Sen. William E. Brady
Filed: 4/4/2014
 
 

 

 

 
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1
AMENDMENT TO SENATE BILL 3456 




2    AMENDMENT NO. ______. Amend Senate Bill 3456 by replacing 
3everything after the enacting clause with the following:


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



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



7    Sec. 6. 
The Department shall have the authority to conduct 
8hearings and
to make such reasonable rules as may be necessary 
9from time to time in the
proper administration and enforcement 
10of this Act, including the adoption
of rules and the holding of 
11hearings for the following purposes:


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


2        (2) To require the person desiring or proposing to 
3    drill, deepen or
convert any well for the exploration or 
4    production of
oil or gas, for injection or water supply in 
5    connection with
enhanced recovery projects, for the 
6    disposal of salt water, brine, or other
oil or gas field 
7    wastes, or for input, withdrawal, or observation in

8    connection with the storage of natural gas or other liquid 
9    or gaseous
hydrocarbons before commencing the drilling, 
10    deepening or
conversion of any such well, to make 
11    application to the Department upon
such form as the 
12    Department may prescribe and to comply with the provisions

13    of this Section. The drilling, deepening or conversion of 
14    any well is
hereby prohibited until such application is 
15    made and the applicant is
issued a permit therefor as 
16    provided by this Act. Each application for a
well permit 
17    shall include the following: (A) The exact location of the

18    well, (B) the name and address of the manager, operator, 
19    contractor,
driller, or any other person responsible for 
20    the conduct of drilling
operations, (C) the proposed depth 
21    of the well, (D) lease ownership
information, and (E) such 
22    other relevant information as the Department may
deem 
23    necessary or convenient to effectuate the purposes of this 
24    Act.


25        Additionally, each applicant who has not been issued a 
26    permit that is
of record on the effective date of this 
 
 
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1    amendatory Act of 1991, or who has
not thereafter made 
2    payments of assessments under Section 19.7 of this Act
for 
3    at least 2 consecutive years preceding the application, 
4    shall execute,
as principal, and file with the Department a 
5    bond, executed by a surety
authorized to transact business 
6    in this State, in an amount estimated to
cover the cost of 
7    plugging the well and restoring the well site, but not to

8    exceed $5000, as determined by the Department for each 
9    well, or a blanket
bond in an amount not to exceed $100,000 
10    for all wells, before drilling,
deepening, converting, or 
11    operating any well for which a permit is required
that has 
12    not previously been plugged and abandoned in accordance 
13    with the
Act. The Department shall release the bond if the 
14    well, or all wells in the
case of a blanket bond, is not 
15    completed but is plugged and the well site
restored in 
16    accordance with the Department's rules or is completed in

17    accordance with the Department's rules and the permittee 
18    pays assessments
to the Department in accordance with 
19    Section 19.7 of this Act for 2
consecutive years.


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


24        The sureties on all bonds in effect on the effective 
25    date of this
amendatory Act of 1991 shall remain liable as 
26    sureties in accordance with
their undertakings until 
 
 
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1    released by the Department from further liability
under the 
2    Act.  The principal on each bond in effect on the effective 
3    date
of this amendatory Act of 1991 shall be released from 
4    the obligation of
maintaining the bond if either the well 
5    covered by a surety bond has been
plugged and the well site 
6    restored in accordance with the Department's
rules or the 
7    principal of the surety has paid the initial assessment in

8    accordance with Section 19.7 and no well or well site 
9    covered by the surety
bond is in violation of the Act.


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


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


18        (3) To require the person assigning, transferring, or 
19    selling any well
for which a permit is required under this 
20    Act to notify the Department of
the change of ownership.  
21    The notification shall be on a form prescribed by
the 
22    Department, shall be executed by the current permittee and 
23    by the new
permittee, or their authorized representatives, 
24    and shall be filed with the
Department within 30 days after 
25    the effective date of the assignment,
transfer or sale. 
26    Within the 30 day notification period and prior to

 
 
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1    operating the well, the new permittee shall pay the 
2    required well transfer
fee and, where applicable, file with 
3    the Department the bond required under
subsection (2) of 
4    this Section.


5        (4) To require the filing with the State Geological 
6    Survey
of all geophysical logs, a well drilling
report and 
7    drill cuttings or cores, if cores are required,
within 90 
8    days after drilling ceases; and to file a completion report

9    with the Department within 30 days after the date of first 
10    production
following initial drilling  or any reworking, or 
11    after the plugging of the
well, if a dry hole.  A copy of 
12    each completion report submitted to the
Department shall be 
13    delivered to the State Geological Survey.  The
Department 
14    and the State Geological Survey shall keep the reports

15    confidential, if requested in writing by the permittee, for 
16    2 years after
the date the permit is issued by the 
17    Department.  This confidentiality
requirement shall not 
18    prohibit the use of the report for research purposes,

19    provided the State Geological Survey does not publish 
20    specific data or
identify the well to which the completion 
21    report pertains.


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


25        (6) To prevent fires.


