Bill Text: FL S0958 | 2013 | Regular Session | Comm Sub
Bill Title: Underground Natural Gas Storage
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2013-04-29 - Laid on Table, companion bill(s) passed, see CS/CS/CS/HB 1083 (Ch. 2013-205), CS/CS/HB 1085 (Ch. 2013-206) [S0958 Detail]
Download: Florida-2013-S0958-Comm_Sub.html
Florida Senate - 2013 CS for CS for CS for SB 958 By the Committees on Appropriations; Communications, Energy, and Public Utilities; and Environmental Preservation and Conservation; and Senators Richter and Smith 576-04968-13 2013958c3 1 A bill to be entitled 2 An act relating to underground natural gas storage; 3 providing a short title; amending s. 211.02, F.S.; 4 narrowing the use of the term “oil”; amending s. 5 211.025, F.S.; narrowing the scope of the gas 6 production tax to apply only to native gas; amending 7 s. 376.301, F.S.; conforming a cross-reference; 8 amending s. 377.06, F.S.; declaring underground 9 natural gas storage to be in the public interest; 10 amending s. 377.18, F.S.; clarifying common sources of 11 oil and gas; amending s. 377.19, F.S.; modifying and 12 providing definitions; amending s. 377.21, F.S.; 13 extending the jurisdiction of the Division of Resource 14 Management of the Department of Environmental 15 Protection; amending s. 377.22, F.S.; expanding the 16 scope of the department’s rules and orders; amending 17 s. 377.24, F.S.; providing for the notice and 18 permitting of storage in and recovery from natural gas 19 storage reservoirs; creating s. 377.2407, F.S.; 20 establishing a natural gas storage facility permit 21 application process; specifying requirements for an 22 application, including fees; amending s. 377.241, 23 F.S.; providing criteria that the division must 24 consider in issuing permits; amending s. 377.242, 25 F.S.; granting authority to the department to issue 26 permits to establish natural gas storage facilities; 27 creating s. 377.2431, F.S.; establishing conditions 28 and procedures for granting natural gas storage 29 facility permits; prohibiting the issuance of permits 30 for facilities located in specified areas; creating s. 31 377.2432, F.S.; providing for the protection of water 32 supplies at natural gas storage facilities; providing 33 that an operator is presumed responsible for pollution 34 of an underground water supply under certain 35 circumstances; creating s. 377.2433, F.S.; providing 36 for the protection of natural gas storage facilities 37 through requirement of notice, compliance with certain 38 standards, and a right of entry to monitor activities; 39 creating s. 377.2434, F.S.; providing that property 40 rights to injected natural gas are with the injector 41 or the injector’s heirs, successors, or assigns; 42 providing for compensation to the owner of the stratum 43 and the owner of the surface for use of or damage to 44 the surface or substratum; amending s. 377.25, F.S.; 45 limiting the scope of certain drilling unit 46 requirements; amending s. 377.28, F.S.; modifying 47 situations in which the department is required to 48 issue an order requiring unit operation; amending s. 49 377.30, F.S.; providing that limitations on the amount 50 of oil or gas taken do not apply to nonnative gas 51 recovered from a permitted natural gas storage 52 facility; amending s. 377.34, F.S.; providing for 53 legal action against a person who appears to be 54 violating a rule that relates to the storage or 55 recovery of natural gas; amending s. 377.37, F.S.; 56 expanding penalties to reach persons who violate the 57 terms of a permit relating to storage of gas in a 58 natural gas storage facility; amending s. 377.371, 59 F.S.; providing that a person storing gas in a natural 60 gas storage facility may not pollute or otherwise 61 damage certain areas and that a person who pollutes 62 water by storing natural gas is liable for cleanup or 63 other costs incurred by the state; amending s. 64 403.973, F.S.; allowing expedited permitting for 65 natural gas storage facilities permitted under ch. 66 377, F.S., and certain projects to construct 67 interstate natural gas pipelines; providing that 68 natural gas storage facilities are subject to certain 69 requirements; directing the department to adopt 70 certain rules before issuing permits for natural gas 71 storage facilities; providing an effective date. 72 73 Be It Enacted by the Legislature of the State of Florida: 74 75 Section 1. This act may be cited as the “Florida 76 Underground Natural Gas Storage Act.” 77 Section 2. Subsection (7) is added to section 211.02, 78 Florida Statutes, to read: 79 211.02 Oil production tax; basis and rate of tax; tertiary 80 oil and mature field recovery oil.—An excise tax is hereby 81 levied upon every person who severs oil in the state for sale, 82 transport, storage, profit, or commercial use. Except as 83 otherwise provided in this part, the tax is levied on the basis 84 of the entire production of oil in this state, including any 85 royalty interest. Such tax shall accrue at the time the oil is 86 severed and shall be a lien on production regardless of the 87 place of sale, to whom sold, or by whom used, and regardless of 88 the fact that delivery of the oil may be made outside the state. 89 (7) As used in this section, the term “oil” does not 90 include gas-phase hydrocarbons that are transported into the 91 state, injected in the gaseous phase into a natural gas storage 92 facility permitted under part I of chapter 377, and later 93 recovered as a liquid hydrocarbon. 94 Section 3. Subsection (6) is added to section 211.025, 95 Florida Statutes, to read: 96 211.025 Gas production tax; basis and rate of tax.—An 97 excise tax is hereby levied upon every person who severs gas in 98 the state for sale, transport, profit, or commercial use. Except 99 as otherwise provided in this part, the tax shall be levied on 100 the basis of the entire production of gas in this state, 101 including any royalty interest. Such tax shall accrue at the 102 time the gas is severed and shall be a lien on production 103 regardless of the place of sale, to whom sold, or by whom used 104 and regardless of the fact that delivery of the gas may be made 105 outside the state. 106 (6) This section applies only to native gas as defined in 107 s. 377.19. 108 Section 4. Subsection (36) of section 376.301, Florida 109 Statutes, is amended to read: 110 376.301 Definitions of terms used in ss. 376.30-376.317, 111 376.70, and 376.75.