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| THE GENERAL ASSEMBLY OF PENNSYLVANIA |
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| SENATE BILL |
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| INTRODUCED BY LEACH, FONTANA, ERICKSON, COSTA, RAFFERTY, GREENLEAF AND FERLO, FEBRUARY 7, 2011 |
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| REFERRED TO ENVIRONMENTAL RESOURCES AND ENERGY, FEBRUARY 7, 2011 |
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| AN ACT |
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1 | Amending the act of December 19, 1984 (P.L.1140, No.223), |
2 | entitled "An act relating to the development of oil and gas |
3 | and coal; imposing duties and powers on the Department of |
4 | Environmental Resources; imposing notification requirements |
5 | to protect landowners; and providing for definitions, for |
6 | various requirements to regulate the drilling and operation |
7 | of oil and gas wells, for gas storage reservoirs, for various |
8 | reporting requirements, including certain requirements |
9 | concerning the operation of coal mines, for well permits, for |
10 | well registration, for distance requirements, for well casing |
11 | requirements, for safety device requirements, for storage |
12 | reservoir obligations, for well bonding requirements, for a |
13 | Well Plugging Restricted Revenue Account to enforce oil and |
14 | gas well plugging requirements, for the creation of an Oil |
15 | and Gas Technical Advisory Board, for oil and gas well |
16 | inspections, for enforcement and for penalties," further |
17 | providing for definitions, for well permits, for well |
18 | location restrictions, for protection of fresh groundwater |
19 | and casing requirements and for protection of water supplies; |
20 | providing for hydraulic fracturing chemicals and surface |
21 | impoundments, for hydraulic fracture fluids monitoring and |
22 | for use of surface impoundments for temporary flowback |
23 | storage; and further providing for bonding, for enforcement |
24 | orders, for penalties, for civil penalties, for well plugging |
25 | funds and for local ordinances. |
26 | The General Assembly of the Commonwealth of Pennsylvania |
27 | hereby enacts as follows: |
28 | Section 1. Section 103 of the act of December 19, 1984 |
29 | (P.L.1140, No.223), known as the Oil and Gas Act, is amended by |
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1 | adding definitions to read: |
2 | Section 103. Definitions. |
3 | The following words and phrases when used in this act shall |
4 | have the meanings given to them in this section unless the |
5 | context clearly indicates otherwise: |
6 | "12-digit Hydrologic Unit Code." A subwatershed, generally |
7 | ranging in size from 10,000 to 40,000 acres, as designated by |
8 | the United States Geological Survey and the United States |
9 | Department of Agriculture Natural Resources Conservation |
10 | Service. |
11 | * * * |
12 | "Body of water." A natural or artificial lake, pond, |
13 | reservoir, swamp, marsh or wetland. |
14 | * * * |
15 | "Erosion and sediment control permit." A permit issued by |
16 | the Department of Environmental Protection and required for |
17 | earth disturbance activities associated with oil and gas |
18 | activities. |
19 | "FEMA." The Federal Emergency Management Agency. |
20 | "Flood." A general but temporary condition of partial or |
21 | complete inundation of normally dry land areas from the overflow |
22 | of streams, rivers or other waters of this Commonwealth. |
23 | "Floodplain." The lands adjoining a river or stream that |
24 | have been or may be expected to be inundated by flood waters in |
25 | a 100-year frequency flood. Unless otherwise specified, the |
26 | boundary of the floodplain is as indicated on maps and flood |
27 | insurance studies provided by the Federal Emergency Management |
28 | Agency or equivalent floodplain maps and studies. In an area |
29 | where no such maps or studies have defined the boundary of the |
30 | 100-year floodplain, it is assumed, absent evidence to the |
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1 | contrary, that the floodplain extends from the stream to 100 |
2 | feet from the top of the streambank. |
3 | "Floodway." The channel of the watercourse and portions of |
4 | the adjoining floodplains which are reasonably required to carry |
5 | and discharge the 100-year frequency flood. Unless otherwise |
6 | specified, the boundary of the floodway is as indicated on maps |
7 | and flood insurance studies provided by the Federal Emergency |
8 | Management Agency. In an area where no Federal Emergency |
9 | Management Agency maps or studies have defined the boundary of |
10 | the 100-year frequency floodway, it is assumed, absent evidence |
11 | to the contrary, that the floodway extends from the stream to 50 |
12 | feet from the top of the streambank. |
13 | * * * |
14 | "Stream." A watercourse. |
15 | "Top of streambank." The first substantial break in slope |
16 | between the edge of the bed of the stream and the surrounding |
17 | terrain. |
18 | "Watercourse." A channel or conveyance of surface water |
19 | having defined bed and banks, whether natural or artificial, |
20 | with perennial or intermittent flow. |
21 | * * * |
22 | "Wild trout stream." A stream classified as supporting |
23 | naturally reproducing trout populations by the Fish and Boat |
24 | Commission. |
25 | "Wilderness trout stream." A surface water designated by the |
26 | Fish and Boat Commission to protect and promote native trout |
27 | fisheries and maintain and enhance wilderness aesthetics and |
28 | ecological requirements necessary for the natural reproduction |
29 | of trout. |
30 | * * * |
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1 | Section 2. Section 201(a), (b), (e)(5), (f) and (g) of the |
2 | act are amended and the section is amended by adding a |
3 | subsection to read: |
4 | Section 201. Well permits. |
5 | (a) No person shall drill a well or alter any existing well, |
6 | except for alterations which satisfy the requirements of |
7 | subsection (j), without having first obtained a well permit |
8 | pursuant to subsections (b), (c), (d) and (e). A copy of the |
