Florida Senate - 2013                CS for CS for CS for SB 958
       
       
       
       By the Committees on Appropriations; Communications, Energy, and
       Public Utilities; and Environmental Preservation and
       Conservation; and Senators Richter and Smith
       
       
       576-04968-13                                           2013958c3
    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.; declaring underground
    9         natural gas storage to be in the public interest;
   10         amending s. 377.18, F.S.; clarifying common sources of
   11         oil and gas; amending s. 377.19, F.S.; modifying and
   12         providing definitions; amending s. 377.21, F.S.;
   13         extending the jurisdiction of the Division of Resource
   14         Management of the Department of Environmental
   15         Protection; amending s. 377.22, F.S.; expanding the
   16         scope of the department’s rules and orders; amending
   17         s. 377.24, F.S.; providing for the notice and
   18         permitting of storage in and recovery from natural gas
   19         storage reservoirs; creating s. 377.2407, F.S.;
   20         establishing a natural gas storage facility permit
   21         application process; specifying requirements for an
   22         application, including fees; amending s. 377.241,
   23         F.S.; providing criteria that the division must
   24         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 the issuance of permits
   30         for facilities located in specified areas; creating s.
   31         377.2432, F.S.; providing for the protection of water
   32         supplies at natural gas storage facilities; providing
   33         that an operator is presumed responsible for pollution
   34         of an underground water supply under certain
   35         circumstances; creating s. 377.2433, F.S.; providing
   36         for the protection of natural gas storage facilities
   37         through requirement of notice, compliance with certain
   38         standards, and a right of entry to monitor activities;
   39         creating s. 377.2434, F.S.; providing that property
   40         rights to injected natural gas are with the injector
   41         or the injector’s heirs, successors, or assigns;
   42         providing for compensation to the owner of the stratum
   43         and the owner of the surface for use of or damage to
   44         the surface or substratum; amending s. 377.25, F.S.;
   45         limiting the scope of certain drilling unit
   46         requirements; amending s. 377.28, F.S.; modifying
   47         situations in which the department is required to
   48         issue an order requiring unit operation; amending s.
   49         377.30, F.S.; providing that limitations on the amount
   50         of oil or gas taken do not apply to nonnative gas
   51         recovered from a permitted natural gas storage
   52         facility; amending s. 377.34, F.S.; providing for
   53         legal action against a person who appears to be
   54         violating a rule that relates to the storage or
   55         recovery of natural gas; amending s. 377.37, F.S.;
   56         expanding penalties to reach persons who violate the
   57         terms of a permit relating to storage of gas in a
   58         natural gas storage facility; amending s. 377.371,
   59         F.S.; providing that a person storing gas in a natural
   60         gas storage facility may not pollute or otherwise
   61         damage certain areas and that a person who pollutes
   62         water by storing natural gas is liable for cleanup or
   63         other costs incurred by the state; amending s.
   64         403.973, F.S.; allowing expedited permitting for
   65         natural gas storage facilities permitted under ch.
   66         377, F.S., and certain projects to construct
   67         interstate natural gas pipelines; providing that
   68         natural gas storage facilities are subject to certain
   69         requirements; directing the department to adopt
   70         certain rules before issuing permits for natural gas
   71         storage facilities; providing an effective date.
   72  
   73  Be It Enacted by the Legislature of the State of Florida:
   74  
   75         Section 1. This act may be cited as the “Florida
   76  Underground Natural Gas Storage Act.”
   77         Section 2. Subsection (7) is added to section 211.02,
   78  Florida Statutes, to read:
   79         211.02 Oil production tax; basis and rate of tax; tertiary
   80  oil and mature field recovery oil.—An excise tax is hereby
   81  levied upon every person who severs oil in the state for sale,
   82  transport, storage, profit, or commercial use. Except as
   83  otherwise provided in this part, the tax is levied on the basis
   84  of the entire production of oil in this state, including any
   85  royalty interest. Such tax shall accrue at the time the oil is
   86  severed and shall be a lien on production regardless of the
   87  place of sale, to whom sold, or by whom used, and regardless of
   88  the fact that delivery of the oil may be made outside the state.
   89         (7) As used in this section, the term “oil” does not
   90  include gas-phase hydrocarbons that are transported into the
   91  state, injected in the gaseous phase into a natural gas storage
   92  facility permitted under part I of chapter 377, and later
   93  recovered as a liquid hydrocarbon.
   94         Section 3. Subsection (6) is added to section 211.025,
   95  Florida Statutes, to read:
   96         211.025 Gas production tax; basis and rate of tax.—An
   97  excise tax is hereby levied upon every person who severs gas in
   98  the state for sale, transport, profit, or commercial use. Except
   99  as otherwise provided in this part, the tax shall be levied on
  100  the basis of the entire production of gas in this state,
  101  including any royalty interest. Such tax shall accrue at the
  102  time the gas is severed and shall be a lien on production
  103  regardless of the place of sale, to whom sold, or by whom used
  104  and regardless of the fact that delivery of the gas may be made
  105  outside the state.
  106         (6) This section applies only to native gas as defined in
  107  s. 377.19.
  108         Section 4. Subsection (36) of section 376.301, Florida
  109  Statutes, is amended to read:
  110         376.301 Definitions of terms used in ss. 376.30-376.317,
  111  376.70, and 376.75.—When used in ss. 376.30-376.317, 376.70, and
  112  376.75, unless the context clearly requires otherwise, the term:
  113         (36) “Pollutants” includes any “product” as defined in s.
  114  377.19(11), pesticides, ammonia, chlorine, and derivatives
  115  thereof, excluding liquefied petroleum gas.