—When used in ss. 376.30-376.317, 376.70, and 112 376.75, unless the context clearly requires otherwise, the term: 113 (36) “Pollutants” includes any “product” as defined in s. 114 377.19(11), pesticides, ammonia, chlorine, and derivatives 115 thereof, excluding liquefied petroleum gas. 116 Section 5. Section 377.06, Florida Statutes, is amended to 117 read: 118 377.06 Public policy of state concerning natural resources 119 of oil and gas.—It is hereby declaredto bethe public policy of 120 thisthestate to conserve and control the natural resources of 121 oil and gas in thissaidstate, and the products made from oil 122 and gas in this statetherefrom; to prevent waste ofsaid123 natural resources; to provide for the protection and adjustment 124 of the correlative rights of the owners of the land in which the 125wherein saidnatural resources lie, ofandthe owners and 126 producers of oil and gas resources and the products made from 127 oil and gastherefrom, and of others interested in these 128 resources and productstherein; to safeguard the health, 129 property, and public welfare of the residentscitizensof this 130saidstate and other interested persons and for all purposes 131 indicated by the provisions in this sectionherein. Further, it 132 is declared that underground storage of natural gas is in the 133 public interest because underground storage promotes 134 conservation of natural gas; makes gas more readily available to 135 the domestic, commercial, and industrial consumers of this 136 state; and allows the accumulation of large quantities of gas in 137 reserve for orderly withdrawal during emergencies or periods of 138 peak demand. It is not the intention of this section to limit, 139orrestrict, or modify in any way the provisions of this law. 140 Section 6. Section 377.18, Florida Statutes, is amended to 141 read: 142 377.18 Common sources of oil and gas.—All common sources of 143 supply of oil or nativeandgasor either of themshall have the 144 productiontherefromcontrolled or regulated in accordance with 145 the provisions of this law. 146 Section 7. Section 377.19, Florida Statutes, is reordered 147 and amended to read: 148 377.19 Definitions.—As usedUnless the context otherwise149requires, the words defined in this section shall have the150following meanings when foundin ss. 377.06, 377.07, and 377.10 151 377.40, the term: 152 (3)(1)“Division” means the Division of Resource Management 153 of the Department of Environmental Protection. 154 (28)(2)“State” means the State of Florida. 155 (20)(3)“Person” means aanynatural person, corporation, 156 association, partnership, receiver, trustee, guardian, executor, 157 administrator, fiduciary, or representative of any kind. 158 (15)(4)“Oil” means crude petroleum oil and other 159 hydrocarbons, regardless of gravity, which are produced at the 160 well in liquid form by ordinary production methods, and which 161 are not the result of condensation of gas after it leaves the 162 reservoir. 163 (5) “Gas” means all natural gas, including casinghead gas, 164 and all other hydrocarbons not defined as oil in subsection (4). 165 (21)(6)“Pool” means an underground reservoir containing or 166 appearing to contain a common accumulation of oil or gas or 167 both. Each zone of a general structure which is completely 168 separated from any other zone on the structure is considered a 169 separate pool as used herein. 170 (4)(7)“Field” means the general area thatwhichis 171 underlaid, or appears to be underlaid, by at least one pool. The 172 term; and “field”includes the underground reservoir, or 173 reservoirs, containing oil or gas, or both. The termswords174 “field” and “pool” mean the same thing ifwhenonly one 175 underground reservoir is involved; however, the term “field,” 176 unlike the term “pool,” may relate to two or more pools. 177 (19)(8)“Owner” means the person who has the right to drill 178 into and to produce from any pool and to appropriate the 179 productioneitherfor the person or for the person and another, 180 or others. 181 (22)(9)“Producer” means the owner or operator of a well or 182 wells capable of producing oil or gas, or both. 183 (31)(10)“Waste,” in addition to its ordinary meaning, 184 means “physical waste” as that term is generally understood in 185 the oil and gas industry. The term “waste” includes: 186 (a) The inefficient, excessive, or improper use or 187 dissipation of reservoir energy; and the locating, spacing, 188 drilling, equipping, operating, or producing of any oil or gas 189 well or wells in a manner thatwhichresults, or tends to 190 result, in reducing the quantity of oil or gas ultimately to be 191 stored or recovered from any pool in this state. 192 (b) The inefficient storing of oil; and the locating, 193 spacing, drilling, equipping, operating, or producing of any oil 194 or gas well or wells in a manner that causes, or tendscausing,195or tendingto cause, unnecessary or excessive surface loss or 196 destruction of oil or gas. 197 (c) The producing of oil or gas insucha manner that 198 causesas to causeunnecessary water channeling or coning. 199 (d) The operation of any oil well or wells with an 200 inefficient gas-oil ratio. 201 (e) The drowning with water of any stratum or part thereof 202 capable of producing oil or gas. 203 (f) The underground waste, however caused and whether or 204 not defined. 205 (g) The creation of unnecessary fire hazards. 206 (h) The escape into the open air, from a well producing 207 both oil and gas, of gas in excess of the amount thatwhichis 208 necessary in the efficient drilling or operation of the well. 209 (i) The use of gas for the manufacture of carbon black. 210 (j) Permitting gas produced from a gas well to escape into 211 the air. 212 (k) The abuse of the correlative rights and opportunities 213 of each owner of oil and gas in a common reservoir due to 214 nonuniform, disproportionate, and unratable withdrawals, causing 215 undue drainage between tracts of land. 216 (23)(11)“Product” means aanycommodity made from oil or 217 gas and includes refined crude oil, crude tops, topped crude, 218 processed crude petroleum, residue from crude petroleum, 219 cracking stock, uncracked fuel oil, fuel oil, treated crude oil, 220 residuum, gas oil, casinghead gasoline, natural gas gasoline, 221 naphtha, distillate, condensate, gasoline, waste oil, kerosene, 222 benzine, wash oil, blended gasoline, lubricating oil, blends or 223 mixtures of oil with one or more liquid products or byproducts 224 derived from oil or gas, and blends or mixtures of two or more 225 liquid products or byproducts derived from oil or gas, whether 226 hereinabove enumerated or not. 227 (8)(12)“Illegal oil” means oil thatwhichhas been 228 produced within the state from any well or wells in excess of 229 the amount