9 | permit shall be kept at the well site during preparation or |
10 | construction of the well site or access road, or drilling, |
11 | operation or alteration of the well. However, no person shall be |
12 | required to obtain a permit to redrill a nonproducing well, if: |
13 | (1) the redrilling has been evaluated and approved as |
14 | part of an order from the department authorizing the cleaning |
15 | out and plugging or replugging of a nonproducing well, |
16 | pursuant to section 13(c) of the act of December 18, 1984 |
17 | (P.L.1069, No.214), known as the Coal and Gas Resource |
18 | Coordination Act; and |
19 | (2) the redrilling is incidental to the plugging or |
20 | replugging operation and the well subsequently is plugged |
21 | within 15 days of redrilling. |
22 | (b) The permit application shall be accompanied by a plat |
23 | prepared by a competent engineer or a competent surveyor, on |
24 | forms to be furnished by the department, showing the political |
25 | subdivision and county in which the tract of land upon which the |
26 | well to be drilled, operated or altered, is located, the name of |
27 | the surface landowner of record and lessor, the name of all |
28 | surface landowners or water purveyors whose water supplies are |
29 | within [1,000] 2,500 feet of the proposed well location, the |
30 | name of the owner of record or operator of all known underlying |
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1 | workable coal seams, if any, the acreage in the tract to be |
2 | drilled, the proposed location of the well determined by survey, |
3 | the courses and distances of such location from two or more |
4 | permanent identifiable points or landmarks on said tract |
5 | boundary corners, the proposed angle and direction of such well, |
6 | if the well is to be deviated substantially from a vertical |
7 | course, the number or other identification to be given the well, |
8 | the workable coal seams, if any, underlying the tract of land |
9 | upon which the well is to be drilled, operated or altered, which |
10 | are to be cased off in accordance with section 207, and such |
11 | information needed by the department to administer this act. The |
12 | applicant shall forward, by certified mail, a copy of said plat |
13 | to each political subdivision in which the well is to be |
14 | located, the surface landowner, all surface landowners or water |
15 | purveyors whose water supplies are within [1,000] 2,500 feet of |
16 | the proposed well location, the owner and lessee, if any, of |
17 | such coal seams, and every coal operator required to be |
18 | identified on the well permit application and shall submit proof |
19 | of such notification with the well permit application. With |
20 | respect to surface owners, notification shall be accomplished |
21 | under this section by sending notice to the persons to whom the |
22 | tax notices for said surface property are sent, as indicated in |
23 | the assessment books in the county in which the property is |
24 | located. With respect to surface landowners or water purveyors |
25 | whose water supplies are within [1,000] 2,500 feet of the |
26 | proposed well location, notification shall be made on forms and |
27 | in a manner prescribed by the department sufficient to identify, |
28 | for such persons, the rights afforded them under section 208 and |
29 | the advisability of taking their own predrilling or |
30 | prealteration survey. With respect to the political subdivision |
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1 | in which the well is to be located, notification shall be made |
2 | on forms and in a manner prescribed by the department. If the |
3 | applicant submits to the department written approval of the |
4 | proposed well location by the political subdivision in which the |
5 | well is to be located, the surface landowner and the coal |
6 | operator, lessee or owner, if any, of the coal underlying the |
7 | proposed well location and no objections are raised by the |
8 | department within 15 days of filing or if no such approval has |
9 | been submitted and no objections are made to such proposed well |
10 | location within 15 days from receipt of such notice by the |
11 | political subdivision in which the well is to be located, the |
12 | surface landowner and the coal operator, lessee or owner, if |
13 | any, or by the department, the same shall be filed and become a |
14 | permanent record of such location, subject to inspection at any |
15 | time by any interested person. The application form to operate |
16 | an abandoned or orphan well shall notify the applicant of its |
17 | responsibilities to plug the well upon abandonment. |
18 | * * * |
19 | (e) The department shall issue a permit within 45 days of |
20 | the submission of a permit application unless the department |
21 | denies the permit application for one or more of the five |
22 | reasons set forth below: Provided, however, That the department |
23 | shall have the right to extend such period for 15 days for cause |
24 | shown upon notification to the applicant of the reasons for that |
25 | extension. The department may impose such permit terms and |
26 | conditions as are necessary to assure compliance with this act |
27 | and other laws administered by the department. The department |
28 | shall have the authority to deny a permit to any person for the |
29 | following reasons: |
30 | * * * |
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1 | (5) the applicant, with respect to any other well or |
2 | wells which the applicant operates, is in continuing |
3 | violation of this act or any other applicable statute |
4 | administered by the department. [The right of the department |
5 | to deny a permit under this paragraph shall not be effective |
6 | until a final administrative determination has been made of |
7 | any of these violations and no appeal is pending in which a |
8 | stay has been granted.] |
9 | (f) Upon issuance of a permit, the well operator may proceed |
10 | [with the drilling of] to prepare or construct the well site and |
11 | access roads and drill, operate or alter the well at the exact |