  116         Section 5. Section 377.06, Florida Statutes, is amended to
  117  read:
  118         377.06 Public policy of state concerning natural resources
  119  of oil and gas.—It is hereby declared to be the public policy of
  120  this the state to conserve and control the natural resources of
  121  oil and gas in this said state, and the products made from oil
  122  and gas in this state therefrom; to prevent waste of said
  123  natural resources; to provide for the protection and adjustment
  124  of the correlative rights of the owners of the land in which the
  125  wherein said natural resources lie, of and the owners and
  126  producers of oil and gas resources and the products made from
  127  oil and gas therefrom, and of others interested in these
  128  resources and products therein; to safeguard the health,
  129  property, and public welfare of the residents citizens of this
  130  said state and other interested persons and for all purposes
  131  indicated by the provisions in this section herein. Further, it
  132  is declared that underground storage of natural gas is in the
  133  public interest because underground storage promotes
  134  conservation of natural gas; makes gas more readily available to
  135  the domestic, commercial, and industrial consumers of this
  136  state; and allows the accumulation of large quantities of gas in
  137  reserve for orderly withdrawal during emergencies or periods of
  138  peak demand. It is not the intention of this section to limit,
  139  or restrict, or modify in any way the provisions of this law.
  140         Section 6. Section 377.18, Florida Statutes, is amended to
  141  read:
  142         377.18 Common sources of oil and gas.—All common sources of
  143  supply of oil or native and gas or either of them shall have the
  144  production therefrom controlled or regulated in accordance with
  145  the provisions of this law.
  146         Section 7. Section 377.19, Florida Statutes, is reordered
  147  and amended to read:
  148         377.19 Definitions.—As used Unless the context otherwise
  149  requires, the words defined in this section shall have the
  150  following meanings when found in ss. 377.06, 377.07, and 377.10
  151  377.40, the term:
  152         (3)(1) “Division” means the Division of Resource Management
  153  of the Department of Environmental Protection.
  154         (28)(2) “State” means the State of Florida.
  155         (20)(3) “Person” means a any natural person, corporation,
  156  association, partnership, receiver, trustee, guardian, executor,
  157  administrator, fiduciary, or representative of any kind.
  158         (15)(4) “Oil” means crude petroleum oil and other
  159  hydrocarbons, regardless of gravity, which are produced at the
  160  well in liquid form by ordinary production methods, and which
  161  are not the result of condensation of gas after it leaves the
  162  reservoir.
  163         (5) “Gas” means all natural gas, including casinghead gas,
  164  and all other hydrocarbons not defined as oil in subsection (4).
  165         (21)(6) “Pool” means an underground reservoir containing or
  166  appearing to contain a common accumulation of oil or gas or
  167  both. Each zone of a general structure which is completely
  168  separated from any other zone on the structure is considered a
  169  separate pool as used herein.
  170         (4)(7) “Field” means the general area that which is
  171  underlaid, or appears to be underlaid, by at least one pool. The
  172  term; and “field” includes the underground reservoir, or
  173  reservoirs, containing oil or gas, or both. The terms words
  174  “field” and “pool” mean the same thing if when only one
  175  underground reservoir is involved; however, the term “field,”
  176  unlike the term “pool,” may relate to two or more pools.
  177         (19)(8) “Owner” means the person who has the right to drill
  178  into and to produce from any pool and to appropriate the
  179  production either for the person or for the person and another,
  180  or others.
  181         (22)(9) “Producer” means the owner or operator of a well or
  182  wells capable of producing oil or gas, or both.
  183         (31)(10) “Waste,” in addition to its ordinary meaning,
  184  means “physical waste” as that term is generally understood in
  185  the oil and gas industry. The term “waste” includes:
  186         (a) The inefficient, excessive, or improper use or
  187  dissipation of reservoir energy; and the locating, spacing,
  188  drilling, equipping, operating, or producing of any oil or gas
  189  well or wells in a manner that which results, or tends to
  190  result, in reducing the quantity of oil or gas ultimately to be
  191  stored or recovered from any pool in this state.
  192         (b) The inefficient storing of oil; and the locating,
  193  spacing, drilling, equipping, operating, or producing of any oil
  194  or gas well or wells in a manner that causes, or tends causing,
  195  or tending to cause, unnecessary or excessive surface loss or
  196  destruction of oil or gas.
  197         (c) The producing of oil or gas in such a manner that
  198  causes as to cause unnecessary water channeling or coning.
  199         (d) The operation of any oil well or wells with an
  200  inefficient gas-oil ratio.
  201         (e) The drowning with water of any stratum or part thereof
  202  capable of producing oil or gas.
  203         (f) The underground waste, however caused and whether or
  204  not defined.
  205         (g) The creation of unnecessary fire hazards.
  206         (h) The escape into the open air, from a well producing
  207  both oil and gas, of gas in excess of the amount that which is
  208  necessary in the efficient drilling or operation of the well.
  209         (i) The use of gas for the manufacture of carbon black.
  210         (j) Permitting gas produced from a gas well to escape into
  211  the air.
  212         (k) The abuse of the correlative rights and opportunities
  213  of each owner of oil and gas in a common reservoir due to
  214  nonuniform, disproportionate, and unratable withdrawals, causing
  215  undue drainage between tracts of land.
  216         (23)(11) “Product” means a any commodity made from oil or
  217  gas and includes refined crude oil, crude tops, topped crude,
  218  processed crude petroleum, residue from crude petroleum,
  219  cracking stock, uncracked fuel oil, fuel oil, treated crude oil,
  220  residuum, gas oil, casinghead gasoline, natural gas gasoline,
  221  naphtha, distillate, condensate, gasoline, waste oil, kerosene,
  222  benzine, wash oil, blended gasoline, lubricating oil, blends or
  223  mixtures of oil with one or more liquid products or byproducts
  224  derived from oil or gas, and blends or mixtures of two or more
  225  liquid products or byproducts derived from oil or gas, whether
  226  hereinabove enumerated or not.
  227         (8)(12) “Illegal oil” means oil that which has been
  228  produced within the state from any well or wells in excess of
  229  the amount allowed by rule, regulation, or order of the
  230  division, as distinguished from oil produced within the state
  231  from a well not producing in excess of the amount so allowed,
  232  which is “legal oil.”