allowed by rule, regulation, or order of the 230 division, as distinguished from oil produced within the state 231 from a well not producing in excess of the amount so allowed, 232 which is “legal oil.” 233 (7)(13)“Illegal gas” means gas thatwhichhas been 234 produced within the state from any well or wells in excess of 235 the amount allowed by any rule, regulation, or order of the 236 division, as distinguished from gas produced within the State of 237 Florida from a well not producing in excess of the amount so 238 allowed, which is “legal gas.” 239 (9)(14)“Illegal product” means aanyproduct of oil or 240 gas, any part of which was processed or derived, in whole or in 241 part, from illegal gas or illegal oil or from any product 242 thereof, as distinguished from “legal product,” which is a 243 product processed or derived to no extent from illegal oil or 244 illegal gas. 245 (24)(15)“Reasonable market demand” means the amount of oil 246 reasonably needed for current consumption, together with a 247 reasonable amount of oil for storage and working stocks. 248 (30)(16)“Tender” means a permit or certificate of 249 clearance for the transportation or the delivery of oil, gas, or 250 products, approved and issued or registered under the authority 251 of the division. 252(17) The use of the word “and” includes the word “or” and253the use of “or” includes “and,” unless the context clearly254requires a different meaning, especially with respect to such255expressions as “oil and gas” or “oil or gas.”256 (32)(18)“Well site” means the general area around a well, 257 which area has been disturbed from its natural or existing 258 condition, as well as the drilling or production pad, mud and 259 water circulation pits, and other operation areas necessary to 260 drill for or produce oil or gas, or to inject gas into and 261 recover gas from a natural gas storage facility. 262 (17)(19)“Oil and gas administrator” means the State 263 Geologist. 264 (18)(20)“Operator” means the entity who: 265 (a) Has the right to drill and to produce a well; or 266 (b) As part of a natural gas storage facility, injects, or 267 is engaged in the work of preparing to inject, gas into a 268 natural gas storage reservoir; or stores gas in, or removes gas 269 from, a natural gas storage reservoir. 270 (1)(21)“Completion date” means the day, month, and year 271 that a new productive well, a previously shut-in well, or a 272 temporarily abandoned well is completed, repaired, or 273 recompleted and the operator begins producing oil or gas in 274 commercial quantities. 275 (26)(22)“Shut-in well” means an oil or gas well that has 276 been taken out of service for economic reasons or mechanical 277 repairs. 278 (29)(23)“Temporarily abandoned well” means a permitted 279 well or wellbore that has been abandoned by plugging in a manner 280 that allows reentry and redevelopment in accordance with oil or 281 gas rules of the Department of Environmental Protection. 282 (14)(24)“New field well” means an oil or gas well 283 completed after July 1, 1997, in a new field as designated by 284 the Department of Environmental Protection. 285 (6)(25)“Horizontal well” means a well completed with the 286 wellbore in a horizontal or nearly horizontal orientation within 287 10 degrees of horizontal within the producing formation. 288 (2) “Department” means the Department of Environmental 289 Protection. 290 (10) “Lateral storage reservoir boundary” means the 291 projection up to the land surface of the maximum horizontal 292 extent of the gas volume contained in a natural gas storage 293 reservoir. 294 (11) “Native gas” means gas that occurs naturally within 295 this state and does not include gas produced outside the state, 296 transported to this state, and injected into a permitted natural 297 gas storage facility. 298 (12) “Natural gas storage facility” means an underground 299 reservoir from which oil or gas has previously been produced and 300 which is used or to be used for the underground storage of 301 natural gas, and any surface or subsurface structure, or 302 infrastructure, except wells. The term also includes a right or 303 appurtenance necessary or useful in the operation of the 304 facility for the underground storage of natural gas, including 305 any necessary or reasonable reservoir protective area as 306 designated for the purpose of ensuring the safe operation of the 307 storage of natural gas or protecting the natural gas storage 308 facility from pollution, invasion, escape, or migration of gas, 309 or any subsequent extension thereof. The term does not mean a 310 transmission, distribution, or gathering pipeline or system that 311 is not used primarily as integral piping for a natural gas 312 storage facility. 313 (13) “Natural gas storage reservoir” means a pool or field 314 from which gas or oil has previously been produced and which is 315 suitable for or capable of being made suitable for the 316 injection, storage, and recovery of gas, as identified in a 317 permit application submitted to the department under s. 318 377.2407. 319 (16) “Oil and gas” has the same meaning as the term “oil or 320 gas.” 321 (25) “Reservoir protective area” means the area extending 322 up to and including 2,000 feet surrounding a natural gas storage 323 reservoir. 324 (27) “Shut-in bottom hole pressure” means the pressure at 325 the bottom of a well when all valves are closed and no oil or 326 gas has been allowed to escape for at least 24 hours. 327 Section 8. Subsection (1) of section 377.21, Florida 328 Statutes, is amended to read: 329 377.21 Jurisdiction of division.— 330 (1) The division shall have jurisdiction and authority over 331 all persons and property necessary to administer and enforce 332 effectively the provisions of this law and all other laws 333 relating to the conservation of oil and gas or to the storage of 334 gas in and recovery of gas from natural gas storage reservoirs. 335 Section 9. Subsection (2) of section 377.22, Florida 336 Statutes, is amended to read: 337 377.22 Rules and orders.— 338 (2) The department shall issue orders and adopt rules 339 pursuant to ss. 120.536(1)and 120.54 to implement and enforce 340 the provisions of this chapter. Such rules and orders shall 341 ensure that all precautions are taken to prevent the spillage of 342 oil or any other pollutant in all phases of the drilling for, 343 and extracting of, oil, gas, or other petroleum products, or 344 during the injection of gas into and recovery of gas from a 345 natural gas storage reservoir. The department shall revise such 346 rules from time to time as necessary for the proper 347 administration and enforcement of this chapter. Rules adopted 348 and orders issued in accordance with this section areshall be349 for, butshallnotbelimited to, the following purposes: 350 (a) To require the drilling, casing, and plugging of wells 351 to be done in such a manner as to prevent the pollution of the 352 fresh, salt, or brackish waters or the lands of the state and to 353 protect the integrity of natural gas storage reservoirs. 