Regular Session 2023-2024 House Bill 0962 P.N. 1299

PRIOR PRINTER'S NO. 948

PRINTER'S NO. 1299

THE GENERAL ASSEMBLY OF PENNSYLVANIA

HOUSE BILL

No.

962

Session of

2023

INTRODUCED BY VITALI, BRENNAN, MADDEN, PIELLI, RABB, SAMUELSON,

SANCHEZ, FREEMAN, HOHENSTEIN, HILL-EVANS, KHAN, CIRESI,

STEELE, FIEDLER AND KRAJEWSKI, APRIL 19, 2023

AS REPORTED FROM COMMITTEE ON ENVIRONMENTAL RESOURCES AND

ENERGY, HOUSE OF REPRESENTATIVES, AS AMENDED, MAY 23, 2023

AN ACT

Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated

Statutes, in development, further providing for bonding.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1. Section 3225(a)(1), (2) and (2.1) of Title 58 of

the Pennsylvania Consolidated Statutes, amended or added July

19, 2022 (P.L.1622, No.96), are amended to read:

SECTION 1. SECTION 3225(A)(1) INTRODUCTORY PARAGRAPH AND

(III) AND (2) OF TITLE 58 OF THE PENNSYLVANIA CONSOLIDATED

STATUTES, AMENDED JULY 19, 2022 (P.L.1622, NO.96), ARE AMENDED

TO READ:

§ 3225. Bonding.

(a) General rule.--The following shall apply:

(1) Except as provided in subsection (d), upon filing an

application for a well permit and before continuing to

operate an oil or gas well, the owner or operator of the well

shall file with the department a bond covering the well and

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well site on a form to be prescribed and furnished by the

department. A bond filed with an application for a well

permit shall be payable to the Commonwealth and conditioned

upon the operator's faithful performance of all drilling,

water supply replacement, restoration and plugging

requirements of this chapter. A bond for a well in existence

on April 18, 1985, shall be payable to the Commonwealth and

conditioned upon the operator's faithful performance of all

water supply replacement, restoration and plugging

requirements of this chapter. The amount of the bond required

shall be in the following amounts and [amounts under

subparagraphs (i) and (ii)] may be adjusted by the

Environmental Quality Board every two years to reflect the

projected costs to the Commonwealth of plugging the well:

(i) For [unconventional] wells with a total well

bore length less than 6,000 feet:

(A) For operating up to 50 wells, $4,000 per

well, but no bond may be required under this clause

in excess of $35,000.

(B) For operating 51 to 150 wells, $35,000 plus

$4,000 per well for each well in excess of 50 wells,

but no bond may be required under this clause in

excess of $60,000.

$4,000 per well for each well in excess of 150 wells,

but no bond may be required under this clause in

excess of $100,000.

(D) For operating more than 250 wells, $100,000

plus $4,000 per well for each well in excess of 250

wells, but no bond may be required under this clause

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in excess of $250,000.

(ii) For [unconventional] wells with a total well

bore length of at least 6,000 feet:

(A) For operating up to 25 wells, $10,000 per

well, but no bond may be required under this clause

in excess of $140,000.

(B) For operating 26 to 50 wells, $140,000 plus

$10,000 per well for each well in excess of 25 wells,

but no bond may be required under this clause in

excess of $290,000.

$10,000 per well for each well in excess of 50 wells,

but no bond may be required under this clause in

excess of $430,000.

(D) For operating more than 150 wells, $430,000

plus $10,000 per well for each well in excess of 150

wells, but no bond may be required under this clause

in excess of $600,000.

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[(iii) For a well other than an unconventional well,

$2,500 per well. [For 10 years following the effective

date of this subparagraph, the Environmental Quality

Board and the department shall have no authority to

adjust the amount under this subparagraph.]

(2) [The following apply:

(i) Except as provided under subparagraph (ii), in]

In lieu of individual bonds for each well, an owner or

operator may file a blanket bond for the applicable

amount under paragraph (1)(i) or (ii), on a form prepared

by the department, covering all of its wells in this

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Commonwealth, as enumerated on the bond form.

[(ii) As follows:

(A) An operator may file a blanket bond of

$25,000 for all of the operator's wells in this

Commonwealth that are not unconventional wells.

[(B) For every new well that is not an

unconventional well drilled after six months after

the effective date of this subsection, the bond

amount for that operator shall increase by $1,000.

wells that are not unconventional wells shall not

exceed $100,000.

(D) The blanket bond increase of $1,000 shall be

waived by the department for a new well drilled under

this subsection if the operator provides evidence to

the department that the operator has plugged an

orphan well at the operator's own expense for which

the operator was not the responsible party within the

previous 365 days that the operator has not yet

received credit for under this subsection by the

department.

(E) For 10 years following the effective date of

this clause, the bond amounts for wells that are not

unconventional wells may only be revised by the

General Assembly. The Environmental Quality Board and

the department shall have no authority to adjust bond

amounts related to wells that are not unconventional

wells during that time period.]

(2.1) Notwithstanding any other provision of this

section, section 1934-A of the act of April 9, 1929 (P.L.177,

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No.175), known as The Administrative Code of 1929, shall

continue to apply to a well drilled prior to April 18, 1985.]

(F) THE DEPARTMENT SHALL CONDUCT A STUDY OF ITS

EXPERIENCE IN IMPLEMENTING THIS SECTION, REPORT ITS

FINDINGS TO THE GOVERNOR AND THE GENERAL ASSEMBLY AND

MAKE RECOMMENDATIONS FOR PROGRAM AMENDMENTS WITHIN 12

MONTHS OF THE EFFECTIVE DATE OF THIS CLAUSE. THE

REPORT SHALL CONTAIN INFORMATION RELATING TO:

(I) THE COST TO THE COMMONWEALTH TO PLUG

ORPHAN AND IMPROPERLY ABANDONED WELLS;

(II) EVALUATION OF INDUSTRY TRENDS RELATING

TO COMPLIANCE WITH PLUGGING AND RECLAMATION

REQUIREMENTS UNDER EXISTING LAW;

(III) EVALUATION OF THE EFFECTIVENESS OF

EXISTING ENFORCEMENT AUTHORITY IN AVOIDING

IMPROPER ABANDONMENT, INCLUDING CIVIL PENALTY

AUTHORITY AND FORFEITING OIL AND GAS WELL BONDS;

(IV) THE SYSTEM FOR REVIEWING OPERATORS'

REQUESTS FOR REGULATORY INACTIVE STATUS APPROVAL

AND PERMIT TRANSFERS AND WHAT IMPACT APPROVING

THOSE ACTIONS UNDER CURRENT REQUIREMENTS HAVE ON

FUTURE IMPROPER ABANDONMENT OF ACTIVE WELLS;

(V) THE NUMBER OF IDENTIFIED ORPHAN AND

IMPROPERLY ABANDONED WELLS ELIGIBLE FOR PLUGGING;

(VI) ANY RECOMMENDATION ON EFFECTIVE

ALTERNATIVE FINANCIAL ASSURANCE MECHANISMS,

INCLUDING, BUT NOT LIMITED TO, INCREASED BOND

AMOUNTS FOR CONVENTIONAL OIL AND GAS WELLS; AND

(VII) THE POTENTIAL APPLICABILITY OF THE

MECHANISMS TO OIL AND GAS WELLS DRILLED PRIOR TO

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APRIL 18, 1985.

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Section 2. This act shall take effect in 60 days.

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