Florida Senate - 2016 CS for SB 318
By the Committee on Environmental Preservation and Conservation;
and Senator Richter
592-02111-16 2016318c1
1 A bill to be entitled
2 An act relating to the regulation of oil and gas
3 resources; amending s. 377.06, F.S.; preempting the
4 regulation of all matters relating to the exploration,
5 development, production, processing, storage, and
6 transportation of oil and gas; declaring existing
7 ordinances and regulations relating thereto void;
8 providing an exception for certain zoning ordinances;
9 amending s. 377.19, F.S.; applying the definitions of
10 certain terms to additional sections of ch. 377, F.S.;
11 revising the definition of the term “division”;
12 conforming a cross-reference; defining the term “high
13 pressure well stimulation”; amending s. 377.22, F.S.;
14 revising the rulemaking authority of the Department of
15 Environmental Protection; amending s. 377.24, F.S.;
16 requiring that a permit be obtained before the
17 performance of a high-pressure well stimulation;
18 specifying that a permit may authorize single or
19 multiple activities; deleting provisions that prohibit
20 the Division of Water Resource Management from
21 granting permits to drill gas or oil wells within the
22 limits of a municipality without approval of the
23 governing authority of the municipality; prohibiting
24 the department from approving permits for high
25 pressure well stimulation until certain rules are
26 adopted and take effect; requiring legislative
27 ratification of such rules; amending s. 377.241, F.S.;
28 requiring the Division of Water Resource Management to
29 give consideration to and be guided by certain
30 additional criteria when issuing permits; amending s.
31 377.242, F.S.; authorizing the department to issue
32 permits for the performance of a high-pressure well
33 stimulation; revising permit requirements that
34 permitholders agree not to prevent division
35 inspections; amending s. 377.2425, F.S.; requiring an
36 applicant or operator to provide surety that
37 performance of a high-pressure well stimulation will
38 be conducted in a safe and environmentally compatible
39 manner; creating s. 377.2436, F.S.; requiring the
40 department to conduct a study on high-pressure well
41 stimulation; providing study criteria; requiring the
42 study to be submitted to the Governor and Legislature
43 and posted on the department website; prohibiting the
44 department from adopting rules until the study has
45 been submitted to the Legislature; requiring the
46 department to adopt rules under certain conditions by
47 a specified date; amending s. 377.37, F.S.; increasing
48 the maximum amount of a civil penalty; creating s.
49 377.45, F.S.; requiring the department to designate
50 the national chemical disclosure registry as the
51 state’s registry; requiring service providers,
52 vendors, and well owners or operators to report
53 certain information to the department; requiring the
54 department to report certain information to the
55 national chemical registry; providing applicability;
56 requiring the department to adopt rules; amending ss.
57 377.07, 377.10, 377.243, and 377.244, F.S.; making
58 technical changes; conforming provisions to changes
59 made by the act; providing an appropriation; providing
60 an effective date.
61
62 Be It Enacted by the Legislature of the State of Florida:
63
64 Section 1. Section 377.06, Florida Statutes, is amended to
65 read:
66 377.06 Public policy of state concerning natural resources
67 of oil and gas; preemption.—
68 (1) It is hereby declared the public policy of this state
69 to conserve and control the natural resources of oil and gas in
70 this state, and the products made from oil and gas in this
71 state; to prevent waste of natural resources; to provide for the
72 protection and adjustment of the correlative rights of the
73 owners of the land in which the natural resources lie, of the
74 owners and producers of oil and gas resources and the products
75 made from oil and gas, and of others interested in these
76 resources and products; and to safeguard the health, property,
77 and public welfare of the residents of this state and other
78 interested persons and for all purposes indicated by the
79 provisions in this section.
80 (2) Further, It is the public policy of this state declared
81 that underground storage of natural gas is in the public
82 interest because underground storage promotes conservation of
83 natural gas,; makes gas more readily available to the domestic,
84 commercial, and industrial consumers of this state,; and allows
85 the accumulation of large quantities of gas in reserve for
86 orderly withdrawal during emergencies or periods of peak demand.
87 It is not the intention of this section to limit, restrict, or
88 modify in any way the provisions of this law.
89 (3) The Legislature declares that all matters relating to
90 the regulation of the exploration, development, production,
91 processing, storage, and transportation of oil and gas are
92 preempted to the state, to the exclusion of all existing and
93 future ordinances or regulations relating thereto adopted by any
94 county, municipality, or other political subdivision of the
95 state. Any such existing ordinance or regulation is void. A
96 county or municipality may, however, enforce an existing zoning
97 ordinance adopted before January 1, 2015, if the ordinance is
98 otherwise valid.
99 Section 2. Section 377.19, Florida Statutes, is amended to
100 read:
101 377.19 Definitions.—As used in ss. 377.06, 377.07, and
102 377.10-377.45 377.10-377.40, the term:
103 (1) “Completion date” means the day, month, and year that a
104 new productive well, a previously shut-in well, or a temporarily
105 abandoned well is completed, repaired, or recompleted and the
106 operator begins producing oil or gas in commercial quantities.