354 (b) To prevent the alteration of the sheet flow of water in 355 any area. 356 (c) To require that appropriate safety equipment be 357 installed to minimize the possibility of an escape of oil or 358 other petroleum products in the event of accident, human error, 359 or a natural disaster during drilling, casing, or plugging of 360 any well and during extraction operations. 361 (d) To require the drilling, casing, and plugging of wells 362 to be done in such a manner as to prevent the escape of oil or 363 other petroleum products from one stratum to another. 364 (e) To prevent the intrusion of water into an oil or gas 365 stratum from a separate stratum, except as provided by rules of 366 the division relating to the injection of water for proper 367 reservoir conservation and brine disposal. 368 (f) To require a reasonable bond, or other form of security 369 acceptable to the department, conditioned upon the performance 370 of the duty to plug properly each dry and abandoned well and the 371 full and complete restoration by the applicant of the area over 372 which geophysical exploration, drilling, or production is 373 conducted to the similar contour and general condition in 374 existence prior to such operation. 375 (g) To require and carry out a reasonable program of 376 monitoring or inspection of all drilling operations,or377 producing wells, or injecting wells, including regular 378 inspections by division personnel. 379 (h) To require the making of reports showing the location 380 of all oil and gas wells; the making and filing of logs; the 381 taking and filing of directional surveys; the filing of 382 electrical, sonic, radioactive, and mechanical logs of oil and 383 gas wells; if taken, the saving of cutting and cores, the cuts 384 of which shall be given to the Bureau of Geology; and the making 385 of reports with respect to drilling and production records. 386 However, such information, or any part thereof, at the request 387 of the operator, shall be exempt from the provisions of s. 388 119.07(1) and held confidential by the division for a period of 389 1 year after the completion of a well. 390 (i) To prevent wells from being drilled, operated, or 391 produced in such a manner as to cause injury to neighboring 392 leases,orproperty, or natural gas storage reservoirs. 393 (j) To prevent the drowning by water of any stratum, or 394 part thereof, capable of producing oil or gas in paying 395 quantities and to prevent the premature and irregular 396 encroachment of water which reduces, or tends to reduce, the 397 total ultimate recovery of oil or gas from any pool. 398 (k) To require the operation of wells with efficient gas 399 oil ratio, and to fix such ratios. 400 (l) To prevent “blowouts,” “caving,” and “seepage,” in the 401 sense that conditions indicated by such terms are generally 402 understood in the oil and gas business. 403 (m) To prevent fires. 404 (n) To identify the ownership of all oil or gas wells, 405 producing leases, refineries, tanks, plants, structures, and 406 storage and transportation equipment and facilities. 407 (o) To regulate the “shooting,” perforating and chemical 408 treatment of wells. 409 (p) To regulate secondary recovery methods, including the 410 introduction of gas, air, water, or other substance into 411 producing formations. 412 (q) To regulate gas cycling operations. 413 (r) To regulate the storage and recovery of gas injected 414 into natural gas storage facilities. 415 (s)(r)If necessary for the prevention of waste, as herein 416 defined, to determine, limit, and prorate the production of oil 417 or gas, or both, from any pool or field in the state. 418 (t)(s)To require, either generally or in or from 419 particular areas, certificates of clearance or tenders in 420 connection with the transportation or delivery of oil or gas, or 421 any product. 422 (u)(t)To regulate the spacing of wells and to establish 423 drilling units. 424 (v)(u)To prevent, so far as is practicable, reasonably 425 avoidable drainage from each developed unit which is not 426 equalized by counterdrainage. 427 (w)(v)To require that geophysical operations requiring a 428 permit be conducted in a manner which will minimize the impact 429 on hydrology and biota of the area, especially environmentally 430 sensitive lands and coastal areas. 431 (x)(w)To regulate aboveground crude oil storage tanks in a 432 manner which will protect the water resources of the state. 433 (y)(x)To act in a receivership capacity for fractional 434 mineral interests for which the owners are unknown or unlocated 435 and to administratively designate the operator as the lessee. 436 Section 10. Subsections (1) and (2) of section 377.24, 437 Florida Statutes, are amended to read: 438 377.24 Notice of intention to drill well; permits; 439 abandoned wells and dry holes.— 440 (1) Before drilling aanywell in search of oil or gas, or 441 before storing gas in or recovering gas from a natural gas 442 storage reservoirshall be drilled, the person who desires 443desiringto drill for, store, or recover gas, or drill for oil 444 or gas,the sameshall notify the division upon such form as it 445 may prescribe and shall pay a reasonable fee set by rule of the 446 department not to exceed the actual cost of processing and 447 inspecting for each well or reservoir. The drilling of any well 448 and the storing and recovering of gas areis herebyprohibited 449 until such notice is given, theand suchfee ishas beenpaid, 450 and the permit is granted. 451 (2) AnEachapplication for the drilling of a well in 452 search of oil or gas, or for the storing of gas in and 453 recovering of gas from a natural gas storage reservoir, in this 454 state mustshallinclude the address of the residence of the 455 applicant, or applicantseach applicant, which mustaddress456shallbe the address of each person involved in accordance with 457 the records of the Division of Resource Management until such 458 address is changed on the records of the division after written 459 request. 460 Section 11. Section 377.2407, Florida Statutes, is created 461 to read: 462 377.2407 Natural gas storage facility permit application to 463 inject gas into and recover gas from a natural gas storage 464 reservoir.