  233         (7)(13) “Illegal gas” means gas that which has been
  234  produced within the state from any well or wells in excess of
  235  the amount allowed by any rule, regulation, or order of the
  236  division, as distinguished from gas produced within the State of
  237  Florida from a well not producing in excess of the amount so
  238  allowed, which is “legal gas.”
  239         (9)(14) “Illegal product” means a any product of oil or
  240  gas, any part of which was processed or derived, in whole or in
  241  part, from illegal gas or illegal oil or from any product
  242  thereof, as distinguished from “legal product,” which is a
  243  product processed or derived to no extent from illegal oil or
  244  illegal gas.
  245         (24)(15) “Reasonable market demand” means the amount of oil
  246  reasonably needed for current consumption, together with a
  247  reasonable amount of oil for storage and working stocks.
  248         (30)(16) “Tender” means a permit or certificate of
  249  clearance for the transportation or the delivery of oil, gas, or
  250  products, approved and issued or registered under the authority
  251  of the division.
  252         (17) The use of the word “and” includes the word “or” and
  253  the use of “or” includes “and,” unless the context clearly
  254  requires a different meaning, especially with respect to such
  255  expressions as “oil and gas” or “oil or gas.”
  256         (32)(18) “Well site” means the general area around a well,
  257  which area has been disturbed from its natural or existing
  258  condition, as well as the drilling or production pad, mud and
  259  water circulation pits, and other operation areas necessary to
  260  drill for or produce oil or gas, or to inject gas into and
  261  recover gas from a natural gas storage facility.
  262         (17)(19) “Oil and gas administrator” means the State
  263  Geologist.
  264         (18)(20) “Operator” means the entity who:
  265         (a) Has the right to drill and to produce a well; or
  266         (b) As part of a natural gas storage facility, injects, or
  267  is engaged in the work of preparing to inject, gas into a
  268  natural gas storage reservoir; or stores gas in, or removes gas
  269  from, a natural gas storage reservoir.
  270         (1)(21) “Completion date” means the day, month, and year
  271  that a new productive well, a previously shut-in well, or a
  272  temporarily abandoned well is completed, repaired, or
  273  recompleted and the operator begins producing oil or gas in
  274  commercial quantities.
  275         (26)(22) “Shut-in well” means an oil or gas well that has
  276  been taken out of service for economic reasons or mechanical
  277  repairs.
  278         (29)(23) “Temporarily abandoned well” means a permitted
  279  well or wellbore that has been abandoned by plugging in a manner
  280  that allows reentry and redevelopment in accordance with oil or
  281  gas rules of the Department of Environmental Protection.
  282         (14)(24) “New field well” means an oil or gas well
  283  completed after July 1, 1997, in a new field as designated by
  284  the Department of Environmental Protection.
  285         (6)(25) “Horizontal well” means a well completed with the
  286  wellbore in a horizontal or nearly horizontal orientation within
  287  10 degrees of horizontal within the producing formation.
  288         (2) “Department” means the Department of Environmental
  289  Protection.
  290         (10) “Lateral storage reservoir boundary” means the
  291  projection up to the land surface of the maximum horizontal
  292  extent of the gas volume contained in a natural gas storage
  293  reservoir.
  294         (11) “Native gas” means gas that occurs naturally within
  295  this state and does not include gas produced outside the state,
  296  transported to this state, and injected into a permitted natural
  297  gas storage facility.
  298         (12) “Natural gas storage facility” means an underground
  299  reservoir from which oil or gas has previously been produced and
  300  which is used or to be used for the underground storage of
  301  natural gas, and any surface or subsurface structure, or
  302  infrastructure, except wells. The term also includes a right or
  303  appurtenance necessary or useful in the operation of the
  304  facility for the underground storage of natural gas, including
  305  any necessary or reasonable reservoir protective area as
  306  designated for the purpose of ensuring the safe operation of the
  307  storage of natural gas or protecting the natural gas storage
  308  facility from pollution, invasion, escape, or migration of gas,
  309  or any subsequent extension thereof. The term does not mean a
  310  transmission, distribution, or gathering pipeline or system that
  311  is not used primarily as integral piping for a natural gas
  312  storage facility.
  313         (13) “Natural gas storage reservoir” means a pool or field
  314  from which gas or oil has previously been produced and which is
  315  suitable for or capable of being made suitable for the
  316  injection, storage, and recovery of gas, as identified in a
  317  permit application submitted to the department under s.
  318  377.2407.
  319         (16) “Oil and gas” has the same meaning as the term “oil or
  320  gas.”
  321         (25) “Reservoir protective area” means the area extending
  322  up to and including 2,000 feet surrounding a natural gas storage
  323  reservoir.
  324         (27) “Shut-in bottom hole pressure” means the pressure at
  325  the bottom of a well when all valves are closed and no oil or
  326  gas has been allowed to escape for at least 24 hours.
  327         Section 8. Subsection (1) of section 377.21, Florida
  328  Statutes, is amended to read:
  329         377.21 Jurisdiction of division.—
  330         (1) The division shall have jurisdiction and authority over
  331  all persons and property necessary to administer and enforce
  332  effectively the provisions of this law and all other laws
  333  relating to the conservation of oil and gas or to the storage of
  334  gas in and recovery of gas from natural gas storage reservoirs.