107 (2) “Department” means the Department of Environmental
108 Protection.
109 (3) “Division” means the Division of Water Resource
110 Management of the Department of Environmental Protection.
111 (4) “Field” means the general area that is underlaid, or
112 appears to be underlaid, by at least one pool. The term includes
113 the underground reservoir, or reservoirs, containing oil or gas,
114 or both. The terms “field” and “pool” mean the same thing if
115 only one underground reservoir is involved; however, the term
116 “field,” unlike the term “pool,” may relate to two or more
117 pools.
118 (5) “Gas” means all natural gas, including casinghead gas,
119 and all other hydrocarbons not defined as oil in subsection (16)
120 (15).
121 (6) “High-pressure well stimulation” means all stages of a
122 well intervention performed by injecting fluids into a rock
123 formation at high pressure that exceeds the fracture gradient of
124 the rock formation in order to propagate fractures in such
125 formation to increase production at an oil or gas well by
126 improving the flow of hydrocarbons from the formation into the
127 wellbore. The term does not include well stimulation or
128 conventional workover procedures that may incidentally fracture
129 the formation near the wellbore.
130 (7)(6) “Horizontal well” means a well completed with the
131 wellbore in a horizontal or nearly horizontal orientation within
132 10 degrees of horizontal within the producing formation.
133 (8)(7) “Illegal gas” means gas that has been produced
134 within the state from any well or wells in excess of the amount
135 allowed by any rule, regulation, or order of the division, as
136 distinguished from gas produced within the State of Florida from
137 a well not producing in excess of the amount so allowed, which
138 is “legal gas.”
139 (9)(8) “Illegal oil” means oil that has been produced
140 within the state from any well or wells in excess of the amount
141 allowed by rule, regulation, or order of the division, as
142 distinguished from oil produced within the state from a well not
143 producing in excess of the amount so allowed, which is “legal
144 oil.”
145 (10)(9) “Illegal product” means a product of oil or gas,
146 any part of which was processed or derived, in whole or in part,
147 from illegal gas or illegal oil or from any product thereof, as
148 distinguished from “legal product,” which is a product processed
149 or derived to no extent from illegal oil or illegal gas.
150 (11)(10) “Lateral storage reservoir boundary” means the
151 projection up to the land surface of the maximum horizontal
152 extent of the gas volume contained in a natural gas storage
153 reservoir.
154 (12)(11) “Native gas” means gas that occurs naturally
155 within this state and does not include gas produced outside the
156 state, transported to this state, and injected into a permitted
157 natural gas storage facility.
158 (13)(12) “Natural gas storage facility” means an
159 underground reservoir from which oil or gas has previously been
160 produced and which is used or to be used for the underground
161 storage of natural gas, and any surface or subsurface structure,
162 or infrastructure, except wells. The term also includes a right
163 or appurtenance necessary or useful in the operation of the
164 facility for the underground storage of natural gas, including
165 any necessary or reasonable reservoir protective area as
166 designated for the purpose of ensuring the safe operation of the
167 storage of natural gas or protecting the natural gas storage
168 facility from pollution, invasion, escape, or migration of gas,
169 or any subsequent extension thereof. The term does not mean a
170 transmission, distribution, or gathering pipeline or system that
171 is not used primarily as integral piping for a natural gas
172 storage facility.
173 (14)(13) “Natural gas storage reservoir” means a pool or
174 field from which gas or oil has previously been produced and
175 which is suitable for or capable of being made suitable for the
176 injection, storage, and recovery of gas, as identified in a
177 permit application submitted to the department under s.
178 377.2407.
179 (15)(14) “New field well” means an oil or gas well
180 completed after July 1, 1997, in a new field as designated by
181 the Department of Environmental Protection.
182 (16)(15) “Oil” means crude petroleum oil and other
183 hydrocarbons, regardless of gravity, which are produced at the
184 well in liquid form by ordinary production methods, and which
185 are not the result of condensation of gas after it leaves the
186 reservoir.
187 (17)(16) “Oil and gas” has the same meaning as the term
188 “oil or gas.”
189 (18)(17) “Oil and gas administrator” means the State
190 Geologist.
191 (19)(18) “Operator” means the entity who:
192 (a) Has the right to drill and to produce a well; or
193 (b) As part of a natural gas storage facility, injects, or
194 is engaged in the work of preparing to inject, gas into a
195 natural gas storage reservoir; or stores gas in, or removes gas
196 from, a natural gas storage reservoir.
197 (20)(19) “Owner” means the person who has the right to
198 drill into and to produce from any pool and to appropriate the
199 production for the person or for the person and another, or
200 others.
201 (21)(20) “Person” means a natural person, corporation,
202 association, partnership, receiver, trustee, guardian, executor,
203 administrator, fiduciary, or representative of any kind.