— 465 (1) Before drilling a well to inject gas into and recover 466 gas from a natural gas storage reservoir, the person who desires 467 to conduct such operation shall apply to the department in the 468 manner described in this section using such form as the 469 department may prescribe to obtain a natural gas storage 470 facility permit. The department shall also require any applicant 471 seeking to obtain such permit to pay a reasonable permit 472 application fee. Such fee must be in an amount necessary to 473 cover the costs associated with receiving, processing, issuing, 474 and recertifying the permit application, and inspecting for 475 compliance with the permit. 476 (2) Each application must contain: 477 (a) A detailed, three-dimensional description of the 478 natural gas storage reservoir, including geologic-based 479 descriptions of the reservoir boundaries, and the horizontal and 480 vertical dimensions. 481 (b) A geographic description of the lateral storage 482 reservoir boundary. 483 (c) A general description and location of all injection, 484 recovery, withdrawal-only, and observation wells. 485 (d) A description of the reservoir protective area. 486 (e) Information demonstrating that the proposed natural gas 487 storage reservoir is suitable for the storage and recovery of 488 gas. 489 (f) Information identifying all reasonably known abandoned 490 or active wells within the natural gas storage facility. 491 (g) A field-monitoring plan that requires, at a minimum, 492 monthly field inspections of all wells that are part of the 493 natural gas storage facility. 494 (h) A monitoring and testing plan for the well integrity. 495 (i) A well inspection plan that requires, at a minimum, the 496 inspection of all wells that are part of the natural gas storage 497 facility and plugged wells within the natural gas storage 498 facility boundary. 499 (j) A spill prevention and response plan. 500 (k) A well spacing plan. 501 (l) An operating plan for the natural gas storage 502 reservoir, which must include gas capacities, anticipated 503 operating conditions, and maximum storage pressure. 504 (m) A gas migration response plan. 505 (n) A location plat and general facility map surveyed and 506 prepared by a registered land surveyor licensed under chapter 507 472. 508 (3) The department may require the applicant to provide 509 additional information that is deemed necessary to permit the 510 development of the natural gas storage facility. Each well 511 related to the natural gas storage facility shall be authorized 512 and permitted individually upon the applicant’s satisfying 513 applicable well construction and operation criteria under this 514 part; however, notwithstanding any other provision of this 515 chapter, well spacing requirements do not apply. 516 Section 12. Subsection (4) is added to section 377.241, 517 Florida Statutes, to read: 518 377.241 Criteria for issuance of permits.—The division, in 519 the exercise of its authority to issue permits as hereinafter 520 provided, shall give consideration to and be guided by the 521 following criteria: 522 (4) For activities and operations concerning a natural gas 523 storage facility, the nature, structure, and proposed use of the 524 natural gas storage reservoir is suitable for the storage and 525 recovery of gas without adverse effect to public health or 526 safety or the environment. 527 Section 13. Subsection (3) of section 377.242, Florida 528 Statutes, is amended to read: 529 377.242 Permits for drilling or exploring and extracting 530 through well holes or by other means.—The department is vested 531 with the power and authority: 532 (3) To issue permits to establish natural gas storage 533 facilities or construct wells for the injection and recovery of 534 any natural gas fortemporarystorage in natural gas storage 535subsurfacereservoirs. 536 537 Each permit shall contain an agreement by the permitholder that 538 the permitholder will not prevent inspection by division 539 personnel at any time. The provisions of this section 540 prohibiting permits for drilling or exploring for oil in coastal 541 waters do not apply to any leases entered into before June 7, 542 1991. 543 Section 14. Section 377.2431, Florida Statutes, is created 544 to read: 545 377.2431 Conditions for granting permits for natural gas 546 storage facilities.— 547 (1) A natural gas storage facility permit shall authorize 548 the construction and operation of a natural gas storage facility 549 and must be issued for the life of the facility, subject to 550 recertification every 10 years. 551 (2) Before issuing or recertifying a permit, the department 552 shall require satisfactory evidence of the following: 553 (a) The applicant has implemented, or is in the process of 554 implementing, programs for the control and mitigation of 555 pollution related to oil, petroleum products or their 556 byproducts, and other pollutants. 557 (b) The applicant or operator has acquired a lawful right 558 to drill, explore, or develop a natural gas storage reservoir 559 from owners of at least 75 percent of the storage rights within 560 the natural gas storage reservoir, or the applicant or operator 561 has obtained a certificate of public convenience and necessity 562 for the natural gas storage reservoir from the Federal Energy 563 Regulatory Commission pursuant to the Natural Gas Act, 15 U.S.C. 564 ss. 717 et seq. 565 (c) The applicant has used all reasonable means to identify 566 known wells that have been drilled into or through the natural 567 gas storage reservoir or the reservoir protective area to 568 determine the status of the wells and whether inactive or 569 abandoned wells have been properly plugged. For any well that 570 has not been properly plugged, before conducting injection 571 operations and after issuance of the permit, the applicant must 572 plug or recondition the well to ensure the integrity of the 573 storage reservoir or the reservoir protective area. 574 (d) The applicant has tested the quality of water produced 575 by all water supply wells within the lateral boundary of the 576 natural gas storage facility and complied with all requirements 577 under s. 377.2432. The applicant shall provide to the department 578 and the owner of the water supply well a written copy of the 579 water quality data collected under this paragraph. 580 (e) A determination has been made whether native gas or oil 581 will be severed from below the soil or water of this state in 582 the recovery of injected gas. If native gas or oil will be 583 severed, the applicant or operator must acquire a lawful right 584 to develop the native gas or oil before injecting gas into the 585 natural gas storage reservoir. 