Sen. William E. Brady
Filed: 4/9/2014
 
 


 




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1
AMENDMENT TO SENATE BILL 3456




2 AMENDMENT NO. ______. Amend Senate Bill 3456 by replacing 
3everything after the enacting clause with the following:


4 "Section 5. The Illinois Oil and Gas Act is amended by 
5changing Section 6 as follows:




6 (225 ILCS 725/6) (from Ch. 96 1/2, par. 5409)



7 Sec. 6. 
The Department shall have the authority to conduct 
8hearings and
to make such reasonable rules as may be necessary 
9from time to time in the
proper administration and enforcement 
10of this Act, including the adoption
of rules and the holding of 
11hearings for the following purposes:


12  (1) To require the drilling, casing and plugging of 
13 wells to be done in
such a manner as to prevent the 
14 migration of oil or gas from one stratum to
another; to 
15 prevent the intrusion of water into oil, gas or coal 
16 strata;
to prevent the pollution of fresh water supplies by 
 
 
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1 oil, gas or salt
water.


2  (2) To require the person desiring or proposing to 
3 drill, deepen or
convert any well for the exploration or 
4 production of
oil or gas, for injection or water supply in 
5 connection with
enhanced recovery projects, for the 
6 disposal of salt water, brine, or other
oil or gas field 
7 wastes, or for input, withdrawal, or observation in

8 connection with the storage of natural gas or other liquid 
9 or gaseous
hydrocarbons before commencing the drilling, 
10 deepening or
conversion of any such well, to make 
11 application to the Department upon
such form as the 
12 Department may prescribe and to comply with the provisions

13 of this Section. The drilling, deepening or conversion of 
14 any well is
hereby prohibited until such application is 
15 made and the applicant is
issued a permit therefor as 
16 provided by this Act. Each application for a
well permit 
17 shall include the following: (A) The exact location of the

18 well, (B) the name and address of the manager, operator, 
19 contractor,
driller, or any other person responsible for 
20 the conduct of drilling
operations, (C) the proposed depth 
21 of the well, (D) lease ownership
information, and (E) such 
22 other relevant information as the Department may
deem 
23 necessary or convenient to effectuate the purposes of this 
24 Act.


25  Additionally, each applicant who has not been issued a 
26 permit that is
of record on the effective date of this 
 
 
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1 amendatory Act of 1991, or who has
not thereafter made 
2 payments of assessments under Section 19.7 of this Act
for 
3 at least 2 consecutive years preceding the application, 
4 shall execute,
as principal, and file with the Department a 
5 bond, executed by a surety
authorized to transact business 
6 in this State, in an amount estimated to
cover the cost of 
7 plugging the well and restoring the well site, but not to

8 exceed $5000, as determined by the Department for each 
9 well, or a blanket
bond in an amount not to exceed $100,000 
10 for all wells, before drilling,
deepening, converting, or 
11 operating any well for which a permit is required
that has 
12 not previously been plugged and abandoned in accordance 
13 with the
Act. The Department shall release the bond if the 
14 well, or all wells in the
case of a blanket bond, is not 
15 completed but is plugged and the well site
restored in 
16 accordance with the Department's rules or is completed in

17 accordance with the Department's rules and the permittee 
18 pays assessments
to the Department in accordance with 
19 Section 19.7 of this Act for 2
consecutive years.


20  In lieu of a surety bond, the applicant may provide 
21 cash,
certificates of deposit, or irrevocable letters of 
22 credit under such terms
and conditions as the Department 
23 may provide by rule.


24  The sureties on all bonds in effect on the effective 
25 date of this
amendatory Act of 1991 shall remain liable as 
26 sureties in accordance with
their undertakings until 
 
 
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1 released by the Department from further liability
under the 
2 Act. The principal on each bond in effect on the effective 
3 date
of this amendatory Act of 1991 shall be released from 
4 the obligation of
maintaining the bond if either the well 
5 covered by a surety bond has been
plugged and the well site 
6 restored in accordance with the Department's
rules or the 
7 principal of the surety has paid the initial assessment in

8 accordance with Section 19.7 and no well or well site 
9 covered by the surety
bond is in violation of the Act.