204 (22)(21) “Pool” means an underground reservoir containing
205 or appearing to contain a common accumulation of oil or gas or
206 both. Each zone of a general structure which is completely
207 separated from any other zone on the structure is considered a
208 separate pool as used herein.
209 (23)(22) “Producer” means the owner or operator of a well
210 or wells capable of producing oil or gas, or both.
211 (24)(23) “Product” means a commodity made from oil or gas
212 and includes refined crude oil, crude tops, topped crude,
213 processed crude petroleum, residue from crude petroleum,
214 cracking stock, uncracked fuel oil, fuel oil, treated crude oil,
215 residuum, gas oil, casinghead gasoline, natural gas gasoline,
216 naphtha, distillate, condensate, gasoline, waste oil, kerosene,
217 benzine, wash oil, blended gasoline, lubricating oil, blends or
218 mixtures of oil with one or more liquid products or byproducts
219 derived from oil or gas, and blends or mixtures of two or more
220 liquid products or byproducts derived from oil or gas, whether
221 hereinabove enumerated or not.
222 (25)(24) “Reasonable market demand” means the amount of oil
223 reasonably needed for current consumption, together with a
224 reasonable amount of oil for storage and working stocks.
225 (26)(25) “Reservoir protective area” means the area
226 extending up to and including 2,000 feet surrounding a natural
227 gas storage reservoir.
228 (27)(26) “Shut-in bottom hole pressure” means the pressure
229 at the bottom of a well when all valves are closed and no oil or
230 gas has been allowed to escape for at least 24 hours.
231 (28)(27) “Shut-in well” means an oil or gas well that has
232 been taken out of service for economic reasons or mechanical
233 repairs.
234 (29)(28) “State” means the State of Florida.
235 (30)(29) “Temporarily abandoned well” means a permitted
236 well or wellbore that has been abandoned by plugging in a manner
237 that allows reentry and redevelopment in accordance with oil or
238 gas rules of the Department of Environmental Protection.
239 (31)(30) “Tender” means a permit or certificate of
240 clearance for the transportation or the delivery of oil, gas, or
241 products, approved and issued or registered under the authority
242 of the division.
243 (32)(31) “Waste,” in addition to its ordinary meaning,
244 means “physical waste” as that term is generally understood in
245 the oil and gas industry. The term “waste” includes:
246 (a) The inefficient, excessive, or improper use or
247 dissipation of reservoir energy; and the locating, spacing,
248 drilling, equipping, operating, or producing of any oil or gas
249 well or wells in a manner that results, or tends to result, in
250 reducing the quantity of oil or gas ultimately to be stored or
251 recovered from any pool in this state.
252 (b) The inefficient storing of oil; and the locating,
253 spacing, drilling, equipping, operating, or producing of any oil
254 or gas well or wells in a manner that causes, or tends to cause,
255 unnecessary or excessive surface loss or destruction of oil or
256 gas.
257 (c) The producing of oil or gas in a manner that causes
258 unnecessary water channeling or coning.
259 (d) The operation of any oil well or wells with an
260 inefficient gas-oil ratio.
261 (e) The drowning with water of any stratum or part thereof
262 capable of producing oil or gas.
263 (f) The underground waste, however caused and whether or
264 not defined.
265 (g) The creation of unnecessary fire hazards.
266 (h) The escape into the open air, from a well producing
267 both oil and gas, of gas in excess of the amount that is
268 necessary in the efficient drilling or operation of the well.
269 (i) The use of gas for the manufacture of carbon black.
270 (j) Permitting gas produced from a gas well to escape into
271 the air.
272 (k) The abuse of the correlative rights and opportunities
273 of each owner of oil and gas in a common reservoir due to
274 nonuniform, disproportionate, and unratable withdrawals, causing
275 undue drainage between tracts of land.
276 (33)(32) “Well site” means the general area around a well,
277 which area has been disturbed from its natural or existing
278 condition, as well as the drilling or production pad, mud and
279 water circulation pits, and other operation areas necessary to
280 drill for or produce oil or gas, or to inject gas into and
281 recover gas from a natural gas storage facility.
282 Section 3. Subsection (2) of section 377.22, Florida
283 Statutes, is amended to read:
284 377.22 Rules and orders.—
285 (2) The department shall issue orders and adopt rules
286 pursuant to ss. 120.536 and 120.54 to implement and enforce the
287 provisions of this chapter. Such rules and orders shall ensure
288 that all precautions are taken to prevent the spillage of oil or
289 any other pollutant in all phases of the drilling for, and
290 extracting of, oil, gas, or other petroleum products, including
291 high-pressure well stimulations, or during the injection of gas
292 into and recovery of gas from a natural gas storage reservoir.
