| (B) documentation that the operator has satisfied at
least one of the following requirements:
(i) for all inactive land wells that an operator has
operated for more than 12 months, the operator has plugged or restored
to active operation, as defined by Commission rule, 10% of the number
of inactive land wells operated at the time of the last annual renewal
of the operator's organization report;
(ii) if the operator is a publicly traded entity, for
all inactive land wells, the operator has filed with the Commission
a copy of the operator's federal documents filed to comply with Financial
Accounting Standards Board Statement No. 143, Accounting for Asset
Retirement Obligations, and an original executed Uniform Commercial
Code Form 1 Financing Statement, filed with the Secretary of State,
that names the operator as the "debtor" and the Railroad
Commission of Texas as the "secured creditor" and specifies
the funds covered by the documents in the amount of the cost calculation
for plugging all inactive wells;
(iii) the filing of a blanket bond on Commission Form
P-5PB(2), Blanket Performance Bond, a letter of credit on Commission
Form P-5LC, Irrevocable Documentary Blanket Letter of Credit, or a
cash deposit, in the amount of either the lesser of the cost calculation
for plugging all inactive wells or $2 million;
(iv) for each inactive land well identified in the
application, the Commission has approved an abeyance of plugging report
and the operator has paid the required filing fee;
(v) for each inactive land well identified in the application,
the operator has filed a statement that the well is part of a Commission-approved
EOR project;
(vi) for each inactive land well identified in the
application that is not otherwise required by Commission rule or order
to conduct a fluid level or hydraulic pressure test of the well, the
operator has conducted a successful fluid level test or hydraulic
pressure test of the well and the operator has paid the required filing
fee;
(vii) for each inactive land well identified in the
application, the operator has filed Commission Form W-3X and the Commission
or its delegate has approved a supplemental bond, letter of credit,
or cash deposit in an amount at least equal to the cost calculation
for plugging an inactive land well for each well specified in the
application; or
(viii) for each time an operator files an application
for a plugging extension and for each inactive land well identified
in the application, the operator has filed Commission Form W-3X and
the Commission or its delegate has approved an escrow fund deposit
in an amount at least equal to 10% of the total cost calculation for
plugging an inactive land well.
(g) Commission action on application for plugging extension.
(1) The Commission or its delegate shall administratively
grant all applications for plugging extensions that meet the requirements
of Commission rules.
(2) The Commission or its delegate may administratively
deny an application for a plugging extension for an inactive well
if the Commission or its delegate determines that:
(A) the applicant does not have an active organization
report at the time the plugging extension application is filed;
(B) the applicant has not submitted all required filing
fees and financial assurance for the requested plugging extension
and for renewal of its organization report; or
(C) the applicant has not submitted a signed organization
report for the applied-for extension year that qualifies for approval
regardless of whether the applicant has complied with the inactive
well requirements of this section.
(3) Except as provided in paragraph (2) of this subsection,
if the Commission or its delegate determines that an organization
report should be denied renewal solely because it does not meet the
inactive well requirements of this section, a Commission delegate
shall, within a reasonable time of not more than 14 days after receipt
of the applicant's administratively complete organization report renewal
packet, including all statutorily required fees and financial assurance:
(A) notify the operator of the determination;
(B) provide the operator with a written statement of
the reasons for the determination; and
(C) notify the operator that it has 90 days from the
expiration of its most recently approved organization report to comply
with the requirements of this section.
(4) If, after the expiration of the 90-day period specified
in paragraph (3)(C) of this subsection, the Commission or its delegate
determines that the operator remains out of compliance with the requirements
of this section, the Commission delegate shall mail the operator a
written notice of this determination. The operator may request a hearing.
If the operator fails to timely file a request for hearing and the
required hearing fee, the Commission shall enter an order denying
the plugging extension request and denying renewal of the operator's
organization report without further notice or opportunity for hearing.
(5) To request a hearing, the operator must file a
written request for hearing and the hearing fee of $4,500 with the
Hearings Division, no later than 30 days from the date the written
notice was mailed to the operator. In the request for hearing, the
operator must identify by its assigned American Petroleum Institute
(API) number each inactive well for which the operator is seeking
a hearing to contest the determination that the well remains out of
compliance. At the time an operator files a request for hearing under
this subsection, the operator shall provide a list of affected persons
to be given notice of the hearing. Affected persons shall include
the owners of the surface estate of each tract on which a well that
is the subject of the hearing request is located, the director of
the Commission's Enforcement Section, and the district director of
each Commission district in which the wells are located. The applicant's
failure to diligently prosecute a hearing requested under this subsection
may result in the application being involuntarily dismissed for want
of prosecution on the motion of any affected person or on the Commission's
own motion.
(6) If an operator files a timely plugging extension
application that is not properly administratively denied for the reasons
specified in paragraph (2) of this subsection, then the operator's
previously approved organization report shall remain in effect until
the Commission approves its plugging extension application or enters
a final order denying the application.
(h) Revocation of extension. The Commission or its
delegate may revoke an extension of the deadline for plugging an inactive
well if the Commission or its delegate determines, after notice and
an opportunity for a hearing, that the applicant is ineligible for
the extension under the Commission's rules or orders.
(i) Removal of surface equipment for land wells inactive
more than 10 years. Requirements to remove surface equipment for land
wells inactive more than 10 years do not excuse an operator from compliance
with all other applicable Commission rules and orders including the
requirements in Chapter 4 of this title (relating to Environmental
Protection).
(1) An operator of an inactive land well must leave
a clearly visible sign as required by §3.3 of this title (relating
to Identification of Properties, Wells, and Tanks) at the wellhead
of the well and must maintain wellhead control as required by §3.13
of this title (relating to Casing, Cementing, Drilling, and Completion
Requirements).
(2) An operator may not store surface equipment removed
from an inactive land well on an active lease.
(3) An operator may be eligible for a temporary extension
of the deadline for plugging an inactive land well or a temporary
exemption from the surface equipment removal requirements if the operator
is unable to comply with the requirements of subsection (f)(2)(A)
of this section because of safety concerns or required maintenance
of the well site and the operator includes with the application a
written affirmation of the facts regarding the safety concerns or
maintenance.
(4) An operator may be eligible for an extension of
the deadline for plugging a well without complying with the surface
equipment removal requirements for inactive land wells if the well
is located on a unit or lease or in a field associated with an EOR
project and the operator includes a statement in the written affirmation
that the well is part of such a project. The exemption provided by
this subsection applies only to the equipment associated with current
and future operations of the project.
(j) Abeyance of plugging report.
(1) An operator that files an abeyance of plugging
report must:
(A) pay an annual fee of $100 for each inactive land
well covered by the report;
(B) use Commission Form W-3X on which the operator
must specify the field and the covered wells within that field; and
Cont'd... |
