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Agenda 10/13/2015 Item #11C10/13/2015 11.C. EXECUTIVE SUMMARY Recommendation to consider staffs analysis of filed bills proposing regulations on high - pressure well stimulation activities. OBJECTIVE: To support legislation that improves and strengthens state rules and regulations governing oil well drilling activities. CONSIDERATIONS: At the September 22, 2015, County Commission meeting, the Board approved its 2016 State Legislative Priorities. Following discussion on the Inland Oil Drilling and Fracking issue, staff was directed to bring an analysis of Senate Bill 318 (Senator Garrett Richter), which proposes regulations on high - pressure well stimulation activities, back to the Board on the October 13, 2015 agenda for further discussion. A companion bill, House Bill 191, has been filed by Representative Ray Rodrigues. The attached document outlines the key features of Senate Bill 318 (SB 318) and House Bill 191 (HB 191) and provides additional background, along with staff recommendations. FISCAL IMPACT: None at this time. GROWTH MANAGEMENT IMPACT: The adoption of the bills as written would limit the County's ability to review for local land use compatibility standards. LEGAL CONSIDERATION: This item has been approved by the County Attorney, raises no legal issues, and requires majority vote for approval. - JAK RECOMMENDATION: To consider staff's analysis of filed bills proposing regulations on high - pressure well stimulation activities and provide further guidance. SUBMITTED BY: Tim C. Durham, Executive Manager Corporate Business Operations Attachments: 1) Presentation 2) SB 318, 3) HB 191 Packet Page -418- COLLIER COUNTY Board of County Commissioners Item Number: 11.11.C. 10/13/2015 11.C. Item Summary: Recommendation to consider staff's analysis of filed bills proposing regulations on high - pressure well stimulation activities. (Tim Durham, Executive Manager Corporate Business Operations) Meeting Date: 10/13/2015 Prepared By Name: BrockMaryJo Title: Executive Secretary to County Manager, County Managers Office 10/6/2015 10:30:20 AM Submitted by Title: Executive Secretary to County Manager, County Managers Office Name: BrockMaryJo 10/6/2015 10:30:21 AM Approved By Name: DurhamTim Title: Executive Manager of Corp Business Ops, Date: 10/6/2015 1 0:37:27 AM Name: IsacksonMark Title: Division Director - Corp Fin & Mgmt Svc, Office of Management & Budget Date: 10/6/2015 11:04:32 AM Name: KlatzkowJeff Title: County Attorney, Date: 10/7/2015 8:55:15 AM Name: OchsLeo Title: County Manager, County Managers Office Date: 10/7/2015 9:29:00 AM Packet Page -419- Packet Page -421- 10/13/2015 11.C. Packet Page -422- 10/13/2015 11. C. m r Packet Page -423- 10/13/2015 11.C. 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N " r--i Florida Senate - 2016 By Senator Richter 23- 0019OB -16 10/13/2015 11.C. 2016318 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; amending s. 377.241, F.S.; requiring the 27 Division of Water Resource Management to give 28 consideration to and be guided by certain additional 29 criteria when issuing permits; amending s. 377.242, Page 1 of 27 CODING: Wordss;[=-L-ie1Een are d Packet Page - 432 -,ds underlined are additions. r11 Florida Senate - 2016 23- 00190B -16 10/13/2015 11.C. 2016318 30 F.S.; authorizing the department to issue permits for 31 the performance of a high - pressure well stimulation; 32 revising permit requirements that permitholders agree 33 not to prevent division inspections; amending s. 34 377.2425, F.S.; requiring an applicant or operator to 35 provide surety that performance of a high - pressure 36 well stimulation will be conducted in a safe and 37 environmentally compatible manner; creating s. 38 377.2436, F.S.; requiring the department to conduct a 39 study on high - pressure well stimulation; providing 40 study criteria; requiring the study to be submitted to ^41 the Governor and Legislature and posted on the 42 department website; amending s. 377.37, F.S.; 43 increasing the maximum amount of a civil penalty; 44 creating s. 377.45, F.S.; requiring the department to 45 designate the national chemical disclosure registry as 46 the state's registry; requiring service providers, 47 vendors, and well owners or operators to report 48 certain information to the department; requiring the 49 department to report certain information to the 50 national chemical registry; providing applicability; 51 requiring the department to adopt rules; amending ss. 52 377.07, 377.10, 377.243, and 377.244, F.S.; making 53 technical changes; conforming provisions to changes 54 made by the act; providing an appropriation; providing 55 an effective date. 56 ^57 Be It Enacted by the Legislature of the State of Florida: 58 Page 2 of 27 CODING: Words stEieleen are d Packet Page - 433 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 59 Section 1. Section 377.06, Florida Statutes, is amended to 60 read: 61 377.06 Public policy of state concerning natural resources 62 of oil and gas; preemption. - 63 (1) It is hereby deel=red the public policy of this state 64 to conserve and control the natural resources of oil and gas in 65 this state, and the products made from oil and gas in this 66 state; to prevent waste of natural resources; to provide for the 67 protection and adjustment of the correlative rights of the 68 owners of the land in which the natural resources lie, of the 69 owners and producers of oil and gas resources and the products 70 made from oil and gas, and of others interested in these 71 resources and products; and to safeguard the health, property, 72 and public welfare of the residents of this state and other 73 interested persons aREi €eEa-li- -r-peses iiieiieat-ed lay the 74 pr- e� s-i emirs —in tl2ir seet-i&n . 75 (2) FuEtl-,eEr It is the public policy of this state deelaEed 76 that underground storage of natural gas is in the public 77 interest because underground storage promotes conservation of 78 natural gas,;— makes gas more readily available to the domestic, 79 commercial, and industrial consumers of this state,;— and allows 80 the accumulation of large quantities of gas in reserve for 81 orderly withdrawal during emergencies or periods of peak demand. 82 It is not the intention of this section to limit, restrict, or 83 modify in any way the provisions of this law. 84 (3) The Legislature declares that all matters relating to 85 the regulation of the exploration, development, production, 86 processing, storage, and transportation of oil and gas are 87 preempted to the state, to the exclusion of all existing and Page 3 of 27 CODING: Wordsn are d Packet Page -434- ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 88 future ordinances or regulations relating thereto adopted by any 89 county, municipality, or other political subdivision of the 90 state. Any such existing ordinance or regulation is void. A 91 county or municipality may, however, enforce an existing zoning 92 ordinance adopted before January 1, 2015, if the ordinance is 93 otherwise valid. 94 Section 2. Section 377.19, Florida Statutes, is amended to 95 read: 96 377.19 Definitions. -As used in ss. 377.06, 377.07, and 97 377.10- 377.45 the term: 98 (1) "Completion date" means the day, month, and year that a ^99 new productive well, a previously shut -in well, or a temporarily 100 abandoned well is completed, repaired, or recompleted and the 101 operator begins producing oil or gas in commercial quantities. 102 (2) "Department" means the Department of Environmental 103 Protection. 104 (3) "Division" means the Division of Water Resource 105 Management of the Department of Environmental Protection. 106 (4) "Field" means the general area that is underlaid, or 107 appears to be underlaid, by at least one pool. The term includes 108 the underground reservoir, or reservoirs, containing oil or gas, 109 or both. The terms "field" and "pool" mean the same thing if 110 only one underground reservoir is involved; however, the term 111 "field," unlike the term "pool," may relate to two or more 112 pools. 113 (5) "Gas" means all natural gas, including casinghead gas, 114 and all other hydrocarbons not defined as oil in subsection (16) X115 -(19) . 16 (6) "High- pressure well stimulation" means all stages of a Page 4 of 27 CODING: Words strrieken are d, Packet Page - 435 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 117 well intervention performed by injecting fluids into a rock 118 formation at high pressure that exceeds the fracture gradient of 119 the rock formation in order to propagate fractures in such 120 formation to increase production at an oil or gas well by 121 improving the flow of hydrocarbons from the formation into the 122 wellbore. The term does not include well stimulation or 123 conventional workover procedures that may incidentally fracture 124 the formation near the wellbore. 125 (7)+6+ "Horizontal well" means a well completed with the 126 wellbore in a horizontal or nearly horizontal orientation within 127 10 degrees of horizontal within the producing formation. 