12 | location shown on the plat after providing the department, the |
13 | surface landowner and the local political subdivision in which |
14 | the well is to be located 24 hours' notice of the date that |
15 | drilling will commence. In noncoal areas where more than one |
16 | well is to be drilled as part of the same development project, |
17 | only the first well of the project need be located by survey. |
18 | The remaining wells of the project shall be shown on the plat in |
19 | a manner prescribed by regulation. Prior to drilling each of the |
20 | additional project wells, the well operator shall notify the |
21 | department of his intention and provide reasonable notice of the |
22 | date drilling will commence. Whenever, before or during the |
23 | drilling of any well which is not within the outside boundaries |
24 | of an operating coal mine, the well operator shall encounter |
25 | conditions of such a nature as to render drilling of the bore |
26 | hole or portions thereof more hazardous than usual, or otherwise |
27 | impossible, then the well operator shall have the right, upon |
28 | verbal notice to the department, to immediately plug all or |
29 | portions of the bore hole, if drilling has occurred, and to |
30 | commence a new bore hole not more than 50 feet distant if the |
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1 | location of the new bore hole does not violate section 205 and |
2 | if, for wells subject to the act of July 25, 1961 (P.L.825, |
3 | No.359), known as the Oil and Gas Conservation Law, the new |
4 | location complies with any existing law, regulation or spacing |
5 | order and if the new bore hole is a minimum of 330 feet distant |
6 | from the nearest lease boundary. Within ten days of commencement |
7 | of the new bore hole, the well operator shall file with the |
8 | department a written notice of intention to plug, a well record, |
9 | a completion report, a plugging certificate for the original |
10 | bore hole and an amended plat for the new bore hole. The well |
11 | operator shall forward a copy of the amended plat to the surface |
12 | landowner identified on the well permit application within ten |
13 | days of commencement of the new well bore. |
14 | * * * |
15 | (g) The well permit number and operator's name, address and |
16 | telephone number shall be posted at the drilling site, in a |
17 | conspicuous manner, prior to initiating preparation or |
18 | construction of the well site or access road or commencement of |
19 | drilling, operation or alteration of the well. |
20 | (g.1) The department shall authorize conservation districts |
21 | to conduct a quarterly review of erosion and sediment control |
22 | permit applications issued on an expedited basis for all earth |
23 | disturbance associated with oil and gas activities. Conservation |
24 | districts shall conduct such review and submit a report to the |
25 | department of their findings. The department shall revoke any |
26 | permits related to the oil and gas operations for which an |
27 | expedited erosion and sediment control permit was issued if a |
28 | finding is made in the report that the erosion and sediment |
29 | control permit application contained material omission or |
30 | misstatement. |
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1 | * * * |
2 | Section 3. Section 205 of the act is amended to read: |
3 | Section 205. Well location restrictions. |
4 | (a) Wells may not be drilled within [200] 1000 feet measured |
5 | horizontally from any existing building or existing water well |
6 | without the written consent of the owner thereof. Where the |
7 | distance restriction would deprive the owner of the oil and gas |
8 | rights of the right to produce or share in the oil or gas |
9 | underlying said surface tract, the well operator may be granted |
10 | a variance from said distance restriction upon submission of a |
11 | plan which shall identify the additional measures, facilities or |
12 | practices to be employed during well site construction, drilling |
13 | and operations. The variance, if granted, shall include such |
14 | additional terms and conditions as the department shall require |
15 | to insure the safety and protection of affected persons and |
16 | property. The provisions may include insurance, bonding and |
17 | indemnification, as well as technical requirements. |
18 | (b) No well site may be prepared or well drilled within 100 |
19 | feet measured horizontally from any [stream, spring or body of |
20 | water as identified on the most current 7 ½ minute topographic |
21 | quadrangle map of the United States Geological Survey] |
22 | watercourse, natural or artificial lake, pond or reservoir or |
23 | within [100 feet of any wetlands greater than one acre in size.] |
24 | the boundary of a wetland or the boundary that affects the |
25 | functions and values of a wetland. However, no well may be |
26 | drilled using hydraulic fracturing or horizontal drilling within |
27 | 2,500 feet of a surface water source, and within 1,000 feet of a |
28 | groundwater source, that serves a public water system. The |
29 | distance from the public water supply source, as identified by |
30 | the department, shall be measured as follows: |
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1 | (1) For a surface water intake on a lake or reservoir, |
2 | the distance shall be measured from the boundary of the lake |
3 | or reservoir. |
4 | (2) For a surface water intake on a flowing stream, the |
5 | distance shall be measured from a semicircular radius |
6 | extending upstream of the surface water intake. |
7 | (3) For a groundwater source, the distance shall be |
8 | measured from the wellhead or spring. |
9 | The department may waive such distance restrictions upon |
10 | submission of a plan which shall identify the additional |
11 | measures, facilities or practices to be employed during well |
12 | site construction, drilling and operations. Such waiver, if |
13 | granted, shall impose such permit conditions as are necessary to |
14 | protect the waters of the Commonwealth. |
15 | (c) [The] On making a determination on a well permit, the |
16 | department shall[, on making a determination on a well permit,] |
