Florida Senate - 2013 CS for CS for SB 958
By the Committees on Communications, Energy, and Public
Utilities; and Environmental Preservation and Conservation; and
Senators Richter and Smith
579-04330-13 2013958c2
1 A bill to be entitled
2 An act relating to underground natural gas storage;
3 providing a short title; amending s. 211.02, F.S.;
4 narrowing the use of the term “oil”; amending s.
5 211.025, F.S.; narrowing the scope of the gas
6 production tax to apply only to native gas; amending
7 s. 376.301, F.S.; conforming a cross-reference;
8 amending s. 377.06, F.S.; making grammatical changes;
9 declaring underground natural gas storage to be in the
10 public interest; amending s. 377.18, F.S.; clarifying
11 common sources of oil and gas; amending s. 377.19,
12 F.S.; modifying and providing definitions; amending s.
13 377.21, F.S.; extending the jurisdiction of the
14 Division of Resource Management of the Department of
15 Environmental Protection; amending s. 377.22, F.S.;
16 expanding the scope of the department’s rules and
17 orders; amending s. 377.24, F.S.; providing for the
18 notice and permitting of storage in and recovery from
19 natural gas storage reservoirs; creating s. 377.2407,
20 F.S.; establishing a natural gas storage facility
21 permit application process; specifying requirements
22 for an application, including fees; amending s.
23 377.241, F.S.; providing criteria that the division
24 must consider in issuing permits; amending s. 377.242,
25 F.S.; granting authority to the department to issue
26 permits to establish natural gas storage facilities;
27 creating s. 377.2431, F.S.; establishing conditions
28 and procedures for granting natural gas storage
29 facility permits; prohibiting a permit for certain
30 natural gas storage facilities; creating s. 377.2432,
31 F.S.; providing for the protection of water supplies
32 at natural gas storage facilities; providing that a
33 natural gas storage facility operator is presumed
34 responsible for pollution of an underground water
35 supply under certain circumstances; creating s.
36 377.2433, F.S.; providing for the protection of
37 natural gas storage facilities through a requirement
38 of notice, compliance with certain standards, and a
39 right of entry to monitor activities; creating s.
40 377.2434, F.S.; providing that property rights to
41 injected natural gas are with the injector or the
42 injector’s heirs, successors, or assigns; providing
43 for compensation to the owner of the stratum and the
44 owner of the surface for use of or damage to the
45 surface or substratum; amending s. 377.25, F.S.;
46 limiting the scope of certain drilling unit
47 requirements; amending s. 377.28, F.S.; modifying
48 situations in which the department is required to
49 issue an order requiring unit operation; amending s.
50 377.30, F.S.; providing that limitations on the amount
51 of oil or gas taken do not apply to nonnative gas
52 recovered from a permitted natural gas storage
53 facility; amending s. 377.34, F.S.; providing for
54 legal action against a person who appears to be
55 violating a rule that relates to the storage or
56 recovery of natural gas; amending s. 377.37, F.S.;
57 expanding penalties to reach persons who violate the
58 terms of a permit relating to storage of gas in a
59 natural gas storage facility; amending s. 377.371,
60 F.S.; providing that a person storing gas in a natural
61 gas storage facility may not pollute or otherwise
62 damage certain areas and that a person who pollutes
63 water by storing natural gas is liable for cleanup or
64 other costs incurred by the state; amending s.
65 403.973, F.S.; allowing expedited permitting for
66 natural gas storage facilities permitted under ch.
67 377, F.S., and for certain projects to construct
68 interstate natural gas pipelines; providing that
69 natural gas storage facilities are subject to certain
70 requirements; requiring the Department of
71 Environmental Protection to adopt rules; providing an
72 effective date.
73
74 Be It Enacted by the Legislature of the State of Florida:
75
76 Section 1. This act may be cited as the “Florida
77 Underground Natural Gas Storage Act.”
78 Section 2. Subsection (7) is added to section 211.02,
79 Florida Statutes, to read:
80 211.02 Oil production tax; basis and rate of tax; tertiary
81 oil and mature field recovery oil.—An excise tax is hereby
82 levied upon every person who severs oil in the state for sale,
83 transport, storage, profit, or commercial use. Except as
84 otherwise provided in this part, the tax is levied on the basis
85 of the entire production of oil in this state, including any
86 royalty interest. Such tax shall accrue at the time the oil is
87 severed and shall be a lien on production regardless of the
88 place of sale, to whom sold, or by whom used, and regardless of
89 the fact that delivery of the oil may be made outside the state.
90 (7) As used in this section, the term “oil” does not
91 include gas-phase hydrocarbons that are transported into the
92 state, injected in the gaseous phase into a natural gas storage
93 facility permitted under part I of chapter 377, and later
94 recovered as a liquid hydrocarbon.
95 Section 3. Subsection (6) is added to section 211.025,
96 Florida Statutes, to read:
97 211.025 Gas production tax; basis and rate of tax.—An
98 excise tax is hereby levied upon every person who severs gas in
99 the state for sale, transport, profit, or commercial use. Except
100 as otherwise provided in this part, the tax shall be levied on
101 the basis of the entire production of gas in this state,
102 including any royalty interest. Such tax shall accrue at the
103 time the gas is severed and shall be a lien on production
104 regardless of the place of sale, to whom sold, or by whom used
105 and regardless of the fact that delivery of the gas may be made
106 outside the state.
107 (6) This section applies only to native gas as defined in
108 s. 377.19.
109 Section 4. Subsection (36) of section 376.301, Florida
110 Statutes, is amended to read:
111 376.301 Definitions of terms used in ss. 376.30-376.317,
112 376.70, and 376.75.—When used in ss. 376.30-376.317, 376.70, and
113 376.75, unless the context clearly requires otherwise, the term:
114 (36) “Pollutants” includes any “product” as defined in s.