128 (8) +- "Illegal gas" means gas that has been produced 129 within the state from any well or wells in excess of the amount 130 allowed by any rule, regulation, or order of the division, as 131 distinguished from gas produced within the State of Florida from 132 a well not producing in excess of the amount so allowed, which 133 is "legal gas." 134 (9)+�+ "Illegal oil" means oil that has been produced 135 within the state from any well or wells in excess of the amount 136 allowed by rule, regulation, or order of the division, as 137 distinguished from oil produced within the state from a well not 138 producing in excess of the amount so allowed, which is "legal 139 oil." 140 (10)-(-9-}- "Illegal product" means a product of oil or gas, 141 any part of which was processed or derived, in whole or in part, 142 from illegal gas or illegal oil or from any product thereof, as 143 distinguished from "legal product," which is a product processed 144 or derived to no extent from illegal oil or illegal gas. 145 (11)(19) "Lateral storage reservoir boundary" means the Page 5 of 27 CODING: Words stEieken are d Packet Page -436- ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 146 projection up to the land surface of the maximum horizontal 147 extent of the gas volume contained in a natural gas storage 148 reservoir. 149 (12)(11)- "Native gas" means gas that occurs naturally 150 within this state and does not include gas produced outside the 151 state, transported to this state, and injected into a permitted 152 natural gas storage facility. 153 (13)-{1-2+ "Natural gas storage facility" means an 154 underground reservoir from which oil or gas has previously been 155 produced and. which is used or to be used for the underground 156 storage of natural gas, and any surface or subsurface structure, x`57 or infrastructure, except wells. The term also includes a right 158 or appurtenance necessary or useful in the operation of the 159 facility for the underground storage of natural gas, including 160 any necessary or reasonable reservoir protective area as 161 designated for the purpose of ensuring the safe operation of the 162 storage of natural gas or protecting the natural gas storage 163 facility from pollution, invasion, escape, or migration of gas, 164 or any subsequent extension thereof. The term does not mean a 165 transmission., distribution, or gathering pipeline or system that 166 is not used primarily as integral piping for a natural gas 167 storage facility. 168 (14)(13 -) "Natural gas storage reservoir" means a pool or 169 field from which gas or oil has previously been produced and 170 which is suitable for or capable of being made suitable for the 171 injection, storage, and recovery of gas, as identified in a 172 permit application submitted to the department under s. 173 377.2407. 74 (15)4-}- "New field well" means an oil or gas well Page 6 of 27 CODING: Wordsstrd:eiEen are d Packet Page- 437 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 175 completed after July 1, 1997, in a new field as designated by 176 the Department of Environmental Protection. 177 (16)(16) "Oil" means crude petroleum oil and other 178 hydrocarbons, regardless of gravity, which are produced at the 179 well in liquid form by ordinary production methods, and which 180 are not the result of condensation of gas after it leaves the 181 reservoir. 182 (17) (16) "Oil and gas" has the same meaning as the term 183 "oil or gas." 184 (18)(-1:7) "Oil and gas administrator" means the State 185 Geologist. 186 (19)(18 -) "Operator" means the entity who: 187 (a) Has the right to drill and to produce a well; or 188 (b) As part of a natural gas storage facility, injects, or 189 is engaged in the work of preparing to inject, gas into a 190 natural gas storage reservoir; or stores gas in, or removes gas 191 from, a natural gas storage reservoir. 192 (20) ) "Owner" means the person who has the right to 193 drill into and to produce from any pool and to appropriate the 194 production for the person or for the person and another, or 195 others. 196 (21)(20) "Person" means a natural person, corporation, 197 association, partnership, receiver, trustee, guardian, executor, 198 administrator, fiduciary, or representative of any kind. 199 (22)) "Pool" means an underground reservoir containing 200 or appearing to contain a common accumulation of oil or gas or 201 both. Each zone of a general structure which is completely 202 separated from any other zone on the structure is considered a 203 separate pool as used herein. Page 7 of 27 CODING: WordsstLad:eken are d Packet Page -438- ds underlined are additions. n Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 204 (23)(22 -) "Producer" means the owner or operator of a well 205 or wells capable of producing oil or gas, or both. 206 (24)(23) "Product" means a commodity made from oil or gas 207 and includes refined crude oil, crude tops, topped crude, 208 processed crude petroleum, residue from crude petroleum, 209 cracking stock, uncracked fuel oil, fuel oil, treated crude oil, 210 residuum, gas oil, casinghead gasoline, natural gas gasoline, 211 naphtha, distillate, condensate, gasoline, waste oil, kerosene, 212 benzine, wash oil, blended gasoline, lubricating oil, blends or 213 mixtures of oil with one or more liquid products or byproducts 214 derived from oil or gas, and blends or mixtures of two or more "�15 liquid products or byproducts derived from oil or gas, whether 216 hereinabove enumerated or not. 217 (25)( 4-) "Reasonable market demand" means the amount of oil 218 reasonably needed for current consumption, together with a 219 reasonable amount of oil for storage and working stocks. 220 (26) (25) "Reservoir protective area" means the area 221 extending up to and including 2,000 feet surrounding a natural 222 gas storage reservoir. 223 (27)( 6-) "Shut -in bottom hole pressure" means the pressure 224 at the bottom of a well when all valves are closed and no oil or 225 gas has been allowed to escape for at least 24 hours. 226 (28) -(2�) "Shut -in well" means an oil or gas well that has 227 been taken out of service for economic reasons or mechanical 228 repairs. 229 (29) ) "State" means the State of Florida. 230 (30) -(29 -) "Temporarily abandoned well" means a permitted X231 well or wellbore that has been abandoned by plugging in a manner =32 that allows reentry and redevelopment in accordance with oil or Page 8 of 27 CODING: Words strieken are d Packet Page- 439 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 233 gas rules of the Department of Environmental Protection. 234 (31)(9)- "Tender" means a permit or certificate of 235 clearance for the transportation or the delivery of oil, gas, or 236 products, approved and issued or registered under the authority 237 of the division. 238 (32)(31) "Waste," in addition to its ordinary meaning, 239 means "physical waste" as that term is generally understood in 240 the oil and gas industry. The term "waste" includes: 241 (a) The inefficient, excessive, or improper use or 242 dissipation of reservoir energy; and the locating, spacing, 243 drilling, equipping, operating, or producing of any oil or gas 244 well or wells in a manner that results, or tends to result, in 245 reducing the quantity of oil or gas ultimately to be stored or 246 recovered from any pool in this state. 247 (b) The inefficient storing of oil; and the locating, 248 spacing, drilling, equipping, operating, or producing of any oil 249 or gas well or wells in a manner that causes, or tends to cause, 250 unnecessary or excessive surface loss or destruction of oil or 251 gas. 252 (c) The producing of oil or gas in a manner that causes 253 unnecessary water channeling or coning. 254 (d) The operation of any oil well or wells with an 255 inefficient gas -oil ratio. 256 (e) The drowning with water of any stratum or part thereof 257 capable of producing oil or gas. 258 (f) The underground waste, however caused and whether or 259 not defined. 260 (g) The creation of unnecessary fire hazards. 261 (h) The escape into the open air, from a well producing Page 9 of 27 CODING: Words stEdmeken are d Packet Page - 440 - ds underlined are additions. Florida Senate - 2016 n 10/13/2015 11.C. 23- 0019OB -16 2016318 262 both oil and gas, of gas in excess of the amount that is 263 necessary in the efficient drilling or operation of the well. 264 (i) The use of gas for the manufacture of carbon black. 265 (j) Permitting gas produced from a gas well to escape into 266 the air. 267 (k) The abuse of the correlative rights and opportunities 268 of each owner of oil and gas in a common reservoir due to 269 nonuniform, disproportionate, and unratable withdrawals, causing 270 undue drainage between tracts of land. 271 (33)(32) "Well site" means the general area around a well, 272 which area has been disturbed from its natural or existing 73 condition, as well as the drilling or production pad, mud and 274 water circulation pits, and other operation areas necessary to 275 drill for or produce oil or gas, or to inject gas into and 276 recover gas from a natural gas storage facility. 