17 | consider and may deny or condition a well permit based on the |
18 | impact of the proposed well on public resources to include, but |
19 | not be limited to, the following: |
20 | (1) Publicly owned parks, forests, gamelands and |
21 | wildlife areas. |
22 | (2) National or State scenic rivers. |
23 | (3) National natural landmarks. |
24 | (4) Habitats of rare and endangered flora and fauna and |
25 | other critical communities. |
26 | (5) Historical and archaeological sites listed on the |
27 | Federal or State list of historic places. |
28 | (6) Bodies of water and watercourses, including, but not |
29 | limited to, wetlands, wild trout streams and wilderness trout |
30 | streams. |
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1 | (d) Prior to submitting a permit application to the |
2 | department for a well or well site within a wild trout stream, |
3 | High Quality or Exceptional Value watershed as indicated by the |
4 | 12-digit Hydrologic Unit Code, the applicant shall consult with |
5 | the Pennsylvania Fish and Boat Commission. |
6 | Section 4. Section 207 of the act is amended by adding a |
7 | subsection to read: |
8 | Section 207. Protection of fresh groundwater; casing |
9 | requirements. |
10 | * * * |
11 | (e) The department shall inspect each permitted well drilled |
12 | in any formation using hydraulic fracturing or horizontal |
13 | drilling, or both, during each phase of cementing, completing |
14 | and altering. The permittee may not proceed to the next phase of |
15 | the drilling operation until an inspection by the department has |
16 | been performed. The department shall allocate an appropriate |
17 | portion of the well permit fees to fund the inspection and may |
18 | increase the permit fees to meet an increase in the inspection |
19 | costs. |
20 | Section 5. Section 208(c) and (d) of the act are amended and |
21 | the section is amended by adding subsections to read: |
22 | Section 208. Protection of water supplies. |
23 | * * * |
24 | (b.1) Upon a written request by any landowner residing |
25 | within 5,500 feet but farther than 2,500 feet of a proposed gas |
26 | well using hydraulic fracturing, the well permit applicant shall |
27 | conduct a predrilling or prealteration survey, using a facility |
28 | or laboratory certified by the department, and send a copy of |
29 | the survey by certified mail to the requestor. A predrilling or |
30 | prealteration survey shall provide at a minimum the testing |
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1 | results for chemicals or chemical compounds known to be commonly |
2 | used for hydraulic fracturing including, but not limited to, the |
3 | following: all major cations and anions, arsenic, benzene, |
4 | toluene, ethylbenzene, xylenes, manganese, dissolved methane, |
5 | total dissolved solids, chlorides, nutrients and radionuclides. |
6 | (c) Unless rebutted by one of the five defenses established |
7 | in subsection (d), it shall be presumed that a well operator is |
8 | responsible for the pollution of a water supply that is within |
9 | [1,000] 2,500 feet of the oil or gas well, where the pollution |
10 | occurred within [six] 12 months after the completion of drilling |
11 | or alteration of such well. |
12 | (c.1) In case of horizontal drilling, the presumption under |
13 | subsection (c) covers the entire length of the horizontal |
14 | drilling and extends an additional 2,500 feet from the end or |
15 | ends of the horizontal well bore. |
16 | (d) In order to rebut the presumption of liability |
17 | established in subsection (c), the well operator must |
18 | affirmatively prove one of the following five defenses: |
19 | (1) The pollution existed prior to the drilling or |
20 | alteration activity as determined by a predrilling or |
21 | prealteration survey. |
22 | (2) The landowner or water purveyor refused to allow the |
23 | operator access to conduct a predrilling or prealteration |
24 | survey. |
25 | (3) The water supply is not within [1,000] 2,500 feet of |
26 | the well. |
27 | (4) The pollution occurred more than [six] 12 months |
28 | after completion of drilling or alteration activities. |
29 | (5) The pollution occurred as the result of some cause |
30 | other than the drilling or alteration activity. |
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1 | * * * |
2 | Section 6. The act is amended by adding sections to read: |
3 | Section 208.1. Hydraulic fracturing chemicals and surface |
4 | impoundments. |
5 | (a) Notwithstanding a trade secret claim, a well operator |
6 | shall file a report with the department for each well that is |
7 | drilled using the hydraulic fracturing process within 30 days of |
8 | completion of such well. The report shall include, without |
9 | limitation, the complete list of the chemicals and chemical |
10 | compounds used in the fracturing fluid products, specifying the |
11 | volume of fluid utilized in each separate hydraulic fracturing |
12 | operation and the Chemical Abstract Service registry number for |
13 | each constituent chemical. The department shall make the report |
14 | available to the public upon a written request. |
15 | (b) In case of a medical emergency, the operator shall |
16 | provide the concentration of each constituent chemical and the |
17 | formula for each chemical compound to medical emergency |
18 | personnel or local emergency personnel, or both. |
19 | (c) The well operator shall keep a copy of the report at the |
20 | well site and produce it upon request by the department, local |
21 | emergency personnel or surface landowners residing within 5,500 |
22 | feet of the well. |
23 | Section 208.2. Hydraulic fracture fluids monitoring. |
24 | For each individual hydraulic fracturing operation performed |
25 | at a well site, the well operator shall maintain the data |
26 | indicating the total volume of fracturing fluids used for the |
27 | operation as well as the total volume of fluids that returned to |
28 | the surface. The well operator shall compile the data and the |
29 | necessary records to support the data, and submit it to the |
30 | department on a semi-annual basis. |