115 377.19(11), pesticides, ammonia, chlorine, and derivatives
116 thereof, excluding liquefied petroleum gas.
117 Section 5. Section 377.06, Florida Statutes, is amended to
118 read:
119 377.06 Public policy of state concerning natural resources
120 of oil and gas.—It is hereby declared to be the public policy of
121 this the state to conserve and control the natural resources of
122 oil and gas in this said state, and the products made from oil
123 and gas in this state therefrom; to prevent waste of said
124 natural resources; to provide for the protection and adjustment
125 of the correlative rights of the owners of the land in which the
126 wherein said natural resources lie, of and the owners and
127 producers of oil and gas resources and the products made from
128 oil and gas therefrom, and of others interested in these
129 resources and products therein; to safeguard the health,
130 property, and public welfare of the residents citizens of this
131 said state and other interested persons and for all purposes
132 indicated by the provisions in this section herein. Further, it
133 is declared that underground storage of natural gas is in the
134 public interest because underground storage promotes
135 conservation of natural gas; makes gas more readily available to
136 the domestic, commercial, and industrial consumers of this
137 state; and allows the accumulation of large quantities of gas in
138 reserve for orderly withdrawal during emergencies or periods of
139 peak demand. It is not the intention of this section to limit,
140 or restrict, or modify in any way the provisions of this law.
141 Section 6. Section 377.18, Florida Statutes, is amended to
142 read:
143 377.18 Common sources of oil and gas.—All common sources of
144 supply of oil or native and gas or either of them shall have the
145 production therefrom controlled or regulated in accordance with
146 the provisions of this law.
147 Section 7. Section 377.19, Florida Statutes, is reordered
148 and amended to read:
149 377.19 Definitions.—As used Unless the context otherwise
150 requires, the words defined in this section shall have the
151 following meanings when found in ss. 377.06, 377.07, and 377.10
152 377.40, the term:
153 (3)(1) “Division” means the Division of Resource Management
154 of the Department of Environmental Protection.
155 (28)(2) “State” means the State of Florida.
156 (20)(3) “Person” means a any natural person, corporation,
157 association, partnership, receiver, trustee, guardian, executor,
158 administrator, fiduciary, or representative of any kind.
159 (15)(4) “Oil” means crude petroleum oil and other
160 hydrocarbons, regardless of gravity, which are produced at the
161 well in liquid form by ordinary production methods, and which
162 are not the result of condensation of gas after it leaves the
163 reservoir.
164 (5) “Gas” means all natural gas, including casinghead gas,
165 and all other hydrocarbons not defined as oil in subsection (4).
166 (21)(6) “Pool” means an underground reservoir containing or
167 appearing to contain a common accumulation of oil or gas or
168 both. Each zone of a general structure which is completely
169 separated from any other zone on the structure is considered a
170 separate pool as used herein.
171 (4)(7) “Field” means the general area that which is
172 underlaid, or appears to be underlaid, by at least one pool. The
173 term; and “field” includes the underground reservoir, or
174 reservoirs, containing oil or gas, or both. The terms words
175 “field” and “pool” mean the same thing if when only one
176 underground reservoir is involved; however, the term “field,”
177 unlike the term “pool,” may relate to two or more pools.
178 (19)(8) “Owner” means the person who has the right to drill
179 into and to produce from any pool and to appropriate the
180 production either for the person or for the person and another,
181 or others.
182 (22)(9) “Producer” means the owner or operator of a well or
183 wells capable of producing oil or gas, or both.
184 (31)(10) “Waste,” in addition to its ordinary meaning,
185 means “physical waste” as that term is generally understood in
186 the oil and gas industry. The term “waste” includes:
187 (a) The inefficient, excessive, or improper use or
188 dissipation of reservoir energy; and the locating, spacing,
189 drilling, equipping, operating, or producing of any oil or gas
190 well or wells in a manner that which results, or tends to
191 result, in reducing the quantity of oil or gas ultimately to be
192 stored or recovered from any pool in this state.
193 (b) The inefficient storing of oil; and the locating,
194 spacing, drilling, equipping, operating, or producing of any oil
195 or gas well or wells in a manner that causes, or tends causing,
196 or tending to cause, unnecessary or excessive surface loss or
197 destruction of oil or gas.
198 (c) The producing of oil or gas in such a manner that
199 causes as to cause unnecessary water channeling or coning.
200 (d) The operation of any oil well or wells with an
201 inefficient gas-oil ratio.
202 (e) The drowning with water of any stratum or part thereof
203 capable of producing oil or gas.
204 (f) The underground waste, however caused and whether or
205 not defined.
206 (g) The creation of unnecessary fire hazards.
207 (h) The escape into the open air, from a well producing
208 both oil and gas, of gas in excess of the amount that which is
209 necessary in the efficient drilling or operation of the well.
210 (i) The use of gas for the manufacture of carbon black.
211 (j) Permitting gas produced from a gas well to escape into
212 the air.
213 (k) The abuse of the correlative rights and opportunities
214 of each owner of oil and gas in a common reservoir due to
215 nonuniform, disproportionate, and unratable withdrawals, causing
216 undue drainage between tracts of land.
217 (23)(11) “Product” means a any commodity made from oil or
218 gas and includes refined crude oil, crude tops, topped crude,
219 processed crude petroleum, residue from crude petroleum,
220 cracking stock, uncracked fuel oil, fuel oil, treated crude oil,
221 residuum, gas oil, casinghead gasoline, natural gas gasoline,
222 naphtha, distillate, condensate, gasoline, waste oil, kerosene,
223 benzine, wash oil, blended gasoline, lubricating oil, blends or
224 mixtures of oil with one or more liquid products or byproducts
225 derived from oil or gas, and blends or mixtures of two or more
226 liquid products or byproducts derived from oil or gas, whether
227 hereinabove enumerated or not.