586 (3) The applicant shall maintain records of well pressures 587 recorded monthly, and monthly volumes of gas injected into and 588 withdrawn from the reservoir. These records shall be maintained 589 at the natural gas storage facility and shall be made available 590 for inspection by the department at any reasonable time. 591 (4)(a) The maximum storage pressure for a natural gas 592 storage reservoir shall be the highest shut-in bottom hole 593 pressure found to exist during the production history of the 594 reservoir, unless a higher pressure is established by the 595 department based on testing of caprock and pool containment. The 596 methods used for determining the higher pressure must be 597 approved by the department. 598 (b) If the shut-in bottom hole pressure of the original 599 discovery or of the highest production is not known, or a higher 600 pressure has not been established through a method approved by 601 the department pursuant to paragraph (a), the maximum storage 602 reservoir pressure must be limited to a freshwater hydrostatic 603 gradient. 604 (5) A permit may not be issued for a natural gas storage 605 facility that includes a natural gas storage reservoir located 606 beneath an underground source of drinking water unless the 607 applicant demonstrates that the injection, storage, or recovery 608 of natural gas will not cause or allow natural gas to migrate 609 into the underground source of drinking water; in any offshore 610 location in the Gulf of Mexico, the Straits of Florida, or the 611 Atlantic Ocean; or in any solution-mined cavern within a salt 612 formation. 613 (6) A natural gas storage facility permit issued by the 614 department must contain a condition that requires the permittee 615 to obtain the lawful right to develop a natural gas storage 616 reservoir from the owners of 100 percent of the storage rights 617 within the natural gas storage reservoir. 618 Section 15. Section 377.2432, Florida Statutes, is created 619 to read: 620 377.2432 Natural gas storage facilities; protection of 621 water supplies.— 622 (1) An operator of a natural gas storage facility who 623 affects a public or private underground water supply by 624 pollution or diminution shall restore or replace the affected 625 supply with an alternate source of water adequate in quantity 626 and quality for the purposes served by the supply. The 627 department shall ensure that the quality of restored or replaced 628 water is comparable to the quality of the water before it was 629 affected by the operator. 630 (2) Unless rebutted by a defense established in subsection 631 (4), a natural gas storage facility operator is presumed 632 responsible for pollution of an underground water supply if: 633 (a) The water supply is within the lateral boundary of the 634 natural gas storage facility; and 635 (b) The pollution occurred within 6 months after completion 636 of drilling or alteration of any well under or associated with 637 the natural gas storage facility permit or the initial injection 638 of gas into the natural gas storage reservoir, whichever is 639 later. 640 (3) If the affected underground water supply is within the 641 rebuttable presumption area as provided in subsection (2) and 642 the rebuttable presumption applies, the natural gas storage 643 facility operator shall provide a temporary water supply if the 644 water user is without a readily available alternative source of 645 water at no cost to the owner or user of the affected water 646 supply. The temporary water supply provided under this 647 subsection must be adequate in quantity and quality for the 648 purposes served by the affected supply. 649 (4) A natural gas storage facility operator rebuts the 650 presumption in subsection (2) by affirmatively proving any of 651 the following: 652 (a) The pollution existed before the drilling or alteration 653 activity as determined by a predrilling or prealteration survey. 654 (b) The landowner or water purveyor refused to allow the 655 operator access to conduct a predrilling or prealteration 656 survey. 657 (c) The water supply well is not within the lateral 658 boundary of the natural gas storage facility. 659 (d) The pollution occurred more than 6 months after 660 completion of drilling or alteration of any well under or 661 associated with the natural gas storage facility permit. 662 (e) The pollution occurred as the result of a cause other 663 than activities authorized under the natural gas storage 664 facility permit. 665 (5) A natural gas storage facility operator electing to 666 preserve a defense under subsection (4) must retain an 667 independent certified laboratory to conduct a predrilling or 668 prealteration survey of the water supply. A copy of survey 669 results must be submitted to the department and the landowner or 670 water purveyor in the manner prescribed by the department. 671 (6) A natural gas storage facility operator must provide 672 written notice to the landowner or water purveyor indicating 673 that the presumption established under subsection (2) may be 674 void if the landowner or water purveyor refused to allow the 675 operator access to conduct a predrilling or prealteration 676 survey. Proof of written notice to the landowner or water 677 purveyor must be provided to the department in order for the 678 operator to retain the protections under subsection (4). 679 (7) This section does not prevent a landowner or water 680 purveyor who claims pollution or diminution of a water supply 681 from seeking any other remedy at law or in equity. 682 Section 16. Section 377.2433, Florida Statutes, is created 683 to read: 684 377.2433 Protection of natural gas storage facilities; 685 remedies.— 686 (1) The department may not authorize the drilling of any 687 well into or through a permitted natural gas storage reservoir 688 or reservoir protective area, except upon conditions deemed by 689 the department to be sufficient to prevent the loss, migration, 690 or escape of gas from the natural gas storage reservoir. The 691 department shall provide written notice to the natural gas 692 storage facility operator of any application filed with the 693 department and any agency action taken related to drilling a 694 well into or through a permitted natural gas storage facility 695 boundary or reservoir protective area. 696 (2) As a condition for the issuance of a permit by the 697 department, an applicant seeking to drill a well into or through 698 a permitted natural gas storage facility boundary or reservoir 699 protective area must provide the affected natural gas storage 700 facility operator a reasonable right of entry to observe and 701 monitor all drilling activities. 