearing regarding the | ||
determination. The operator shall pay the costs associated with a | ||
hearing requested under this subsection. | ||
(g) If the commission determines following the hearing that | ||
the operator has failed to comply with the requirements of this | ||
subchapter or the operator fails to file a timely request for a | ||
hearing, the commission by order shall refuse to renew the | ||
organization report. The organization report remains in effect | ||
until the commission's order becomes final. | ||
SECTION 2. Section 89.023(a), Natural Resources Code, is | ||
amended to read as follows: | ||
(a) The commission may grant an extension of the deadline | ||
for plugging an inactive well if the operator maintains a current | ||
organization report with the commission as required by Section | ||
91.142 and if, on or before the date of renewal of the operator's | ||
organization report as required by that section, the operator files | ||
with the commission an application for an extension that includes: | ||
(1) an affirmation that complies with Section 89.029; | ||
(2) [ |
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request will provide, evidence of a good faith claim to a continuing | ||
right to operate the well; and | ||
(3) [ |
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(A) documentation that since the preceding date | ||
that the operator's organization report was required to be renewed | ||
the operator has plugged, or restored to active operation as | ||
defined by commission rule, a number of inactive wells equal to or | ||
greater than 10 percent of the number of inactive wells operated by | ||
the operator on that date; | ||
(B) an abeyance of plugging report on a form | ||
approved by the commission that: | ||
(i) is in the form of a certification signed | ||
by a person licensed by the Texas Board of Professional Engineers or | ||
the Texas Board of Professional Geoscientists; | ||
(ii) includes: | ||
(a) an affirmation by the licensed | ||
person that the well has: | ||
(1) a reasonable expectation of | ||
economic value in excess of the cost of plugging the well for the | ||
duration of the period covered by the report, based on the cost | ||
calculation for plugging an inactive well; and | ||
(2) a reasonable expectation of | ||
being restored to a beneficial use that will prevent waste of oil or | ||
gas resources that otherwise would not be produced if the well were | ||
plugged; and | ||
(b) appropriate documentation | ||
demonstrating the basis for the affirmation of the well's future | ||
utility; and | ||
(iii) specifies the field and the covered | ||
wells within that field in a format prescribed by the commission; | ||
(C) a statement that the well is part of an | ||
enhanced oil recovery project; | ||
(D) if the operator of the well is not currently | ||
otherwise required by commission rule or order to conduct a fluid | ||
level or hydraulic pressure test of the well, documentation of the | ||
results of a successful fluid level or hydraulic pressure test of | ||
the well conducted in accordance with the commission's rules in | ||
effect at the time the test is conducted; | ||
(E) a supplemental bond, letter of credit, or | ||
cash deposit sufficient for each well specified in the application | ||
that: | ||
(i) complies with the requirements of | ||
Chapter 91; and | ||
(ii) is of an amount at least equal to the | ||
cost calculation for plugging an inactive well for each well | ||
specified in the application; | ||
(F) documentation of the deposit with the | ||
commission each time the operator files an application of an amount | ||
of escrow funds as prescribed by commission rule that equal at least | ||
10 percent of the total cost calculation for plugging an inactive | ||
well for each well specified in the application; or | ||
(G) if the operator is a publicly traded entity: | ||
(i) the following documents: | ||
(a) a copy of the operator's federal | ||
documents filed to comply with Financial Accounting Standards Board | ||
Statement No. 143, Accounting for Asset Retirement Obligations; and | ||
(b) an original, executed Uniform | ||
Commercial Code Form 1 Financing Statement, filed with the | ||
secretary of state, that: | ||
(1) names the operator as the | ||
"debtor" and the Railroad Commission of Texas as the "secured | ||
creditor"; and | ||
(2) specifies the funds covered | ||
by the documents described by Sub-subparagraph (a) in the amount of | ||
the cost calculation for plugging an inactive well for each well | ||
specified in the application; or | ||
(ii) a blanket bond in the amount of the | ||
lesser of: | ||
(a) the cost calculation for plugging | ||
any inactive wells; or | ||
(b) $2 million. | ||
SECTION 3. Section 89.024(a), Natural Resources Code, is | ||
amended to read as follows: | ||
(a) An abeyance of plugging report filed under Section | ||
89.023(a)(3)(B) [ |
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than five years. | ||
SECTION 4. Section 89.025(a), Natural Resources Code, is | ||
amended to read as follows: | ||
(a) For purposes of Section 89.023(a)(3)(C) | ||
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enhanced oil recovery project if the well is located on a unit or | ||
lease or in a field associated with such a project. | ||
SECTION 5. Section 89.026(a), Natural Resources Code, is | ||
amended to read as follows: | ||
(a) Documentation filed under Section 89.023(a)(3)(D) | ||
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is valid for a period of one year from the date of the | ||
test. Documentation filed under that section of the results of a | ||
successful hydraulic pressure test is valid for a period of not more | ||
than five years from the date of the test. | ||
SECTION 6. Section 89.027(a), Natural Resources Code, is | ||
amended to read as follows: | ||
(a) A supplemental bond, letter of credit, or cash deposit | ||
filed under Section 89.023(a)(3)(E) [ |
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addition to any other financial assurance otherwise required of the | ||
operator or for the well. | ||
SECTION 7. Section 89.028(a), Natural Resources Code, is | ||
amended to read as follows: | ||
(a) Escrow funds described by Section 89.023(a)(3)(F) | ||
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an operator files an application for an extension of the deadline | ||
for plugging an inactive well. | ||
SECTION 8. The changes in law made by this Act apply only to | ||
the renewal of an organization report on or after the effective date | ||
of this Act. The renewal of an organization report before the | ||
effective date of this Act is governed by the law as it existed | ||
immediately before the effective date of this Act, and that law is | ||
continued in effect for that purpose. | ||
SECTION 9. This Act takes effect immediately if it receives | ||
a vote of two-thirds of all the members elected to each house, as | ||
provided by Section 39, Article III, Texas Constitution. If this | ||
Act does not receive the vote necessary for immediate effect, this | ||
Act takes effect September 1, 2011. |