228 (8)(12) “Illegal oil” means oil that which has been
229 produced within the state from any well or wells in excess of
230 the amount allowed by rule, regulation, or order of the
231 division, as distinguished from oil produced within the state
232 from a well not producing in excess of the amount so allowed,
233 which is “legal oil.”
234 (7)(13) “Illegal gas” means gas that which has been
235 produced within the state from any well or wells in excess of
236 the amount allowed by any rule, regulation, or order of the
237 division, as distinguished from gas produced within the State of
238 Florida from a well not producing in excess of the amount so
239 allowed, which is “legal gas.”
240 (9)(14) “Illegal product” means a any product of oil or
241 gas, any part of which was processed or derived, in whole or in
242 part, from illegal gas or illegal oil or from any product
243 thereof, as distinguished from “legal product,” which is a
244 product processed or derived to no extent from illegal oil or
245 illegal gas.
246 (24)(15) “Reasonable market demand” means the amount of oil
247 reasonably needed for current consumption, together with a
248 reasonable amount of oil for storage and working stocks.
249 (30)(16) “Tender” means a permit or certificate of
250 clearance for the transportation or the delivery of oil, gas, or
251 products, approved and issued or registered under the authority
252 of the division.
253 (17) The use of the word “and” includes the word “or” and
254 the use of “or” includes “and,” unless the context clearly
255 requires a different meaning, especially with respect to such
256 expressions as “oil and gas” or “oil or gas.”
257 (32)(18) “Well site” means the general area around a well,
258 which area has been disturbed from its natural or existing
259 condition, as well as the drilling or production pad, mud and
260 water circulation pits, and other operation areas necessary to
261 drill for or produce oil or gas, or to inject gas into and
262 recover gas from a natural gas storage facility.
263 (17)(19) “Oil and gas administrator” means the State
264 Geologist.
265 (18)(20) “Operator” means the entity who:
266 (a) Has the right to drill and to produce a well; or
267 (b) As part of a natural gas storage facility, injects, or
268 is engaged in the work of preparing to inject, gas into a
269 natural gas storage reservoir; or stores gas in, or removes gas
270 from, a natural gas storage reservoir.
271 (1)(21) “Completion date” means the day, month, and year
272 that a new productive well, a previously shut-in well, or a
273 temporarily abandoned well is completed, repaired, or
274 recompleted and the operator begins producing oil or gas in
275 commercial quantities.
276 (26)(22) “Shut-in well” means an oil or gas well that has
277 been taken out of service for economic reasons or mechanical
278 repairs.
279 (29)(23) “Temporarily abandoned well” means a permitted
280 well or wellbore that has been abandoned by plugging in a manner
281 that allows reentry and redevelopment in accordance with oil or
282 gas rules of the Department of Environmental Protection.
283 (14)(24) “New field well” means an oil or gas well
284 completed after July 1, 1997, in a new field as designated by
285 the Department of Environmental Protection.
286 (6)(25) “Horizontal well” means a well completed with the
287 wellbore in a horizontal or nearly horizontal orientation within
288 10 degrees of horizontal within the producing formation.
289 (2) “Department” means the Department of Environmental
290 Protection.
291 (10) “Lateral storage reservoir boundary” means the
292 projection up to the land surface of the maximum horizontal
293 extent of the gas volume contained in a natural gas storage
294 reservoir.
295 (11) “Native gas” means gas that occurs naturally within
296 this state and does not include gas produced outside the state,
297 transported to this state, and injected into a permitted natural
298 gas storage facility.
299 (12) “Natural gas storage facility” means an underground
300 reservoir from which oil or gas has previously been produced and
301 which is used or intended to be used for the underground storage
302 of natural gas, and any surface or subsurface structure, or
303 infrastructure, except wells. The term also includes a right or
304 appurtenance necessary or useful in the operation of the
305 facility for the underground storage of natural gas, including
306 any necessary or reasonable reservoir protective area as
307 designated for the purpose of ensuring the safe operation of the
308 storage of natural gas or protecting the natural gas storage
309 facility from pollution, invasion, escape, or migration of gas,
310 or any subsequent extension thereof. The term does not mean a
311 transmission, distribution, or gathering pipeline or system that
312 is not used primarily as integral piping for a natural gas
313 storage facility.
314 (13) “Natural gas storage reservoir” means a pool or field
315 from which oil or gas has previously been produced and which is
316 suitable for or capable of being made suitable for the
317 injection, storage, and recovery of gas, as identified in a
318 permit application submitted to the department under s.
319 377.2407.
320 (16) “Oil and gas” has the same meaning as the term “oil or
321 gas.”
322 (25) “Reservoir protective area” means the area extending
323 up to and including 2,000 feet surrounding a natural gas storage
324 reservoir.
325 (27) “Shut-in bottom hole pressure” means the pressure at
326 the bottom of a well when all valves are closed and no oil or
327 gas has been allowed to escape for at least 24 hours.
328 Section 8. Subsection (1) of section 377.21, Florida
329 Statutes, is amended to read:
330 377.21 Jurisdiction of division.—
331 (1) The division shall have jurisdiction and authority over
332 all persons and property necessary to administer and enforce
333 effectively the provisions of this law and all other laws
334 relating to the conservation of oil and gas or to the storage of
335 gas in and recovery of gas from natural gas storage reservoirs.