277 Section 3. Subsection (2) of section 377.22, Florida 278 Statutes, is amended to read: 279 377.22 Rules and orders. - 280 (2) The department shall issue orders and adopt rules 281 pursuant to ss. 120.536 and 120.54 to implement and enforce ire 282 �r r,_r - =~, of this chapter. Such rules and orders shall ensure 283 that all precautions are taken to prevent the spillage of oil or 284 any other pollutant in all phases of the drilling for, and 285 extracting of, oil, gas, or other petroleum products, including 286 high - pressure well stimulations, or during the injection of gas 287 into and recovery of gas from a natural gas storage reservoir. 288 The department shall revise such rules from time to time as 289 necessary for the proper administration and enforcement of this 90 chapter. Rules adopted and orders issued in accordance with this Page 10 of 27 CODING: Words men are d Packet Page - 441 -,ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318_ 291 section are for, but not limited to, the following purposes: 292 (a) To require the drilling, casing, and plugging of wells 293 to be done in such a manner as to prevent the pollution of the 294 fresh, salt, or brackish waters or the lands of the state and to 295 protect the integrity of natural gas storage reservoirs. 296 (b) To prevent the alteration of the sheet flow of water in 297 any area. 298 (c) To require that appropriate safety equipment be 299 installed to minimize the possibility of an escape of oil or 300 other petroleum products in the event of accident, human error, 301 or a natural disaster during drilling, casing, or plugging of 302 any well and during extraction operations. 303 (d) To require the drilling, casing, and plugging of wells 304 to be done in such a manner as to prevent the escape of oil or 305 other petroleum products from one stratum to another. 306 (e) To prevent the intrusion of water into an oil or gas 307 stratum from a separate stratum, except as provided by rules of 308 the division relating to the injection of water for proper 309 reservoir conservation and brine disposal. 310 (f) To require a reasonable bond, or other form of security 311 acceptable to the department, conditioned upon properly 312 drilling, casing, producing, and operating each well and 313 properly plugging the perfeL=ffianee ef :�he— d?i}y :�e p '_i= 3 l=e eiF' 314 each dry and abandoned well and upon the full and complete 315 restoration by the applicant of the area over which geophysical 316 exploration, drilling, or production is conducted to the similar 317 contour and general condition in existence before nT-er- t-e such 318 operation. 319 (g) To require and carry out a reasonable program of Page 11 of 27 CODING: Wordsst-n are d Packet Page - 442 -'ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 320 monitoring and inspecting er - nspeet -_n =f all drilling 321 operations, high - pressure well stimulations, producing wells, e-r- 322 injecting wells, and well sites, including regular inspections 323 by division personnel. Inspections are required during the 324 testing of blowout preventers, during the pressure testing of 325 the casing and casing shoe, and during the integrity testing of 326 the cement plugs in plugging and abandonment operations. 327 (h) To require the making of reports showing the location 328 of all oil and gas wells; the making and filing of logs; the 329 taking and filing of directional surveys; the filing of 330 electrical, sonic, radioactive, and mechanical logs of oil and '-`°31 gas wells; if taken, the saving of cutting and cores, the cuts 332 of which shall be given to the Bureau of Geology; and the making 333 of reports with respect to drilling and production records. 334 However, such information, or any part thereof, at the request 335 of the operator, shall be exempt from t-l=te — p_Eevis_ ens of. s. 336 119.07(1) and held confidential by the division for , pei=d:ed of 337 1 year after the completion of a well. 338 (i) To prevent wells from being drilled, operated, or 339 produced in such a manner as to cause injury to neighboring 340 leases, property, or natural gas storage reservoirs. 341 (j) To prevent the drowning by water of any stratum, or 342 part thereof, capable of producing oil or gas in paying 343 quantities and to prevent the premature and irregular 344 encroachment of water which reduces, or tends to reduce, the 345 total ultimate recovery of oil or gas from any pool. 346 (k) To require the operation of wells with efficient gas - ,-_347 oil ratio, and to fix such ratios. 48 (1) To prevent "blowouts," "caving," and "seepage," in the Page 12 of 27 CODING: Words men are d Packet Page - 443 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318_ 349 sense that conditions indicated by such terms are generally 350 understood in the oil and gas business. 351 (m) To prevent fires. 352 (n) To identify the ownership of all oil or gas wells, 353 producing leases, refineries, tanks, plants, structures, and 354 storage and transportation equipment and facilities. 355 (o) To regulate the "shooting," perforating, a-Rd chemical 356 treatment, and high - pressure stimulations of wells. 357 (p) To regulate secondary recovery methods, including the 358 introduction of gas, air, water, or other substance into 359 producing formations. 360 (q) To regulate gas cycling operations. 361 (r) To regulate the storage and recovery of gas injected 362 into natural gas storage facilities. 363 (s) If necessary for the prevention of waste, as herein 364 defined, to determine, limit, and prorate the production of oil 365 or gas, or both, from any pool or field in the state. 366 (t) To require, either generally or in or from particular 367 areas, certificates of clearance or tenders in connection with 368 the transportation or delivery of oil or gas, or any product. 369 (u) To regulate the spacing of wells and to establish 370 drilling units. 371 (v) To prevent, so far as is practicable, reasonably 372 avoidable drainage from each developed unit which is not 373 equalized by counterdrainage. 374 (w) To require that geophysical operations requiring a 375 permit be conducted in a manner which will minimize the impact 376 on hydrology and biota of the area, especially environmentally 377 sensitive lands and coastal areas. Page 13 of 27 CODING: Wordsn are d Packet Page -444-,ds underlined are additions. *-N Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 378 (x) To regulate aboveground crude oil storage tanks in a 379 manner which will protect the water resources of the state. 380 (y) To act in a receivership capacity for fractional 381 mineral interests for which the owners are unknown or unlocated 382 and to administratively designate the operator as the lessee. 383 (z) To evaluate the history of past adjudicated violations 384 committed by permit applicants or the applicants' affiliated 385 entities of any substantive and material rule or law pertaining 386 to the regulation of oil or gas. 387 Section 4. Subsections (1), (2), (4), and (5) of section 388 377.24, Florida Statutes, are amended, present subsections (6) X89 through (9) of that section are redesignated as subsections (5) 390 through (8), respectively, and a new subsection (9) is added to 391 that section, to read: 392 377.24 Notice of intention to drill well; permits; 393 abandoned wells and dry holes. - 394 (1) Before drilling a well in search of oil or gas, before 395 performing a high - pressure well stimulation, or before storing 396 gas in or recovering gas from a natural gas storage reservoir, 397 the person who desires to drill for, store, or recover gas, e-r- 398 drill for oil or gas, or perform a high - pressure well 399 stimulation shall notify the division upon such form as it may 400 prescribe and shall pay a reasonable fee set by rule of the 401 department not to exceed the actual cost of processing and 402 inspecting for each well or reservoir. The drilling of any well, 403 the performance of any high - pressure well stimulation, and the 404 storing and recovering of gas are prohibited until such notice 405 is given, the fee is paid, and a -t-� permit is granted. A permit .06 may authorize a single activity or multiple activities. Page 14 of 27 CODING: Words st-iAeken are d Packet Page - 445 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 00190B -16 2016318 407 (2) An application for the drilling of a well in search of 408 oil or gas, for the performance of a high - pressure well 409 stimulation, or for the storing of gas in and recovering of gas 410 from a natural gas storage reservoir,— in this state must include 411 the address of the residence of the applicant,— or applicants, 412 which must be the address of each person involved in accordance 413 with the records of the Division of Water Resource Management 414 until such address is changed on the records of the division 415 after written request. 