HB2264ham001 98TH GENERAL ASSEMBLY

Rep. Brad E. Halbrook

Filed: 3/19/2013

09800HB2264ham001 LRB098 08143 MGM 43485 a

AMENDMENT TO HOUSE BILL 2264

AMENDMENT NO. ______. Amend House Bill 2264 by replacing everything after the enacting clause with the following:

"Section 5. The Illinois Oil and Gas Act is amended by changing Section 6 and by adding Section 8d as follows:

(225 ILCS 725/6) (from Ch. 96 1/2, par. 5409)

Sec. 6. The Department shall have the authority to conduct hearings and to make such reasonable rules as may be necessary from time to time in the proper administration and enforcement of this Act, including the adoption of rules and the holding of hearings for the following purposes:

(1) To require the drilling, casing and plugging of wells to be done in such a manner as to prevent the migration of oil or gas from one stratum to another; to prevent the intrusion of water into oil, gas or coal strata; to prevent the pollution of fresh water supplies by oil, gas or salt water.

(2) To require the person desiring or proposing to drill, deepen or convert any well for the exploration or production of oil or gas, for injection or water supply in connection with enhanced recovery projects, for the disposal of salt water, brine, or other oil or gas field wastes, or for input, withdrawal, or observation in connection with the storage of natural gas or other liquid or gaseous hydrocarbons before commencing the drilling, deepening or conversion of any such well, to make application to the Department upon such form as the Department may prescribe and to comply with the provisions of this Section. The drilling, deepening or conversion of any well is hereby prohibited until such application is made and the applicant is issued a permit therefor as provided by this Act. Each application for a well permit shall include the following: (A) The exact location of the well, (B) the name and address of the manager, operator, contractor, driller, or any other person responsible for the conduct of drilling operations, (C) the proposed depth of the well, (D) lease ownership information, and (E) such other relevant information as the Department may deem necessary or convenient to effectuate the purposes of this Act.

Additionally, each applicant who has not been issued a permit that is of record on the effective date of this amendatory Act of 1991, or who has not thereafter made payments of assessments under Section 19.7 of this Act for at least 2 consecutive years preceding the application, shall execute, as principal, and file with the Department a bond, executed by a surety authorized to transact business in this State, in an amount estimated to cover the cost of plugging the well and restoring the well site, but not to exceed $5000, as determined by the Department for each well, or a blanket bond in an amount not to exceed $100,000 for all wells, before drilling, deepening, converting, or operating any well for which a permit is required that has not previously been plugged and abandoned in accordance with the Act. The Department shall release the bond if the well, or all wells in the case of a blanket bond, is not completed but is plugged and the well site restored in accordance with the Department's rules or is completed in accordance with the Department's rules and the permittee pays assessments to the Department in accordance with Section 19.7 of this Act for 2 consecutive years.

In lieu of a surety bond, the applicant may provide cash, certificates of deposit, or irrevocable letters of credit under such terms and conditions as the Department may provide by rule.

The sureties on all bonds in effect on the effective date of this amendatory Act of 1991 shall remain liable as sureties in accordance with their undertakings until released by the Department from further liability under the Act. The principal on each bond in effect on the effective date of this amendatory Act of 1991 shall be released from the obligation of maintaining the bond if either the well covered by a surety bond has been plugged and the well site restored in accordance with the Department's rules or the principal of the surety has paid the initial assessment in accordance with Section 19.7 and no well or well site covered by the surety bond is in violation of the Act.

No permit shall be issued to a corporation incorporated outside of Illinois until the corporation has been authorized to do business in Illinois.

No permit shall be issued to an individual, partnership, or other unincorporated entity that is not a resident of Illinois until that individual, partnership, or other unincorporated entity has irrevocably consented to be sued in Illinois.

(3) To require the person assigning, transferring, or selling any well for which a permit is required under this Act to notify the Department of the change of ownership. The notification shall be on a form prescribed by the Department, shall be executed by the current permittee and by the new permittee, or their authorized representatives, and shall be filed with the Department within 30 days after the effective date of the assignment, transfer or sale. Within the 30 day notification period and prior to operating the well, the new permittee shall pay the required well transfer fee and, where applicable, file with the Department the bond required under subsection (2) of this Section.

(4) To require the filing with the State Geological Survey of all geophysical logs, a well drilling report and drill cuttings or cores, if cores are required, within 90 days after drilling ceases; and to file a completion report with the Department within 30 days after the date of first production following initial drilling or any reworking, or after the plugging of the well, if a dry hole. A copy of each completion report submitted to the Department shall be delivered to the State Geological Survey. The Department and the State Geological Survey shall keep the reports confidential, if requested in writing by the permittee, for 2 years after the date the permit is issued by the Department. This confidentiality requirement shall not prohibit the use of the report for research purposes, provided the State Geological Survey does not publish specific data or identify the well to which the completion report pertains.

(5) To prevent "blowouts", "caving" and "seepage" in the same sense that conditions indicated by such terms are generally understood in the oil and gas business.

(6) To prevent fires.

(7) To ascertain and identify the ownership of all oil and gas wells, producing leases, refineries, tanks, plants, structures, and all storage and transportation equipment and facilities.

(8) To regulate the use of any enhanced recovery method in oil pools and oil fields.

(9) To regulate or prohibit the use of vacuum.

(10) To regulate the spacing of wells, the issuance of permits, and the establishment of drilling units.

(11) To regulate directional drilling of oil or gas wells.

(12) To regulate the plugging of wells.

(13) To require that wells for which no logs or unsatisfactory logs are supplied shall be completely plugged with cement from bottom to top.