336 Section 9. Subsection (2) of section 377.22, Florida
337 Statutes, is amended to read:
338 377.22 Rules and orders.—
339 (2) The department shall issue orders and adopt rules
340 pursuant to ss. 120.536(1) and 120.54 to implement and enforce
341 the provisions of this chapter. Such rules and orders shall
342 ensure that all precautions are taken to prevent the spillage of
343 oil or any other pollutant in all phases of the drilling for,
344 and extracting of, oil, gas, or other petroleum products, or
345 during the injection of gas into and recovery of gas from a
346 natural gas storage reservoir. The department shall revise such
347 rules from time to time as necessary for the proper
348 administration and enforcement of this chapter. Rules adopted
349 and orders issued in accordance with this section are shall be
350 for, but shall not be limited to, the following purposes:
351 (a) To require the drilling, casing, and plugging of wells
352 to be done in such a manner as to prevent the pollution of the
353 fresh, salt, or brackish waters or the lands of the state and to
354 protect the integrity of natural gas storage reservoirs.
355 (b) To prevent the alteration of the sheet flow of water in
356 any area.
357 (c) To require that appropriate safety equipment be
358 installed to minimize the possibility of an escape of oil or
359 other petroleum products in the event of accident, human error,
360 or a natural disaster during drilling, casing, or plugging of
361 any well and during extraction operations.
362 (d) To require the drilling, casing, and plugging of wells
363 to be done in such a manner as to prevent the escape of oil or
364 other petroleum products from one stratum to another.
365 (e) To prevent the intrusion of water into an oil or gas
366 stratum from a separate stratum, except as provided by rules of
367 the division relating to the injection of water for proper
368 reservoir conservation and brine disposal.
369 (f) To require a reasonable bond, or other form of security
370 acceptable to the department, conditioned upon the performance
371 of the duty to plug properly each dry and abandoned well and the
372 full and complete restoration by the applicant of the area over
373 which geophysical exploration, drilling, or production is
374 conducted to the similar contour and general condition in
375 existence prior to such operation.
376 (g) To require and carry out a reasonable program of
377 monitoring or inspection of all drilling operations, or
378 producing wells, or injecting wells, including regular
379 inspections by division personnel.
380 (h) To require the making of reports showing the location
381 of all oil and gas wells; the making and filing of logs; the
382 taking and filing of directional surveys; the filing of
383 electrical, sonic, radioactive, and mechanical logs of oil and
384 gas wells; if taken, the saving of cutting and cores, the cuts
385 of which shall be given to the Bureau of Geology; and the making
386 of reports with respect to drilling and production records.
387 However, such information, or any part thereof, at the request
388 of the operator, shall be exempt from the provisions of s.
389 119.07(1) and held confidential by the division for a period of
390 1 year after the completion of a well.
391 (i) To prevent wells from being drilled, operated, or
392 produced in such a manner as to cause injury to neighboring
393 leases, or property, or natural gas storage reservoirs.
394 (j) To prevent the drowning by water of any stratum, or
395 part thereof, capable of producing oil or gas in paying
396 quantities and to prevent the premature and irregular
397 encroachment of water which reduces, or tends to reduce, the
398 total ultimate recovery of oil or gas from any pool.
399 (k) To require the operation of wells with efficient gas
400 oil ratio, and to fix such ratios.
401 (l) To prevent “blowouts,” “caving,” and “seepage,” in the
402 sense that conditions indicated by such terms are generally
403 understood in the oil and gas business.
404 (m) To prevent fires.
405 (n) To identify the ownership of all oil or gas wells,
406 producing leases, refineries, tanks, plants, structures, and
407 storage and transportation equipment and facilities.
408 (o) To regulate the “shooting,” perforating and chemical
409 treatment of wells.
410 (p) To regulate secondary recovery methods, including the
411 introduction of gas, air, water, or other substance into
412 producing formations.
413 (q) To regulate gas cycling operations.
414 (r) To regulate the storage and recovery of gas injected
415 into natural gas storage facilities.
416 (s)(r) If necessary for the prevention of waste, as herein
417 defined, to determine, limit, and prorate the production of oil
418 or gas, or both, from any pool or field in the state.
419 (t)(s) To require, either generally or in or from
420 particular areas, certificates of clearance or tenders in
421 connection with the transportation or delivery of oil or gas, or
422 any product.
423 (u)(t) To regulate the spacing of wells and to establish
424 drilling units.
425 (v)(u) To prevent, so far as is practicable, reasonably
426 avoidable drainage from each developed unit which is not
427 equalized by counterdrainage.
428 (w)(v) To require that geophysical operations requiring a
429 permit be conducted in a manner which will minimize the impact
430 on hydrology and biota of the area, especially environmentally
431 sensitive lands and coastal areas.
432 (x)(w) To regulate aboveground crude oil storage tanks in a
433 manner which will protect the water resources of the state.
434 (y)(x) To act in a receivership capacity for fractional
435 mineral interests for which the owners are unknown or unlocated
436 and to administratively designate the operator as the lessee.
437 Section 10. Subsections (1) and (2) of section 377.24,
438 Florida Statutes, are amended to read:
439 377.24 Notice of intention to drill well; permits;
440 abandoned wells and dry holes.—
441 (1) Before drilling a any well in search of oil or gas, or
442 before storing gas in or recovering gas from a natural gas
443 storage reservoir shall be drilled, the person who desires
444 desiring to drill for, store, or recover gas, or drill for oil,
445 the same shall notify the division upon such form as it may
446 prescribe and shall pay a reasonable fee set by rule of the
447 department not to exceed the actual cost of processing and
448 inspecting for each well or reservoir. The drilling of any well
449 and the storing and recovering of gas are is hereby prohibited
450 until such notice is given, the and such fee is has been paid,
451 and the permit is granted.
