Bill Text: WV SB827 | 2020 | Regular Session | Introduced

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Bill Title: Relating to protection and repair of damage caused by oil and gas industry to state roads

Spectrum: Moderate Partisan Bill (Democrat 6-1)

Status: (Introduced - Dead) 2020-02-20 - To Judiciary [SB827 Detail]

Download: West_Virginia-2020-SB827-Introduced.html

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WEST virginia legislature

2020 regular session

Introduced

Senate Bill 827

By Senator Jeffries

[Introduced February 17, 2020; referred
to the Committee on Transportation and Infrastructure; and then to the Committee on the Judiciary]

A BILL to amend the Code of West Virginia, 1931, as amended, by adding thereto a new article, designated §17-30-1, §17-30-2, §17-30-3, and §17-30-4; and to amend and reenact §22-1-6 of said code, all relating to the protection and repair of damage caused by the oil and gas industry to our state roads; stating legislative findings and intent; defining terms; prohibiting issuance of any permit under chapter 22 of this code until Division of Highways agreement and permit issued; requiring a road use agreement and permit; specifying terms and conditions for road use agreement and permit; requiring surety; specifying minimum bond amounts; authorizing commissioner to increase bond requirements; and authorizing the oil and gas operation to choose form of security provided.

Be it enacted by the Legislature of West Virginia:

CHAPTER 17. ROADS AND HIGHWAYS.

ARTICLE 30. oil and gas industry road use.

§17-30-1.  Legislative findings and intent.

(a) The Legislature finds that:

(1) The advent and advancement of new and existing technologies and drilling practices have created the opportunity for the efficient development of natural gas and oil contained in underground shales and other geologic formations;

(2) These practices have resulted in a new type and scale of development and subsequent transportation and storage of natural gas and oil that involve repeated travel of materials and equipment which damages our roads and highways;

(3) The commissioner has broad authority to condition the issuance of encroachment permits when, in the commissioner’s discretion, it is necessary to protect the safety of the traveling public, prevent damage to public roads and highways when possible, and assure repair when such damage occurs;

(4) Allowing the responsible development of our state’s natural gas and oil resources and its necessary transport and storage will enhance the economy of our state and the quality of life for our citizens while assuring the long-term protection of the state road system;

(5) Allowing the oil and gas industry to damage our state’s roads and highways without properly making any upgrades that may be necessary to support industry traffic or performing necessary repairs and maintenance would be irresponsible; and

(6) The industry and the Division of Highways have attempted to address this issue with limited success, but too many roads and highways remain in an unacceptable state of disrepair.

(b) The Legislature declares that the implementation of a responsible regulatory scheme to address the road damage caused by natural gas development, transportation, and storage is in the public interest and should be done in a manner that protects our citizens, our industry and our roads and highways for current and future generations.

(c) The Legislature declares that the urgent need for action to address our damaged roads requires imposition of the Oil and Gas Road Use Permit and Road Maintenance system to assure that the Division of Highways is carrying out its statutory duties and that all of the members of the oil and gas industry are and continue to be good corporate citizens and stewards of our public lands.

§17-30-2.  Definitions.

“Anticipated Damage” means the added potential stress placed on a highway or structure due to the road degradation created during pipeline installation, drilling operations, compressor station installation, well fracturing operations, and injection or storage well operations due to the increased temporary use by the high volume of construction vehicles.

“Commissioner” means the Commissioner of the Division of Highways.

“Division” means the West Virginia Division of Highways.

“Gas” means all natural gas and all other fluid hydrocarbons not defined as oil in chapter 22 of this code;

“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 and which are not the result of condensation of gas after it leaves the underground reservoirs;

“Oil and gas industry operation” or “operation” means a vertical or horizontal drilling operation, transmission or production pipeline facility, compressor station operation, storage or injection well or well abandonments that produce, or may produce, transport oil or gas that is permitted or regulated under chapter 22 of this code.

“Pipeline facility” means, without limitation, new and existing pipe, pipe rights-of-way and any equipment, facility, or building used in the transportation of oil or natural gas or the treatment of oil or natural gas during the course of transportation: Provided, That the term “pipeline facility” shall not include pipelines of four inches or less, measuring the inside diameter, that service a farm, commercial structure or residence.

§17-30-3.  Oil and gas industry road use permit and road maintenance agreement; requirements for environmental permits.

(a) The West Virginia Department of Environmental Protection may not issue any permit authorized or required by chapter 22 of this code to any oil and gas industry operation until the oil and gas operation has first executed a road use agreement and received a permit from the Division of Highways.

(b) An oil and gas operation seeking to operate in West Virginia shall enter into a road use agreement with the division and submit a permit application on the form prescribed by the division.  The division shall make available a permit form and instructions for its completion available to the public on its website.

