Oil and Gas at Your Door? (2005 Edition) - Earthworks

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Legal and Regulatory Issues FIGURE II-5. SELECTED STATES WITH SURFACE DAMAGE COMPENSATION REQUIREMENTS OR LAWS. 407 II-16
REGULATIONS AND SURFACE OWNER PROTECTIONS Financial Assurance (Bonds) Typically, if oil and gas operators walk away from their operations (e.g., by declaring bankruptcy), the management of these orphan sites falls to the state or federal governments. Nearly all states require that companies post a bond or another form of financial assurance with the state to cover the costs related to plugging and abandonment of wells. These funds are collected to provide the state with some “insurance,” in the event that a company is no longer willing or able to perform the plugging and restoration. The funds are released back to a company if it properly plugs and abandons its well. Proper abandonment typically includes the restoration of surface lands. 408 State Financial Assurance Per Well State-wide Blanket Bond Alaska $100,000 $200,000 California Colorado $5,000 Illinois Kansas Kentucky $15,000 (wells < 5,000’ deep) $20,000 (wells 5,000 – 10,000’) $30,000 (wells > 10,000’) $1,500 (well < 2,000’ deep) $3,000 (well = or > 2,000’ deep) $50 refundable fee (if operator has an acceptable record of compliance) $0.75 per foot drilled (for all the operator’s wells) $500 (wells = or < 500’ deep) $5,000 (wells > 4,000’ deep) $100,000 (50 or fewer onshore wells) $250,000 (more than 50 onshore wells) $1 million (all onshore and offshore wells) $30,000 (less than 100 wells) $100,000 (more than 100 wells) $25,000 for up to 25 wells $50,000 for up to 50 wells $100,000 for all wells in state $5,000 (1-5 wells that are 2,000’; this increases to $30,000 for 25 or more wells) $10,000 Montana New Mexico $1,500 (well < 2,000’ deep) $5,000 (2,000’ – 3,500’ deep) $10,000 (3,501’ or deeper) $5,000 - $7,500 (well < 5,000’ deep) $7,500 - $10,000 (5,000’ – 10,000’ deep) $10,000 – $12,500 (well > 10,000’ deep) $50,000 $50,000 Ohio $5,000 $15,000 Oklahoma None. $25,000 OR financial statement showing operator net worth of at least $50,000 Pennsylvania Wyoming $2,500 (this amount may be adjusted every two years; different rules apply for wells drilled prior to 1985) $10,000 (wells < 2,000’ deep) $20,000 (wells > 2,000’ deep) $25,000 (this amount may be adjusted every two years; different rules apply for wells drilled prior to 1985) $75,000 for all wells < 2.000’ deep FIGURE II-6. VARIATIONS IN FINANCIAL ASSURANCE REQUIREMENTS FOR PLUGGING AND SITE RESTORATION. 409 Well depth and geographic location are two factors that play into the amount of financial assurance that state agencies require for plugging and restoration of individual wells. The amount varies with well depth in fourteen states (Alabama, Arizona, California, Illinois, Kansas, Kentucky, Michigan, Mississippi, Missouri, Montana, New Mexico, New York, Utah and Wyoming). 410 Geographical differences in financial assurance are evident by comparing bond amounts in Kentucky and Alaska. In Kentucky a single bond for a well 500 feet deep or less is $500, while the minimum per well amount in Alaska is $100,000. This may reflect the higher costs of reclaiming Alaskan well sites. In most states, companies are allowed to post state-wide or blanket financial assurances with the state government. These blanket bonds are supposed to demonstrate a company’s financial capability of plugging and restoring all of its wells in that state. The states vary greatly on the amount of financial assurance required in a blanket bond. The amounts range from as low II-17
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Oil and Gas at Your Door? A Landown
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About the Oil & Gas Accountability
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Table of Contents Introduction What
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Chapter III, Tips for Landowners Wh
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Introduction Oil and gas developmen
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For the oil we need, unless we choo
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With the recent boom in extraction
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Do you own the minerals associated
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Chapter I Oil and Gas Development a
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TERMS AND CONCEPTS When natural gas
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STAGES OF OIL & GAS DEVELOPMENT In
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STAGES OF OIL & GAS DEVELOPMENT •
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STAGES OF OIL & GAS DEVELOPMENT FIG
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STAGES OF OIL & GAS DEVELOPMENT Sur
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STAGES OF OIL & GAS DEVELOPMENT pan
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STAGES OF OIL & GAS DEVELOPMENT Nex
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STAGES OF OIL & GAS DEVELOPMENT One
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STAGES OF OIL & GAS DEVELOPMENT Gat
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STAGES OF OIL & GAS DEVELOPMENT Pro
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STAGES OF OIL & GAS DEVELOPMENT PRO
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STAGES OF OIL & GAS DEVELOPMENT pro
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STAGES OF OIL & GAS DEVELOPMENT Plu
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NON CONVENTIONAL OIL AND GAS FIGURE
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NON CONVENTIONAL OIL AND GAS COALBE