452 (2) An Each application for the drilling of a well in
453 search of oil or gas, or for the storing of gas in and
454 recovering of gas from a natural gas storage reservoir, in this
455 state must shall include the address of the residence of the
456 applicant, or applicants each applicant, which must address
457 shall be the address of each person involved in accordance with
458 the records of the Division of Resource Management until such
459 address is changed on the records of the division after written
460 request.
461 Section 11. Section 377.2407, Florida Statutes, is created
462 to read:
463 377.2407 Natural gas storage facility permit application to
464 inject gas into and recover gas from a natural gas storage
465 reservoir.—
466 (1) Before drilling a well to inject gas into and recover
467 gas from a natural gas storage reservoir, the person who desires
468 to conduct such operation shall apply to the department in the
469 manner described in this section using such form as the
470 department may prescribe to obtain a natural gas storage
471 facility permit. The Department of Environmental Protection
472 shall also require any applicant seeking to obtain such permit
473 to pay a reasonable permit application fee. Such fee must be in
474 an amount necessary to cover the costs associated with
475 permitting, processing, issuing, and recertifying the permit
476 application, and inspecting for compliance with the permit.
477 (2) Each application must contain:
478 (a) A detailed, three-dimensional description of the
479 natural gas storage reservoir, including geologic-based
480 descriptions of the reservoir boundaries, and the horizontal and
481 vertical dimensions.
482 (b) A geographic description of the lateral reservoir
483 boundary.
484 (c) A general description and location of all injection,
485 recovery, withdrawal-only, and observation wells.
486 (d) A description of the reservoir protective area.
487 (e) Information demonstrating that the proposed natural gas
488 storage reservoir is suitable for the storage and recovery of
489 gas.
490 (f) Information identifying all known abandoned or active
491 wells within the natural gas storage facility.
492 (g) A field-monitoring plan that requires, at a minimum,
493 monthly field inspections of all wells that are part of the
494 natural gas storage facility.
495 (h) A monitoring and testing plan for the well integrity.
496 (i) A well inspection plan that requires, at a minimum, the
497 inspection of all wells that are part of the natural gas storage
498 facility and plugged wells within the natural gas storage
499 facility boundary.
500 (j) A spill prevention and response plan.
501 (k) A well spacing plan.
502 (l) An operating plan for the natural gas storage
503 reservoir, which must include gas capacities, anticipated
504 operating conditions, and maximum storage pressure.
505 (m) A gas migration response plan.
506 (n) A location plat and general facility map surveyed and
507 prepared by a registered land surveyor licensed under chapter
508 472.
509 (3) The department may require additional information that
510 is deemed necessary to permit the development of the natural gas
511 storage facility. Each well related to the natural gas storage
512 facility shall be authorized and permitted individually upon the
513 applicant satisfying applicable well construction and operation
514 criteria under this part; however, notwithstanding any other
515 provision under this chapter, well spacing requirements do not
516 apply.
517 Section 12. Subsection (4) is added to section 377.241,
518 Florida Statutes, to read:
519 377.241 Criteria for issuance of permits.—The division, in
520 the exercise of its authority to issue permits as hereinafter
521 provided, shall give consideration to and be guided by the
522 following criteria:
523 (4) For activities and operations concerning a natural gas
524 storage facility, the nature, structure, and proposed use of the
525 natural gas storage reservoir is suitable for the storage and
526 recovery of gas without adverse effect to public health or
527 safety or the environment.
528 Section 13. Subsection (3) of section 377.242, Florida
529 Statutes, is amended to read:
530 377.242 Permits for drilling or exploring and extracting
531 through well holes or by other means.—The department is vested
532 with the power and authority:
533 (3) To issue permits to establish natural gas storage
534 facilities or construct wells for the injection and recovery of
535 any natural gas for temporary storage in natural gas storage
536 subsurface reservoirs.
537
538 Each permit shall contain an agreement by the permitholder that
539 the permitholder will not prevent inspection by division
540 personnel at any time. The provisions of this section
541 prohibiting permits for drilling or exploring for oil in coastal
542 waters do not apply to any leases entered into before June 7,
543 1991.
544 Section 14. Section 377.2431, Florida Statutes, is created
545 to read:
546 377.2431 Conditions for granting permits for natural gas
547 storage facilities.—
548 (1) A natural gas storage facility permit shall authorize
549 the construction and operation of a natural gas storage facility
550 and must be issued for the life of the facility, subject to
551 recertification every 10 years.
552 (2) Before issuing or recertifying a permit, the department
553 shall require satisfactory evidence of the following:
554 (a) The applicant has implemented, or is in the process of
555 implementing, programs for the control and mitigation of
556 pollution related to oil, petroleum products or their
557 byproducts, and other pollutants.
558 (b) The applicant or operator has acquired a lawful right
559 to drill, explore, or develop a natural gas storage reservoir
560 from owners of at least 75 percent of the storage rights within
561 the natural gas storage reservoir, or the applicant or operator
562 has obtained a certificate of public convenience and necessity
563 for the natural gas storage reservoir from the Federal Energy
564 Regulatory Commission pursuant to the Natural Gas Act, 15 U.S.C.
565 ss. 717 et seq.
566 (c) The applicant has used all reasonable means to identify
567 known wells that have been drilled into or through the natural
568 gas storage reservoir or reservoir protective area to determine
569 the status of the wells and whether inactive or abandoned wells
570 have been properly plugged. For any well that has not been
571 properly plugged, before conducting injection operations and
572 after issuance of the permit, the applicant must plug or
573 recondition the well to ensure the integrity of the storage
574 reservoir or reservoir protective area.