416 (4) Application for permission to drill or abandon any well 417 or perform a high - pressure well stimulation may be denied by the 418 division for only just and lawful cause. 419 (5) — rie jeesfRi- t- - te Ek=dmll -a — e3l well: shall lee EjLcaiiteEi 42 0 within the —ee Lpo r- a#=e Amdmfftim�s —e any ffiiiri e i a l im�yy ii-ile s s t g thie -1 t1 +e miind:eipal _ _ 1== ,h -cr, -3 have first --day 422 aplaLaeved the app- ieatiems— €eE s�deh per-Fft t- by - i„se,.,t; 423 (9) The department may not approve a permit to authorize a 424 high - pressure well stimulation until the department adopts rules 425 for high - pressure well stimulation. 426 Section 5. Subsections (5) and (6) are added to section 427 377.241, Florida Statutes, to read: 428 377.241 Criteria for issuance of permits. -The division, in 429 the exercise of its authority to issue permits as hereinafter 430 provided, shall give consideration to and be guided by the 431 following criteria: 432 (5) For high - pressure well stimulations, whether the high - 433 pressure well stimulation as proposed is designed to ensure 434 that: 435 (a) The groundwater through which the well will be or has Page 15 of 27 CODING: Wordsn are d Packet Page -446 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 436 been drilled is not contaminated by the high - pressure well 437 stimulation; and 438 (b) The high - pressure well stimulation is consistent with 439 the public policy of this state as specified in s. 377.06. 440 (6) As a basis for permit denial or imposition of specific 441 permit conditions, including increased bonding up to five times 442 the applicable limits and increased monitoring, the history of 443 past adjudicated violations committed by the applicant or an 444 affiliated entity of the applicant of any substantive and 445 material rule or law pertaining to the regulation of oil or gas, 446 including violations that occurred outside the state. X47 Section 6. Section 377.242, Florida Statutes, is amended to 448 read: 449 377.242 Permits for drilling or exploring and extracting 450 through well holes or by other means. -The department is vested 451 with the power and authority: 452 (1)(a) To issue permits for the performance of a high - 453 pressure well stimulation or the drilling for, exploring for, or 454 production of oil, gas, or other petroleum products that rr 455 are to be extracted from below the surface of the land, 456 including submerged land, only through the well hole drilled for 457 oil, gas, and other petroleum products. 458 1. A Ne structure intended for the drilling for, or 459 production of, oil, gas, or other petroleum products may not be 460 permitted or constructed on any submerged land within any bay or 461 estuary. 462 2. A ire structure intended for the drilling for, or 63 production of, oil, gas, or other petroleum products may not be 64 permitted or constructed within 1 mile seaward of the coastline Page 16 of 27 CODING: Wordsn are d Packet Page - 447 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 465 of the state. 466 3. A N-e structure intended for the drilling for, or 467 production of, oil, gas, or other petroleum products may not be 468 permitted or constructed within 1 mile of the seaward boundary 469 of any state, local, or federal park or aquatic or wildlife 470 preserve or on the surface of a freshwater lake, river, or 471 stream. 472 4. A N-& structure intended for the drilling for, or 473 production of, oil, gas, or other petroleum products may not be 474 permitted or constructed within 1 mile inland from the shoreline 475 of the Gulf of Mexico, the Atlantic Ocean, or any bay or estuary 476 or within 1 mile of any freshwater lake, river, or stream unless 477 the department is satisfied that the natural resources of such 478 bodies of water and shore areas of the state will be adequately 479 protected in the event of accident or blowout. 480 5. Without exception, after July 1, 1989, a ire structure 481 intended for the drilling for, or production of, oil, gas, or 482 other petroleum products may not be permitted or constructed 483 south of 26 °00'00" north latitude off Florida's west coast and 484 south of 27 000'00" north latitude off Florida's east coast, 485 within the boundaries of Florida's territorial seas as defined 486 in 43 U.S.C. s. 1301. After July 31, 1990, a na structure 487 intended for the drilling for, or production of, oil, gas, or 488 other petroleum products may not be permitted or constructed 489 north of 26 000'00" north latitude off Florida's west coast to 490 the western boundary of the state bordering Alabama as set forth 491 in s. 1, Art. II of the State Constitution, or located north of 492 27 °00'00" north latitude off Florida's east coast to the 493 northern boundary of the state bordering Georgia as set forth in Page 17 of 27 CODING: Words strieken are d Packet Page - 448 -,ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 494 s. 1, Art. II of the State Constitution, within the boundaries 495 of Florida's territorial seas as defined in 43 U.S.C. s. 1301. 496 (b) Subparagraphs (a)l. and 4. do not apply to permitting 497 or construction of structures intended for the drilling for, or 498 production of, oil, gas, or other petroleum products pursuant to 499 an oil, gas, or mineral lease of such lands by the state under 500 which lease any valid drilling permits are in effect on the 501 effective date of this act. In the event that such permits 502 contain conditions or stipulations, such conditions and 503 stipulations shall govern and supersede subparagraphs (a)1. and 504 4. X 0 5 (c) The prohibitions of subparagraphs (a)l. -4. iii t-l:iis 506 sabs ,et do not include "infield gathering lines," provided no 507 other placement is reasonably available and all other required 508 permits have been obtained. 509 (2) To issue permits to explore for and extract minerals 510 which are subject to extraction from the land by means other 511 than through a well hole. 512 (3) To issue permits to establish natural gas storage 513 facilities or construct wells for the injection and recovery of 514 any natural gas for storage in natural gas storage reservoirs. 515 516 Each permit shall contain an agreement by the permitholder that 517 the permitholder will not prevent inspection by division 518 personnel at any time, including during installation and 519 cementing of casing, during the testing of blowout preventers, 520 during the pressure testing of the casing and casing shoe, and X521 during the integrity testing of the cement plugs in plugging and 22 abandonment operations. The provisions of this section Page 18 of 27 CODING: Wordsst-Laielten are d Packet Page - 449 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318_ 523 prohibiting permits for drilling or exploring for oil in coastal 524 waters do not apply to any leases entered into before June 7, 525 1991. 526 Section 7. Subsection (1) of section 377.2425, Florida 527 Statutes, is amended to read: 528 377.2425 Manner of providing security for geophysical 529 exploration, drilling, and production. - 530 (1) Before PEieEt-e granting a permit for conducting -t-e, 531 eendiaet geophysical operations; drilling of exploratory, 532 injection, or production wells; producing oil and gas from a 533 wellhead; performing a high - pressure well stimulation; or 534 transporting oil and gas through a field - gathering system, the 535 department shall require the applicant or operator to provide 536 surety that these operations will be conducted in a safe and 537 environmentally compatible manner. 538 (a) The applicant for a drilling, production, high - pressure 539 well stimulation, or injection well permit or a geophysical 540 permit may provide the following types of surety to the 541 department for this purpose: 542 1. A deposit of cash or other securities made payable to 543 the Minerals Trust Fund. Such cash or securities so deposited 544 shall be held at interes` by the Chief Financial Officer to 545 satisfy safety and environmental performance provisions of this 546 chapter. The interest shall be credited to the Minerals Trust 547 Fund. Such cash or other securities shall be released by the 548 Chief Financial Officer upon request of the applicant and 549 certification by the department that all safety and 550 environmental performance provisions established by the 551 department for permitted activities have been fulfilled. Page 19 of 27 CODING: Wordsn are d Packet Page - 450 - ds underlined are additions. III Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 552 2. A bond of a surety company authorized to do business in 553 the state in an amount as provided by rule. 554 3. A surety in the form of an irrevocable letter of credit 555 in an amount as provided by rule guaranteed by an acceptable 556 financial institution. 