293 The department shall revise such rules from time to time as
294 necessary for the proper administration and enforcement of this
295 chapter. Rules adopted and orders issued in accordance with this
296 section are for, but not limited to, the following purposes:
297 (a) To require the drilling, casing, and plugging of wells
298 to be done in such a manner as to prevent the pollution of the
299 fresh, salt, or brackish waters or the lands of the state and to
300 protect the integrity of natural gas storage reservoirs.
301 (b) To prevent the alteration of the sheet flow of water in
302 any area.
303 (c) To require that appropriate safety equipment be
304 installed to minimize the possibility of an escape of oil or
305 other petroleum products in the event of accident, human error,
306 or a natural disaster during drilling, casing, or plugging of
307 any well and during extraction operations.
308 (d) To require the drilling, casing, and plugging of wells
309 to be done in such a manner as to prevent the escape of oil or
310 other petroleum products from one stratum to another.
311 (e) To prevent the intrusion of water into an oil or gas
312 stratum from a separate stratum, except as provided by rules of
313 the division relating to the injection of water for proper
314 reservoir conservation and brine disposal.
315 (f) To require a reasonable bond, or other form of security
316 acceptable to the department, conditioned upon properly
317 drilling, casing, producing, and operating each well and
318 properly plugging the performance of the duty to plug properly
319 each dry and abandoned well and upon the full and complete
320 restoration by the applicant of the area over which geophysical
321 exploration, drilling, or production is conducted to the similar
322 contour and general condition in existence before prior to such
323 operation.
324 (g) To require and carry out a reasonable program of
325 monitoring and inspecting or inspection of all drilling
326 operations, high-pressure well stimulations, producing wells, or
327 injecting wells, and well sites, including regular inspections
328 by division personnel. Inspections are required during the
329 testing of blowout preventers, during the pressure testing of
330 the casing and casing shoe, and during the integrity testing of
331 the cement plugs in plugging and abandonment operations.
332 (h) To require the making of reports showing the location
333 of all oil and gas wells; the making and filing of logs; the
334 taking and filing of directional surveys; the filing of
335 electrical, sonic, radioactive, and mechanical logs of oil and
336 gas wells; if taken, the saving of cutting and cores, the cuts
337 of which shall be given to the Bureau of Geology; and the making
338 of reports with respect to drilling and production records.
339 However, such information, or any part thereof, at the request
340 of the operator, shall be exempt from the provisions of s.
341 119.07(1) and held confidential by the division for a period of
342 1 year after the completion of a well.
343 (i) To prevent wells from being drilled, operated, or
344 produced in such a manner as to cause injury to neighboring
345 leases, property, or natural gas storage reservoirs.
346 (j) To prevent the drowning by water of any stratum, or
347 part thereof, capable of producing oil or gas in paying
348 quantities and to prevent the premature and irregular
349 encroachment of water which reduces, or tends to reduce, the
350 total ultimate recovery of oil or gas from any pool.
351 (k) To require the operation of wells with efficient gas
352 oil ratio, and to fix such ratios.
353 (l) To prevent “blowouts,” “caving,” and “seepage,” in the
354 sense that conditions indicated by such terms are generally
355 understood in the oil and gas business.
356 (m) To prevent fires.
357 (n) To identify the ownership of all oil or gas wells,
358 producing leases, refineries, tanks, plants, structures, and
359 storage and transportation equipment and facilities.
360 (o) To regulate the “shooting,” perforating, and chemical
361 treatment, and high-pressure stimulations of wells.
362 (p) To regulate secondary recovery methods, including the
363 introduction of gas, air, water, or other substance into
364 producing formations.
365 (q) To regulate gas cycling operations.
366 (r) To regulate the storage and recovery of gas injected
367 into natural gas storage facilities.
368 (s) If necessary for the prevention of waste, as herein
369 defined, to determine, limit, and prorate the production of oil
370 or gas, or both, from any pool or field in the state.
371 (t) To require, either generally or in or from particular
372 areas, certificates of clearance or tenders in connection with
373 the transportation or delivery of oil or gas, or any product.
374 (u) To regulate the spacing of wells and to establish
375 drilling units.
376 (v) To prevent, so far as is practicable, reasonably
377 avoidable drainage from each developed unit which is not
378 equalized by counterdrainage.
379 (w) To require that geophysical operations requiring a
380 permit be conducted in a manner which will minimize the impact
381 on hydrology and biota of the area, especially environmentally
382 sensitive lands and coastal areas.
383 (x) To regulate aboveground crude oil storage tanks in a
384 manner which will protect the water resources of the state.
385 (y) To act in a receivership capacity for fractional
386 mineral interests for which the owners are unknown or unlocated
387 and to administratively designate the operator as the lessee.
388 (z) To evaluate the history of prior adjudicated,
389 uncontested, or settled violations committed by permit
390 applicants or the applicants’ affiliated entities of any
391 substantive and material rule or law pertaining to the
392 regulation of oil or gas.