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1 | Section 208.3. Use of surface impoundments for temporary |
2 | flowback storage. |
3 | Where centralized flowback impoundments are used to |
4 | temporarily store flowback water, the department shall require |
5 | the use of dual liner systems with a leak detection system |
6 | installed between the two liners. The department shall inspect |
7 | such impoundments on a monthly basis. |
8 | Section 7. Section 215(a), (c), (d), (d.1) and (f) of the |
9 | act, amended July 2, 1992 (P.L.365, No.78), are amended to read: |
10 | Section 215. Bonding. |
11 | (a) (1) Except as provided in subsection (d) hereof, upon |
12 | filing an application for a well permit and before continuing |
13 | to operate any oil or gas well, the owner or operator thereof |
14 | shall file with the department a bond for the well and the |
15 | well site on a form to be prescribed and furnished by the |
16 | department. Any such bond filed with an application for a |
17 | well permit shall be payable to the Commonwealth and |
18 | conditioned that the operator shall faithfully perform all of |
19 | the drilling, water supply replacement, restoration and |
20 | plugging requirements of this act. Any such bond filed with |
21 | the department for a well in existence on the effective date |
22 | of this act shall be payable to the Commonwealth and |
23 | conditioned that the operator shall faithfully perform all of |
24 | the water supply replacement, restoration and plugging |
25 | requirements of this act. The amount of the bond required |
26 | shall be in the [amount of $2,500 per well for at least two |
27 | years following the effective date of this act, after which |
28 | time the bond amount] following amounts and may be adjusted |
29 | by the Environmental Quality Board every two years to reflect |
30 | the projected costs to the Commonwealth of performing well |
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1 | plugging[.]: |
2 | (i) For wells less than 2,500 feet in depth: |
3 | (A) $2,500 per well, provided the operator shall |
4 | not be required to provide a bond under this item |
5 | exceeding $35,000 for 25 wells. |
6 | (B) For operating 26 to 50 wells, $35,000 plus |
7 | $2,500 per well, provided the operator may not be |
8 | required to provide a bond under this item exceeding |
9 | $60,000. |
10 | (C) For operating 51 to 100 wells, $60,000 plus |
11 | $2,500 per well, provided the operator may not be |
12 | required to provide a bond under this item exceeding |
13 | $100,000. |
14 | (D) For operating over 100 wells, $100,000 plus |
15 | $2,500 per well, provided the operator may not be |
16 | required to provide a bond under this item exceeding |
17 | $250,000. |
18 | (ii) For wells less between 2,500 feet and 5,000 |
19 | feet in depth: |
20 | (A) $5,000 per well, provided the operator may |
21 | not be required to provide a bond under this item |
22 | exceeding $70,000 for 25 wells. |
23 | (B) For operating 26 to 50 wells, $70,000 plus |
24 | $5,000 per well, provided the operator may not be |
25 | required to provide a bond under this item exceeding |
26 | $120,000. |
27 | (C) For operating 51 to 100 wells, $120,000 plus |
28 | $5,000 per well, provided the operator may not be |
29 | required to provide a bond under this item exceeding |
30 | $200,000. |
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1 | (D) For operating over 100 wells, $200,000 plus |
2 | $5,000 per well, provided the operator may not be |
3 | required to provide a bond under this item exceeding |
4 | $500,000. |
5 | (iii) For wells over 5,000 feet in depth: |
6 | (A) $12,500 per well, provided the operator may |
7 | not be required to provide a bond under this item |
8 | exceeding $220,000 for 25 wells. |
9 | (B) For operating 26 to 50 wells, $220,000 plus |
10 | $12,500 per well, provided the operator may not be |
11 | required to provide a bond under this item exceeding |
12 | $375,000. |
13 | (C) For operating 51 to 100 wells, $375,000 plus |
14 | $12,500 per well, provided the operator may not be |
15 | required to provide a bond under this item exceeding |
16 | $625,000. |
17 | (D) For operating over 100 wells, $625,000 plus |
18 | $12,500 per well. |
19 | [(2) In lieu of individual bonds for each well, an owner |
20 | or operator may file a blanket bond, on a form prepared by |
21 | the department, covering all of its wells in Pennsylvania as |
22 | enumerated on the bond form. A blanket bond shall be in the |
23 | amount of $25,000 for at least two years following the |
24 | effective date of this act, after which time the bond amount |
25 | may be adjusted by the Environmental Quality Board every two |
26 | years to reflect the projected costs to the Commonwealth of |
27 | performing well plugging.] |
28 | (3) Liability under such bond shall continue until the |
29 | well has been properly plugged in accordance with this act |
30 | and for a period of one year after filing of the certificate |
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1 | of plugging with the department. Each bond shall be executed |
2 | by the operator and a corporate surety licensed to do |
3 | business in the Commonwealth and approved by the secretary. |
4 | The operator may elect to deposit cash, certificates of |
5 | deposit or automatically renewable irrevocable letters of |
6 | credit from financial institutions chartered or authorized to |
7 | do business in Pennsylvania and regulated and examined by the |
8 | Commonwealth or a Federal agency which may be terminated at |
9 | the end of a term only upon the financial institution giving |
10 | 90 days prior written notice to the permittee and the |
11 | department or negotiable bonds of the United States |
12 | Government or the Commonwealth, the Pennsylvania Turnpike |
13 | Commission, the General State Authority, the State Public |
14 | School Building Authority or any municipality within the |
15 | Commonwealth, or United States Treasury Bonds issued at a |
16 | discount without a regular schedule of interest payments to |
17 | maturity, otherwise known as Zero Coupon Bonds, having a |
18 | maturity date of not more than ten years after the date of |
19 | purchase and at such maturity date having a value of not less |