557 (b) An applicant for a drilling, production, high - pressure 558 well stimulation, or injection well permit, or a permittee who 559 intends to continue participating in long -term production 560 activities of such wells, has the option to provide surety to 561 the department by paying an annual fee to the Minerals Trust 562 Fund. For an applicant or permittee choosing this option the X63 following shall apply: 564 1. For the first year, or part of a year, of a drilling, 565 production, or injection well permit, or change of operator, the 566 fee is $4,000 per permitted well. 567 2. For each subsequent year, or part of a year, the fee is 568 $1,500 per permitted well. 569 3. The maximum fee that an applicant or permittee may be 570 required to pay into the trust fund is $30,000 per calendar 571 year, regardless of the number of permits applied for or in 572 effect. 573 4. The fees set forth in subparagraphs 1., 2., and 3. shall 574 be reviewed by the department on a biennial basis and adjusted 575 for the cost of inflation. The department shall establish by 576 rule a suitable index for implementing such fee revisions. 577 (c) An applicant for a drilling or operating permit for 578 operations planned in coastal waters that by their nature 579 warrant greater surety shall provide surety only in accordance 80 with paragraph (a), or similar proof of financial responsibility Page 20 of 27 CODING: Wordsst-Eie!Een are dPacketPage- 451 -'ds underlined are additions. 581 582 583 584 585 586 587 588 589 590 591 592 593 594 595 596 597 598 599 600 601 602 603 604 605 606 607 608 609 Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318_ other than as provided in paragraph (b). For all such applications, including applications pending at the effective date of this act and notwithstanding the jarevi,.iens of paragraph (b), the Governor and Cabinet in their capacity as the Administration Commission, at the recommendation of the department e— Tr-e en a ret-ec- tee , shall set a reasonable amount of surety required under this subsection. The surety amount shall be based on the projected cleanup costs and natural resources damages resulting from a maximum oil spill and adverse hydrographic and atmospheric conditions that would tend to transport the oil into environmentally sensitive areas, as determined by the department ef EnvTt-enffient-a! PiFeteeti . Section 8. Section 377.2436, Florida Statutes, is created to read: 377.2436 Studv on high- pressure well stimulations.— 1) The department shall conduct a study on high- pressure well stimulations. The study must: (a) Evaluate the underlying geologic features present in the counties where oil wells have been permitted and analyze the potential impact that high- pressure well stimulation and wellbore construction may have on the underlying geologic features. (b) Evaluate the potential hazards and risks that high- ressure well stimulation poses to surface water or groundwater resources. The studv must assess the potential impacts of hiah- pressure well stimulation on drinking water resources and identify the main factors affecting the severity and frequency of impacts and must analvze the potential for the use or reuse of recycled water in well stimulation fluids while meeting Page 21 of 27 CODING: Words strieken are d Packet Page - 452 -'ds underlined are additions. Florida Senate - 2016 ?0-N.. 10/13/2015 11. C. 23- 0019OB -16 2016318 610 appropriate water quality standards. 611 (c) Review and evaluate the potential for groundwater 612 contamination from conducting high - pressure well stimulation 613 under wells that have been previously abandoned and plugged and 614 identify a setback radius from previously plugged and abandoned 615 wells that could be impacted by high - pressure well stimulation. 616 (d) Review and evaluate the ultimate disposition of high - 617 pressure well stimulation fluids after use in high - pressure well 618 stimulation processes. 619 (2) The department shall continue conventional oil and gas 620 business operations during the performance of the study. There 10"'q 21 may not be a moratorium on the evaluation and issuance of 622 permits for conventional drilling, exploration, conventional 623 completions, or conventional workovers during the performance of 624 the study. 625 (3) The study is subject to independent scientific peer 626 review. 627 (4) The department shall submit the findings of the study 628 to the Governor, the President of the Senate, and the Speaker of 629 the House of Representatives by June 30, 2017, and shall 630 prominently post the findings on its website. 631 Section 9. Paragraph (a) of subsection (1) of section 632 377.37, Florida Statutes, is amended to read: 633 377.37 Penalties. - 634 (1)(a) A person who violates any provision of this 635 chapter law or any rule, regulation, or order of the division 636 made under this chapter or who violates the terms of any permit 637 to drill for or produce oil, gas, or other petroleum products 38 referred to in s. 377.242(1) or to store gas in a natural gas Page 22 of 27 CODING: Wordss#=Ladmeken are d Packet Page - 453 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 00190B -16 2016318 639 storage facility, or any lessee, permitholder, or operator of 640 equipment or facilities used in the exploration for, drilling 641 for, or production of oil, gas, or other petroleum products, or 642 storage of gas in a natural gas storage facility, who refuses 643 inspection by the division as provided in this chapter, is 644 liable to the state for any damage caused to the air, waters, or 645 property, including animal, plant, or aquatic life, of the state 646 and for reasonable costs and expenses of the state in tracing 647 the source of the discharge, in controlling and abating the 648 source and the pollutants, and in restoring the air, waters, and 649 property, including animal, plant, and aquatic life, of the 650 state. Furthermore, such person, lessee, permitholder, or 651 operator is subject to the judicial imposition of a civil 652 penalty i7n an afftei:iRla of not more than $25,000 $19,999 for each 653 offense. However, the court may receive evidence in mitigation. 654 Each day during any portion of which such violation occurs 655 constitutes a separate offense. This paragraph does not �4etl:iing 656 herein —slial= give the department the right to bring an action on 657 behalf of a a-Fry private person. 658 Section 10. Section 377.45, Florida Statutes, is created to 659 read: 660 377.45 High - pressure well stimulation chemical disclosure 661 registry. - 662 (1)(a) The department shall designate the national chemical 663 disclosure registry, known as FracFocus, developed by the Ground 664 Water Protection Council and the Interstate Oil and Gas Compact 665 Commission, as the state's registry for chemical disclosure for 666 all wells on which high - pressure well stimulations are 667 performed. The department shall provide a link to FracFocus Page 23 of 27 CODING: Words stEieken are d Packet Page -454- ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 668 through its website. 669 (b) In addition to providing the following information to 670 the department as part of the permitting process, a service 671 provider, vendor, or well owner or operator shall report, as 672 established by department rule, to the department, at a minimum, 673 the following information: 674 1. The name of the service provider, vendor, or owner or 675 operator. 676 2. The date of completion of the high - pressure well 677 stimulation. 678 3. The county in which the well is located. 79 4. The API Well Number. 680 5. The well name and number. 681 6. The longitude and latitude of the wellhead. 682 7. The total vertical depth of the well. 683 8. The total volume of water used in the high - pressure well 684 stimulation. 685 9. Each chemical ingredient that is subject to 29 C.F.R. s. 686 1910.1200(g)(2) and the ingredient concentration in the high - 687 pressure well stimulation fluid by mass for each well on which a 688 high - pressure well stimulation is performed. 689 10. The trade or common name and the CAS Registry Number 690 for each chemical ingredient. 691 (c) The department shall report to FracFocus all 692 information received under paragraph (b), excluding any 693 information subject to chapter 688. 694 (d) If FracFocus cannot accept and make publicly available ^695 any information specified in this section, the department shall ,96 post the information on its website, excluding any information Page 24 of 27 CODING: Words n are &Packet Page - 455 - ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 001908 -16 2016318 697 subject to chapter 688. 698 (2) A service provider, vendor, or well owner or operator 699 shall: 700 (a) Report the information required under subsection (1) to 701 the department within 60 days after the initiation of the high - 702 pressure well stimulation for each well on which such high - 703 pressure well stimulation is performed. 