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Introduced Version House Bill 4702 History

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Key: Green = existing Code. Red = new code to be enacted
H. B. 4702


(By Delegate Kessler)
[Introduced February 18, 2008; referred to the
Committee on Finance.]




A BILL to amend and reenact §22-6-3, §22-6-4, §22-6-22, §22-6-23 and §22-6-34 of the Code of West Virginia, 1931, as amended, all relating to regulation and administration of oil and gas wells.

Be it enacted by the Legislature of West Virginia:
That §22-6-3, §22-6-4, §22-6-22, §22-6-23 and §22-6-34 of the Code of West Virginia, 1931, as amended, be amended and reenacted, all to read as follows:
ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS; ADMINISTRATION; ENFORCEMENT.

§22-6-3. Findings and orders of inspectors concerning violations; determination of reasonable time for abatement; extensions of time for abatement; special inspections; notice of findings and orders.

(a) If an oil and gas inspector, upon making an inspection of a well or well site or any other oil or gas facility, finds that any provision of this article is being violated, the inspector shall also find whether or not an imminent danger to persons exists, or whether or not there exists an imminent danger that a fresh water source or supply will be contaminated or lost. If the inspector finds that such imminent danger exists, an order requiring the operator of such well or well site or other oil or gas facility to cease further operations until such imminent danger has been abated shall be issued by the inspector. If the inspector finds that no such imminent danger exists, the inspector shall determine what would be a reasonable period of time within which such violation should be totally abated. Such findings shall contain reference to the provisions of this article which the inspector finds are being violated, and a detailed description of the conditions which cause and constitute such violation.
(b) The period of time so found by such oil and gas inspector to be a reasonable period of time shall not exceed seven days. Such period may be extended by such inspector, or by any other oil and gas inspector duly authorized by the director, from time to time, for good cause, but not to exceed a total of thirty days, upon the making of a special inspection to ascertain whether or not such violation has been totally abated: Provided,
That such thirty-day period may be extended beyond thirty days by such inspectors where abatement is shown to be incapable of accomplishment because of circumstances or conditions beyond the control of the well operator. The director shall cause a special inspection to be made: (A) Whenever an operator of a well or well site or any other oil or gas facility, prior to the expiration of any such period of time, requests the director to cause a special inspection to be made at such well or well site or any other oil or gas facility; and (B) upon expiration of such period of time as originally fixed or as extended, unless the director is satisfied that the violation has been abated. Upon making such special inspection, such oil and gas inspector shall determine whether or not such violation has been totally abated. If the inspector determines that such violation has not been totally abated, the inspector shall determine whether or not such period of time as originally fixed, or as so fixed and extended, should be extended. If the inspector determines that such period of time should be extended, the inspector shall determine what a reasonable extension would be. If the inspector determines that such violation has not been totally abated, and if such period of time as originally fixed, or as so fixed and extended, has then expired, and if the inspector also determines that such period of time should not be further extended, the inspector shall thereupon make an order requiring the operator of such well or well site or other oil or gas facility to cease further operations of such well, well site or facility, as the case may be. Such findings and order shall contain reference to the specific provisions of this article which are being violated.
(c) Notice of each finding and order made under this section shall promptly be given to the operator of the well or well site or other oil or gas facility to which it pertains by the person making such finding or order.
(d) No order shall be issued under the authority of this section which is not expressly authorized herein.
(e) Notwithstanding any other provisions of this chapter, each owner of a methane or natural gas well shall be required to report the ownership of each well to the Secretary of State's Office. Failure to do so will cause immediate forfeiture of the well to the state and the owner shall be assessed a ten thousand dollar fine. The Secretary of State's Office shall update the ownership list biweekly and provide a map showing the location of all wells reported.
ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS; ADMINISTRATION; ENFORCEMENT.

§22-6-4. Review of findings and orders by director; special inspection; annulment, revision, etc., of order; notice.

