HB 2535

This bill makes various technical clarifications and the following substantive changes to present law concerning the production of gas and oil: (1) Generally, present law requires an operator to submit a plan to prevent erosion and pollution, and for reclamation, prior to issuance of a permit to drill a well for oil or gas. Present law defines "operator"" to mean any person who owns or is direc tly responsible for a business involved in some phase of the production, manufacture, refining or distribution of petroleum oil or natural gas. This bill redefines ""operator"" to mean any person who is supervising or responsible for drilling, operating, pro ducing, repairing, abandoning, or plugging of wells ; (2) This bill expands the meaning of ""person"" for purposes of oil and gas production to include any public or private entity; (3) Present law imposes distance requirements for the placement of wells in order to limit the number of wells drilling to the same pool of oil or gas. Present law defines ""p ool "" to mean an underground reservoir containing a common accumulation of crude petroleum oil or natural gas or both. This bill removes ""crude petroleum"" from such definition so that ""pool"" will mean an underground reservoir containing a common accumulation of oil or natural gas or both ; (4) Present law defines ""p roducer "" to mean the owner of a well or wells capable of producing oil or gas, or both, in paying quantities . This bill adds that operators of such wells are also producers; (5) This bill adds a definition of ""well"", which is a borehole drilled or proposed to be drilled for the purpose of producing natural gas or oil, or both, or a borehole through which natural gas or oil, or both, is being produced ; (6) Present law requires that an application for a drilling permit include the location of all blue-line streams within 0.5 mi le of the well site or access roads . This bill instead requires that the permit include the location of all streams within 0.25 mile of the well site ; (7) Under present law, f ailure to comply with an operator's plan that is part of a permit is grounds for revocation of the permit and forfeiture of the bond . This bill specifies that such failure is also grounds for s uspension of operations, a ssessment of civil penalties, and i mposition of any other penalties permitted by law; (8) This bill specifies that the present law recordkeeping requirements for a person producing, selling, gathering, transporting, or storing crude petroleum or natural gas from any well in this state apply to persons so involved with oil from any well in this state; (9) This bill removes a provision concerning payment of an application fee for determinations concerning obsolete federal price-setting requirements for natural gas; (10) This bill specifies that the Tennessee board of water quality, oil and gas is authorized to contract with any person to perform plugging or reclamation work; (11) Present law requires the board to promulgate rules for various purposes. This bill makes the following changes with regard to the board's rules: (A) Specifies that a bond may be required for the plugging of each well ; (B) Changes from 30 to 60 days following cessation of drilling operations the time within which an operator may be required to file of logs, samples, and downhole surveys; and (C) Removes the statutory cap on the bond amount of $15, 000 per well site and, for sites with multiple wells, $10, 000 per well (12) Present law requires that applications for permits to drill be submitted to the board and that disagreements between the applicant and a landowner concerning the proposed location of drilling operations be decided in a hearing before the commissioner of environment and conservation . This bill instead requires that permit applications be submitted to the commissioner and that disagreement between the applicant and the landowner be submitted to a court; (13) Under present law, when the commissioner issues a citation to an operator, the citation must include a reasonable time for abatement of the violation. This bill adds authorization for the commissioner to suspend or lengthen the abatement period upon a showing of a good faith effort to comply with the abatement requirements and that failure to comply with the abatement requirements is due to factors beyond the person's reasonable control ; (14) This bill increases from $1, 000 to $10, 000 per day a violation occurs the maximum civil penalty that the commissioner may assess. This bill increases from 20 to 30 days the amount of time within which a civil penalty may be appealed to the board. This bill makes various changes to the procedure that will be followed in such appeals, as specified in the full text of this bill; (15) Upon failure of any operator to perform site protection or reclamation activities, and notice of default, if the default is not cured within a reasonable time by the operator or the surety on the operator's bond, present law requires the board to declare the bond forfeited, collect the bond and use the proceeds for the required site protection or reclamation work. This bill instead authorizes the commissioner to o rder the forfeiture of the bond to the department for any person who violates the laws related to production of oil and gas, rules promulgated pursuant to such laws, an order adopted by the board, or the terms or conditions of a permit. The full text of this bill specifies the process that will be followed for bond forfeitures; (16) Present law requires an operator to take measures at the well site to prevent or minimize soil erosion and pollution of surface waters during the life of the operation. This bill specifies that such requirement also applies to work preparatory to or incidental to such operations ; (17) Present law requires that access roads to well sites be constructed in such a manner as to reduce erosion to a practical minimum. Present law further provides that regulations concerning access roads are guidelines a nd not mandatory. This bill instead requires that a ccess roads be constructed and maintained in accordance with all applicable local, state, and federal laws, rules, and regulations, including, but not limited to, the requirements of the Water Quality Control Act and applicable rules promulgated by the board ; (18) One of the present law requirements for reclamation of a well site is revegetation. Revegetation success is a prerequisite for release of the reclamation bond. Present law provides that r evegetation success shall not be determined until after two successfully completed growing seasons have occurred . This bill authorizes the commissioner to determine whether or not revegetation success has occurred lesser time than the completion of two growing seasons; and (19) This bill specifies that an operator must make a written request for the release of a reclamation bond."