  335         Section 9. Subsection (2) of section 377.22, Florida
  336  Statutes, is amended to read:
  337         377.22 Rules and orders.—
  338         (2) The department shall issue orders and adopt rules
  339  pursuant to ss. 120.536(1) and 120.54 to implement and enforce
  340  the provisions of this chapter. Such rules and orders shall
  341  ensure that all precautions are taken to prevent the spillage of
  342  oil or any other pollutant in all phases of the drilling for,
  343  and extracting of, oil, gas, or other petroleum products, or
  344  during the injection of gas into and recovery of gas from a
  345  natural gas storage reservoir. The department shall revise such
  346  rules from time to time as necessary for the proper
  347  administration and enforcement of this chapter. Rules adopted
  348  and orders issued in accordance with this section are shall be
  349  for, but shall not be limited to, the following purposes:
  350         (a) To require the drilling, casing, and plugging of wells
  351  to be done in such a manner as to prevent the pollution of the
  352  fresh, salt, or brackish waters or the lands of the state and to
  353  protect the integrity of natural gas storage reservoirs.
  354         (b) To prevent the alteration of the sheet flow of water in
  355  any area.
  356         (c) To require that appropriate safety equipment be
  357  installed to minimize the possibility of an escape of oil or
  358  other petroleum products in the event of accident, human error,
  359  or a natural disaster during drilling, casing, or plugging of
  360  any well and during extraction operations.
  361         (d) To require the drilling, casing, and plugging of wells
  362  to be done in such a manner as to prevent the escape of oil or
  363  other petroleum products from one stratum to another.
  364         (e) To prevent the intrusion of water into an oil or gas
  365  stratum from a separate stratum, except as provided by rules of
  366  the division relating to the injection of water for proper
  367  reservoir conservation and brine disposal.
  368         (f) To require a reasonable bond, or other form of security
  369  acceptable to the department, conditioned upon the performance
  370  of the duty to plug properly each dry and abandoned well and the
  371  full and complete restoration by the applicant of the area over
  372  which geophysical exploration, drilling, or production is
  373  conducted to the similar contour and general condition in
  374  existence prior to such operation.
  375         (g) To require and carry out a reasonable program of
  376  monitoring or inspection of all drilling operations, or
  377  producing wells, or injecting wells, including regular
  378  inspections by division personnel.
  379         (h) To require the making of reports showing the location
  380  of all oil and gas wells; the making and filing of logs; the
  381  taking and filing of directional surveys; the filing of
  382  electrical, sonic, radioactive, and mechanical logs of oil and
  383  gas wells; if taken, the saving of cutting and cores, the cuts
  384  of which shall be given to the Bureau of Geology; and the making
  385  of reports with respect to drilling and production records.
  386  However, such information, or any part thereof, at the request
  387  of the operator, shall be exempt from the provisions of s.
  388  119.07(1) and held confidential by the division for a period of
  389  1 year after the completion of a well.
  390         (i) To prevent wells from being drilled, operated, or
  391  produced in such a manner as to cause injury to neighboring
  392  leases, or property, or natural gas storage reservoirs.
  393         (j) To prevent the drowning by water of any stratum, or
  394  part thereof, capable of producing oil or gas in paying
  395  quantities and to prevent the premature and irregular
  396  encroachment of water which reduces, or tends to reduce, the
  397  total ultimate recovery of oil or gas from any pool.
  398         (k) To require the operation of wells with efficient gas
  399  oil ratio, and to fix such ratios.
  400         (l) To prevent “blowouts,” “caving,” and “seepage,” in the
  401  sense that conditions indicated by such terms are generally
  402  understood in the oil and gas business.
  403         (m) To prevent fires.
  404         (n) To identify the ownership of all oil or gas wells,
  405  producing leases, refineries, tanks, plants, structures, and
  406  storage and transportation equipment and facilities.
  407         (o) To regulate the “shooting,” perforating and chemical
  408  treatment of wells.
  409         (p) To regulate secondary recovery methods, including the
  410  introduction of gas, air, water, or other substance into
  411  producing formations.
  412         (q) To regulate gas cycling operations.
  413         (r) To regulate the storage and recovery of gas injected
  414  into natural gas storage facilities.
  415         (s)(r) If necessary for the prevention of waste, as herein
  416  defined, to determine, limit, and prorate the production of oil
  417  or gas, or both, from any pool or field in the state.
  418         (t)(s) To require, either generally or in or from
  419  particular areas, certificates of clearance or tenders in
  420  connection with the transportation or delivery of oil or gas, or
  421  any product.
  422         (u)(t) To regulate the spacing of wells and to establish
  423  drilling units.
  424         (v)(u) To prevent, so far as is practicable, reasonably
  425  avoidable drainage from each developed unit which is not
  426  equalized by counterdrainage.
  427         (w)(v) To require that geophysical operations requiring a
  428  permit be conducted in a manner which will minimize the impact
  429  on hydrology and biota of the area, especially environmentally
  430  sensitive lands and coastal areas.
  431         (x)(w) To regulate aboveground crude oil storage tanks in a
  432  manner which will protect the water resources of the state.
  433         (y)(x) To act in a receivership capacity for fractional
  434  mineral interests for which the owners are unknown or unlocated
  435  and to administratively designate the operator as the lessee.
  436         Section 10. Subsections (1) and (2) of section 377.24,
  437  Florida Statutes, are amended to read:
  438         377.24 Notice of intention to drill well; permits;
  439  abandoned wells and dry holes.—
  440         (1) Before drilling a any well in search of oil or gas, or
  441  before storing gas in or recovering gas from a natural gas
  442  storage reservoir shall be drilled, the person who desires
  443  desiring to drill for, store, or recover gas, or drill for oil
  444  or gas, the same shall notify the division upon such form as it
  445  may prescribe and shall pay a reasonable fee set by rule of the
  446  department not to exceed the actual cost of processing and
  447  inspecting for each well or reservoir. The drilling of any well
  448  and the storing and recovering of gas are is hereby prohibited
  449  until such notice is given, the and such fee is has been paid,
  450  and the permit is granted.
  451         (2) An Each application for the drilling of a well in
  452  search of oil or gas, or for the storing of gas in and
  453  recovering of gas from a natural gas storage reservoir, in this
  454  state must shall include the address of the residence of the
  455  applicant, or applicants each applicant, which must address
  456  shall be the address of each person involved in accordance with
  457  the records of the Division of Resource Management until such
  458  address is changed on the records of the division after written
  459  request.