(a) Any well operator, complaining coal operator, owner or lessee, if any, aggrieved by findings or an order made by an oil or gas inspector pursuant to section three of this article, may within fifteen days apply to the director for annulment or revision of such order. Upon receipt of such application the director shall make a special inspection of the well, well site or other oil and gas facility affected by such order, or cause two duly authorized oil and gas inspectors, other than the oil and gas inspector who made such order or the supervising inspector and one duly authorized oil and gas inspector other than the oil and gas inspector who made such order, to make such inspection of such well, or well site or other oil or gas facility and to report thereon to them. Upon making such special inspection, or upon receiving the report of such special inspection, as the case may be, the director shall make an order which shall include the director's findings and shall annul, revise or affirm the order of the oil and gas inspector.
(b) The director shall cause notice of each finding and order made under this section to be given promptly to the operator of the well, well site or other oil or gas facility to which such findings and order pertain, and the complainant under section three, if any.
(c) At any time while an order made pursuant to section three of this article is in effect, the operator of the well, well site or other oil or gas facility affected by such order may apply to the director for annulment or revision of such order. The director shall thereupon proceed to act upon such application in the manner provided in this section.
(d) In view of the urgent need for prompt decision of matters submitted to the director under this article, all actions which the director, or oil and gas inspectors or the supervising inspector are required to take under this article, shall be taken as rapidly as practicable, consistent with adequate consideration of the issues involved.
(e) A special inspection unit shall be created in the State Auditor's office whose sole purpose shall be to search for wells within the state and ascertain their registration with the Secretary of State's Office. These special inspectors shall report all unregistered wells so that prosecution of the owners may commence and the state shall move immediately to have the well forfeited to it.
ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS; ADMINISTRATION; ENFORCEMENT.

§22-6-22. Well log to be filed; contents; authority to promulgate rules.

(a) Within a reasonable time after the completion of the drilling of a well, the well operator shall file with the director an accurate log. Such log shall contain the character, depth and thickness of geological formations encountered, including fresh water, coal seams, mineral beds, brine and oil and gas bearing formations and such other information as the director may require to effectuate the purposes of this chapter.
The director may promulgate such reasonable rules in accordance with article three, chapter twenty-nine-a of this code
as he may deem necessary to ensure that the character, depth, and thickness of geological formations encountered are accurately logged: Provided, That the director shall not require logging by the use of an electrically logging device.
(b) A public meter shall be installed on all wells in the state and shall be read periodically by the special inspectors from the State Auditors Office in order to determine the correct amount of gas being pumped from each well and insure its accurate calculation. Meters must run continuously and not be altered so as a constant reading by the inspectors can be procured at any time. A record of the amount of gas produced must be reported monthly to the State Tax Department with the marking and location of the well so noted.
ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS; ADMINISTRATION; ENFORCEMENT.

§22-6-23. Plugging, abandonment and reclamation of well; notice of intention; bonds; affidavit showing time and manner.

