Oil and gas: bonding requirements.
Vote required
Majority
Fiscal committee
No
Appropriation
No
Current location
Appropriations
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Progress
Where this bill stands in the legislative process.
- Introduced
- Passed Assembly
- Passed Senate
- To Governor
- Became Law
Overview
This bill changes how oil and gas operators provide financial security for plugging and abandoning wells. Instead of requiring a specific amount of additional bonding, it allows the Geologic Energy Management Division to determine a security amount based on the estimated costs of plugging and abandoning wells and decommissioning facilities, or a maximum amount tied to the number of wells the operator controls. The bill also restricts increases to existing security agreements and requires operators to notify the division if they can’t meet financial criteria, with penalties for non-compliance. It also addresses transfers of wells for plugging and abandonment, clarifying responsibilities and requiring specific documentation.
Key provisions
- Allows the Geologic Energy Management Division to determine additional security based on estimated plugging and abandonment costs or a well-based maximum amount.
- Limits the amount of additional security to the lesser of estimated plugging and abandonment costs or a maximum tied to the number of wells operated.
- Prohibits increasing existing security agreements beyond five years after the original agreement’s effective date.
- Requires operators to notify the division if they cannot meet financial criteria and imposes penalties for failure to do so.
- Replaces the exclusion of self-insurance and corporate guarantees with a requirement for an additional security agreement outlining a schedule for plugging and abandonment.
- Exempts operators solely acquiring wells for plugging and abandonment from the requirement to file an individual indemnity bond.
Bill text
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Sponsors
Official sponsors from legislative records.
1 on record
Primary sponsor
Ávila Farías
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