(14) To require a description in such form as is determined by the Department of the method of well plugging for each well, indicating the character of material used and the positions and dimensions of each plug.

(15) To prohibit waste, as defined in this Act.

(16) To require the keeping of such records, the furnishing of such relevant information and the performance of such tests as the Department may deem necessary to carry into effect the purposes of this Act.

(17) To regulate the disposal of salt or sulphur-bearing water and any oil field waste produced in the operation of any oil or gas well.

(18) To prescribe rules, conduct inspections and require compliance with health and safety standards for the protection of persons working underground in connection with any oil and gas operations. For the purposes of this paragraph, oil and gas operations include drilling or excavation, production operations, plugging or filling in and sealing, or any other work requiring the presence of workers in shafts or excavations beneath the surface of the earth. Rules promulgated by the Department may include minimum qualifications of persons performing tasks affecting the health and safety of workers underground, minimum standards for the operation and maintenance of equipment, and safety procedures and precautions, and shall conform, as nearly as practicable, to corresponding qualifications, standards and procedures prescribed under The Coal Mining Act.

(19) To deposit the amount of any forfeited surety bond or other security in the Plugging and Restoration Fund, a special fund in the State treasury which is hereby created; to deposit into the Fund any amounts collected, reimbursed or recovered by the Department under Sections 19.5, 19.6 and 19.7 of this Act; to accept, receive, and deposit into the Fund any grants, gifts or other funds which may be made available from public or private sources and all earnings received from investment of monies in the Fund; and to make expenditures from the Fund for the purposes of plugging, replugging or repairing any well, and restoring the site of any well, determined by the Department to be abandoned or ordered by the Department to be plugged, replugged, repaired or restored under Sections 8a, 19 or 19.1 of this Act, including expenses in administering the Fund.

(20) To regulate the application of oil field brine under the pilot program authorized by Section 8d.

For the purposes of this Act, the State Geological Survey shall co-operate with the Department in making available its scientific and technical information on the oil and gas resources of the State, and the Department shall in turn furnish a copy to the State Geological Survey of all drilling permits as issued, and such other drilling and operating data received or secured by the Department which are pertinent to scientific research on the State's mineral resources.

(Source: P.A. 86-205; 86-364; 86-1177; 87-744.)

(225 ILCS 725/8d new)

Sec. 8d. Oil brine application pilot project.

(a) The Department shall conduct a 2-year pilot project in Cumberland County to evaluate the feasibility of utilizing oil field brine for the purpose of ice and dust control or soil stabilization.

(b) The Department shall establish standards for the amount and kind of brine that may be discharged under the pilot project.

(c) Brine shall only be applied at a frequency necessary to control dust and ice in order to protect the public health, safety, and welfare.

(d) Cumberland County employees shall only discharge brine for dust control and soil stabilization in accordance with the following criteria:

(1) Brine shall be applied with vehicular equipment dedicated solely to brine application or to fresh water transportation. Brine shall be applied at a maximum rate of 0.25 gallons per square yard for dust control and 1 gallon per square yard for soil stabilization.

(2) Brine shall not be applied to the surface of roads, parking lots, and other land more than once per month, unless water and traffic conditions require additional applications to suppress dust.

(3) Brine shall not be applied to the surface of roads being used as a detour and on other areas during construction as necessary to control dust more than 6 times per year.

(4) Brine shall be applied to roads and parking areas with a spreader bar. These devices shall be constructed to deliver a uniform application of brine over a width of at least 8 feet.

(5) Brine shall be applied in a manner designed to prevent runoff.

(e) Cumberland County employees shall only discharge brine for ice control in accordance with the following criteria:

(1) Brine shall be applied only on paved roads or paved parking lots.

(2) Brine shall be applied at a maximum rate of 500 gallons per lane mile of road or 400 gallons per acre of land.

(3) Brine shall be applied only when the air temperature is above 20 degrees Fahrenheit, unless used for pre-wetting solid salt.

(4) Brine shall be applied with equipment designed to direct the discharge to the center of the pavement or high sides of curves.

(f) Cumberland County employees shall use brine application measurements to ensure compliance with this Section, and as approved by the Department.

(g) Cumberland County shall keep records of the use of brine and make such records available for review by the Department upon request. These records shall include:

(1) the location, description, volume, and source or sources of the brine; and

(2) a brine application log, including:

(A) the driver's name;

(B) the loading date and time and source of brine;

(C) the dates of brine application;

(D) the township where brine was applied;

(E) the name of the road or roads or other land areas where brine was applied and the number of gallons of brine that were applied;

(F) for application on roads, the distance brine was applied between startup and stopping point to the closest one-tenth mile; and

(G) documentation of the permit approving application.

(h) The records for the previous 2 weeks, as described in this Section, shall be maintained on the vehicle for inspection by the Department or a law enforcement agent.

(i) The records described in this Section shall be maintained by Cumberland County for a period of 3 calendar years from the date they were generated and shall be available for inspection by the Department or a law enforcement agent.

(j) Cumberland County shall immediately report to the Department and the Illinois Environmental Protection Agency any release of any polluting material that occurs to the surface waters or groundwater of the State in relation to the activities authorized by the permit.

(k) Nothing in this Section shall be construed to relieve Cumberland County from any civil or criminal liability.

(l) The provisions of this Section do not convey any property rights in either real or personal property or any exclusive privileges.

(m) If at any point during the pilot project the Department finds that Cumberland County or its agents have violated this Section or that the oil field brine is causing environmental damage where applied, the Department may terminate the pilot project.

(n) The Department may adopt any rules necessary for the administration of this Section.".