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Introduced Version House Bill 2725 History

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

WEST virginia legislature

2021FISCAL NOTE regular session

Introduced

House Bill 2725

By Delegate Hansen

[Introduced February 24, 2021; Referred to the Committee on Energy and Manufacturing then Finance]

A BILL to amend and reenact §22-6-2 and §22-6-29 of the Code of West Virginia, 1931, as amended, relating to funding of the Office of Oil and Gas of the Department of Environmental Protection and to the plugging of orphaned oil and gas wells by an annual fee on each well that is not plugged.

Be it enacted by the Legislature of West Virginia:

ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS; ADMINISTRATION; ENFORCEMENT.

§22-6-2. Secretary -- Powers and duties generally; department records open to public; inspectors.


(a) The secretary shall have as his or her duty the supervision of the execution and enforcement of matters related to oil and gas set out in this article and in articles six-a, eight, nine, ten and twenty-one of this chapter §22-6A-1 et seq., §22-8-1 et seq., §22-9-1 et seq., §22-10-1 et seq., and §22-21-1 et seq. of this code.

(b) The secretary is authorized to propose rules for legislative approval in accordance with the provisions of §29A-3-1 et seq. of this code necessary to effectuate the above stated purposes.

(c) The secretary shall have full charge of the oil and gas matters set out in this article and in  articles six-a, eight, nine, ten and twenty-one of this chapter §22-6A-1 et seq., §22-8-1 et seq., §22-9-1 et seq., §22-10-1 et seq., and §22-21-1 et seq. of this code. In addition to all other powers and duties conferred upon him or her, the secretary shall have the power and duty to:

(1) Supervise and direct the activities of the office of oil and gas and see that the purposes set forth in subsections (a) and (b) of this section §22-6-1(a) and §22-6-1(b) of this code are carried out;

(2) Determine the number of supervising oil and gas inspectors and oil and gas inspectors needed to carry out the purposes of this article and articles six-a, eight, nine, ten, and twenty-one of this chapter §22-6A-1 et seq., §22-8-1 et seq., §22-9-1 et seq., §22-10-1 et seq., and §22-21-1 et seq. of this code and appoint them as such. All appointees must be qualified civil service employees, but no person is eligible for appointment until he or she has served in a probationary status for a period of six months to the satisfaction of the secretary;

(3) Supervise and direct such oil and gas inspectors and supervising inspectors in the performance of their duties;

(4) Make investigations or inspections necessary to ensure compliance with and to enforce the provisions of this article and articles six-a, eight, nine, ten, and twenty-one of this chapter §22-6A-1 et seq., §22-8-1 et seq., §22-9-1 et seq., §22-10-1 et seq., and §22-21-1 et seq. of this code;

(5) Prepare report forms to be used by oil and gas inspectors or the supervising inspector in making their findings, orders and notices, upon inspections made in accordance with this article and articles six-a, eight, nine, ten and twenty-one of this chapter §22-6A-1 et seq., §22-8-1 et seq., §22-9-1 et seq., §22-10-1 et seq., and §22-21-1 et seq. of this code;

(6) Employ a hearing officer and such clerks, stenographers and other employees, as may be necessary to carry out his or her duties and the purposes of the office of oil and gas and fix their compensation;

(7) Hear and determine applications made by owners, well operators and coal operators for the annulment or revision of orders made by oil and gas inspectors or the supervising inspector, and to make inspections, in accordance with the provisions of this article and articles eight and nine of this chapter §22-6A-1 et seq., §22-8-1 et seq. and §22-9-1 et seq. of this code;

(8) Cause a properly indexed permanent and public record to be kept of all inspections made by the secretary or by oil and gas inspectors or the supervising inspector;

(9) Conduct research and studies as the secretary shall deem necessary to aid in protecting the health and safety of persons employed within or at potential or existing oil or gas production fields within this state, to improve drilling and production methods and to provide for the more efficient protection and preservation of oil and gas-bearing rock strata and property used in connection therewith;

(10) Collect a permit fee of $400 for each permit application filed other than an application for a deep well, horizontal wells regulated pursuant to article six-a of this chapter, or a coalbed methane well; and collect a permit fee of $650 for each permit application filed for a deep well: Provided, That no permit application fee is required when an application is submitted solely for the plugging or replugging of a well, or to modify an existing application for which the operator previously has submitted a permit fee under this section. All application fees required hereunder are in lieu of and not in addition to any fees imposed under article eleven of this chapter relating to discharges of stormwater but are in addition to any other fees required by the provisions of this article: Provided, however, That upon a final determination by the United States Environmental Protection Agency regarding the scope of the exemption under section 402(l)(2) of the federal Clean Water Act (33 U.S.C. 1342(l)(2)), which determination requires a "national pollutant discharge elimination system" permit for stormwater discharges from the oil and gas operations described therein, any permit fees for stormwater permits required under article eleven of this chapter for such operations may not exceed $100.

(11) On or after the first day of July each year collect from the responsible operator of each well subject to this article or §22-6A-1 et seq. of this code that has not yet been plugged, and that is not only providing free gas to a landowner, an annual oversight fee of $100 for each well.

(11) (12) Perform all other duties which are expressly imposed upon the secretary by the provisions of this chapter;

(12) (13) Perform all duties as the permit issuing authority for the state in all matters pertaining to the exploration, development, production, storage and recovery of this state's oil and gas;

(13) (14) Adopt rules with respect to the issuance, denial, retention, suspension or revocation of permits, authorizations and requirements of this chapter, which rules shall assure that the rules, permits and authorizations issued by the secretary are adequate to satisfy the purposes of this article and articles six-a, seven, eight, nine, ten and twenty-one of this chapter §22-6A-1 et seq., §22-8-1 et seq., §22-9-1 et seq., §22-10-1 et seq., and §22-21-1 et seq. of this code particularly with respect to the consolidation of the various state and federal programs which place permitting requirements on the exploration, development, production, storage and recovery of this state's oil and gas; and

(14) (15) Perform such acts as may be necessary or appropriate to secure to this state the benefits of federal legislation establishing programs relating to the exploration, development, production, storage and recovery of this state's oil and gas, which programs are assumable by the state.