20 | than $25,000, with the department in lieu of a corporate |
21 | surety. The cash deposit, certificate of deposit, amount of |
22 | such irrevocable letter of credit or market value of such |
23 | securities shall be equal at least to the sum of the bond. |
24 | The secretary shall, upon receipt of any such deposit of |
25 | cash, letters of credit or negotiable bonds, immediately |
26 | place the same with the State Treasurer, whose duty it shall |
27 | be to receive and hold the same in the name of the |
28 | Commonwealth, in trust, for the purpose for which such |
29 | deposit is made. The State Treasurer shall at all times be |
30 | responsible for the custody and safekeeping of such deposits. |
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1 | The operator making deposit shall be entitled from time to |
2 | time to demand and receive from the State Treasurer, on the |
3 | written order of the secretary, the whole or any portion of |
4 | any collateral so deposited, upon depositing with him, in |
5 | lieu thereof, other collateral of the classes herein |
6 | specified having a market value at least equal to the sum of |
7 | the bond, and also to demand, receive and recover the |
8 | interest and income from said negotiable bonds as the same |
9 | becomes due and payable. Where negotiable bonds, deposited as |
10 | aforesaid, mature or are called, the State Treasurer, at the |
11 | request of the owner thereof, shall convert such negotiable |
12 | bonds into such other negotiable bonds of the classes herein |
13 | specified as may be designated by the owner. Where notice of |
14 | intent to terminate a letter of credit is given, the |
15 | department shall give the operator 30 days' written notice to |
16 | replace the letter of credit with other acceptable bond |
17 | guarantees as provided herein and, if the owner or operator |
18 | fails to replace the letter of credit within the 30-day |
19 | notification period, the department shall draw upon and |
20 | convert such letter of credit into cash and hold it as a |
21 | collateral bond guarantee. |
22 | * * * |
23 | (c) If the well owner or operator fails or refuses to comply |
24 | with the applicable requirements of this act identified in |
25 | subsection (a), the regulations promulgated hereunder or the |
26 | conditions of the permit relating thereto, the department may |
27 | declare the bond forfeited and shall certify the same to the |
28 | Attorney General, who shall proceed to enforce and collect the |
29 | full amount of the bond and, where the owner or operator has |
30 | deposited cash or securities as collateral in lieu of a |
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1 | corporate surety, the department shall declare said collateral |
2 | forfeited and shall direct the State Treasurer to pay the full |
3 | amount of said funds into the Well Plugging Restricted Revenue |
4 | Account or to proceed to sell said security to the extent |
5 | forfeited and pay the proceeds thereof into the Well Plugging |
6 | Restricted Revenue Account. Should any corporate surety or |
7 | financial institution fail to promptly pay, in full, a forfeited |
8 | bond, it shall be disqualified from writing any further bonds |
9 | under the act or any other environmental act administered by the |
10 | department. Any person aggrieved by reason of forfeiting the |
11 | bond or converting collateral, as herein provided, shall have a |
12 | right to appeal to the Environmental Hearing Board in the manner |
13 | provided by law. Upon forfeiture of a [blanket] bond for a |
14 | violation occurring at one or more well sites, the person whose |
15 | bond is forfeited shall submit a replacement bond to cover all |
16 | other wells of which he is owner or operator within ten days of |
17 | said forfeiture. Failure to submit said replacement bond |
18 | constitutes a violation of this section as to each of the wells |
19 | owned or operated by said person. |
20 | (d) [(1) Any operator of not more than 200 wells who cannot |
21 | obtain a bond for a well drilled prior to April 18, 1985, as |
22 | required under subsection (a), due to an inability to |
23 | demonstrate sufficient financial resources may, in lieu of |
24 | the bond: |
25 | (i) Submit to the department a fee in the amount of |
26 | $50 per well, or a blanket fee of $500 for ten to 20 |
27 | wells, or a blanket fee of $1,000 for more than 20 wells, |
28 | which shall be a nonrefundable fee paid each year that |
29 | the operator has not filed a bond with the department. |
30 | All fees collected in lieu of a bond under this |
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1 | subsection shall be used for the purposes authorized by |
2 | this act. The Environmental Quality Board shall have the |
3 | power, by regulation, to increase the amount of the fees |
4 | established under this subsection. |
5 | (ii) (A) Make phased deposits of collateral to |
6 | fully collateralize the bond. Such payment shall be |
7 | based on the number of wells the operator owns or |
8 | operates. The operator shall make an initial deposit |
9 | and shall, thereafter, make annual deposits in |
10 | accordance with the schedule in clause (B). Interest |
11 | accumulated by the collateral shall become a part of |
12 | the bond until such time as the collateral plus |
13 | accumulated interest equals the amount of the |
14 | required bond. The collateral shall be deposited, in |
15 | trust, with the State Treasurer as provided in this |
16 | subsection, or with a bank selected by the department |
17 | which shall act as trustee for the benefit of the |
18 | Commonwealth to guarantee the operator's compliance |
19 | with the drilling, water supply replacement, |
20 | restoration and plugging requirements of this act. |
21 | The operator shall be required to pay all costs of |
22 | the trust. |
23 | (B) An operator of up to ten existing wells who |
24 | does not intend to operate additional wells shall |
25 | deposit $250 per well and shall, thereafter, annually |
26 | deposit $50 per well until the obligations of this |
27 | section are fully met. An operator of 11 to 25 wells |