  460         Section 11. Section 377.2407, Florida Statutes, is created
  461  to read:
  462         377.2407Natural gas storage facility permit application to
  463  inject gas into and recover gas from a natural gas storage
  464  reservoir.—
  465         (1) Before drilling a well to inject gas into and recover
  466  gas from a natural gas storage reservoir, the person who desires
  467  to conduct such operation shall apply to the department in the
  468  manner described in this section using such form as the
  469  department may prescribe to obtain a natural gas storage
  470  facility permit. The department shall also require any applicant
  471  seeking to obtain such permit to pay a reasonable permit
  472  application fee. Such fee must be in an amount necessary to
  473  cover the costs associated with receiving, processing, issuing,
  474  and recertifying the permit application, and inspecting for
  475  compliance with the permit.
  476         (2) Each application must contain:
  477         (a) A detailed, three-dimensional description of the
  478  natural gas storage reservoir, including geologic-based
  479  descriptions of the reservoir boundaries, and the horizontal and
  480  vertical dimensions.
  481         (b) A geographic description of the lateral storage
  482  reservoir boundary.
  483         (c) A general description and location of all injection,
  484  recovery, withdrawal-only, and observation wells.
  485         (d) A description of the reservoir protective area.
  486         (e) Information demonstrating that the proposed natural gas
  487  storage reservoir is suitable for the storage and recovery of
  488  gas.
  489         (f) Information identifying all reasonably known abandoned
  490  or active wells within the natural gas storage facility.
  491         (g) A field-monitoring plan that requires, at a minimum,
  492  monthly field inspections of all wells that are part of the
  493  natural gas storage facility.
  494         (h) A monitoring and testing plan for the well integrity.
  495         (i) A well inspection plan that requires, at a minimum, the
  496  inspection of all wells that are part of the natural gas storage
  497  facility and plugged wells within the natural gas storage
  498  facility boundary.
  499         (j) A spill prevention and response plan.
  500         (k) A well spacing plan.
  501         (l) An operating plan for the natural gas storage
  502  reservoir, which must include gas capacities, anticipated
  503  operating conditions, and maximum storage pressure.
  504         (m) A gas migration response plan.
  505         (n) A location plat and general facility map surveyed and
  506  prepared by a registered land surveyor licensed under chapter
  507  472.
  508         (3) The department may require the applicant to provide
  509  additional information that is deemed necessary to permit the
  510  development of the natural gas storage facility. Each well
  511  related to the natural gas storage facility shall be authorized
  512  and permitted individually upon the applicant’s satisfying
  513  applicable well construction and operation criteria under this
  514  part; however, notwithstanding any other provision of this
  515  chapter, well spacing requirements do not apply.
  516         Section 12. Subsection (4) is added to section 377.241,
  517  Florida Statutes, to read:
  518         377.241 Criteria for issuance of permits.—The division, in
  519  the exercise of its authority to issue permits as hereinafter
  520  provided, shall give consideration to and be guided by the
  521  following criteria:
  522         (4) For activities and operations concerning a natural gas
  523  storage facility, the nature, structure, and proposed use of the
  524  natural gas storage reservoir is suitable for the storage and
  525  recovery of gas without adverse effect to public health or
  526  safety or the environment.
  527         Section 13. Subsection (3) of section 377.242, Florida
  528  Statutes, is amended to read:
  529         377.242 Permits for drilling or exploring and extracting
  530  through well holes or by other means.—The department is vested
  531  with the power and authority:
  532         (3) To issue permits to establish natural gas storage
  533  facilities or construct wells for the injection and recovery of
  534  any natural gas for temporary storage in natural gas storage
  535  subsurface reservoirs.
  536  
  537  Each permit shall contain an agreement by the permitholder that
  538  the permitholder will not prevent inspection by division
  539  personnel at any time. The provisions of this section
  540  prohibiting permits for drilling or exploring for oil in coastal
  541  waters do not apply to any leases entered into before June 7,
  542  1991.
  543         Section 14. Section 377.2431, Florida Statutes, is created
  544  to read:
  545         377.2431Conditions for granting permits for natural gas
  546  storage facilities.—
  547         (1) A natural gas storage facility permit shall authorize
  548  the construction and operation of a natural gas storage facility
  549  and must be issued for the life of the facility, subject to
  550  recertification every 10 years.
  551         (2) Before issuing or recertifying a permit, the department
  552  shall require satisfactory evidence of the following:
  553         (a) The applicant has implemented, or is in the process of
  554  implementing, programs for the control and mitigation of
  555  pollution related to oil, petroleum products or their
  556  byproducts, and other pollutants.
  557         (b) The applicant or operator has acquired a lawful right
  558  to drill, explore, or develop a natural gas storage reservoir
  559  from owners of at least 75 percent of the storage rights within
  560  the natural gas storage reservoir, or the applicant or operator
  561  has obtained a certificate of public convenience and necessity
  562  for the natural gas storage reservoir from the Federal Energy
  563  Regulatory Commission pursuant to the Natural Gas Act, 15 U.S.C.
  564  ss. 717 et seq.
  565         (c) The applicant has used all reasonable means to identify
  566  known wells that have been drilled into or through the natural
  567  gas storage reservoir or the reservoir protective area to
  568  determine the status of the wells and whether inactive or
  569  abandoned wells have been properly plugged. For any well that
  570  has not been properly plugged, before conducting injection
  571  operations and after issuance of the permit, the applicant must
  572  plug or recondition the well to ensure the integrity of the
  573  storage reservoir or the reservoir protective area.
  574         (d) The applicant has tested the quality of water produced
  575  by all water supply wells within the lateral boundary of the
  576  natural gas storage facility and complied with all requirements
  577  under s. 377.2432. The applicant shall provide to the department
  578  and the owner of the water supply well a written copy of the
  579  water quality data collected under this paragraph.