10  No permit shall be issued to a corporation incorporated 
11 outside of
Illinois until the corporation has been 
12 authorized to do business in Illinois.


13  No permit shall be issued to an individual, 
14 partnership, or other
unincorporated entity that is not a 
15 resident of Illinois until that individual,
partnership, 
16 or other unincorporated entity has irrevocably consented 
17 to be
sued in Illinois.


18  (3) To require the person assigning, transferring, or 
19 selling any well
for which a permit is required under this 
20 Act to notify the Department of
the change of ownership. 
21 The notification shall be on a form prescribed by
the 
22 Department, shall be executed by the current permittee and 
23 by the new
permittee, or their authorized representatives, 
24 and shall be filed with the
Department within 30 days after 
25 the effective date of the assignment,
transfer or sale. 
26 Within the 30 day notification period and prior to

 
 
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1 operating the well, the new permittee shall pay the 
2 required well transfer
fee and, where applicable, file with 
3 the Department the bond required under
subsection (2) of 
4 this Section.


5  (4) To require the filing with the State Geological 
6 Survey
of all geophysical logs, a well drilling
report and 
7 drill cuttings or cores, if cores are required,
within 90 
8 days after drilling ceases; and to file a completion report

9 with the Department within 30 days after the date of first 
10 production
following initial drilling or any reworking, or 
11 after the plugging of the
well, if a dry hole. A copy of 
12 each completion report submitted to the
Department shall be 
13 delivered to the State Geological Survey. The
Department 
14 and the State Geological Survey shall keep the reports

15 confidential, if requested in writing by the permittee, for 
16 2 years after
the date the permit is issued by the 
17 Department. This confidentiality
requirement shall not 
18 prohibit the use of the report for research purposes,

19 provided the State Geological Survey does not publish 
20 specific data or
identify the well to which the completion 
21 report pertains.


22  (5) To prevent "blowouts", "caving" and "seepage" in 
23 the same sense that
conditions indicated by such terms are 
24 generally understood in the oil and
gas business.


25  (6) To prevent fires.


26  (7) To ascertain and identify the ownership of all oil 
 
 
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1 and gas wells,
producing leases, refineries, tanks, 
2 plants, structures, and all storage
and transportation 
3 equipment and facilities.


4  (8) To regulate the use of any enhanced recovery method 
5 in oil pools
and oil fields.


6  (9) To regulate or prohibit the use of vacuum.


7  (10) To regulate the spacing of wells, the
issuance of 
8 permits, and the establishment of drilling units.


9  (11) To regulate directional drilling of oil or gas 
10 wells.


11  (12) To regulate the plugging of wells.


12  (13) To require that wells for which no logs or

13 unsatisfactory logs are supplied shall be completely 
14 plugged with cement
from bottom to top.


15  (14) To require a description in such form as is

16 determined by the Department of the method of well plugging 
17 for each
well, indicating the character of material used 
18 and the positions and
dimensions of each plug.


19  (15) To prohibit waste, as defined in this Act.


20  (16) To require the keeping of such records, the 
21 furnishing of such
relevant information and the 
22 performance of such tests as the Department
may deem 
23 necessary to carry into effect the purposes of this Act.


24  (17) To regulate the disposal of salt or 
25 sulphur-bearing water and any
oil field waste produced in 
26 the operation of any oil or gas well.


 
 
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1  (18) To prescribe rules, conduct inspections and 
2 require compliance with
health and safety standards for the 
3 protection of persons working
underground in connection 
4 with any oil and gas operations. For the
purposes of this 
5 paragraph, oil and gas operations include drilling or

6 excavation, production operations, plugging or filling in 
7 and sealing, or
any other work requiring the presence of 
8 workers in shafts or excavations
beneath the surface of the 
9 earth. Rules promulgated by the Department may
include 
10 minimum qualifications of persons performing tasks 
11 affecting the
health and safety of workers underground, 
12 minimum standards for the
operation and maintenance of 
13 equipment, and safety procedures and
precautions, and 
14 shall conform, as nearly as practicable, to corresponding

15 qualifications, standards and procedures prescribed under 
16 The Coal Mining Act.