393 Section 4. Subsections (1), (2), (4), and (5) of section
394 377.24, Florida Statutes, are amended, present subsections (6)
395 through (9) of that section are redesignated as subsections (5)
396 through (8), respectively, and a new subsection (9) and
397 subsection (10) are added to that section, to read:
398 377.24 Notice of intention to drill well; permits;
399 abandoned wells and dry holes.—
400 (1) Before drilling a well in search of oil or gas, before
401 performing a high-pressure well stimulation, or before storing
402 gas in or recovering gas from a natural gas storage reservoir,
403 the person who desires to drill for, store, or recover gas, or
404 drill for oil or gas, or perform a high-pressure well
405 stimulation shall notify the division upon such form as it may
406 prescribe and shall pay a reasonable fee set by rule of the
407 department not to exceed the actual cost of processing and
408 inspecting for each well or reservoir. The drilling of any well,
409 the performance of any high-pressure well stimulation, and the
410 storing and recovering of gas are prohibited until such notice
411 is given, the fee is paid, and a the permit is granted. A permit
412 may authorize a single activity or multiple activities.
413 (2) An application for the drilling of a well in search of
414 oil or gas, for the performance of a high-pressure well
415 stimulation, or for the storing of gas in and recovering of gas
416 from a natural gas storage reservoir, in this state must include
417 the address of the residence of the applicant, or applicants,
418 which must be the address of each person involved in accordance
419 with the records of the Division of Water Resource Management
420 until such address is changed on the records of the division
421 after written request.
422 (4) Application for permission to drill or abandon any well
423 or perform a high-pressure well stimulation may be denied by the
424 division for only just and lawful cause.
425 (5) No permit to drill a gas or oil well shall be granted
426 within the corporate limits of any municipality, unless the
427 governing authority of the municipality shall have first duly
428 approved the application for such permit by resolution.
429 (9) The department may not approve a permit to authorize a
430 high-pressure well stimulation until the department adopts rules
431 for high-pressure well stimulations which are based upon the
432 findings of the study required pursuant to s. 377.2436 and such
433 rules take effect.
434 (10) The rules for high-pressure well stimulation shall be
435 submitted to the President of the Senate and Speaker of the
436 House of Representatives and such rules may not take effect
437 until they are ratified by the Legislature.
438 Section 5. Subsections (5) and (6) are added to section
439 377.241, Florida Statutes, to read:
440 377.241 Criteria for issuance of permits.—The division, in
441 the exercise of its authority to issue permits as hereinafter
442 provided, shall give consideration to and be guided by the
443 following criteria:
444 (5) For high-pressure well stimulations, whether the high
445 pressure well stimulation as proposed is designed to ensure
446 that:
447 (a) The groundwater near the well location, including
448 groundwater through which the well will be or has been drilled,
449 is not contaminated as a result of the high-pressure well
450 stimulation; and
451 (b) The high-pressure well stimulation is consistent with
452 the public policy of this state as specified in s. 377.06.
453 (6) As a basis for permit denial or imposition of specific
454 permit conditions, including increased bonding up to five times
455 the applicable limits and increased monitoring, the history of
456 prior adjudicated, uncontested, or settled violations committed
457 by the applicant or an affiliated entity of the applicant of any
458 substantive and material rule or law pertaining to the
459 regulation of oil or gas, including violations that occurred
460 outside the state.
461 Section 6. Section 377.242, Florida Statutes, is amended to
462 read:
463 377.242 Permits for drilling or exploring and extracting
464 through well holes or by other means.—The department is vested
465 with the power and authority:
466 (1)(a) To issue permits for the performance of a high
467 pressure well stimulation or the drilling for, exploring for, or
468 production of oil, gas, or other petroleum products that which
469 are to be extracted from below the surface of the land,
470 including submerged land, only through the well hole drilled for
471 oil, gas, and other petroleum products.
472 1. A No structure intended for the drilling for, or
473 production of, oil, gas, or other petroleum products may not be
474 permitted or constructed on any submerged land within any bay or
475 estuary.
476 2. A No structure intended for the drilling for, or
477 production of, oil, gas, or other petroleum products may not be
478 permitted or constructed within 1 mile seaward of the coastline
479 of the state.
480 3. A No structure intended for the drilling for, or
481 production of, oil, gas, or other petroleum products may not be
482 permitted or constructed within 1 mile of the seaward boundary
483 of any state, local, or federal park or aquatic or wildlife
484 preserve or on the surface of a freshwater lake, river, or
485 stream.
486 4. A No structure intended for the drilling for, or
487 production of, oil, gas, or other petroleum products may not be
488 permitted or constructed within 1 mile inland from the shoreline
489 of the Gulf of Mexico, the Atlantic Ocean, or any bay or estuary
490 or within 1 mile of any freshwater lake, river, or stream unless
491 the department is satisfied that the natural resources of such
492 bodies of water and shore areas of the state will be adequately
493 protected in the event of accident or blowout.
