Pennsylvania Consolidated & Unconsolidated Statutes
Act 96 - OIL AND GAS (58 PA.C.S.) - OIL AND GAS WELL PLUGGING OVERSIGHT, BONDING, WELL PLUGGING FUNDS AND RELATED REPEAL

Session of 2022
No. 2022-96
 
HB 2644
 
AN ACT
 
Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, providing
for oil and gas well plugging oversight; in development, further providing for bonding
and for well plugging funds; establishing the Oil and Gas Well Plugging Grant Program;
and making a related repeal.

 
The General Assembly of the Commonwealth of Pennsylvania hereby enacts as follows:
 
Section 1.  Title 58 of the Pennsylvania Consolidated Statutes is amended by adding a chapter
to read:

CHAPTER 28
OIL AND GAS WELL PLUGGING OVERSIGHT
Subchapter
A.  Preliminary Provisions
B.  Orphaned Well Site Plugging, Remediation and Restoration Program
C.  Oil and Gas Well Plugging Grant Program
SUBCHAPTER A
PRELIMINARY PROVISIONS
Sec.
2801.  Scope of chapter.
2802.  Definitions.
§ 2801.  Scope of chapter.
This chapter relates to oil and gas well plugging oversight.
§ 2802.  Definitions.
The following words and phrases when used in this chapter shall have the meanings
given to them in this section unless the context clearly indicates otherwise:

"Department."  The Department of Environmental Protection of the Commonwealth.
"Eligible well."  An orphan well that meets the requirements under section 2823(b) (relating to eligible
wells).

"Orphan well."  As defined in section 3203 (relating to definitions).
"Qualified well plugger."  A person that meets the requirements of section 2824 (relating to qualified well plugger).
SUBCHAPTER B
ORPHANED WELL SITE PLUGGING, REMEDIATION
AND RESTORATION PROGRAM
Sec.
2811.  Allocation of funding.
§ 2811.  Allocation of funding.
(a)  Requirements.--Federal money received from the Orphaned Well Site Plugging, Remediation
and Restoration Program under section 40601 of the Infrastructure Investment and Jobs
Act (Public Law 117-58, 135 Stat. 429) shall be subject to the following:

(1)  The amount of 80% received shall be deposited into the Orphan Well Plugging Fund.
(2)  The amount of 20% is hereby appropriated on a continuing basis to the department for
grants under Subchapter C (relating to Oil and Gas Well Plugging Grant Program).

(b)  Records.--The department shall keep records sufficient to document compliance with
the requirements imposed under the Orphaned Well Site Plugging, Remediation and Restoration
Program. The department may not impose requirements on the recipients of the Federal
money under subsection (a)(2) that are stricter than the requirements imposed under
State law when awarding grants under Subchapter C.

SUBCHAPTER C
OIL AND GAS WELL PLUGGING GRANT PROGRAM
Sec.
2821.  Establishment of program.
2822.  Grants.
2823.  Eligible wells.
2824.  Qualified well plugger.
2825.  Applications and review process.
2826.  Reports.
§ 2821.  Establishment of program.
The Oil and Gas Well Plugging Grant Program is established as a program within the
department.

§ 2822.  Grants.
(a)  Availability.--A qualified well plugger that plugs an eligible well shall be eligible
for a grant as provided under this subchapter.

(b)  Amount.--Subject to subsection (c), a grant under this subchapter shall be:
(1)  In the amount of $10,000 for every eligible well plugged that is an orphan well of
a depth of 3,000 feet or less.

(2)  In the amount of $20,000 for every eligible well plugged that is an orphan well of
a depth greater than 3,000 feet.

(c)  Adjustment.--
(1)  If the department finds that it is not receiving an adequate number of applications
for grants under this section, the department may increase the amounts under subsection
(b) at its discretion by posting the increased amounts on its publicly accessible
Internet website.

