| (iv) none of the operator's wells or operations, including
any land-based wells, have been found by Commission staff to be violating
or to have violated any Commission rule that resulted in pollution
or in any hazard to the health or safety of the public in the last
12 months.
(B) If the director administratively denies the requested
reduction, an operator may request a hearing to determine if a full
or partial reduction should be granted.
(C) The operator may also request a hearing to challenge
the Commission's presumed estimate of the operator's plugging liability
for bay and offshore wells as applied to any additional financial
security required for any inactive bay and offshore wells. The operator
shall present clear and convincing evidence that the estimated plugging
liability is less than the amount estimated by the Commission. Notice
of the hearing shall be provided by the Commission to the owners of
the surface estate and the owners of the mineral estate for any well
that is a subject of the requested hearing, and all other affected
persons as identified by the operator or otherwise required by the
Commission.
(6) Persons with non-well operations not exempted under
paragraph (7) of this subsection. A person performing other operations
who is not an operator of wells and who is not a person whose only
activity is as a first purchaser, survey company, gas nominator, gas
purchaser or well plugger shall file financial security in the amount
of $25,000.
(7) Persons exempt from financial security requirements.
No financial security is required of a person who is not an operator
of wells if the person's only activity is as a first purchaser, survey
company, salt water hauler, gas nominator, gas purchaser and/or well
plugger.
(8) Persons with both well and non-well operations.
If a person is engaged in more than one activity or operation, including
well operation, for which financial security is required, the person
is not required to file financial security for each activity or operation
in which the person is engaged. The person is required to file financial
security only in the greatest amount required for any activity or
operation in which the person engages. The financial security filed
covers all of the activities and operations for which financial security
is required. The provisions of this paragraph do not exempt a person
from the financial security required under subsection (l) of this
section.
(9) Financial security amounts are the minimum amounts
required by this section to be filed. A person may file a greater
amount if desired.
(h) Financial security conditions. Any bond, letter
of credit, or cash deposit required under this section is subject
to the conditions that the operator will plug and abandon all wells
and control, abate, and clean up pollution associated with the oil
and gas operations and activities covered under the required financial
security in accordance with applicable state law and permits, rules,
and orders of the Commission. This section does not apply to a well-specific
plugging insurance policy.
(i) Conditions for cash deposits and escrow funds.
Operators must tender cash deposits and escrow funds in United States
currency or certified cashiers check only. The Commission or its delegate
will place all cash deposits and escrow funds in a special account
within the Oil and Gas Regulation and Cleanup Fund account. The Commission
or its delegate will deposit any interest accruing on cash deposits
and escrow funds into the Oil and Gas Regulation and Cleanup Fund
pursuant to Texas Natural Resources Code, §81.067. The Commission
or its delegate may not refund a cash deposit until either financial
security is accepted by the Commission or its delegate as provided
for under this section or an operator ceases all activity. The Commission
or its delegate may release escrow funds to the current operator of
the well only if the well for which the operator tendered the escrow
funds is either restored to active status or plugged in accordance
with Commission rules. In the event that the well is plugged through
the use of state funds, the Commission may collect from the escrow
account in the amount necessary to reimburse the state for any expenditure.
(j) Well or lease transfer.
(1) The Commission shall not approve a transfer of
operatorship submitted for any well or lease unless the operator acquiring
the well or lease has on file with the Commission financial security
in an amount sufficient to cover both its current operations and the
wells or leases being transferred.
(2) Any existing financial security covering the well
or lease proposed for transfer shall remain in effect and the prior
operator of the well remains responsible for compliance with all laws
and Commission rules covering the transferred well until the Commission
approves the transfer.
(3) A transfer of a well or lease from one entity to
another entity under common ownership is a transfer for the purposes
of this section.
(4) The Commission may approve a transfer of operatorship
submitted for any well bore included in a well-specific plugging insurance
policy if the transfer meets all other Commission requirements.
(k) Reimbursement liability. Filing any form of financial
security does not extinguish a person's liability for reimbursement
for the expenditure of state oilfield clean-up funds pursuant to Texas
Natural Resources Code, §89.083 and 91.113.
(l) Financial security for commercial facilities. The
provisions of this subsection shall apply to the holder of any permit
for a commercial facility.
(1) Application.
(A) New permits. Any application for a new or amended
commercial facility permit filed after the original effective date
of this subsection shall include:
(i) a written estimate of the maximum dollar amount
necessary to close the facility prepared in accordance with the provisions
of paragraph (4) of this subsection that shows all assumptions and
calculations used to develop the estimate;
(ii) a copy of the form of the bond or letter of credit
that will be filed with the Commission; and
(iii) information concerning the issuer of the bond
or letter of credit as required under paragraph (5) of this subsection
including the issuer's name and address and evidence of authority
to issue bonds or letters of credit in Texas.
(B) Existing permits. Within 180 days of the original
effective date of this subsection, the holder of any commercial facility
permit issued on or before the original effective date of this subsection
shall file with the Commission the information specified in subparagraph
(A)(i) - (iii) of this paragraph.
(2) Notice and hearing.
(A) New permits. For commercial facility permits issued
after the original effective date of this subsection, the provisions
of §3.8 or §3.57 of this title (relating to Water Protection;
and Reclaiming Tank Bottoms, Other Hydrocarbon Wastes, and Other Waste
Materials), as applicable, regarding notice and opportunity for hearing,
shall apply to review and approval of financial security proposed
to be filed to meet the requirements of this subsection.
(B) Existing permits. Notice of filing of information
required under paragraph (1)(B) of this subsection shall not be required.
In the event approval of the financial security proposed to be filed
for a commercial facility operating under a permit in effect as of
the original effective date of this subsection is denied administratively,
the applicant shall have the right to a hearing upon written request.
After hearing, the examiner shall recommend a final action by the
Commission.
(3) Filing of instrument.
(A) New permits. A commercial facility permitted after
the original effective date of this subsection may not receive oil
field fluids or oil and gas waste until a bond or letter of credit
in an amount approved by the Commission or its delegate under this
subsection and meeting the requirements of this subsection as to form
and issuer has been filed with the Commission.
(B) Existing permits. Except as otherwise provided
in this subsection, after one year from the original effective date
of this section, a commercial facility permitted on or before the
original effective date of this subsection may not continue to receive
oil field fluids or oil and gas waste unless a bond or letter of credit
in an amount approved by the Commission or its delegate under this
subsection and meeting the requirements of this subsection as to form
and issuer has been filed with and approved by the Commission or its
delegate.
(C) Extensions for existing permits. On written request
and for good cause shown, the Commission or its delegate may authorize
a commercial facility permitted before the original effective date
of this subsection to continue to receive oil field fluids or oil
and gas waste after one year after the original effective date of
this section even though financial security required under this subsection
has not been filed. In the event the Commission or its delegate has
not taken final action to approve or Cont'd... |