28 | or an operator of up to ten wells who applies for one |
29 | or more permits for additional wells shall deposit |
30 | $2,000 and shall, thereafter, annually deposit $1,150 |
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1 | plus $150 for each additional well to be permitted |
2 | that year until the obligations of this section are |
3 | fully met. An operator of 26 to 50 wells shall |
4 | deposit $3,000 and shall, thereafter, annually |
5 | deposit $1,300 plus $400 for each additional well to |
6 | be permitted that year until the obligations of this |
7 | section are fully met. An operator of 51 to 100 wells |
8 | shall deposit $4,000 and shall, thereafter, annually |
9 | deposit $1,500 plus $400 for each additional well to |
10 | be permitted that year until the obligations of this |
11 | section are fully met. Operators of 101 to 200 wells |
12 | shall deposit $8,000 and shall, thereafter, annually |
13 | deposit $1,600 plus $1,000 for each additional well |
14 | to be permitted that year until the obligations of |
15 | this section are fully met. Operators of more than |
16 | 200 wells shall fully bond their wells immediately. |
17 | The department shall reduce the amount of phased |
18 | collateral payments or the period of time over which |
19 | phased collateral payments shall be made on behalf of |
20 | owners or operators who, prior to the effective date |
21 | of this amendatory act, have paid a fee in lieu of |
22 | bond pursuant to subparagraph (i), and who, within |
23 | one year of the effective date of this amendatory |
24 | act, choose to enter the phased collateral program |
25 | pursuant to this subparagraph (ii) rather than to |
26 | continue to make payments in lieu of bond. Payments |
27 | made in lieu of bond prior to the effective date of |
28 | this amendatory act shall not be credited in any |
29 | other manner, nor shall the department be required to |
30 | refund such fees at any time. The Environmental |
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1 | Quality Board shall have the power, by regulation, to |
2 | change the annual deposits established under this |
3 | clause if it is found to be necessary to accommodate |
4 | a change in the amount of the bond required under |
5 | this section. |
6 | (2) An operator may continue to pay a fee in lieu of |
7 | bond or make phased deposits of collateral to fully |
8 | collateralize the bond so long as the operator does not miss |
9 | any payments for wells as provided under this subsection and |
10 | so long as the operator remains in compliance with the |
11 | provisions of this act and regulations and permits issued |
12 | thereunder. If an operator has missed any payments for wells |
13 | as provided under this subsection, the operator shall: |
14 | (i) immediately submit the appropriate bond amount |
15 | in full; or |
16 | (ii) cease all operations and plug the wells in |
17 | accordance with section 210. |
18 | (d.1) (1) An individual who cannot obtain a bond to drill |
19 | new wells due to an inability to demonstrate financial |
20 | resources may meet the collateral bond requirements of |
21 | subsection (a) by making phased deposits of collateral to |
22 | fully collateralize the bond. Such individuals shall be |
23 | limited to drilling ten new wells per calendar year. The |
24 | individual shall, for each well to be drilled, deposit $500 |
25 | and shall, thereafter, annually deposit 10% of the remaining |
26 | bond amount for a period of ten years. Interest accumulated |
27 | by the collateral shall become a part of the bond until such |
28 | time as the collateral, plus accumulated interest, equals the |
29 | amount of the required bond. The collateral shall be |
30 | deposited, in trust, with the State Treasurer as provided in |
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1 | subsection (a) or with a bank selected by the department |
2 | which shall act as trustee for the benefit of the |
3 | Commonwealth, to guarantee the individual's compliance with |
4 | the drilling, water supply replacement, restoration and |
5 | plugging requirements of this act. The individual shall be |
6 | required to pay all costs of the trust. |
7 | (2) Individuals may continue to use phased collateral to |
8 | obtain permits so long as they have not missed any payments |
9 | for wells drilled under this provision and so long as they |
10 | remain in compliance with this act and regulations and |
11 | permits issued thereunder. If an individual has missed any |
12 | payments for wells under this subsection, the operator shall: |
13 | (i) immediately submit the appropriate bond amount |
14 | in full; or |
15 | (ii) cease all operations and plug the wells in |
16 | accordance with section 210. |
17 | For the purposes of this subsection an "individual" is defined |
18 | as an applicant who is a natural person doing business under his |
19 | own name.] The Environmental Quality Board may, by regulation, |
20 | develop an alternative financial assurance requirement in which |
21 | an operator may voluntarily choose to participate. An operator |
22 | participating in the alternative financial assurance requirement |
23 | established pursuant to this paragraph may be exempt from a bond |
24 | specified under subsection (a). The alternative financial |
25 | assurance requirement may require an insurance policy, trust |
26 | fund or financial mechanism but must provide for full coverage |
27 | of an operator's well plugging liability as determined by the |
28 | board. The alternative financial assurance mechanism may only be |
29 | utilized to plug wells upon abandonment and may not be forfeited |
30 | or otherwise recovered for violations of the act. |
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1 | * * * |
2 | [(f) Owners or operators who have failed to meet the |
3 | requirements of this section prior to the effective date of this |
4 | amendatory act shall not be required to make payments pursuant |
5 | to this section on a retroactive basis as a condition of |
6 | obtaining a permit under this act nor shall such failure be |
7 | deemed a violation of this act.] |
8 | Section 8. Sections 503(c), 505 and 506 of the act are |
9 | amended to read: |