(2)  The department may not decrease the amounts specified in this subsection.
§ 2823.  Eligible wells.
(a)  Review of known orphan wells.--No later than 30 days after the effective date of this
subsection, the department shall review available documentation on all known orphan
wells with no known owner or operator.

(b)  Determination of eligible wells.--No later than 45 days after the effective date of
this subsection, the department shall designate each orphan well reviewed under subsection
(a) as an eligible well if it meets the following requirements:

(1)  The orphan well is not plugged in accordance with the requirements of section 3220
(relating to plugging requirements).

(2)  No amount of a bond under section 3225 (relating to bonding) is available to pay for
the plugging of the orphan well.

(3)  No person who is financially responsible for the plugging of the orphan well is known
to the department or likely to be identifiable.

(c)  Publication of notice of availability of grants.--No later than 60 days after the
effective date of this subsection, the department shall publish on its publicly accessible
Internet website all of the following:

(1)  A list of each eligible well and any relevant identifying information.
(2)  Any available technical data that would be necessary for a qualified well plugger
to plug each eligible well on the list under paragraph (1).

(d)  Publication of notice of updated availability of grants.--The department shall periodically
update the notice under subsection (c) to identify all of the following:

(1)  Which eligible well has been the subject of an approval under section 2825 (relating
to applications and review process).

(2)  Which eligible well has been plugged in accordance with section 3220.
(e)  Plugging contract discretion.--The department may remove an eligible well from the
list under subsection (c) that the department makes available for plugging through
a contracting process. Upon removing an eligible well from the list, the department
shall update the notice and list under subsection (c) to reflect the removal.

§ 2824.  Qualified well plugger.
(a)  Criteria.--A person shall qualify as a qualified well plugger if the person meets
any of the following criteria:

(1)  The person has drilled 10 or more wells in this Commonwealth in accordance with section
3211 (relating to well permits).

(2)  The person has plugged 10 or more wells in this Commonwealth in accordance with section
3220 (relating to plugging requirements).

(3)  The person otherwise demonstrates access to the equipment, materials, resources and
services to plug wells in accordance with section 3220.

(b)  Legal responsibility.--A qualified well plugger shall not be the person who is legally
responsible for plugging the orphan well.

§ 2825.  Applications and review process.
(a)  Application form.--No later than the date that the notice of availability under section
2823(c) (relating to eligible wells) is published, the department shall make an application
form for a grant under this subchapter available on the department's publicly accessible
Internet website.

(b)  Content of applications.--An application submitted by a qualified well plugger shall
contain all of the following:

(1)  The name of the qualified well plugger.
(2)  A list of eligible wells listed under section 2823(c) that the qualified well plugger
intends to plug in accordance with the requirements of section 3220 (relating to plugging
requirements) if approved for a grant under this subchapter.

(3)  A certification that the qualified well plugger has legal authority to access and
perform the activities needed to plug each well listed under paragraph (2).

(c)  Acceptance of applications.--
(1)  The department shall begin accepting applications under subsection (a) no later than
the date that the application is made available under subsection (a).

(2)  As additional amounts are appropriated to the department for the grant program under
this subchapter after the effective date of this subsection, the department shall
begin accepting applications under subsection (a) no later than seven days after the
additional money is appropriated.

(d)  Review.--The department shall review and approve applications received under subsection
(c) on a rolling basis.

(e)  Initial approval.--
(1)  If an application submitted under subsections (b) and (c) meets the requirements of
this subchapter and if the amount of grant money that the qualified well plugger would
be eligible to receive remains available, the department shall approve the application
and shall notify the applicant which orphan wells on the list under subsection (b)(2)
for which the qualified well plugger has been approved to receive a grant.

(2)  An approval under this subsection shall be made within seven days of the receipt of
the application. The department shall provide notice of the approval to the qualified
plugger within three days of the date of approval.

