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.