494 5. Without exception, after July 1, 1989, a no structure
495 intended for the drilling for, or production of, oil, gas, or
496 other petroleum products may not be permitted or constructed
497 south of 26°00′00″ north latitude off Florida’s west coast and
498 south of 27°00′00″ north latitude off Florida’s east coast,
499 within the boundaries of Florida’s territorial seas as defined
500 in 43 U.S.C. s. 1301. After July 31, 1990, a no structure
501 intended for the drilling for, or production of, oil, gas, or
502 other petroleum products may not be permitted or constructed
503 north of 26°00′00″ north latitude off Florida’s west coast to
504 the western boundary of the state bordering Alabama as set forth
505 in s. 1, Art. II of the State Constitution, or located north of
506 27°00′00″ north latitude off Florida’s east coast to the
507 northern boundary of the state bordering Georgia as set forth in
508 s. 1, Art. II of the State Constitution, within the boundaries
509 of Florida’s territorial seas as defined in 43 U.S.C. s. 1301.
510 (b) Subparagraphs (a)1. and 4. do not apply to permitting
511 or construction of structures intended for the drilling for, or
512 production of, oil, gas, or other petroleum products pursuant to
513 an oil, gas, or mineral lease of such lands by the state under
514 which lease any valid drilling permits are in effect on the
515 effective date of this act. In the event that such permits
516 contain conditions or stipulations, such conditions and
517 stipulations shall govern and supersede subparagraphs (a)1. and
518 4.
519 (c) The prohibitions of subparagraphs (a)1.-4. in this
520 subsection do not include “infield gathering lines,” provided no
521 other placement is reasonably available and all other required
522 permits have been obtained.
523 (2) To issue permits to explore for and extract minerals
524 which are subject to extraction from the land by means other
525 than through a well hole.
526 (3) To issue permits to establish natural gas storage
527 facilities or construct wells for the injection and recovery of
528 any natural gas for storage in natural gas storage reservoirs.
529
530 Each permit shall contain an agreement by the permitholder that
531 the permitholder will not prevent inspection by division
532 personnel at any time, including during installation and
533 cementing of casing, during the testing of blowout preventers,
534 during the pressure testing of the casing and casing shoe, and
535 during the integrity testing of the cement plugs in plugging and
536 abandonment operations. The provisions of this section
537 prohibiting permits for drilling or exploring for oil in coastal
538 waters do not apply to any leases entered into before June 7,
539 1991.
540 Section 7. Subsection (1) of section 377.2425, Florida
541 Statutes, is amended to read:
542 377.2425 Manner of providing security for geophysical
543 exploration, drilling, and production.—
544 (1) Before Prior to granting a permit for conducting to
545 conduct geophysical operations; drilling of exploratory,
546 injection, or production wells; producing oil and gas from a
547 wellhead; performing a high-pressure well stimulation; or
548 transporting oil and gas through a field-gathering system, the
549 department shall require the applicant or operator to provide
550 surety that these operations will be conducted in a safe and
551 environmentally compatible manner.
552 (a) The applicant for a drilling, production, high-pressure
553 well stimulation, or injection well permit or a geophysical
554 permit may provide the following types of surety to the
555 department for this purpose:
556 1. A deposit of cash or other securities made payable to
557 the Minerals Trust Fund. Such cash or securities so deposited
558 shall be held at interest by the Chief Financial Officer to
559 satisfy safety and environmental performance provisions of this
560 chapter. The interest shall be credited to the Minerals Trust
561 Fund. Such cash or other securities shall be released by the
562 Chief Financial Officer upon request of the applicant and
563 certification by the department that all safety and
564 environmental performance provisions established by the
565 department for permitted activities have been fulfilled.
566 2. A bond of a surety company authorized to do business in
567 the state in an amount as provided by rule.
568 3. A surety in the form of an irrevocable letter of credit
569 in an amount as provided by rule guaranteed by an acceptable
570 financial institution.
571 (b) An applicant for a drilling, production, high-pressure
572 well stimulation, or injection well permit, or a permittee who
573 intends to continue participating in long-term production
574 activities of such wells, has the option to provide surety to
575 the department by paying an annual fee to the Minerals Trust
576 Fund. For an applicant or permittee choosing this option the
577 following shall apply:
578 1. For the first year, or part of a year, of a drilling,
579 production, or injection well permit, or change of operator, the
580 fee is $4,000 per permitted well.
581 2. For each subsequent year, or part of a year, the fee is
582 $1,500 per permitted well.
583 3. The maximum fee that an applicant or permittee may be
584 required to pay into the trust fund is $30,000 per calendar
585 year, regardless of the number of permits applied for or in
586 effect.
587 4. The fees set forth in subparagraphs 1., 2., and 3. shall
588 be reviewed by the department on a biennial basis and adjusted
589 for the cost of inflation. The department shall establish by
590 rule a suitable index for implementing such fee revisions.
