S0284B0904A03899 SFR:EJH 04/05/22 #90 A03899
AMENDMENTS TO SENATE BILL NO. 284
Sponsor: SENATOR MUTH
Printer's No. 904
Amend Bill, page 1, line 3, by inserting after "projects"
and for bonding for conventional and unconventional wells
Amend Bill, page 4, by inserting between lines 26 and 27
CHAPTER 45
BONDING FOR CONVENTIONAL AND UNCONVENTIONAL WELLS
Sec.
4501. Definitions.
4502. Bonding.
4503. Separate bond.
4504. Amount of bond.
4505. Duration of liability for bond.
§ 4501. Definitions.
The following words and phrases when used in this chapter
shall have the meanings given to them in this section unless the
context clearly indicates otherwise:
" Board." The Environmental Quality Board established under
section 1920-A of the act of April 9, 1929 (P.L.177, No.175),
known as The Administrative Code of 1929.
"Department." The Department of Environmental Protection of
the Commonwealth.
"Operator." A well operator.
"Owner." A person who owns, manages, leases, controls or
possesses a well or coal property. The term does not apply to
orphan wells, except if the department determines a prior owner
or operator benefited from the well as provided in 58 Pa.C.S. §
3220(a) (relating to plugging requirements).
"Unconventional formation." A geological shale formation
existing below the base of the Elk Sandstone or its geologic
equivalent stratigraphic interval where natural gas generally
cannot be produced at economic flow rates or in economic volumes
except by vertical or horizontal well bores stimulated by
hydraulic fracture treatments or by using multilateral well
bores or other techniques to expose more of the formation to the
well bore.
"Unconventional well." A bore hole drilled or being drilled
for the purpose of or to be used for the production of natural
gas from an unconventional formation.
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§ 4502. Bonding.
Upon filing an application on or after the effective date of
this section for a well permit and before continuing to operate
an oil or gas well, the owner or operator of a conventional or
unconventional well shall post a bond with the department on a
form prescribed by the department. The bond shall be payable to
the Commonwealth.
§ 4503. Separate bond.
The owner or operator of a conventional or unconventional
well who posts a bond sufficient to comply with this chapter may
be required to post a separate bond for the permitted area under
other laws of this Commonwealth. Nothing in this section shall
be construed to prohibit the board from requiring additional
bond amounts for the permitted area in accordance with the
regulations promulgated under section 4504(a) (relating to
amount of bond).
§ 4504. Amount of bond.
(a) Regulations.--The board shall promulgate regulations
establishing or revising the bonding requirements for an owner
or operator of a conventional or unconventional well.
(b ) Amount.--
(1) The board may determine the amount of the bond
required under this chapter based on the total estimated cost
to the Commonwealth related to any of the following:
(i) Potential hazardous liabilities.
(ii) Decommissioning the permitted area.
(iii) Completing a reclamation plan for the affected
site.
(iv) The proper recycling or disposal of waste
accumulated.
(v) Any other factor as determined by the board.
(2) The amount required for plugging a conventional or
unconventional well shall be an amount reflective of the
actual cost for plugging each well operated or owned as
follows:
(i) A conventional well shall be determined to be an
amount no less than $30,000 per well.
(ii) An unconventional well shall be determined to
be an amount no less than $80,000 per well.
(iii) The board may design tiered bond amounts per
well for an unconventional well if the tiered amount is
based on the length of the well bore and no tier is an
amount less than the base amount in subparagraph (ii).
(iv) In each successive year in which there is a
positive percentage change in the Consumer Price Index
for All Urban Consumers (CPI-U) for the Pennsylvania, New
Jersey, Delaware and Maryland area for the most recent
12-month period for which figures have been officially
reported by the United States Department of Labor, Bureau
of Labor Statistics, immediately prior to the date the
adjustment is due to take effect, the positive percentage
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change shall be multiplied by each base amount and the
products shall be added to the base amounts,
respectively, and the amounts shall be preliminary
adjusted amounts. The preliminary amounts shall be
rounded to the nearest $100 to determine the new final
adjusted base amount. Within 20 days of the date that the
determination is made, the board shall transmit the new
final adjusted base amount to the Legislative Reference
Bureau for publication in the Pennsylvania Bulletin.
(c) Criteria.--In determining the amount of the bond
required under this chapter in accordance with subsection (b),
the board may use any of the following:
(1) A statement of the estimated cost incurred by an
owner or operator of a conventional or unconventional well to
remove potential hazardous liabilities.
(2) A statement of the actual cost incurred by the owner
or operator of a conventional or unconventional well to plug
another well similar to the well subject to the permit
application.
(3) An inspection of the permit documentation submitted
to the department by an owner or operator of a conventional
or unconventional well.
(4) An inspection of the affected site.
(5) The probable difficulty of reclamation for the
affected site.
(6) Any other factors as determined by the board.
§ 4505. Duration of liability for bond.
Liability for a bond under this chapter shall continue until
a reclamation plan is completed in accordance with the laws of
this Commonwealth, the well has been properly plugged in
accordance with the laws of this Commonwealth and for a period
of one year after filing of the certificate of plugging with the
department.
Amend Bill, page 6, by inserting between lines 24 and 25
Section 3. The following shall apply:
(1) Any promulgated regulation is abrogated insofar as
it is inconsistent with the addition of 27 Pa.C.S. Ch. 45.
Abrogation of any regulation shall occur upon publication of
the established revised final-form regulation in the
Pennsylvania Bulletin.
(2) Any provision of 58 Pa.C.S. is repealed insofar as
it is inconsistent with the addition of 27 Pa.C.S. Ch. 45.
Amend Bill, page 6, line 25, by striking out "3" and
inserting
4
Amend Bill, page 6, line 26, by striking out "CH. 43" and
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inserting
Chs. 43 and 45
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