704 (b) Notify the department if any chemical ingredient not 705 previously reported is intentionally included and used for the 706 purpose of performing a high - pressure well stimulation. 707 (3) This section does not apply to an ingredient that: 708 (a) Is not intentionally added to the high - pressure well 709 stimulation; or 710 (b) Occurs incidentally or is otherwise unintentionally 711 present in a high - pressure well stimulation. 712 (4) The department shall adopt rules to administer this 713 section. 714 Section 11. Section 377.07, Florida Statutes, is amended to 715 read: 716 377.07 Division of Water Resource Management; powers, 717 duties, and authority. -The Division of Water Resource Management 718 of the Department of Environmental Protection is heEelay vested 719 with power, authority, and duty to administer, carry out, and 720 enforce the pee ._s_____ of this part law as direetdr S. 721 3:7n.G2(9+. 722 Section 12. Section 377.10, Florida Statutes, is amended to 723 read: 724 377.10 Certain persons not to be employed by division. -A £-e 725 person in the employ of, or holding any official connection or Page 25 of 27 CODING: Words stiFi:elEen are d Packet Page -456- ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 726 position with any person, firm, partnership, corporation, or 727 association of any kind, engaged in the business of buying or 728 selling mineral leases, drilling wells in the search of oil or 729 gas, producing, transporting, refining, or distributing oil or 730 gas may not shall hold any position under, or be employed by, 731 the Division of Water Resource Management in the prosecution of 732 its duties under this part 3�. 733 Section 13. Subsection (1) of section 377.243, Florida 734 Statutes, is amended to read: 735 377.243 Conditions for granting permits for extraction 736 through well holes. - '­`137 (1) Before applying Piai-eE to 4Ehe applieat en to the 738 Division of Water Resource Management for the permit to drill 739 for oil, gas, and related products referred to in s. 377.242(1), 740 the applicant must own a valid deed, or other muniment of title, 741 or lease granting the said applicant the privilege to explore 742 for oil, gas, or related mineral products to be extracted only 743 through the well hole on the land or lands included in the 744 application. However, unallocated interests may be unitized 745 according to s. 377.27. 746 Section 14. Subsection (1) of section 377.244, Florida 747 Statutes, is amended to read: 748 377.244 Conditions for granting permits for surface 749 exploratory and extraction operations. - 750 (1) Exploration for and extraction of minerals under and lay 751 viEt -de-et the authority of a grant of oil, gas, or mineral 752 rights, or which, subsequent to such grant, may be int-e pi=e4-e 753 to include the right to explore for and extract minerals which 54 are subject to extraction from the land by means other than Page 26 of 27 CODING: Words are dPacketPage- 457 -'ds underlined are additions. Florida Senate - 2016 10/13/2015 11.C. 23- 0019OB -16 2016318 755 through a well hole, that is by means of surface exploratory and 756 extraction operations such as sifting of the sands, dragline, 757 open pit mining, or other type of surface operation, which would 758 include movement of sands, dirt, rock, or minerals, shall be 759 exercised only pursuant to a permit issued by the Division of 760 Water Resource Management upon the applicant's compliance 761 applleart _ ffi ly4rng with the following conditions: 762 (a) The applicant must own a valid deed, or other muniment 763 of title, or lease granting the applicant the right to explore 764 for and extract oil, gas, and other minerals from the naj: 765 lands. 766 (b) The applicant shall post a good and sufficient surety 767 bond with the division in such amount as the division determines 768 __ y Eiet..rm_r., is adequate to afford full and complete protection 769 for the owner of the surface rights of the lands described in 770 the application, conditioned upon the full and complete 771 restoration, by the applicant, of the area over which the 772 exploratory and extraction operations are conducted to the same 773 condition and contour in existence before pi=d:er —t-e such 774 operations. 775 Section 15. For the 2016 -2017 fiscal year, the sum of $1 776 million in nonrecurring funds is appropriated from the General 777 Revenue Fund to the Department of Environmental Protection to 778 conduct a high - pressure well stimulation study pursuant to s. 779 377.2436, Florida Statutes. 780 Section 16. This act shall take effect July 1, 2016. Page 27 of 27 CODING: Wordsst-L=dmeken are d Packet Page -458 - ds underlined are additions. 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 10�N HB 191 2016 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 chapter 377, 11 F.S.; 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 prohibiting 20 the division from granting permits to drill gas or oil 21 wells within the limits of a municipality without 22 approval of the governing authority of the 23 municipality; prohibiting the department from 24 approving permits for high - pressure well stimulation 25 until certain rules are adopted; amending s. 377.241, 26 F.S.; requiring the Division of Water Resource Page 1 of 30 �. 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F L O R I D A H O U S E O F R E P R E S E N T A T I V E S HB 191 2016 27 Management to give consideration to and be guided by 28 certain additional criteria when issuing permits; 29 amending s. 377.242, F.S.; authorizing the department 30 to issue permits for the performance of a high - 31 pressure well stimulation; revising permit 32 requirements that permitholders agree not to prevent 33 division inspections; amending s. 377.2425, F.S.; 34 requiring an applicant or operator to provide surety 35 that performance of a high - pressure well stimulation 36 will be conducted in a safe and environmentally 37 compatible manner; creating s. 377.2436, F.S.; 38 directing the department to conduct a study on high - 39 pressure well stimulation; providing study criteria; 40 requiring the study to be submitted to the Governor 41 and Legislature; amending s. 377.37, F.S.; increasing 42 the maximum amount of a civil penalty; creating s. 43 377.45, F.S.; requiring the department to designate 44 the national chemical registry as the state's 45 registry; requiring service providers, vendors, and 46 well owners or operators to report certain information 47 to the department; requiring the department to report 48 certain information to the national chemical fegistry; 49 providing applicability; requiring the department to 50 adopt rules; amending ss. 377.07, 377.10, 377.243, and 51 377.244, F.S.; conforming provisions; providing an 52 appropriation; providing an effective date. Page 2 of 30 CODING: Words stFiGken are deletions; words underlined are additions. hb0191 -00 Packet Page -460- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S • 2016 53 54 Be It Enacted by the Legislature of the State of Florida: 55 56 Section 1. Section 377.06, Florida Statutes, is amended to 57 read: 58 377.06 Public policy of state concerning natural resources 59 of oil and gas; preemption. - 60 (1) It is rrelay e'__'_a__d the public policy of this state 61 to conserve and control the natural resources of oil and gas in 62 this state, and the products made from oil and gas in this 63 state,; - -te prevent waste of natural resources; to provide for 64 the protection and adjustment of the correlative rights of the 65 owners of the land in which the natural resources lie, e-€ the 66 owners and producers of oil and gas resources and the products 67 made from oil and gas, and e-f- others interested in these 68 resources and products; and to safeguard the health, property, 69 and public welfare of the residents of this state and other 70 interested persons end feia all pi v~ _ __ indi _at-e ley the 71 pr- avieiens- in-4�hi et-; . 72 (2) F�-rE:�her-r It is the public policy of this state 73 ,;�eei that underground storage of natural gas is in the 74 public interest because underground storage promotes 75 conservation of natural gas,;- makes gas more readily available 76 to the domestic, commercial, and industrial consumers of this 77 state,;- and allows the accumulation of large quantities of gas 78 in reserve for orderly withdrawal during emergencies or periods Page 3 of 30 ,"- CODING: Words skeR are deletions; words underlined are additions. hb0191 -00 Packet Page -461- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S HB 191 2016 79 of peak demand. It is not the intention of this section to 80 limit, restrict, or modify in any way the provisions of this 81 law. 82 (3) The Legislature declares that all matters relating to 83 the regulation of the exploration, development, production, 84 processing, storage, and transportation of oil and gas are 85 preempted to the state, to the exclusion of all existing and 86 future ordinances or regulations relating thereto adopted by any 87 county, municipality, or other political subdivision of the 88 state. Any such existing ordinance or regulation is void. A 89 county or municipality may, however, enforce an existing zoning 90 ordinance adopted before January 1, 2015, if the ordinance is 91 otherwise valid. 