591 (c) An applicant for a drilling or operating permit for
592 operations planned in coastal waters that by their nature
593 warrant greater surety shall provide surety only in accordance
594 with paragraph (a), or similar proof of financial responsibility
595 other than as provided in paragraph (b). For all such
596 applications, including applications pending at the effective
597 date of this act and notwithstanding the provisions of paragraph
598 (b), the Governor and Cabinet in their capacity as the
599 Administration Commission, at the recommendation of the
600 department of Environmental Protection, shall set a reasonable
601 amount of surety required under this subsection. The surety
602 amount shall be based on the projected cleanup costs and natural
603 resources damages resulting from a maximum oil spill and adverse
604 hydrographic and atmospheric conditions that would tend to
605 transport the oil into environmentally sensitive areas, as
606 determined by the department of Environmental Protection.
607 Section 8. Section 377.2436, Florida Statutes, is created
608 to read:
609 377.2436 Study on high-pressure well stimulations.—
610 (1) The department shall conduct a study on high-pressure
611 well stimulations. The study must:
612 (a) Evaluate the underlying geologic features present in
613 the counties where oil wells have been permitted and analyze the
614 potential impact that high-pressure well stimulation and
615 wellbore construction may have on the underlying geologic
616 features.
617 (b) Evaluate the potential hazards and risks that high
618 pressure well stimulation poses to surface water or groundwater
619 resources. The study must assess the potential impacts of high
620 pressure well stimulation on drinking water resources and
621 identify the main factors affecting the severity and frequency
622 of impacts and must analyze the potential for the use or reuse
623 of recycled water in well stimulation fluids while meeting
624 appropriate water quality standards.
625 (c) Review and evaluate the potential for groundwater
626 contamination from conducting high-pressure well stimulation
627 under or near wells that have been previously plugged and
628 abandoned and identify a setback radius from previously plugged
629 and abandoned wells that could be impacted by high-pressure well
630 stimulation.
631 (d) Review and evaluate the ultimate disposition of high
632 pressure well stimulation fluids after use in high-pressure well
633 stimulation processes.
634 (2) The department shall continue conventional oil and gas
635 business operations during the performance of the study. There
636 may not be a moratorium on the evaluation and issuance of
637 permits for conventional drilling, exploration, conventional
638 completions, or conventional workovers during the performance of
639 the study.
640 (3) The study is subject to independent scientific peer
641 review.
642 (4) The department shall submit the findings of the study
643 to the Governor, the President of the Senate, and the Speaker of
644 the House of Representatives by June 30, 2017, and shall
645 prominently post the findings on its website.
646 (5) The department may not adopt rules for high-pressure
647 well stimulation until the findings of the study have been
648 submitted to the Legislature. However, by March 1, 2018, the
649 department must adopt rules to implement the findings of the
650 study, if such rules are warranted to protect public health,
651 safety, and the environment.
652 Section 9. Paragraph (a) of subsection (1) of section
653 377.37, Florida Statutes, is amended to read:
654 377.37 Penalties.—
655 (1)(a) A Any person who violates any provision of this
656 chapter law or any rule, regulation, or order of the division
657 made under this chapter or who violates the terms of any permit
658 to drill for or produce oil, gas, or other petroleum products
659 referred to in s. 377.242(1) or to store gas in a natural gas
660 storage facility, or any lessee, permitholder, or operator of
661 equipment or facilities used in the exploration for, drilling
662 for, or production of oil, gas, or other petroleum products, or
663 storage of gas in a natural gas storage facility, who refuses
664 inspection by the division as provided in this chapter, is
665 liable to the state for any damage caused to the air, waters, or
666 property, including animal, plant, or aquatic life, of the state
667 and for reasonable costs and expenses of the state in tracing
668 the source of the discharge, in controlling and abating the
669 source and the pollutants, and in restoring the air, waters, and
670 property, including animal, plant, and aquatic life, of the
671 state. Furthermore, such person, lessee, permitholder, or
672 operator is subject to the judicial imposition of a civil
673 penalty in an amount of not more than $25,000 $10,000 for each
674 offense. However, the court may receive evidence in mitigation.
675 Each day during any portion of which such violation occurs
676 constitutes a separate offense. This paragraph does not Nothing
677 herein shall give the department the right to bring an action on
678 behalf of a any private person.
679 Section 10. Section 377.45, Florida Statutes, is created to
680 read:
681 377.45 High-pressure well stimulation chemical disclosure
682 registry.—
683 (1)(a) The department shall designate the national chemical
684 disclosure registry, known as FracFocus, developed by the Ground
685 Water Protection Council and the Interstate Oil and Gas Compact
686 Commission, as the state’s registry for chemical disclosure for
687 all wells on which high-pressure well stimulations are
688 performed. The department shall provide a link to FracFocus
689 through its website.
690 (b) In addition to providing the following information to
691 the department as part of the permitting process, a service
692 provider, vendor, or well owner or operator shall report, as
693 established by department rule, to the department, at a minimum,
694 the following information:
695 1. The name of the service provider, vendor, or owner or
696 operator.