All dry or abandoned wells or wells presumed to be abandoned under the provisions of section nineteen of this article shall be plugged and reclaimed in accordance with this section and the other provisions of this article and in accordance with the rules promulgated by the secretary. Wells that could be productive, but are plugged shall be taxed at a flat fee of twenty percent of an average production well. However, any person that extracts gas from a formerly plugged well and uses that production to lower the prices of West Virginia customers usage shall be given a ten percent tax reduction on such utilized wells.
Prior to the commencement of plugging operations and the abandonment of any well, the well operator shall either: (a) Notify, by registered or certified mail, the secretary and the coal operator operating coal seams, the coal seam owner of record or lessee of record, if any, to whom notices are required to be given by section twelve of this article, and the coal operators to whom notices are required to be given by section thirteen of this article, of its intention to plug and abandon any such well (using such form of notice as the secretary may provide), giving the number of the well and its location and fixing the time at which the work of plugging and filling will be commenced, which time shall be not less than five days after the day on which such notice so mailed is received or in due course should be received by the secretary, in order that a representative or representatives of the secretary and such coal operator, owner or lessee, if any, may be present at the plugging and filling of the well: Provided, That whether such representatives appear or do not appear, the well operator may proceed at the time fixed to plug and fill the well in the manner hereinafter described; or (b) first obtain the written approval of the secretary and such coal operator, owner or lessee, if any; or (c) in the event the well to be plugged and abandoned is one on which drilling or reworking operations have been continuously progressing pursuant to authorization granted by the secretary, first obtain the verbal permission of the secretary or the secretary's designated representative to plug and abandon the well, except that the well operator shall, within a reasonable period not to exceed five days after the commencement of the plugging operations, give the written notices required by subdivision (a) above.
The well operator shall not be required to prepare or submit to the director a plat prior to the commencement of plugging operations as long as a plat pertaining to the particular well is on file with the director and accurately identifies the location of the well, or so long as there is also on file with the director the coordinates of the well established by a global positioning system. The coordinates established by a global positioning system must be filed with the secretary in either a written or electronic form prescribed by the secretary. The global positioning system used to establish the coordinates shall be accurate within the variance allowed by law for the distance between the actual location of the well and location shown on the plat that is required to be filed with a well permit application, or the secretary may establish the accuracy of the global positioning system by legislative rule promulgated pursuant to section two of this article.
No well may be plugged or abandoned unless prior to the commencement of plugging operations and the abandonment of any well the secretary is furnished a bond as provided in section twenty-six of this article. In no event prior to the commencement of plugging operations shall a lessee under a lease covering a well be required to give or sell the well to any person owning an interest in the well, including, but not limited to, the respective lessor, or agent of the lessor, nor may the lessee be required to grant a person with an interest in the well, including, but not limited to, the respective lessor, or agent of the lessor, an opportunity to qualify under section twenty-six of this article to continue operation of the well.
When the plugging, filling and reclamation of a well have been completed, an affidavit, in triplicate, shall be made (on a form to be furnished by the secretary) by two experienced persons who participated in the work, the secretary or the secretary's designated representative, in which affidavit shall be set forth the time and manner in which the well was plugged and filled and the land reclaimed. One copy of this affidavit shall be retained by the well operator, another (or true copies of same) shall be mailed to the coal operator or operators, if any, and the third to the secretary.
ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS; ADMINISTRATION; ENFORCEMENT.

§22-6-34. Offenses; penalties.

(a) Any person or persons, firm, partnership, partnership association or corporation who willfully violates any provision of this article or any rule or order promulgated hereunder shall be subject to a civil penalty not exceeding two thousand five hundred dollars. Each day a violation continues after notice by the division constitutes a separate offense. The penalty shall be recovered by a civil action brought by the division, in the name of the state, before the circuit court of the county in which the subject well or facility is located. All such civil penalties collected shall be credited to the general fund of the state.
(b) Any person or persons, firm, partnership, partnership association or corporation willfully violating any of the provisions of this article which prescribe the manner of drilling and casing or plugging and filling any well, or which prescribe the methods of conserving gas from waste, shall be guilty of a misdemeanor, and, upon conviction thereof, shall be punished by a fine not exceeding five thousand dollars, or imprisonment in jail for not exceeding twelve months, or both, in the discretion of the court, and prosecutions under this section may be brought in the name of the State of West Virginia in the court exercising criminal jurisdiction in the county in which the violation of such provisions of the article or terms of such order was committed, and at the instance and upon the relation of any citizens of this state.
(c) Any company shipping or selling gas product across state lines to then reship back to West Virginia to intentionally increase the price, shall be fined a punitive tax of fifty percent which cannot be passed back to the final consumer. This tax shall be held in a special account solely for use in subsidizing gas bills.



NOTE: The purpose of this bill is to provide regulation, penalties, and administration for natural gas and methane gas wells.

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