575 (d) The applicant has tested the quality of water produced
576 by all water supply wells within the lateral boundary of the
577 natural gas storage facility and complied with all requirements
578 under s. 377.2432. The applicant shall provide to the department
579 and the owner of the water supply well a written copy of the
580 water quality data collected under this paragraph.
581 (e) A determination has been made regarding whether native
582 gas or oil will be severed from below the soil or water of this
583 state in the recovery of injected gas. If native gas or oil will
584 be severed, the applicant or operator must acquire a lawful
585 right to develop the native gas or oil before injecting gas into
586 the natural gas storage reservoir.
587 (3) The applicant shall maintain records of well pressures
588 recorded monthly, and monthly volumes of gas injected into and
589 withdrawn from the reservoir. These records shall be maintained
590 at the natural gas storage facility and shall be made available
591 for inspection by the department at any reasonable time.
592 (4)(a) The maximum storage pressure for a natural gas
593 storage reservoir shall be the highest shut-in bottom hole
594 pressure found to exist during the production history of the
595 reservoir, unless a higher pressure is established by the
596 department based on testing of caprock and pool containment. The
597 methods used for determining the higher pressure must be
598 approved by the department.
599 (b) If the shut-in bottom hole pressure of the original
600 discovery or of the highest production is not known, or a higher
601 pressure has not been established through a method approved by
602 the department pursuant to paragraph (a), the maximum storage
603 reservoir pressure must be limited to a freshwater hydrostatic
604 gradient.
605 (5) A permit may not be issued for a natural gas storage
606 facility that includes a natural gas storage reservoir located
607 beneath an underground source of drinking water unless the
608 applicant demonstrates that the injection or recovery of natural
609 gas will not cause or allow natural gas to migrate into the
610 underground source of drinking water; or in any offshore
611 location in the Gulf of Mexico, the Straits of Florida, or the
612 Atlantic Ocean; or in any solution-mined cavern within a salt
613 formation.
614 Section 15. Section 377.2432, Florida Statutes, is created
615 to read:
616 377.2432 Natural gas storage facilities; protection of
617 water supplies.—
618 (1) An operator of a natural gas storage facility who
619 affects a public or private underground water supply by
620 pollution or diminution shall restore or replace the affected
621 supply with an alternate source of water adequate in quantity
622 and quality for the purposes served by the supply. The
623 department shall ensure that the quality of restored or replaced
624 water is comparable to the quality of the water before it was
625 affected by the operator.
626 (2) Unless rebutted by a defense established in subsection
627 (4), a natural gas storage facility operator is presumed
628 responsible for pollution of an underground water supply if:
629 (a) The water supply is within the lateral boundary of the
630 natural gas storage facility; and
631 (b) The pollution occurred within 6 months after completion
632 of drilling or alteration of any well under or associated with
633 the natural gas storage facility permit or after the initial
634 injection of gas into the natural gas storage reservoir,
635 whichever is later.
636 (3) If the affected underground water supply is within the
637 rebuttable presumption area as provided in subsection (2) and
638 the rebuttable presumption applies, the natural gas storage
639 facility operator shall provide a temporary water supply if the
640 water user is without a readily available alternative source of
641 water at no cost to the owner of the affected water supply. The
642 temporary water supply provided under this subsection must be
643 adequate in quantity and quality for the purposes served by the
644 affected supply.
645 (4) A natural gas storage facility operator rebuts the
646 presumption in subsection (2) by affirmatively proving any of
647 the following:
648 (a) The pollution existed before the drilling or alteration
649 activity as determined by a predrilling or prealteration survey.
650 (b) The landowner or water purveyor refused to allow the
651 operator access to conduct a predrilling or prealteration
652 survey.
653 (c) The water supply well is not within the lateral
654 boundary of the natural gas storage facility.
655 (d) The pollution occurred more than 6 months after
656 completion of drilling or alteration of any well under or
657 associated with the natural gas storage facility permit.
658 (e) The pollution occurred as the result of a cause other
659 than activities authorized under the natural gas storage
660 facility permit.
661 (5) A natural gas storage facility operator electing to
662 preserve a defense under subsection (4) must retain an
663 independent certified laboratory to conduct a predrilling or
664 prealteration survey of the water supply. A copy of survey
665 results must be submitted to the department and the landowner or
666 water purveyor in the manner prescribed by the department.
667 (6) A natural gas storage facility operator must provide
668 written notice to the landowner or water purveyor indicating
669 that the presumption established under subsection (2) may be
670 void if the landowner or water purveyor refused to allow the
671 operator access to conduct a predrilling or prealteration
672 survey. Proof of written notice to the landowner or water
673 purveyor must be provided to the department in order for the
674 operator to retain the protections under subsection (4).
675 (7) This section does not prevent a landowner or water
676 purveyor who claims pollution or diminution of a water supply
677 from seeking any other remedy at law or in equity.
678 Section 16. Section 377.2433, Florida Statutes, is created
679 to read:
680 377.2433 Protection of natural gas storage facilities.—
681 (1) The department may not authorize the drilling of any
682 well into or through a permitted natural gas storage reservoir
683 or reservoir protective area, except upon conditions deemed by
684 the department to be sufficient to prevent the loss, migration,
685 or escape of gas from the natural gas storage reservoir. The
686 department shall provide written notice to the natural gas
687 storage facility operator of any application filed with the
688 department and any agency action taken related to drilling a
689 well into or through a permitted natural gas storage facility
690 boundary or reservoir protective area.