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


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


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


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


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


11        (12) To regulate the plugging of wells.


12        (13) To require that wells for which no logs or

13    unsatisfactory logs are supplied shall be completely 
14    plugged with cement
from bottom to top.


15        (14) To require a description in such form as is

16    determined by the Department of the method of well plugging 
17    for each
well, indicating the character of material used 
18    and the positions and
dimensions of each plug.


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


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


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


 
 
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1        (18) To prescribe rules, conduct inspections and 
2    require compliance with
health and safety standards for the 
3    protection of persons working
underground in connection 
4    with any oil and gas operations.  For the
purposes of this 
5    paragraph, oil and gas operations include drilling or

6    excavation, production operations, plugging or filling in 
7    and sealing, or
any other work requiring the presence of 
8    workers in shafts or excavations
beneath the surface of the 
9    earth.  Rules promulgated by the Department may
include 
10    minimum qualifications of persons performing tasks 
11    affecting the
health and safety of workers underground, 
12    minimum standards for the
operation and maintenance of 
13    equipment, and safety procedures and
precautions, and 
14    shall conform, as nearly as practicable, to corresponding

15    qualifications, standards and procedures prescribed under 
16    The Coal Mining Act.


17        (19) To deposit the amount of any forfeited surety bond 
18    or other
security in the Plugging and Restoration Fund, a 
19    special fund in the State
treasury which is hereby created; 
20    to deposit into the Fund any amounts
collected, reimbursed 
21    or recovered by the Department under Sections 19.5,
19.6 
22    and 19.7 of this Act; to accept, receive, and
deposit into 
23    the Fund any grants, gifts or other funds which may be made

24    available from public or private sources and all earnings 
25    received from
investment of monies in the Fund; and to make 
26    expenditures from the Fund
for the purposes of plugging, 
 
 
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1    replugging or repairing any well, and
restoring the site of 
2    any well, determined by the Department to be
abandoned or 
3    ordered by the Department to be plugged, replugged, 
4    repaired
or restored under Sections 8a, 19 or 19.1 of this 
5    Act, including
expenses in administering the Fund.

6        (20) To determine if oil and gas leases submitted with 
7    an application for a permit or
transfer of a permit for a 
8    well are operative on the basis that prior oil and gas 
9    leases
covering the same lands have terminated due to 
10    non-development or non-production.
Determinations made by 
11    the Department under this paragraph may be based upon 
12    affidavits of non-development
or non-production from 
13    knowledgeable individuals familiar with the history
of 
14    development and production of oil or gas as to such lands, 
15    together with other
evidence, which create a rebuttable 
16    presumption that the prior oil and gas leases have

17    terminated and are of no further force and effect and that 
18    the submitted oil and gas leases are operative and 
19    effective. To create a rebuttable presumption, such 
20    affidavits, together
with other evidence provided to or 
21    available from the Department, shall reasonably
indicate 
22    that there has been no development, operations, or 
23    production of oil and gas on
the lands described in the 
24    prior leases for at least 24 consecutive months subsequent 
25    to the
expiration of the primary term or any extension of 
26    the primary term as set forth in the leases or the
period 
 
 
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1    of time of no development, operations, or production after 
2    expiration of the primary
term as provided in the leases. A 
3    court order or judgment declaring the prior leases

4    terminated is not required for determinations under this 
5    paragraph except in extraordinary
circumstances where such 
6    determinations cannot reasonably be concluded from the

7    affidavits or evidence submitted to or available from the 
8    Department. Upon the
Department's determination of a 
9    rebuttable presumption under this paragraph and if the

10    application is requesting a transfer of an existing permit 
11    of a well located on the lands, the
current permittee shall 
12    be provided notice and opportunity for a hearing to rebut 
13    the
presumption before a final determination is made. If 
14    the presumption is not rebutted
within 10 days after 
15    service of notice, the existing permit shall be transferred 
16    to the
applicant. Upon the Department's determination of a 
17    rebuttable presumption under this
paragraph and if the 
18    applicant is not requesting a transfer of any existing 
19    permit as to a well
located on the lands, but is requesting 
20    a new permit, the permit shall be issued to the applicant.

21    Any determination made by the Department under this 
22    paragraph shall not diminish the
rights or obligations of 
23    any current permittee of a well that are otherwise provided 
24    by statute or regulation of the Department. Any
request for 
25    a determination concerning the transfer of an existing 
26    permit and any subsequent
request for a hearing made by the 
 
 
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1    existing permittee shall require the payment of a 
2    nonrefundable
fee of $500 by the applicant. 
3    For the purposes of this Act, the State Geological Survey 
4shall
co-operate with the Department in making available its 
5scientific and
technical information on the oil and gas 
6resources of the State, and the
Department shall in turn 
7furnish a copy to the State Geological Survey
of all drilling 
8permits as issued, and such other drilling and operating
data 
9received or secured by the Department which are pertinent to

10scientific research on the State's mineral resources.

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

 
 
12    Section 99. Effective date. This Act takes effect upon 
13becoming law.".