92 Section 2. Section 377.19, Florida Statutes, is amended to 93 read: 94 377.19 Definitions. —As used in ss. 377.06, 377.07, and 95 377.10- 377.45 the term: 96 (1) "Completion date" means the day, month, and year that 97 a new productive well, a previously shut -in well, or a 98 temporarily abandoned well is completed, repaired, or 99 recompleted and the operator begins producing oil or gas in 100 commercial quantities. 101 (2) "Department" means the Department of Environmental 102 Protection. 103 (3) "Division" means the Division of Water Resource 104 Management of the Department of Environmental Protection. Page 4 of 30 CODING: Words see are deletions; words underlined are additions. hb0191 -00 Packet Page -462- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 110\ HB 191 2016 105 (4) "Field" means the general area that is underlaid, or 106 appears to be underlaid, by at least one pool. The term includes 107 the underground reservoir, or reservoirs, containing oil or gas, 108 or both. The terms "field" and "pool" mean the same thing if 109 only one underground reservoir is involved; however, the term 110 "field," unlike the term "pool," may relate to two or more 111 pools. 112 (5) "Gas" means all natural gas, including casinghead gas, 113 and all other hydrocarbons not defined as oil in subsection (16) 114 (15). 115 (6) "High- pressure well stimulation" means all stages of a 116 well intervention performed by injecting fluids into a rock 117 formation at high pressure that exceeds the fracture gradient of 18 the rock formation in order to propagate fractures in such 119 formation to increase production at an oil or gas well by 120 improving the flow of hydrocarbons from the formation into the 121 wellbore. The term does not include well stimulation or 122 conventional workover procedures that may incidentally fracture 123 the formation near the wellbore. 124 (7) -4+ "Horizontal well" means a well completed with the 125 wellbore in a horizontal or nearly horizontal orientation within 126 10 degrees of horizontal within the producing formation. 127 (8)-( --7+ "Illegal gas" means gas that has been produced 128 within the state from any well or wells in excess of the amount 129 allowed by any rule, regulation, or order of the division, as 130 distinguished from gas produced within the State of Florida from Page 5 of 30 CODING: Words GtFiGkeR are deletions; words underlined are additions. hb0191 -00 Packet Page -463- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 131 a well not producing in excess of the amount so allowed, which 132 is "legal gas." 133 (9)4-8+ "Illegal oil" means oil that has been produced 134 within the state from any well or wells in excess of the amount 135 allowed by rule, regulation, or order of the division, as 136 distinguished from oil produced within the state from a well not 137 producing in excess of the amount so allowed, which is "legal 138 oil." 139 (10)-E- "Illegal product" means a product of oil or gas, 140 any part of which was processed or derived, in whole or in part, 141 from illegal gas or illegal oil or from any product thereof, as 142 distinguished from "legal product," which is a product processed 143 or derived to no extent from illegal oil or illegal gas. 144 (11)(19) "Lateral storage reservoir boundary" means the 145 projection up to the land surface of the maximum horizontal 146 extent of the gas volume contained in a natural gas storage 147 reservoir. 148 (12) -(11) "Native gas" means gas that occurs naturally 149 within this state and does not include gas produced outside the 150 state, transported to this state, and injected into a permitted 151 natural gas storage facility. 152 (13) (12) "Natural gas storage facility" means an 153 underground reservoir from which oil or gas has previously been 154 produced and which is used or to be used for the underground 155 storage of natural gas, and any surface or subsurface structure, 156 or infrastructure, except wells. The term also includes a right Page 6 of 30 CODING: Words StFiGkeR are deletions; words underlined are additions. I e GLeiiQi111 Packet Page -464- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S FIB 191 2016 157 or appurtenance necessary or useful in the operation of the 158 facility for the underground storage of natural gas, including 159 any necessary or reasonable reservoir protective area as 160 designated for the purpose of ensuring the safe operation of the 161 storage of natural gas or protecting the natural gas storage 162 facility from pollution, invasion, escape, or migration of gas, 163 or any subsequent extension thereof. The term does not mean a 164 transmission, distribution, or gathering pipeline or system that 165 is not used primarily as integral piping for a natural gas 166 storage facility. 167 (14) -( 3) "Natural gas storage reservoir" means a pool or 168 field from which gas or oil has previously been produced and 169 which is suitable for or capable of being made suitable for the 70 injection, storage, and recovery of gas, as identified in a 171 permit application submitted to the department under s. 172 377.2407. 173 (15)) "New field well" means an oil or gas well 174 completed after July 1, 1997, in a new field as designated by 175 the Department of Environmental Protection. 176 (16)(15) "Oil" means crude petroleum oil and other 177 hydrocarbons, regardless of gravity, which are produced at the 178 well in liquid form by ordinary production methods, and which 179 are not the result of condensation of gas after it leaves the 180 reservoir. 181 (17)( 6-) "Oil and gas" has the same meaning as the term 182 "oil or gas." Page 7 of 30 i—. CODING: Words stricken are deletions; words underlined are additions. hb0191 -00 Packet Page -465- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S HB 191 2016 183 (18)(!:7)- "Oil and gas administrator" means the State 184 Geologist. 185 (19) -( 8) "Operator" means the entity who: 186 (a) Has the right to drill and to produce a well; or 187 (b) As part of a natural gas storage facility, injects, or 188 is engaged in the work of preparing to inject, gas into a 189 natural gas storage reservoir; or stores gas in, or removes gas 190 from, a natural gas storage reservoir. 191 (20) (19) "Owner" means the person who has the right to 192 drill into and to produce from any pool and to appropriate the 193 production for the person or for the person and another, or 194 others. 195 (21)( 9-) "Person" means a natural person, corporation, 196 association, partnership, receiver, trustee, guardian, executor, 197 administrator, fiduciary, or representative of any kind. 198 (22)(21) "Pool" means an underground reservoir containing 199 or appearing to contain a common accumulation of oil or gas or 200 both. Each zone of a general structure which is completely 201 separated from any other zone on the structure is considered a 202 separate pool as used herein. 203 (23) -(22) "Producer" means the owner or operator of a well 204 or wells capable of producing oil or gas, or both. 205 (24) -(2-) "Product" means a commodity made from oil or gas 206 and includes refined crude oil, crude tops, topped crude, 207 processed crude petroleum, residue from crude petroleum, 208 cracking stock, uncracked fuel oil, fuel oil, treated crude oil, Page 8 of 30 CODING: Words StFiGkGR are deletions; words underlined are additions. hb0191 -00 Packet Page -466- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S HB 191 2016 209 residuum, gas oil, casinghead gasoline, natural gas gasoline, 210 naphtha, distillate, condensate, gasoline, waste oil, kerosene, 211 benzine, wash oil, blended gasoline, lubricating oil, blends or 212 mixtures of oil with one or more liquid products or byproducts 213 derived from oil or gas, and blends or mixtures of two or more 214 liquid products or byproducts derived from oil or gas, whether 215 hereinabove enumerated or not. 216 (25)- (-2-4) "Reasonable market demand" means the amount of 217 oil reasonably needed for current consumption, together with a 218 reasonable amount of oil for storage and working stocks. 219 (26) -(2S) "Reservoir protective area" means the area 220 extending up to and including 2,000 feet surrounding a natural 221 gas storage reservoir. 22 (27)(26) "Shut -in bottom hole pressure" means the pressure 223 at the bottom of a well when all valves are closed and no oil or 224 gas has been allowed to escape for at least 24 hours. 225 (28) (2:7) "Shut -in well" means an oil or gas well that has 226 been taken out of service for economic reasons or mechanical 227 repairs. 228 (29) -( 8) - "State" means the State of Florida. 