10 | Section 503. Enforcement orders. |
11 | * * * |
12 | (c) Prior to the [suspension or] revocation of a well permit |
13 | or registration, the department shall serve written notice upon |
14 | the well operator or its agent of the intention of the |
15 | department to [suspend or] revoke and shall state with |
16 | specificity the statutory provisions, appropriate rule or |
17 | regulation or other reason and the factual circumstances which |
18 | surround the violation upon which the suspension or revocation |
19 | is to be based. The well operator shall have 15 days to request |
20 | a conference with the department to give such cause why such |
21 | action should not be taken. Upon receipt of such written notice, |
22 | the department shall hold a conference and shall, within 15 days |
23 | thereafter, make a decision on whether to [suspend or] revoke |
24 | the well permit or registration. The department shall provide |
25 | written notice of its decision to revoke to the well operator or |
26 | its agent, which shall become effective upon receipt thereof and |
27 | the operator shall immediately plug the well. |
28 | * * * |
29 | Section 505. Penalties. |
30 | (a) Any person who violates any provisions of the act is |
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1 | guilty of a summary offense and, upon conviction thereof, shall |
2 | be sentenced to pay a fine of not more than [$300] $10,000 or |
3 | undergo imprisonment of not more than 90 days, or both. Each |
4 | day's continuance of such violation shall be a separate and |
5 | distinct offense. |
6 | (b) Any person who willfully violates any provisions of this |
7 | act or any order of the department issued pursuant to the |
8 | provisions of this act is guilty of a misdemeanor and, upon |
9 | conviction thereof, shall be sentenced to pay a fine of not more |
10 | than [$5,000] $150,000 or undergo imprisonment of not more than |
11 | one year, or both. Each day's continuance of such violation |
12 | shall be a separate distinct offense. |
13 | (c) The department shall have the authority to institute |
14 | prosecutions against any person or municipality under this act. |
15 | Section 506. Civil penalties. |
16 | In addition to proceeding under any other remedy available at |
17 | law or in equity for a violation of a provision of this act or a |
18 | rule or regulation of the department or any order of the |
19 | department, the Environmental Hearing Board, after hearing, may |
20 | assess a civil penalty upon a person for such violation. Such a |
21 | penalty may be assessed whether or not the violation was |
22 | willful. The civil penalty so assessed shall not exceed |
23 | [$25,000, PLUS $1,000] $100,000, plus $10,500 for each day of |
24 | continued violation. In determining the amount of the civil |
25 | penalty, the board shall consider the willfulness of the |
26 | violation, damage or injury to the natural resources of the |
27 | Commonwealth or their uses, endangerment of the safety of |
28 | others, costs of remedying the harm, savings resulting to the |
29 | person in consequence of such violation and other relevant |
30 | factors. It shall be payable to the Commonwealth and shall be |
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1 | collectible in any manner provided at law for the collection of |
2 | debts. If any person liable to pay any such penalty neglects or |
3 | refuses to pay the same after demand, the amount, together with |
4 | interest and any costs that may accrue, shall be a lien in favor |
5 | of the Commonwealth upon the property, both real and personal, |
6 | of such person but only after same has been entered and docketed |
7 | of record by the prothonotary of the county where such is |
8 | situated. The board may, at any time, transmit to the |
9 | prothonotaries of the respective counties certified copies of |
10 | all such liens, and it shall be the duty of each prothonotary to |
11 | enter and docket the same of record in his office and to index |
12 | the same as judgments are indexed, without requiring the payment |
13 | of costs as a condition precedent to the entry thereof. |
14 | Section 9. Sections 601(a) and 602 of the act, amended July |
15 | 2, 1992 (P.L.365, No.78), are amended to read: |
16 | Section 601. Well plugging funds. |
17 | (a) All fines, civil penalties, permit and registration fees |
18 | collected under this act are hereby appropriated to the |
19 | Department of Environmental [Resources] Protection to carry out |
20 | the purposes of this act. |
21 | * * * |
22 | Section 602. Local ordinances. |
23 | Except with respect to ordinances adopted pursuant to the act |
24 | of July 31, 1968 (P.L.805, No.247), known as the Pennsylvania |
25 | Municipalities Planning Code, [and], the act of October 4, 1978 |
26 | (P.L.851, No.166), known as the Flood Plain Management Act, and |
27 | the act of March 31, 1927 (P.L.98, No.69), known as the Second |
28 | Class City Zoning Law, all local ordinances and enactments |
29 | purporting to regulate oil and gas well operations regulated by |
30 | this act are hereby preempted and superseded to the extent the |
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1 | ordinances and enactments regulate the method of oil and gas |
2 | well operations. No ordinances or enactments adopted pursuant to |
3 | the aforementioned acts shall contain provisions which impose |
4 | conditions, requirements or limitations on the [same features] |
5 | method of oil and gas well operations regulated by this act or |
6 | that accomplish the same purposes as set forth in this act. [The |
7 | Commonwealth, by this enactment, hereby preempts and supersedes |
8 | the regulation of oil and gas wells as herein defined.] Nothing |
9 | in this act shall affect the traditional power of local |
10 | government to regulate zoning and land development of oil and |
11 | gas activities as well as other aspects, such as the time and |
12 | the place of operations to protect the health, safety and |
13 | welfare of the general public through local ordinances and |
14 | enactments. |
15 | Section 10. This act shall take effect in 60 days. |
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