  580         (e) A determination has been made whether native gas or oil
  581  will be severed from below the soil or water of this state in
  582  the recovery of injected gas. If native gas or oil will be
  583  severed, the applicant or operator must acquire a lawful right
  584  to develop the native gas or oil before injecting gas into the
  585  natural gas storage reservoir.
  586         (3) The applicant shall maintain records of well pressures
  587  recorded monthly, and monthly volumes of gas injected into and
  588  withdrawn from the reservoir. These records shall be maintained
  589  at the natural gas storage facility and shall be made available
  590  for inspection by the department at any reasonable time.
  591         (4)(a) The maximum storage pressure for a natural gas
  592  storage reservoir shall be the highest shut-in bottom hole
  593  pressure found to exist during the production history of the
  594  reservoir, unless a higher pressure is established by the
  595  department based on testing of caprock and pool containment. The
  596  methods used for determining the higher pressure must be
  597  approved by the department.
  598         (b) If the shut-in bottom hole pressure of the original
  599  discovery or of the highest production is not known, or a higher
  600  pressure has not been established through a method approved by
  601  the department pursuant to paragraph (a), the maximum storage
  602  reservoir pressure must be limited to a freshwater hydrostatic
  603  gradient.
  604         (5) A permit may not be issued for a natural gas storage
  605  facility that includes a natural gas storage reservoir located
  606  beneath an underground source of drinking water unless the
  607  applicant demonstrates that the injection, storage, or recovery
  608  of natural gas will not cause or allow natural gas to migrate
  609  into the underground source of drinking water; in any offshore
  610  location in the Gulf of Mexico, the Straits of Florida, or the
  611  Atlantic Ocean; or in any solution-mined cavern within a salt
  612  formation.
  613         (6) A natural gas storage facility permit issued by the
  614  department must contain a condition that requires the permittee
  615  to obtain the lawful right to develop a natural gas storage
  616  reservoir from the owners of 100 percent of the storage rights
  617  within the natural gas storage reservoir.
  618         Section 15. Section 377.2432, Florida Statutes, is created
  619  to read:
  620         377.2432Natural gas storage facilities; protection of
  621  water supplies.—
  622         (1) An operator of a natural gas storage facility who
  623  affects a public or private underground water supply by
  624  pollution or diminution shall restore or replace the affected
  625  supply with an alternate source of water adequate in quantity
  626  and quality for the purposes served by the supply. The
  627  department shall ensure that the quality of restored or replaced
  628  water is comparable to the quality of the water before it was
  629  affected by the operator.
  630         (2) Unless rebutted by a defense established in subsection
  631  (4), a natural gas storage facility operator is presumed
  632  responsible for pollution of an underground water supply if:
  633         (a) The water supply is within the lateral boundary of the
  634  natural gas storage facility; and
  635         (b) The pollution occurred within 6 months after completion
  636  of drilling or alteration of any well under or associated with
  637  the natural gas storage facility permit or the initial injection
  638  of gas into the natural gas storage reservoir, whichever is
  639  later.
  640         (3) If the affected underground water supply is within the
  641  rebuttable presumption area as provided in subsection (2) and
  642  the rebuttable presumption applies, the natural gas storage
  643  facility operator shall provide a temporary water supply if the
  644  water user is without a readily available alternative source of
  645  water at no cost to the owner or user of the affected water
  646  supply. The temporary water supply provided under this
  647  subsection must be adequate in quantity and quality for the
  648  purposes served by the affected supply.
  649         (4) A natural gas storage facility operator rebuts the
  650  presumption in subsection (2) by affirmatively proving any of
  651  the following:
  652         (a) The pollution existed before the drilling or alteration
  653  activity as determined by a predrilling or prealteration survey.
  654         (b) The landowner or water purveyor refused to allow the
  655  operator access to conduct a predrilling or prealteration
  656  survey.
  657         (c) The water supply well is not within the lateral
  658  boundary of the natural gas storage facility.
  659         (d) The pollution occurred more than 6 months after
  660  completion of drilling or alteration of any well under or
  661  associated with the natural gas storage facility permit.
  662         (e) The pollution occurred as the result of a cause other
  663  than activities authorized under the natural gas storage
  664  facility permit.
  665         (5) A natural gas storage facility operator electing to
  666  preserve a defense under subsection (4) must retain an
  667  independent certified laboratory to conduct a predrilling or
  668  prealteration survey of the water supply. A copy of survey
  669  results must be submitted to the department and the landowner or
  670  water purveyor in the manner prescribed by the department.
  671         (6) A natural gas storage facility operator must provide
  672  written notice to the landowner or water purveyor indicating
  673  that the presumption established under subsection (2) may be
  674  void if the landowner or water purveyor refused to allow the
  675  operator access to conduct a predrilling or prealteration
  676  survey. Proof of written notice to the landowner or water
  677  purveyor must be provided to the department in order for the
  678  operator to retain the protections under subsection (4).
  679         (7) This section does not prevent a landowner or water
  680  purveyor who claims pollution or diminution of a water supply
  681  from seeking any other remedy at law or in equity.
  682         Section 16. Section 377.2433, Florida Statutes, is created
  683  to read:
  684         377.2433Protection of natural gas storage facilities;
  685  remedies.—
  686         (1) The department may not authorize the drilling of any
  687  well into or through a permitted natural gas storage reservoir
  688  or reservoir protective area, except upon conditions deemed by
  689  the department to be sufficient to prevent the loss, migration,
  690  or escape of gas from the natural gas storage reservoir. The
  691  department shall provide written notice to the natural gas
  692  storage facility operator of any application filed with the
  693  department and any agency action taken related to drilling a
  694  well into or through a permitted natural gas storage facility
  695  boundary or reservoir protective area.
  696         (2) As a condition for the issuance of a permit by the
  697  department, an applicant seeking to drill a well into or through
  698  a permitted natural gas storage facility boundary or reservoir
  699  protective area must provide the affected natural gas storage
  700  facility operator a reasonable right of entry to observe and
  701  monitor all drilling activities.