(c) A road use agreement shall, at a minimum, include:

(1) The exact location of the project;

(2) The proposed routes to be used;

(3) Description of the road conditions and any bridges on the proposed routes;

(4) Specific responsibilities of the oil and gas operation, any contractors, and the division;

(5) A good faith estimate of the anticipated depreciation caused by the oil and gas operation: Provided, That a single road use agreement per company may be executed when there are several proposed projects in the same area;

(6) A good faith estimate of the anticipated depreciation caused by any other industrial or commercial vehicles using the same or substantially the same routes;

(7) Any required roadway improvements designated by the division to be made before commencement and after completion of the project and who is responsible therefore;

(8) A provision for the oil and gas operation to perform all specified maintenance on the roadway during the course of the operation;

(9) Any terms or conditions necessary to assure continued and adequate ingress, egress, and safety along the proposed routes for the traveling public;

(10) Assurance that the division’s applicable rules, policies, guidelines and standards will be followed by the oil and gas operation;

(11) A provision that the oil and gas operation is responsible for the conduct of any contractors it may use and ensuring that the contractor adheres to the terms and conditions of the roadway use agreement and the permit; and

(12) A provision for sufficient surety, bonding, insurance, or a combination thereof to assure the terms and conditions of the agreement and permit are followed and that the interests of the traveling public using the proposed routes and the division are protected.

§17-30-4. Surety required.

(a) Every oil and gas industry operation, except pipeline operations, shall provide sufficient surety to repair all anticipated damage to the state’s roads and highways due to the operation.  At a minimum the operation shall provide a bond equal to $135,000 per paved mile, $46,000 per tar and chipped mile, and $36,000 per graveled mile: Provided, That bonds for oil and gas wells with less than 5,000 barrels of liquids or well abandonments shall be a minimum of $50,000 per well.

(b) Pipeline operations shall provide sufficient surety to repair all anticipated damage to the state’s roads and highways due to the operation.  At a minimum, the operation shall provide a bond equal to $200,000 per paved mile, $60,000 per tar and chipped mile, and $50,000 per graveled mile

(c) The commissioner may increase a bond amount if, in his or her discretion, the damage to the affected road or roads warrants an increase.

(d) The commissioner may authorize a bond sufficient to cover multiple roads in a district or statewide if, in his or her discretion, the needs of the state and the operation will be adequately protected.

(e) If multiple roads are included in a bond, roads may be added or removed from the bond as they are initiated or completed.  Roads may be removed from the bond only after the division has determined that the road has been repaired to the division’s specifications and standards.

(f) The forms of the security provided pursuant to this section may include, at the option of the operation, surety bonding, collateral bonding (including cash and securities), letters of credit, establishment of an escrow account, self-bonding, or a combination of these methods.

(g) The division is authorized to pursue an action for damages attributable to the operation’s activities that exceed the bonded amount. 

CHAPTER 22. ENVIRONMENTAL RESOURCES.

ARTICLE 1. DEPARTMENT OF ENVIRONMENTAL PROTECTION.

§22-1-6. Secretary of the Department of Environmental Protection.

(a) The secretary is the chief executive officer of the department. Subject to §22-1-7 of this code and other provisions of law, the secretary shall organize the department into such offices, sections, agencies and other units of activity as may be found by the secretary to be desirable for the orderly, efficient and economical administration of the department and for the accomplishment of its objects and purposes. The secretary may appoint a deputy secretary, chief of staff, assistants, hearing officers, clerks, stenographers, and other officers, technical personnel, and employees needed for the operation of the department and may prescribe their powers and duties and fix their compensation within amounts appropriated.

(b) The secretary has the power to and may designate supervisory officers or other officers or employees of the department to substitute for him or her on any board or commission established under this code or to sit in his or her place in any hearings, appeals, meetings, or other activities with such substitute having the same powers, duties, authority, and responsibility as the secretary. The secretary has the power to delegate, as he or she considers appropriate, to supervisory officers or other officers or employees of the department his or her powers, duties, authority, and responsibility relating to issuing permits, hiring and training inspectors and other employees of the department, conducting hearings and appeals, and such other duties and functions set forth in this chapter or elsewhere in this code: Provided, That the secretary may not delegate or authorize issuance of a permit to any oil and gas industry operation, vertical or horizontal drilling operation, transmission or production pipeline facility, compressor station operation, storage or injection well, or well abandonments that are permitted or regulated under chapter 22 of this code unless such operation has a valid road use agreement and permit from the Division of Highways required by §17-30-1 et seq. of this code.

(c) The secretary has responsibility for the conduct of the intergovernmental relations of the department, including assuring:

(1) That the department carries out its functions in a manner which supplements and complements the environmental policies, programs, and procedures of the federal government, other state governments, and other instrumentalities of this state; and

(2) That appropriate officers and employees of the department consult with individuals responsible for making policy relating to environmental issues in the federal government, other state governments, and other instrumentalities of this state concerning differences over environmental policies, programs, and procedures and concerning the impact of statutory law and rules upon the environment of this state.