(d) The secretary shall have authority to visit and inspect any well or well site and any other oil or gas facility in this state and may call for the assistance of any oil and gas inspector or inspectors or supervising inspector whenever such assistance is necessary in the inspection of any such well or well site or any other oil or gas facility. Similarly, all oil and gas inspectors and supervising inspectors shall have authority to visit and inspect any well or well site and any other oil or gas facility in this state. Such inspectors shall make all necessary inspections of oil and gas operations required by this article and articles six-a, eight, nine, ten and twenty-one of this chapter §22-6A-1 et seq., §22-8-1 et seq., §22-9-1 et seq., §22-10-1 et seq., and §22-21-1 et seq. of this code; administer and enforce all oil and gas laws and rules; and perform other duties and services as may be prescribed by the secretary. The inspectors shall note and describe all violations of this article and articles six-a, eight, nine, ten or twenty-one of this chapter §22-6A-1 et seq., §22-8-1 et seq., §22-9-1 et seq., §22-10-1 et seq., or §22-21-1 et seq. of this code and promptly report those violations to the secretary in writing, furnishing at the same time a copy of the report to the operator concerned. Any well operator, coal operator operating coal seams beneath the tract of land, or the coal seam owner or lessee, if any, if said owner or lessee is not yet operating said coal seams beneath said tract of land may request the secretary to have an immediate inspection made. The operator or owner of every well or well site or any other oil or gas facility shall cooperate with the secretary, all oil and gas inspectors and the supervising inspector in making inspections or obtaining information.

(e) Subject to the provisions of §29B-1-1 et seq. of this code, all records of the office shall be open to the public.

§22-6-29. Operating permit and processing fund; special reclamation fund; fees.


(a) There is hereby continued within the Treasury of the State of West Virginia the special fund known as the oil and gas operating permit and processing fund, and the secretary shall deposit with the state Treasurer to the credit of such special fund all fees collected under the provisions of subdivision ten, subsection (c), section two of this article §22-6-2(c)(10) and §22-6-2(c)(11) of this code.

The oil and gas operating permit and processing fund shall be administered by the secretary for the purposes of carrying out the provisions of this chapter. Fees collected under §22-6-2(c)(11) of this code not used for other purposes may be moved to the oil and gas reclamation fund that is continued in §22-6-29(b) of this code at the discretion of the chief of the office of oil and gas.

The secretary shall make an annual report to the Governor and to the Legislature on the use of the fund, and shall make a detailed accounting of all expenditures from the oil and gas operating permit and processing fund.

(b) In addition to any other fees required by the provisions of this article, every applicant for a permit to drill a well shall, before the permit is issued, pay to the secretary a special reclamation fee of $150 for each activity for which a well work application is required to be filed: Provided, That a special reclamation fee shall not be assessed for plugging activities. Such special reclamation fee shall be paid at the time the application for a drilling permit is filed with the secretary and the payment of such reclamation fee shall be a condition precedent to the issuance of said permit.

There is hereby continued within the Treasury of the State of West Virginia the special fund known as the oil and gas reclamation fund, and the secretary shall deposit with the state Treasurer to the credit of such special fund all special reclamation fees collected. The proceeds of any bond forfeited under the provisions of this article shall inure to the benefit of and shall be deposited in such oil and gas reclamation fund.

The oil and gas reclamation fund shall be administered by the secretary. The secretary shall cause to be prepared plans for the reclaiming and plugging of abandoned wells which have not been reclaimed or plugged or which have been improperly reclaimed or plugged. The secretary, as funds become available in the oil and gas reclamation fund, shall reclaim and properly plug wells in accordance with said plans and specifications and in accordance with the provisions of this article relating to the reclaiming and plugging of wells and all rules promulgated thereunder. Such funds may also be utilized for the purchase of abandoned wells, where such purchase is necessary, and for the reclamation of such abandoned wells, and for any engineering, administrative and research costs as may be necessary to properly effectuate the reclaiming and plugging of all wells, abandoned or otherwise.

The secretary may avail the division of any federal funds provided on a matching basis that may be made available for the purpose of reclaiming or plugging any wells.

The secretary shall make an annual report to the Governor and to the Legislature setting forth the number of wells reclaimed or plugged through the use of the oil and gas reclamation fund provided for herein. Such report shall identify each such reclamation and plugging project, state the number of wells reclaimed or plugged thereby, show the county wherein such wells are located and shall make a detailed accounting of all expenditures from the oil and gas reclamation fund.

All wells shall be reclaimed or plugged by contract entered into by the secretary on a competitive bid basis as provided for under the provisions of §5A-3-1 et seq. of this code and the rules promulgated thereunder.

NOTE: The purpose of this bill is to provide stable and adequate funding to the Office of Oil and Gas of the Department of Environmental Protection in order to oversee oil and gas wells' compliance with the law for the life of the wells.  The Office of Oil and Gas currently only receives, and unlike other offices is only funded by, one-time fees generated by the applications for the permits for initial drilling of a well.  It only has a reduced staff of 25 including only one inspector for every 5000 wells.  The bill provides the funding by requiring an annual oversight fee of $100 for each well that is to be used for the functions of the Office of Oil and Gas with any excess to be used to plug orphaned wells.

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

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