702 (3) The department shall require by permit condition that 703 any well drilled into or through a permitted natural gas storage 704 reservoir or reservoir protective area is cased and cemented in 705 a manner sufficient to protect the integrity of the natural gas 706 storage reservoir. 707 Section 17. Section 377.2434, Florida Statutes, is created 708 to read: 709 377.2434 Property rights to injected natural gas.— 710 (1) All natural gas that has previously been reduced to 711 possession and that is subsequently injected into a natural gas 712 storage facility is at all times the property of the injector or 713 the injector’s heirs, successors, or assigns, whether owned by 714 the injector or stored under contract. 715 (2) Such gas may not be subject to the right of the owner 716 of the surface of the lands or of any mineral interest therein, 717 under which the natural gas storage facilities lie, or to the 718 right of any person, other than the injector or the injector’s 719 heirs, successors, or assigns, to waste or otherwise interfere 720 with or exercise control over such gas, to produce, to take, or 721 to reduce to possession, by means of the law of capture or 722 otherwise. This subsection does not affect the ownership of 723 hydrocarbons occurring naturally within this state or the right 724 of the owner of the surface of the lands or of any mineral 725 interest therein to drill or bore through the natural gas 726 storage facilities in a manner that will protect the facilities 727 against pollution or the escape of stored natural gas. 728 (3) With regard to natural gas that has migrated to 729 adjoining property or to a stratum, or portion thereof, which 730 has not been condemned or otherwise purchased: 731 (a) The injector or the injector’s heirs, successors, or 732 assigns: 733 1. May not lose title to or possession of the gas if the 734 injector or the injector’s heirs, successors, or assigns can 735 prove by a preponderance of the evidence that the gas was 736 originally injected into the underground storage; and 737 2. Have the right to conduct tests on any existing wells on 738 adjoining property as may be reasonable to determine ownership 739 of the gas, but the tests are solely at the injector’s risk and 740 expense. 741 (b) The owner of the stratum and the owner of the surface 742 are entitled to compensation, including compensation for use of 743 or damage to the surface or substratum, as provided by law. 744 Section 18. Subsection (3) of section 377.25, Florida 745 Statutes, is amended to read: 746 377.25 Production pools; drilling units.— 747 (3) Each well permitted to be drilled upon any drilling 748 unit shall be drilled approximately in the center thereof, with 749 such exception as may be reasonably necessary where the division 750 finds that the unit is partly outside the pool or, for some 751 other reason, a well approximately in the center of the unit 752 would be nonproductive or where topographical conditions are 753 such as to make the drilling approximately in the center of the 754 unit unduly burdensome or where the operator proposes to 755 complete the well with a horizontal or nearly horizontal well in 756 the producing zone. Whenever an exception is granted, the 757 division shall take such action as will offset any advantage 758 which the person securing the exception may have over other 759 producers by reason of the drilling of the well as an exception, 760 and so that drainage from developed units to the tract, with 761 respect to which the exception is granted, will be prevented or 762 minimized, and the producer of the well drilled, as an 763 exception, will be allowed to produce no more than his or her 764 just and equitable share of the oil and gas in the pool, as such 765 share is set forth in this section. This subsection does not 766 apply to wells associated with a natural gas storage facility. 767 Section 19. Subsection (2) of section 377.28, Florida 768 Statutes, is amended to read: 769 377.28 Cycling, pooling, and unitization of oil and gas.— 770 (2) The department shall issue an order requiring unit 771 operation if it finds that: 772 (a) Unit operation of the field, or of any pool or pools, 773 portion or portions, or combinations thereof within the field, 774 is reasonably necessary to prevent waste, to avoid the drilling 775 of unnecessary wells, or to increase the ultimate recovery of 776 oil or gas by additional recovery methods;and777 (b) The estimated additional cost incident to the conduct 778 of such operation will not exceed the value of the estimated 779 additional recovery of oil or gas; and 780 (c) The additional recovery of oil or gas does not 781 adversely interfere with the storage or recovery of natural gas 782 within a natural gas storage reservoir. 783 784 The phrase “additional recovery methods” as used herein 785 includes, but is not limited to, the maintenance or partial 786 maintenance of reservoir pressures; recycling; flooding a pool 787 or pools, or parts thereof, with air, gas, water, liquid 788 hydrocarbons, any other substance, or any combination thereof; 789 or any other method of producing additional hydrocarbons 790 approved by the department. 791 Section 20. Subsection (4) is added to section 377.30, 792 Florida Statutes, to read: 793 377.30 Limitation on amount of oil or gas taken.— 794 (4) This section does not apply to nonnative gas recovered 795 from a permitted natural gas storage facility. 796 Section 21. Subsection (1) of section 377.34, Florida 797 Statutes, is amended to read: 798 377.34 Actions and injunctions by division.— 799 (1) Whenever it appearsshall appearthat aanyperson is 800 violating, or threatening to violate, any statute of this state 801 with respect to the conservation of oil or gas, or both, or any 802 provision of this law, or any rule, regulation or order made 803thereunderby any act done in the operation of aanywell 804 producing oil or gas, or storing or recovering natural gas, or 805 by omitting ananyact required to be donethereunder, the 806 division, through its counsel, or the Department of Legal 807 Affairs on its own initiative, may bring suit against such 808 person in the Circuit Court in the County of Leon, state, or in 809 the circuit court in the county in which the well in question is 810 located, at the option of the division, or the Department of 811 Legal Affairs, to restrain such person or persons from 812 continuing such violation or from carrying out the threat of 813 violation. In such suit, the division, or the Department of 814 Legal Affairs, may obtain injunctions, prohibitory and 815 mandatory, including temporary restraining orders and temporary 816 injunctions, as the facts may warrant, including, when 817 appropriate, an injunction restraining any person from moving or 818 disposing of illegal oil, illegal gas or illegal product, and 819 any or all such commodities may be ordered to be impounded or 820 placed under the control of a receiver appointed by the court 821 if, in the judgment of the court, such action is advisable. 