17  (19) To deposit the amount of any forfeited surety bond 
18 or other
security in the Plugging and Restoration Fund, a 
19 special fund in the State
treasury which is hereby created; 
20 to deposit into the Fund any amounts
collected, reimbursed 
21 or recovered by the Department under Sections 19.5,
19.6 
22 and 19.7 of this Act; to accept, receive, and
deposit into 
23 the Fund any grants, gifts or other funds which may be made

24 available from public or private sources and all earnings 
25 received from
investment of monies in the Fund; and to make 
26 expenditures from the Fund
for the purposes of plugging, 
 
 
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1 replugging or repairing any well, and
restoring the site of 
2 any well, determined by the Department to be
abandoned or 
3 ordered by the Department to be plugged, replugged, 
4 repaired
or restored under Sections 8a, 19 or 19.1 of this 
5 Act, including
expenses in administering the Fund.

6  (20) To determine if oil and gas leases submitted with 
7 an application for a permit or transfer of a permit for a 
8 well are operative on the basis that prior oil and gas 
9 leases covering the same lands have terminated due to 
10 non-development or non-production. Department 
11 determinations under this paragraph may be based upon 
12 affidavits of non-development or non-production from 
13 knowledgeable individuals familiar with the history of 
14 development and production of oil or gas as to such lands, 
15 together with other evidence, which create a rebuttable 
16 presumption that the prior oil and gas leases have 
17 terminated and are of no further force and effect and that 
18 the submitted oil and gas leases are operative and 
19 effective. To create a rebuttable presumption, such 
20 affidavits, together with other evidence provided to or 
21 available from the Department, shall reasonably indicate 
22 that there has been no development, operations, or 
23 production of oil and gas on the lands described in the 
24 prior leases for at least 24 consecutive months subsequent 
25 to the expiration of the primary term or any extension of 
26 the primary term as set forth in the leases, or the period 
 
 
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1 of time of no development or production after expiration of 
2 the primary term as provided in the leases. A court order 
3 or judgment declaring the prior leases terminated is not 
4 required for determinations under this paragraph, except 
5 in extraordinary circumstances where such determinations 
6 cannot reasonably be concluded from the affidavits or 
7 evidence submitted to or available from the Department. 
8 Upon the Department's determination of a rebuttable 
9 presumption under this paragraph, the Department shall 
10 provide the current permittee with notice and a 30-day 
11 opportunity to request a hearing to rebut the presumption 
12 before a final determination on a lease is made. Upon the 
13 Department's determination of a rebuttable presumption 
14 under this paragraph, if the applicant is not requesting a 
15 transfer of any existing permit as to a well located on the 
16 lands, but is requesting a new permit, the permit shall be 
17 issued to the applicant. Any determination made by the 
18 Department under this paragraph shall not diminish the 
19 rights or obligations of any current permittee of a well 
20 that are otherwise provided by statute or regulation of the 
21 Department. Any request for a determination under this 
22 paragraph shall require the payment of a nonrefundable fee 
23 of $1000 by the applicant. All determinations on leases by 
24 the Department under this paragraph shall be made no later 
25 than 90 days after the Department's receipt of a valid 
26 request for such determination. 
 
 
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1 For the purposes of this Act, the State Geological Survey 
2shall
co-operate with the Department in making available its 
3scientific and
technical information on the oil and gas 
4resources of the State, and the
Department shall in turn 
5furnish a copy to the State Geological Survey
of all drilling 
6permits as issued, and such other drilling and operating
data 
7received or secured by the Department which are pertinent to

8scientific research on the State's mineral resources.

9(Source: P.A. 86-205; 86-364; 86-1177; 87-744.)



10 Section 99. Effective date. This Act takes effect upon 
11becoming law.".