(f)  Awarding of grant.--An approved well plugger shall be awarded a grant if all of the
following requirements are met:

(1)  The qualified well plugger was previously approved under subsection (e).
(2)  The qualified well plugger plugged an orphan well for which the qualified well plugger
was approved under subsection (e).

(3)  The qualified well plugger has submitted a plugging certificate, prepared and signed,
on a form furnished by the department, by two experienced and qualified individuals
who participated in the work and specified the time and manner in which the well was
plugged.

(g)  Amount of grant.--The amount of the grant awarded under subsection (f) shall be the
sum of the amounts under section 2822 (relating to grants) for which the qualified
well plugger is approved under subsection (e). If the qualified well plugger encounters
unusual technical difficulties due to the condition of an orphan well, the department
may, upon awarding the grant, reimburse the qualified well plugger with an additional
grant amount. The additional grant amount under this subsection shall not exceed the
amount of the grant for a specific orphan well. The department may not award the additional
grant amount under this subsection to a qualified well operator without receiving
an adequate proof of cost from the qualified well plugger.

(h)  Civil immunity.--A person who voluntarily provides equipment, materials, resources
or services for plugging an orphan well in accordance with this subchapter shall be
immune from civil liability other than injury or damage resulting from gross negligence
or willful misconduct. The person may raise the civil immunity protections specified
in this subsection in a legal proceeding brought to enforce the environmental laws
of this Commonwealth or otherwise impose civil liability.

§ 2826.  Reports.
(a)  Requirement.--No later than 21 days after the end of each calendar quarter in which
the grant program under this subchapter receives applications, approves applications
or awards grants, the department shall issue a report.

(b)  Contents.--The report under this section shall include all of the following:
(1)  The number of applications received under section 2825(c) (relating to applications
and review process) in the quarter, year to date and since the effective date of this
subsection.

(2)  The number of applications approved under section 2825(e) in the quarter, year to
date and since the effective date of this subsection.

(3)  The number of grants and the total amount awarded under section 2825(f) in the quarter,
year to date and since the effective date of this subsection.

(c)  Recipients.--The report under this section shall be made available on the publicly
accessible Internet website of the department and shall be submitted to the following:

(1)  The chairperson and minority chairperson of the Appropriations Committee of the Senate.
(2)  The chairperson and minority chairperson of the Appropriations Committee of the House
of Representatives.

(3)  The chairperson and minority chairperson of the Environmental Resources and Energy
Committee of the Senate.

(4)  The chairperson and minority chairperson of the Environmental Resources and Energy
Committee of the House of Representatives.

Section 2.  Section 3225(a)(1) and (2) of Title 58 are amended and the subsection is amended by
adding a paragraph to read:

§ 3225.  Bonding.
(a)  General rule.--The following shall apply:
(1)  Except as provided in subsection (d), upon filing an application for a well permit
and before continuing to operate an oil or gas well, the owner or operator of the
well shall file with the department a bond covering the well and well site on a form
to be prescribed and furnished by the department. A bond filed with an application
for a well permit shall be payable to the Commonwealth and conditioned upon the operator's
faithful performance of all drilling, water supply replacement, restoration and plugging
requirements of this chapter. A bond for a well in existence on April 18, 1985, shall
be payable to the Commonwealth and conditioned upon the operator's faithful performance
of all water supply replacement, restoration and plugging requirements of this chapter.
The amount of the bond required shall be in the following amounts and amounts under subparagraphs (i) and (ii) may be adjusted by the Environmental Quality Board every two years to reflect the
projected costs to the Commonwealth of plugging the well:

(i)  For unconventional wells with a total well bore length less than 6,000 feet:

(A)  For operating up to 50 wells, $4,000 per well, but no bond may be required under this
clause in excess of $35,000.

(B)  For operating 51 to 150 wells, $35,000 plus $4,000 per well for each well in excess
of 50 wells, but no bond may be required under this clause in excess of $60,000.