Page 53 and 54: NON CONVENTIONAL OIL AND GAS Cavita
Page 55 and 56: NON CONVENTIONAL OIL AND GAS to pro
Page 57 and 58: IMPACTS ASSOCIATED WITH OIL AND GAS
Page 79 and 80: ALTERNATIVE TECHNOLOGIES AND PRACTI
Page 81 and 82: ALTERNATIVE TECHNOLOGIES AND PRACTI
Page 83 and 84: STAGES OF OIL & GAS DEVELOPMENT The
Page 85 and 86: STAGES OF OIL & GAS DEVELOPMENT to
Page 87 and 88: STAGES OF OIL & GAS DEVELOPMENT FIG
Page 89 and 90: Chapter II Legal and Regulatory Iss
Page 91 and 92: Who Owns the Minerals Beneath Your
Page 93 and 94: WHO OWNS THE MINERALS BENEATH YOUR
Page 95 and 96: MINERAL VS SURFACE RIGHTS er, can b
Page 97 and 98: MINERAL VS SURFACE RIGHTS • In th
Page 99 and 100: REGULATIONS AND SURFACE OWNER PROTE
Page 101 and 102: Exploration Before a company can en
Page 103: REGULATIONS AND SURFACE OWNER PROTE
Page 109 and 110: Other Protections Statutes and regu
Page 113 and 114: face owner to participate in this o
Page 115 and 116: Chapter III Tips for Landowners WHA
Page 117 and 118: SURFACE USE AGREEMENTS Surface Use
Page 119 and 120: SURFACE USE AGREEMENTS Powder River
Page 121 and 122: SURFACE USE AGREEMENTS operations t
Page 123 and 124: SURFACE USE AGREEMENTS ment payment
Page 125 and 126: SURFACE USE AGREEMENTS Reported Com
Page 127 and 128: SURFACE USE AGREEMENTS Examples of
Page 129 and 130: SURFACE USE AGREEMENTS ed by this A
Page 131 and 132: SURFACE USE AGREEMENTS 12. Dry Hole
Page 133 and 134: SURFACE USE AGREEMENTS 25. Firearms
Page 135 and 136: SURFACE USE AGREEMENTS in whole or
Page 137 and 138: LEASING Annual Reclamation Requirem
Page 139 and 140: LEASING • Within the mineral leas
Page 141 and 142: LEASING • Requiring landowner app
Page 143 and 144: OTHER ACTIVITIES TO CONSIDER Push f
Page 145 and 146: OTHER ACTIVITIES TO CONSIDER analys
Page 147 and 148: FILE LAWSUITS amendment also requir
Page 149 and 150: FILE LAWSUITS Landowners are Winnin
Page 151 and 152: Chapter IV Landowner Stories As has
Page 153 and 154: 1. CBM DESTROYS RETIREMENT DREAM By
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has never been a loss of vegetation
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Board came. They accused her of pou
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4. COUNTY OFFICIALS SAY RESIDENTS I
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First, why we did not sign a surfac
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Here is part of a description of on
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cases the agents called and visited
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10. ONE RANCH FAMILY’S STRUGGLE W
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shrubs are now roads, drill pads or
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County and the drilling company to
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opment in their backyards. This is
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After reading Colborn’s memo, I t
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17. WYOMING LANDOWNERS FACE CONDEMN
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involved in a private property issu
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Sources of Information Resources on
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Sources of Information Petroleum Te
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Sources of Information East of Huaj
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Sources of Information NONPROFIT OR
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Sources of Information Native Actio
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Sources of Information STATE REGULA
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Glossary of Oil and Gas Terms A aba
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chain of title Recorded transfers (
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egress The act of getting out or le
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H heavy oil Hydrocarbons composed o
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mineral estate The ownership of min
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petroleum A substance occurring nat
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einjection The introduction of prod
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sour gas Natural gas containing sig
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venting release of gases to atmosph
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Endnotes 1 Thomas, K. 2001. Produce
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57 U.S. EPA. October, 2000. p. 38.
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121 Griffiths, Mary and Marr-Laing,
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187 Kuuskraa, Vello A. (Advanced Re
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236 Otsego County Planning Commissi
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287 USGS. 1997. See endnote 284. 28
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354 Trujillo, Shirena. August 27, 2
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Oklahoma: Oklahoma Statutes. 52-4-3
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Financial Assurance - Colorado: Col
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470 Scheider, Keith. “Ax the $Bil
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Index I-31, I-33, I-60, I-63 conven
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Index mitigation I-31, IV-20 monito
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Index I-52, I-65, III-10 treatment
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