  702         (3) The department shall require by permit condition that
  703  any well drilled into or through a permitted natural gas storage
  704  reservoir or reservoir protective area is cased and cemented in
  705  a manner sufficient to protect the integrity of the natural gas
  706  storage reservoir.
  707         Section 17. Section 377.2434, Florida Statutes, is created
  708  to read:
  709         377.2434Property rights to injected natural gas.—
  710         (1) All natural gas that has previously been reduced to
  711  possession and that is subsequently injected into a natural gas
  712  storage facility is at all times the property of the injector or
  713  the injector’s heirs, successors, or assigns, whether owned by
  714  the injector or stored under contract.
  715         (2) Such gas may not be subject to the right of the owner
  716  of the surface of the lands or of any mineral interest therein,
  717  under which the natural gas storage facilities lie, or to the
  718  right of any person, other than the injector or the injector’s
  719  heirs, successors, or assigns, to waste or otherwise interfere
  720  with or exercise control over such gas, to produce, to take, or
  721  to reduce to possession, by means of the law of capture or
  722  otherwise. This subsection does not affect the ownership of
  723  hydrocarbons occurring naturally within this state or the right
  724  of the owner of the surface of the lands or of any mineral
  725  interest therein to drill or bore through the natural gas
  726  storage facilities in a manner that will protect the facilities
  727  against pollution or the escape of stored natural gas.
  728         (3) With regard to natural gas that has migrated to
  729  adjoining property or to a stratum, or portion thereof, which
  730  has not been condemned or otherwise purchased:
  731         (a) The injector or the injector’s heirs, successors, or
  732  assigns:
  733         1. May not lose title to or possession of the gas if the
  734  injector or the injector’s heirs, successors, or assigns can
  735  prove by a preponderance of the evidence that the gas was
  736  originally injected into the underground storage; and
  737         2. Have the right to conduct tests on any existing wells on
  738  adjoining property as may be reasonable to determine ownership
  739  of the gas, but the tests are solely at the injector’s risk and
  740  expense.
  741         (b) The owner of the stratum and the owner of the surface
  742  are entitled to compensation, including compensation for use of
  743  or damage to the surface or substratum, as provided by law.
  744         Section 18. Subsection (3) of section 377.25, Florida
  745  Statutes, is amended to read:
  746         377.25 Production pools; drilling units.—
  747         (3) Each well permitted to be drilled upon any drilling
  748  unit shall be drilled approximately in the center thereof, with
  749  such exception as may be reasonably necessary where the division
  750  finds that the unit is partly outside the pool or, for some
  751  other reason, a well approximately in the center of the unit
  752  would be nonproductive or where topographical conditions are
  753  such as to make the drilling approximately in the center of the
  754  unit unduly burdensome or where the operator proposes to
  755  complete the well with a horizontal or nearly horizontal well in
  756  the producing zone. Whenever an exception is granted, the
  757  division shall take such action as will offset any advantage
  758  which the person securing the exception may have over other
  759  producers by reason of the drilling of the well as an exception,
  760  and so that drainage from developed units to the tract, with
  761  respect to which the exception is granted, will be prevented or
  762  minimized, and the producer of the well drilled, as an
  763  exception, will be allowed to produce no more than his or her
  764  just and equitable share of the oil and gas in the pool, as such
  765  share is set forth in this section. This subsection does not
  766  apply to wells associated with a natural gas storage facility.
  767         Section 19. Subsection (2) of section 377.28, Florida
  768  Statutes, is amended to read:
  769         377.28 Cycling, pooling, and unitization of oil and gas.—
  770         (2) The department shall issue an order requiring unit
  771  operation if it finds that:
  772         (a) Unit operation of the field, or of any pool or pools,
  773  portion or portions, or combinations thereof within the field,
  774  is reasonably necessary to prevent waste, to avoid the drilling
  775  of unnecessary wells, or to increase the ultimate recovery of
  776  oil or gas by additional recovery methods; and
  777         (b) The estimated additional cost incident to the conduct
  778  of such operation will not exceed the value of the estimated
  779  additional recovery of oil or gas; and
  780         (c) The additional recovery of oil or gas does not
  781  adversely interfere with the storage or recovery of natural gas
  782  within a natural gas storage reservoir.
  783  
  784  The phrase “additional recovery methods” as used herein
  785  includes, but is not limited to, the maintenance or partial
  786  maintenance of reservoir pressures; recycling; flooding a pool
  787  or pools, or parts thereof, with air, gas, water, liquid
  788  hydrocarbons, any other substance, or any combination thereof;
  789  or any other method of producing additional hydrocarbons
  790  approved by the department.
  791         Section 20. Subsection (4) is added to section 377.30,
  792  Florida Statutes, to read:
  793         377.30 Limitation on amount of oil or gas taken.—
  794         (4) This section does not apply to nonnative gas recovered
  795  from a permitted natural gas storage facility.
  796         Section 21. Subsection (1) of section 377.34, Florida
  797  Statutes, is amended to read:
  798         377.34 Actions and injunctions by division.—
  799         (1) Whenever it appears shall appear that a any person is
  800  violating, or threatening to violate, any statute of this state
  801  with respect to the conservation of oil or gas, or both, or any
  802  provision of this law, or any rule, regulation or order made
  803  thereunder by any act done in the operation of a any well
  804  producing oil or gas, or storing or recovering natural gas, or
  805  by omitting an any act required to be done thereunder, the
  806  division, through its counsel, or the Department of Legal
  807  Affairs on its own initiative, may bring suit against such
  808  person in the Circuit Court in the County of Leon, state, or in
  809  the circuit court in the county in which the well in question is
  810  located, at the option of the division, or the Department of
  811  Legal Affairs, to restrain such person or persons from
  812  continuing such violation or from carrying out the threat of
  813  violation. In such suit, the division, or the Department of
  814  Legal Affairs, may obtain injunctions, prohibitory and
  815  mandatory, including temporary restraining orders and temporary
  816  injunctions, as the facts may warrant, including, when
  817  appropriate, an injunction restraining any person from moving or
  818  disposing of illegal oil, illegal gas or illegal product, and
  819  any or all such commodities may be ordered to be impounded or
  820  placed under the control of a receiver appointed by the court
  821  if, in the judgment of the court, such action is advisable.