(d) In addition to other powers, duties, and responsibilities granted and assigned to the secretary by this chapter, the secretary is authorized and empowered to:

(1) Sign and execute in the name of the state by the Department of Environmental Protection any contract or agreement with the federal government or its departments or agencies, subdivisions of the state, corporations, associations, partnerships, or individuals: Provided, That the powers granted to the secretary to enter into agreements or contracts and to make expenditures and obligations of public funds under this subdivision may not exceed or be interpreted as authority to exceed the powers granted by the Legislature to the various commissioners, directors, or board members of the various departments, agencies, or boards that comprise and are incorporated into each secretary’s department pursuant to the provisions of chapter five-f of this code;

(2) Conduct research in improved environmental protection methods and disseminate information to the citizens of this state;

(3) Enter private lands to make surveys and inspections for environmental protection purposes; to investigate for violations of statutes or rules which the department is charged with enforcing; to serve and execute warrants and processes; to make arrests; issue orders, which for the purposes of this chapter include consent agreements; and to otherwise enforce the statutes or rules which the department is charged with enforcing;

(4) Require any applicant or holder of a permit to install, establish, modify, operate, or close a solid waste facility to furnish the fingerprints of the applicant or permittee; any officer, director or manager of the applicant or permittee; any person owning a five percent or more interest, beneficial or otherwise, in the applicant’s or permittee’s business; or any other person conducting or managing the affairs of the applicant or permittee or of the proposed licensed premises, in whole or in part. These fingerprints may be used to obtain and review any police record for the purposes set that may be relevant pursuant to §22-15-5 of this code, and to use the fingerprints furnished to conduct a criminal records check through the Criminal Identification Bureau of the West Virginia State Police and a national criminal history check through the Federal Bureau of Investigation. The results of the checks shall be provided to the secretary.

(5) Acquire for the state in the name of the Department of Environmental Protection by purchase, condemnation, lease, or agreement, or accept or reject for the state, in the name of the Department of Environmental Protection, gifts, donations, contributions, bequests, or devises of money, security, or property, both real and personal, and any interest in property;

(6) Provide for workshops, training programs, and other educational programs, apart from or in cooperation with other governmental agencies, necessary to ensure adequate standards of public service in the department. The secretary may provide for technical training and specialized instruction of any employee. Approved educational programs, training, and instruction time may be compensated for as a part of regular employment. The secretary is authorized to pay out of federal or state funds, or both, as such funds are available, fees and expenses incidental to the educational programs, training, and instruction. Eligibility for participation by employees shall be in accordance with guidelines established by the secretary;

(7) Issue certifications required under 33 U.S.C. §1341 of the federal Clean Water Act and enter into agreements in accordance with the provisions of section seven-a, article eleven of this chapter. Prior to issuing any certification the secretary shall solicit from the Division of Natural Resources reports and comments concerning the possible certification. The Division of Natural Resources shall direct the reports and comments to the secretary for consideration; and

(8) Notwithstanding any provisions of this code to the contrary, employ in-house counsel to perform all legal services for the secretary and the department, including, but not limited to, representing the secretary, any chief, the department, or any office thereof in any administrative proceeding or in any proceeding in any state or federal court. Additionally, the secretary may call upon the Attorney General for legal assistance and representation as provided by law.

(e) The secretary shall be appointed by the Governor, by and with the advice and consent of the Senate, and serves at the will and pleasure of the Governor.

(f) At the time of his or her initial appointment, the secretary must be at least 30 years old and shall be selected with special reference and consideration given to his or her administrative experience and ability, to his or her demonstrated interest in the effective and responsible regulation of the energy industry and the conservation and wise use of natural resources. The secretary must have at least a bachelor’s degree in a related field and at least three years of experience in a position of responsible charge in at least one discipline relating to the duties and responsibilities for which the secretary will be responsible upon assumption of the office. The secretary may not be a candidate for or hold any other public office, may not be a member of any political party committee and shall immediately forfeit and vacate his or her office as secretary in the event he or she becomes a candidate for or accepts appointment to any other public office or political party committee.

(g) The secretary shall receive an annual salary as provided in §6-7-2a of this code and is allowed and shall be paid necessary expenses incident to the performance of his or her official duties. Prior to the assumption of the duties of his or her office, the secretary shall take and subscribe to the oath required of public officers prescribed by section five, article IV of the Constitution of West Virginia and shall execute a bond, with surety approved by the Governor, in the penal sum of $10,000, which executed oath and bond will be filed in the Office of the Secretary of State. Premiums on the bond shall be paid from the department funds.

 

 

NOTE: The purpose of this bill is to protect and repair the state’s roads damaged by oil and gas industry operations. The bill requires a permit and a road use agreement and specifies bonding requirements.

Strike-throughs indicate language that would be stricken from a heading or the present law, and underscoring indicates new language that would be added.