(C)  For operating 151 to 250 wells, $60,000 plus $4,000 per well for each well in excess
of 150 wells, but no bond may be required under this clause in excess of $100,000.

(D)  For operating more than 250 wells, $100,000 plus $4,000 per well for each well in
excess of 250 wells, but no bond may be required under this clause in excess of $250,000.

(ii)  For unconventional wells with a total well bore length of at least 6,000 feet:

(A)  For operating up to 25 wells, $10,000 per well, but no bond may be required under
this clause in excess of $140,000.

(B)  For operating 26 to 50 wells, $140,000 plus $10,000 per well for each well in excess
of 25 wells, but no bond may be required under this clause in excess of $290,000.

(C)  For operating 51 to 150 wells, $290,000 plus $10,000 per well for each well in excess
of 50 wells, but no bond may be required under this clause in excess of $430,000.

(D)  For operating more than 150 wells, $430,000 plus $10,000 per well for each well in
excess of 150 wells, but no bond may be required under this clause in excess of $600,000.

(iii)  For a well other than an unconventional well, $2,500 per well. For 10 years following
the effective date of this subparagraph, the Environmental Quality Board and the department
shall have no authority to adjust the amount under this subparagraph.

(2)  [In] The following apply:
(i)  Except as provided under subparagraph (ii), in lieu of individual bonds for each well, an owner or operator may file a blanket bond
for the applicable amount under paragraph [(1)] (1)(i) or (ii), on a form prepared by the department, covering all of its wells in this Commonwealth,
as enumerated on the bond form.

(ii)  As follows:
(A)  An operator may file a blanket bond of $25,000 for all of the operator's wells in
this Commonwealth that are not unconventional wells.

(B)  For every new well that is not an unconventional well drilled after six months after
the effective date of this subsection, the bond amount for that operator shall increase
by $1,000.

(C)  The total blanket bond for an operator's wells that are not unconventional wells shall
not exceed $100,000.

(D)  The blanket bond increase of $1,000 shall be waived by the department for a new well
drilled under this subsection if the operator provides evidence to the department
that the operator has plugged an orphan well at the operator's own expense for which
the operator was not the responsible party within the previous 365 days that the operator
has not yet received credit for under this subsection by the department.

(E)  For 10 years following the effective date of this clause, the bond amounts for wells
that are not unconventional wells may only be revised by the General Assembly. The
Environmental Quality Board and the department shall have no authority to adjust bond
amounts related to wells that are not unconventional wells during that time period.

(2.1)  Notwithstanding any other provision of this section, section 1934-A of the act of
April 9, 1929 (P.L.177, No.175), known as The Administrative Code of 1929, shall continue
to apply to a well drilled prior to April 18, 1985.

* * *
Section 3.  Section 3271(c)(1) of Title 58 is amended to read:
§ 3271.  Well plugging funds.
* * *
(c)  Orphan Well Plugging Fund.--The following shall apply:
(1)  A restricted revenue account to be known as the Orphan Well Plugging Fund is created.
A $100 surcharge for wells to be drilled for oil production and a $200 surcharge for
wells to be drilled for gas production are added to the permit fee established by
the department under section 3211 for new wells. The surcharges and amounts deposited under section 2811(a)(1) (relating to allocation of funding) shall be placed in the Orphan Well Plugging Fund and expended by the department to
plug orphan wells. If an operator rehabilitates a well abandoned by another operator
or an orphan well, the permit fee and the surcharge for the well shall be waived.

* * *
Section 4.  Repeals are as follows:
(1)  The General Assembly declares that the repeal under paragraph (2) is necessary to
effectuate the amendment of 58 Pa.C.S. § 3225(a)(1).

(2)  Section 1606-E of the act of April 9, 1929 (P.L.343, No.176), known as The Fiscal
Code, is repealed.

Section 5.  This act shall take effect immediately.
 
APPROVED--The 19th day of July, A.D. 2022.

Structure Pennsylvania Consolidated & Unconsolidated Statutes