691 (2) As a condition for the issuance of a permit by the
692 department, an applicant seeking to drill a well into or through
693 a permitted natural gas storage facility boundary or reservoir
694 protective area must provide the affected natural gas storage
695 facility operator a reasonable right of entry to observe and
696 monitor all drilling activities.
697 (3) The department shall ensure that any well drilled into
698 or through a permitted natural gas storage reservoir or
699 reservoir protective area is cased and cemented in a manner
700 sufficient to protect the integrity of the natural gas storage
701 reservoir.
702 Section 17. Section 377.2434, Florida Statutes, is created
703 to read:
704 377.2434 Property rights to injected natural gas.—
705 (1) All natural gas that has previously been reduced to
706 possession and that is subsequently injected into a natural gas
707 storage facility is at all times the property of the injector or
708 the injector’s heirs, successors, or assigns, whether owned by
709 the injector or stored under contract.
710 (2) Such gas may not be subject to the right of the owner
711 of the surface of the lands or of any mineral interest therein,
712 under which the natural gas storage facilities lie, or to the
713 right of any person, other than the injector or the injector’s
714 heirs, successors, or assigns, to waste or otherwise interfere
715 with or exercise control over such gas, to produce, to take, or
716 to reduce to possession, by means of the law of capture or
717 otherwise. This subsection does not affect the ownership of
718 hydrocarbons occurring naturally within this state or the right
719 of the owner of the surface of the lands or of any mineral
720 interest therein to drill or bore through the natural gas
721 storage facilities in a manner that will protect the facilities
722 against pollution or the escape of stored natural gas.
723 (3) With regard to natural gas that has migrated to
724 adjoining property or to a stratum, or portion thereof, which
725 has not been condemned or otherwise purchased:
726 (a) The injector or the injector’s heirs, successors, or
727 assigns:
728 1. May not lose title to or possession of the gas if the
729 injector or the injector’s heirs, successors, or assigns can
730 prove by a preponderance of the evidence that the gas was
731 originally injected into the underground storage; and
732 2. Have the right to conduct tests on any existing wells on
733 adjoining property as may be reasonable to determine ownership
734 of the gas, but the tests are solely at the injector’s risk and
735 expense.
736 (b) The owner of the stratum and the owner of the surface
737 are entitled to compensation, including compensation for use of
738 or damage to the surface or substratum, as provided by law.
739 Section 18. Subsection (3) of section 377.25, Florida
740 Statutes, is amended to read:
741 377.25 Production pools; drilling units.—
742 (3) Each well permitted to be drilled upon any drilling
743 unit shall be drilled approximately in the center thereof, with
744 such exception as may be reasonably necessary where the division
745 finds that the unit is partly outside the pool or, for some
746 other reason, a well approximately in the center of the unit
747 would be nonproductive or where topographical conditions are
748 such as to make the drilling approximately in the center of the
749 unit unduly burdensome or where the operator proposes to
750 complete the well with a horizontal or nearly horizontal well in
751 the producing zone. Whenever an exception is granted, the
752 division shall take such action as will offset any advantage
753 which the person securing the exception may have over other
754 producers by reason of the drilling of the well as an exception,
755 and so that drainage from developed units to the tract, with
756 respect to which the exception is granted, will be prevented or
757 minimized, and the producer of the well drilled, as an
758 exception, will be allowed to produce no more than his or her
759 just and equitable share of the oil and gas in the pool, as such
760 share is set forth in this section. This subsection does not
761 apply to wells associated with a natural gas storage facility.
762 Section 19. Subsection (2) of section 377.28, Florida
763 Statutes, is amended to read:
764 377.28 Cycling, pooling, and unitization of oil and gas.—
765 (2) The department shall issue an order requiring unit
766 operation if it finds that:
767 (a) Unit operation of the field, or of any pool or pools,
768 portion or portions, or combinations thereof within the field,
769 is reasonably necessary to prevent waste, to avoid the drilling
770 of unnecessary wells, or to increase the ultimate recovery of
771 oil or gas by additional recovery methods; and
772 (b) The estimated additional cost incident to the conduct
773 of such operation will not exceed the value of the estimated
774 additional recovery of oil or gas; and
775 (c) The additional recovery of oil or gas does not
776 adversely interfere with the storage or recovery of natural gas
777 within a natural gas storage reservoir.
778
779 The phrase “additional recovery methods” as used herein
780 includes, but is not limited to, the maintenance or partial
781 maintenance of reservoir pressures; recycling; flooding a pool
782 or pools, or parts thereof, with air, gas, water, liquid
783 hydrocarbons, any other substance, or any combination thereof;
784 or any other method of producing additional hydrocarbons
785 approved by the department.
786 Section 20. Subsection (4) is added to section 377.30,
787 Florida Statutes, to read:
788 377.30 Limitation on amount of oil or gas taken.—
789 (4) This section does not apply to nonnative gas recovered
790 from a permitted natural gas storage facility.
791 Section 21. Subsection (1) of section 377.34, Florida
792 Statutes, is amended to read:
793 377.34 Actions and injunctions by division.—
794 (1) Whenever it appears shall appear that a any person is
795 violating, or threatening to violate, any statute of this state
796 with respect to the conservation of oil or gas, or both, or any
797 provision of this law, or any rule, regulation or order made
798 thereunder by any act done in the operation of a any well
799 producing oil or gas, or storing or recovering natural gas, or
800 by omitting an any act required to be done thereunder, the
801 division, through its counsel, or the Department of Legal
802 Affairs on its own initiative, may bring suit against such
803 person in the Circuit Court in the County of Leon, state, or in
804 the circuit court in the county in which the well in question is
805 located, at the option of the division, or the Department of
806 Legal Affairs, to restrain such person or persons from
807 continuing such violation or from carrying out the threat of
808 violation. In such suit, the division, or the Department of
809 Legal Affairs, may obtain injunctions, prohibitory and
810 mandatory, including temporary restraining orders and temporary
811 injunctions, as the facts may warrant, including, when
812 appropriate, an injunction restraining any person from moving or
813 disposing of illegal oil, illegal gas or illegal product, and
814 any or all such commodities may be ordered to be impounded or
815 placed under the control of a receiver appointed by the court
816 if, in the judgment of the court, such action is advisable.
