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Senate of Pennsylvania
Session of 2021 - 2022 Regular Session


Posted: May 7, 2021 03:09 PM
From: Senator Timothy P. Kearney
To: All Senate members
Subject: Updating Bonding Requirements for Unconventional Wells
In the near future, I will be introducing legislation that would increase the bonding amounts that natural gas drillers are required to carry.  As highlighted in the Attorney General’s recent grand jury report, the risks of hydraulic fracturing should fall on the industry, not the public.

The 2012 Oil and Gas Act increased the bonding requirements for unconventional well drilling based on well-bore length and number of wells.  Bonds for well-bores up to 6,000 feet range from $4,000/well to $100,000/well, not to exceed $250K; while bonds for well-bores 6,000 feet or greater from $10,000/well to $430,000/well, not to exceed $600K.

Act 13 of 2012 also provided the Environmental Quality Board (EQB) the ability to adjust the amounts every two years “to reflect the projected costs to the Commonwealth of plugging the well.”

Since Act 13 became law, advances in drilling technology now allow for the ability to extend laterals more than twice as long as the 6,000 ft set in the law and to extend multiple laterals off of a single vertical well-bore—adding thousands of feet to a single well.  This leaves the current bonding standards outdated and inadequate.

My bill will double the current bond amounts for well-bores 6,000 feet or greater from $20,000/well - $860,000/well, not to exceed $1,200,000. In addition, the bill will require the EQB to perform a review and adjustment of the amounts every two years.

Please join me in co-sponsoring this important legislation.