697 2. The date of completion of the high-pressure well
698 stimulation.
699 3. The county in which the well is located.
700 4. The API Well Number.
701 5. The well name and number.
702 6. The longitude and latitude of the wellhead.
703 7. The total vertical depth of the well.
704 8. The total volume of water used in the high-pressure well
705 stimulation.
706 9. Each chemical ingredient that is subject to 29 C.F.R. s.
707 1910.1200(g)(2) and the ingredient concentration in the high
708 pressure well stimulation fluid by mass for each well on which a
709 high-pressure well stimulation is performed.
710 10. The trade or common name and the CAS Registry Number
711 for each chemical ingredient.
712 (c) The department shall report to FracFocus all
713 information received under paragraph (b), excluding any
714 information subject to chapter 688.
715 (d) If FracFocus cannot accept and make publicly available
716 any information specified in this section, the department shall
717 post the information on its website, excluding any information
718 subject to chapter 688.
719 (2) A service provider, vendor, or well owner or operator
720 shall:
721 (a) Report the information required under subsection (1) to
722 the department within 60 days after the initiation of the high
723 pressure well stimulation for each well on which such high
724 pressure well stimulation is performed.
725 (b) Notify the department if any chemical ingredient not
726 previously reported is intentionally included and used for the
727 purpose of performing a high-pressure well stimulation.
728 (3) This section does not apply to an ingredient that:
729 (a) Is not intentionally added to the high-pressure well
730 stimulation; or
731 (b) Occurs incidentally or is otherwise unintentionally
732 present in a high-pressure well stimulation.
733 (4) The department shall adopt rules to administer this
734 section.
735 Section 11. Section 377.07, Florida Statutes, is amended to
736 read:
737 377.07 Division of Water Resource Management; powers,
738 duties, and authority.—The Division of Water Resource Management
739 of the Department of Environmental Protection is hereby vested
740 with power, authority, and duty to administer, carry out, and
741 enforce the provisions of this part law as directed in s.
742 370.02(3).
743 Section 12. Section 377.10, Florida Statutes, is amended to
744 read:
745 377.10 Certain persons not to be employed by division.—A No
746 person in the employ of, or holding any official connection or
747 position with any person, firm, partnership, corporation, or
748 association of any kind, engaged in the business of buying or
749 selling mineral leases, drilling wells in the search of oil or
750 gas, producing, transporting, refining, or distributing oil or
751 gas may not shall hold any position under, or be employed by,
752 the Division of Water Resource Management in the prosecution of
753 its duties under this part law.
754 Section 13. Subsection (1) of section 377.243, Florida
755 Statutes, is amended to read:
756 377.243 Conditions for granting permits for extraction
757 through well holes.—
758 (1) Before applying Prior to the application to the
759 Division of Water Resource Management for the permit to drill
760 for oil, gas, and related products referred to in s. 377.242(1),
761 the applicant must own a valid deed, or other muniment of title,
762 or lease granting the said applicant the privilege to explore
763 for oil, gas, or related mineral products to be extracted only
764 through the well hole on the land or lands included in the
765 application. However, unallocated interests may be unitized
766 according to s. 377.27.
767 Section 14. Subsection (1) of section 377.244, Florida
768 Statutes, is amended to read:
769 377.244 Conditions for granting permits for surface
770 exploratory and extraction operations.—
771 (1) Exploration for and extraction of minerals under and by
772 virtue of the authority of a grant of oil, gas, or mineral
773 rights, or which, subsequent to such grant, may be interpreted
774 to include the right to explore for and extract minerals which
775 are subject to extraction from the land by means other than
776 through a well hole, that is by means of surface exploratory and
777 extraction operations such as sifting of the sands, dragline,
778 open pit mining, or other type of surface operation, which would
779 include movement of sands, dirt, rock, or minerals, shall be
780 exercised only pursuant to a permit issued by the Division of
781 Water Resource Management upon the applicant’s compliance
782 applicant complying with the following conditions:
783 (a) The applicant must own a valid deed, or other muniment
784 of title, or lease granting the applicant the right to explore
785 for and extract oil, gas, and other minerals from the said
786 lands.
787 (b) The applicant shall post a good and sufficient surety
788 bond with the division in such amount as the division determines
789 may determine is adequate to afford full and complete protection
790 for the owner of the surface rights of the lands described in
791 the application, conditioned upon the full and complete
792 restoration, by the applicant, of the area over which the
793 exploratory and extraction operations are conducted to the same
794 condition and contour in existence before prior to such
795 operations.
796 Section 15. For the 2016-2017 fiscal year, the sum of $1
797 million in nonrecurring funds is appropriated from the General
798 Revenue Fund to the Department of Environmental Protection to
799 conduct a high-pressure well stimulation study pursuant to s.
800 377.2436, Florida Statutes.
801 Section 16. This act shall take effect July 1, 2016.