817 Section 22. Paragraph (a) of subsection (1) of section
818 377.37, Florida Statutes, is amended to read:
819 377.37 Penalties.—
820 (1)(a) Any person who violates any provision of this law or
821 any rule, regulation, or order of the division made under this
822 chapter or who violates the terms of any permit to drill for or
823 produce oil, gas, or other petroleum products referred to in s.
824 377.242(1), or to store gas in a natural gas storage facility,
825 or any lessee, permitholder, or operator of equipment or
826 facilities used in the exploration for, drilling for, or
827 production of oil, gas, or other petroleum products, or storage
828 of gas in a natural gas storage facility, who refuses inspection
829 by the division as provided in this chapter, is liable to the
830 state for any damage caused to the air, waters, or property,
831 including animal, plant, or aquatic life, of the state and for
832 reasonable costs and expenses of the state in tracing the source
833 of the discharge, in controlling and abating the source and the
834 pollutants, and in restoring the air, waters, and property,
835 including animal, plant, and aquatic life, of the state.
836 Furthermore, such person, lessee, permitholder, or operator is
837 subject to the judicial imposition of a civil penalty in an
838 amount of not more than $10,000 for each offense. However, the
839 court may receive evidence in mitigation. Each day during any
840 portion of which such violation occurs constitutes a separate
841 offense. Nothing herein shall give the department the right to
842 bring an action on behalf of any private person.
843 Section 23. Subsections (1) and (3) of section 377.371,
844 Florida Statutes, are amended to read:
845 377.371 Pollution prohibited; reporting, liability.—
846 (1) A No person drilling for or producing oil, gas, or
847 other petroleum products, or storing gas in a natural gas
848 storage facility, may not shall pollute land or water; damage
849 aquatic or marine life, wildlife, birds, or public or private
850 property; or allow any extraneous matter to enter or damage any
851 mineral or freshwater-bearing formation.
852 (3) Because it is the intent of this chapter to provide the
853 means for rapid and effective cleanup and to minimize damages
854 resulting from pollution in violation of this chapter, if the
855 waters of the state are polluted by the drilling, storage of
856 natural gas, or production operations of any person or persons
857 and such pollution damages or threatens to damage human, animal,
858 or plant life, public or private property, or any mineral or
859 water-bearing formation, said person shall be liable to the
860 state for all costs of cleanup or other damage incurred by the
861 state. In any suit to enforce claims of the state under this
862 chapter, it is shall not be necessary for the state to plead or
863 prove negligence in any form or manner on the part of the person
864 or persons conducting the drilling or production operations; the
865 state need only plead and prove the fact of the prohibited
866 discharge or other polluting condition and that it occurred at
867 the facilities of the person or persons conducting the drilling
868 or production operation. A No person or persons conducting the
869 drilling, storage, or production operation may not shall be held
870 liable if said person or persons prove that the prohibited
871 discharge or other polluting condition was the result of any of
872 the following:
873 (a) An act of war.
874 (b) An act of government, either state, federal, or
875 municipal.
876 (c) An act of God, which means an unforeseeable act
877 exclusively occasioned by the violence of nature without the
878 interference of any human agency.
879 (d) An act or omission of a third party without regard to
880 whether any such act or omission was or was not negligent.
881 Section 24. Paragraph (b) of subsection (14) and paragraph
882 (b) of subsection (19) of section 403.973, Florida Statutes, are
883 amended, and paragraphs (g) and (h) are added to subsection (3)
884 of that section, to read:
885 403.973 Expedited permitting; amendments to comprehensive
886 plans.—
887 (3)
888 (g) Projects for natural gas storage facilities that are
889 permitted under chapter 377 are eligible for the expedited
890 permitting process.
891 (h) Projects to construct interstate natural gas pipelines
892 subject to certification by the Federal Energy Regulatory
893 Commission are eligible for the expedited permitting process.
894 (14)
895 (b) Projects identified in paragraph (3)(f), (3)(g), or
896 (3)(h) or challenges to state agency action in the expedited
897 permitting process for establishment of a state-of-the-art
898 biomedical research institution and campus in this state by the
899 grantee under s. 288.955 are subject to the same requirements as
900 challenges brought under paragraph (a), except that,
901 notwithstanding s. 120.574, summary proceedings must be
902 conducted within 30 days after a party files the motion for
903 summary hearing, regardless of whether the parties agree to the
904 summary proceeding.
905 (19) The following projects are ineligible for review under
906 this part:
907 (b) A project, the primary purpose of which is to:
908 1. Effect the final disposal of solid waste, biomedical
909 waste, or hazardous waste in this state.
910 2. Produce electrical power, unless the production of
911 electricity is incidental and not the primary function of the
912 project or the electrical power is derived from a fuel source
913 for renewable energy as defined in s. 366.91(2)(d).
914 3. Extract natural resources.
915 4. Produce oil.
916 5. Construct, maintain, or operate an oil, petroleum,
917 natural gas, or sewage pipeline.
918 Section 25. The Department of Environmental Protection
919 shall adopt rules relating to natural gas storage before issuing
920 a natural gas storage facility permit.
921 Section 26. This act shall take effect July 1, 2013.