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:
462 377.2407 Natural 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:
545 377.2431 Conditions 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:
620 377.2432 Natural 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:
684 377.2433 Protection 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:
709 377.2434 Property 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.