  822         Section 22. Paragraph (a) of subsection (1) of section
  823  377.37, Florida Statutes, is amended to read:
  824         377.37 Penalties.—
  825         (1)(a) Any person who violates any provision of this law or
  826  any rule, regulation, or order of the division made under this
  827  chapter or who violates the terms of any permit to drill for or
  828  produce oil, gas, or other petroleum products referred to in s.
  829  377.242(1), or to store gas in a natural gas storage facility,
  830  or any lessee, permitholder, or operator of equipment or
  831  facilities used in the exploration for, drilling for, or
  832  production of oil, gas, or other petroleum products, or storage
  833  of gas in a natural gas storage facility, who refuses inspection
  834  by the division as provided in this chapter, is liable to the
  835  state for any damage caused to the air, waters, or property,
  836  including animal, plant, or aquatic life, of the state and for
  837  reasonable costs and expenses of the state in tracing the source
  838  of the discharge, in controlling and abating the source and the
  839  pollutants, and in restoring the air, waters, and property,
  840  including animal, plant, and aquatic life, of the state.
  841  Furthermore, such person, lessee, permitholder, or operator is
  842  subject to the judicial imposition of a civil penalty in an
  843  amount of not more than $10,000 for each offense. However, the
  844  court may receive evidence in mitigation. Each day during any
  845  portion of which such violation occurs constitutes a separate
  846  offense. Nothing herein shall give the department the right to
  847  bring an action on behalf of any private person.
  848         Section 23. Subsections (1) and (3) of section 377.371,
  849  Florida Statutes, are amended to read:
  850         377.371 Pollution prohibited; reporting, liability.—
  851         (1) A No person drilling for or producing oil, gas, or
  852  other petroleum products, or storing gas in a natural gas
  853  storage facility, may not shall pollute land or water; damage
  854  aquatic or marine life, wildlife, birds, or public or private
  855  property; or allow any extraneous matter to enter or damage any
  856  mineral or freshwater-bearing formation.
  857         (3) Because it is the intent of this chapter to provide the
  858  means for rapid and effective cleanup and to minimize damages
  859  resulting from pollution in violation of this chapter, if the
  860  waters of the state are polluted by the drilling, storage of
  861  natural gas, or production operations of any person or persons
  862  and such pollution damages or threatens to damage human, animal,
  863  or plant life, public or private property, or any mineral or
  864  water-bearing formation, said person shall be liable to the
  865  state for all costs of cleanup or other damage incurred by the
  866  state. In any suit to enforce claims of the state under this
  867  chapter, it is shall not be necessary for the state to plead or
  868  prove negligence in any form or manner on the part of the person
  869  or persons conducting the drilling or production operations; the
  870  state need only plead and prove the fact of the prohibited
  871  discharge or other polluting condition and that it occurred at
  872  the facilities of the person or persons conducting the drilling
  873  or production operation. A No person or persons conducting the
  874  drilling, storage, or production operation may not shall be held
  875  liable if said person or persons prove that the prohibited
  876  discharge or other polluting condition was the result of any of
  877  the following:
  878         (a) An act of war.
  879         (b) An act of government, either state, federal, or
  880  municipal.
  881         (c) An act of God, which means an unforeseeable act
  882  exclusively occasioned by the violence of nature without the
  883  interference of any human agency.
  884         (d) An act or omission of a third party without regard to
  885  whether any such act or omission was or was not negligent.
  886         Section 24. Paragraph (b) of subsection (14) and paragraph
  887  (b) of subsection (19) of section 403.973, Florida Statutes, are
  888  amended, and paragraphs (g) and (h) are added to subsection (3)
  889  of that section, to read:
  890         403.973 Expedited permitting; amendments to comprehensive
  891  plans.—
  892         (3)
  893         (g) Projects for natural gas storage facilities that are
  894  permitted under chapter 377 are eligible for the expedited
  895  permitting process.
  896         (h) Projects to construct interstate natural gas pipelines
  897  subject to certification by the Federal Energy Regulatory
  898  Commission are eligible for the expedited permitting process.
  899         (14)
  900         (b) Projects identified in paragraphs paragraph (3)(f)-(h)
  901  or challenges to state agency action in the expedited permitting
  902  process for establishment of a state-of-the-art biomedical
  903  research institution and campus in this state by the grantee
  904  under s. 288.955 are subject to the same requirements as
  905  challenges brought under paragraph (a), except that,
  906  notwithstanding s. 120.574, summary proceedings must be
  907  conducted within 30 days after a party files the motion for
  908  summary hearing, regardless of whether the parties agree to the
  909  summary proceeding.
  910         (19) The following projects are ineligible for review under
  911  this part:
  912         (b) A project, the primary purpose of which is to:
  913         1. Effect the final disposal of solid waste, biomedical
  914  waste, or hazardous waste in this state.
  915         2. Produce electrical power, unless the production of
  916  electricity is incidental and not the primary function of the
  917  project or the electrical power is derived from a fuel source
  918  for renewable energy as defined in s. 366.91(2)(d).
  919         3. Extract natural resources.
  920         4. Produce oil.
  921         5. Construct, maintain, or operate an oil, petroleum,
  922  natural gas, or sewage pipeline.
  923         Section 25. The Department of Environmental Protection
  924  shall adopt rules relating to natural gas storage before issuing
  925  a natural gas storage facility permit.
  926         Section 26. This act shall take effect July 1, 2013.