822 Section 22. Paragraph (a) of subsection (1) of section 823 377.37, Florida Statutes, is amended to read: 824 377.37 Penalties.— 825 (1)(a) Any person who violates any provision of this law or 826 any rule, regulation, or order of the division made under this 827 chapter or who violates the terms of any permit to drill for or 828 produce oil, gas, or other petroleum products referred to in s. 829 377.242(1),or to store gas in a natural gas storage facility, 830 or any lessee, permitholder, or operator of equipment or 831 facilities used in the exploration for, drilling for, or 832 production of oil, gas, or other petroleum products, or storage 833 of gas in a natural gas storage facility, who refuses inspection 834 by the division as provided in this chapter, is liable to the 835 state for any damage caused to the air, waters, or property, 836 including animal, plant, or aquatic life, of the state and for 837 reasonable costs and expenses of the state in tracing the source 838 of the discharge, in controlling and abating the source and the 839 pollutants, and in restoring the air, waters, and property, 840 including animal, plant, and aquatic life, of the state. 841 Furthermore, such person, lessee, permitholder, or operator is 842 subject to the judicial imposition of a civil penalty in an 843 amount of not more than $10,000 for each offense. However, the 844 court may receive evidence in mitigation. Each day during any 845 portion of which such violation occurs constitutes a separate 846 offense. Nothing herein shall give the department the right to 847 bring an action on behalf of any private person. 848 Section 23. Subsections (1) and (3) of section 377.371, 849 Florida Statutes, are amended to read: 850 377.371 Pollution prohibited; reporting, liability.— 851 (1) ANoperson drilling for or producing oil, gas, or 852 other petroleum products, or storing gas in a natural gas 853 storage facility, may notshallpollute land or water; damage 854 aquatic or marine life, wildlife, birds, or public or private 855 property; or allow any extraneous matter to enter or damage any 856 mineral or freshwater-bearing formation. 857 (3) Because it is the intent of this chapter to provide the 858 means for rapid and effective cleanup and to minimize damages 859 resulting from pollution in violation of this chapter, if the 860 waters of the state are polluted by the drilling, storage of 861 natural gas, or production operations of any person or persons 862 and such pollution damages or threatens to damage human, animal, 863 or plant life, public or private property, or any mineral or 864 water-bearing formation, said person shall be liable to the 865 state for all costs of cleanup or other damage incurred by the 866 state. In any suit to enforce claims of the state under this 867 chapter, it isshallnotbenecessary for the state to plead or 868 prove negligence in any form or manner on the part of the person 869 or persons conducting the drilling or production operations; the 870 state need only plead and prove the fact of the prohibited 871 discharge or other polluting condition and that it occurred at 872 the facilities of the person or persons conducting the drilling 873 or production operation. ANoperson or persons conducting the 874 drilling, storage, or production operation may notshallbe held 875 liable if said person or persons prove that the prohibited 876 discharge or other polluting condition was the result of any of 877 the following: 878 (a) An act of war. 879 (b) An act of government, either state, federal, or 880 municipal. 881 (c) An act of God, which means an unforeseeable act 882 exclusively occasioned by the violence of nature without the 883 interference of any human agency. 884 (d) An act or omission of a third party without regard to 885 whether any such act or omission was or was not negligent. 886 Section 24. Paragraph (b) of subsection (14) and paragraph 887 (b) of subsection (19) of section 403.973, Florida Statutes, are 888 amended, and paragraphs (g) and (h) are added to subsection (3) 889 of that section, to read: 890 403.973 Expedited permitting; amendments to comprehensive 891 plans.— 892 (3) 893 (g) Projects for natural gas storage facilities that are 894 permitted under chapter 377 are eligible for the expedited 895 permitting process. 896 (h) Projects to construct interstate natural gas pipelines 897 subject to certification by the Federal Energy Regulatory 898 Commission are eligible for the expedited permitting process. 899 (14) 900 (b) Projects identified in paragraphsparagraph(3)(f)-(h) 901 or challenges to state agency action in the expedited permitting 902 process for establishment of a state-of-the-art biomedical 903 research institution and campus in this state by the grantee 904 under s. 288.955 are subject to the same requirements as 905 challenges brought under paragraph (a), except that, 906 notwithstanding s. 120.574, summary proceedings must be 907 conducted within 30 days after a party files the motion for 908 summary hearing, regardless of whether the parties agree to the 909 summary proceeding. 910 (19) The following projects are ineligible for review under 911 this part: 912 (b) A project, the primary purpose of which is to: 913 1. Effect the final disposal of solid waste, biomedical 914 waste, or hazardous waste in this state. 915 2. Produce electrical power, unless the production of 916 electricity is incidental and not the primary function of the 917 project or the electrical power is derived from a fuel source 918 for renewable energy as defined in s. 366.91(2)(d). 919 3. Extract natural resources. 920 4. Produce oil. 921 5. Construct, maintain, or operate an oil, petroleum, 922natural gas,or sewage pipeline. 923 Section 25. The Department of Environmental Protection 924 shall adopt rules relating to natural gas storage before issuing 925 a natural gas storage facility permit. 926 Section 26. This act shall take effect July 1, 2013.