229 (30)(29 -)- "Temporarily abandoned well" means a permitted 230 well or wellbore that has been abandoned by plugging in a manner 231 that allows reentry and redevelopment in accordance with oil or 232 gas rules of the Department of Environmental Protection. 233 (31) -(39) "Tender" means a permit or certificate of 234 clearance for the transportation or the delivery of oil, gas, or Page 9 of 30 CODING: Words StPiGWR are deletions; words underlined are additions. hb0191 -00 Packet Page -467- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 235 products, approved and issued or registered under the authority 236 of the division. 237 (32)(31)- "Waste," in addition to its ordinary meaning, 238 means "physical waste" as that term is generally understood in 239 the oil and gas industry. The term "waste" includes: 240 (a) The inefficient, excessive, or improper use or 241 dissipation of reservoir energy; and the locating, spacing, 242 drilling, equipping, operating, or producing of any oil or gas 243 well or wells in a manner that results, or tends to result, in 244 reducing the quantity of oil or gas ultimately to be stored or 245 recovered from any pool in this state. 246 (b) The inefficient storing of oil; and the locating, 247 spacing, drilling, equipping, operating, or producing of any oil 248 or gas well or wells in a manner that causes, or tends to cause, 249 unnecessary or excessive surface loss or destruction of oil or 250 gas. 251 (c) The producing of oil or gas in a manner that causes 252 unnecessary water channeling or coning. 253 (d) The operation of any oil well or wells with an 254 inefficient gas -oil ratio. 255 (e) The drowning with water of any stratum or part thereof 256 capable of producing oil or gas. 257 (f) The underground waste, however caused and whether or 258 not defined. 259 (g) The creation of unnecessary fire hazards. 260 (h) The escape into the open air, from a well producing Page 10 of 30 CODING: Words stFieken are deletions; words underlined are additions. hb0191 -00 Packet Page -468- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S n HB 191 2016 261 both oil and gas, of gas in excess of the amount that is 262 necessary in the efficient drilling or operation of the well. 263 (i) The use of gas for the manufacture of carbon black. 264 (j) Permitting gas produced from a gas well to escape into 265 the air. 266 (k) The abuse of the correlative rights and opportunities 267 of each owner of oil and gas in a common reservoir due to 268 nonuniform, disproportionate, and unratable withdrawals, causing 269 undue drainage between tracts of land. 270 (33) -(32) "Well site" means the general area around a well, 271 which area has been disturbed from its natural or existing 272 condition, as well as the drilling or production pad, mud and 273 water circulation pits, and other operation areas necessary to 74 drill for or produce oil or gas, or to inject gas into and 275 recover gas from a natural gas storage facility. 276 Section 3. Subsection (2) of section 377.22, Florida 277 Statutes, is amended to read: 278 377.22 Rules and orders. - 279 (2) The department shall issue orders and adopt rules 280 pursuant to ss. 120.536 and 120.54 to implement and enforce --fie 281 pL=ev -s =e-rs of this chapter. Such rules and orders shall ensure 282 that all precautions are taken to prevent the spillage of oil or 283 any other pollutant in all phases of the drilling for, and 284 extracting of, oil, gas, or other petroleum products, including 285 high - pressure well stimulations, or during the injection of gas 286 into and recovery of gas from a natural gas storage reservoir. Page 11 of 30 CODING: Words str-iGWR are deletions; words underlined are additions. hb0191 -00 Packet Page -469- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 287 The department shall revise such rules from time to time as 288 necessary for the proper administration and enforcement of this 289 chapter. Rules adopted and orders issued in accordance with this 290 section are for, but not limited to, the following purposes: 291 (a) To require the drilling, casing, and plugging of wells 292 to be done in such a manner as to prevent the pollution of the 293 fresh, salt, or brackish waters or the lands of the state and to 294 protect the integrity of natural gas storage reservoirs. 295 (b) To prevent the alteration of the sheet flow of water 296 in any area. 297 (c) To require that appropriate safety equipment be 298 installed to minimize the possibility of an escape of oil or 299 other petroleum products in the event of accident, human error, 300 or a natural disaster during drilling, casing, or plugging of 301 any well and during extraction operations. 302 (d) To require the drilling, casing, and plugging of wells 303 to be done in such a manner as to prevent the escape of oil or 304 other petroleum products from one stratum to another. 305 (e) To prevent the intrusion of water into an oil or gas 306 stratum from a separate stratum, except as provided by rules of 307 the division relating to the injection of water for proper 308 reservoir conservation and brine disposal. 309 (f) To require a reasonable bond, or other form of 310 security acceptable to the department, conditioned upon properly 311 drilling, casing, producing, and operating each well, and 312 properly plugging the -p i4eEfftanee— of —the di t- }e 1 - _p -_r, -y l' - 1 Page 12 of 30 CODING: Words 6 FiGkeR are deletions; words underlined are additions. hb0191 -00 Packet Page -470- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S HB 191 2016 313 each dry and abandoned well and the full and complete 314 restoration by the applicant of the area over which geophysical 315 exploration, drilling, or production is conducted to the similar 316 contour and general condition in existence before -e such 317 operation. 318 (g) To require and carry out a reasonable program of 319 monitoring and inspecting er - nc1__ }__„ of all drilling 320 operations, high - pressure well stimulations, producing wells, e-r- 321 injecting wells, and well sites, including regular inspections 322 by division personnel. Inspections will be required during the 323 testing of blowout preventers, during the pressure testing of 324 the casing and casing shoe, and during the integrity testing of 325 the cement plugs in plugging and abandonment operations. 26 (h) To require the making of reports showing the location 327 of all oil and gas wells; the making and filing of logs; the 328 taking and filing of directional surveys; the filing of 329 electrical, sonic, radioactive, and mechanical logs of oil and 330 gas wells; if taken, the saving of cutting and cores, the cuts 331 of which shall be given to the Bureau of Geology; and the making 332 of reports with respect to drilling and production records. 333 However, such information, or any part thereof, at the request 334 of the operator, shall be exempt from the pVe ; sites of s. 335 119.07(1) and held confidential by the division for 336 1 year after the completion of a well. 337 (i) To prevent wells from being drilled, operated, or 338 produced in such a manner as to cause injury to neighboring Page 13 of 30 ,"'� CODING: Words stfiskGR are deletions; words underlined are additions. hb0191 -00 Packet Page -471- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 339 leases, property, or natural gas storage reservoirs. 340 (j) To prevent the drowning by water of any stratum, or 341 part thereof, capable of producing oil or gas in paying 342 quantities and to prevent the premature and irregular 343 encroachment of water which reduces, or tends to reduce, the 344 total ultimate recovery of oil or gas from any pool. 345 (k) To require the operation of wells with efficient gas - 346 oil ratio, and to fix such ratios. 347 (1) To prevent "blowouts," "caving," and "seepage," in the 348 sense that conditions indicated by such terms are generally 349 understood in the oil and gas business. 350 (m) To prevent fires. 351 (n) To identify the ownership of all oil or gas wells, 352 producing leases, refineries, tanks, plants, structures, and 353 storage and transportation equipment and facilities. 354 (o) To regulate the "shooting," perforating, chemical 355 treatment, and high - pressure stimulations of wells. 356 (p) To regulate secondary recovery methods, including the 357 introduction of gas, air, water, or other substance into 358 producing formations. 359 (q) To regulate gas cycling operations. 360 (r) To regulate the storage and recovery of gas injected 361 into natural gas storage facilities. 362 (s) If necessary for the prevention of waste, as herein 363 defined, to determine, limit, and prorate the production of oil 364 or gas, or both, from any pool or field in the state. Page 14 of 30 CODING: Words StFiGk8n are deletions; words underlined are additions. hb0191 -00 Packet Page -472- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S HB 191 2016 365 (t) To require, either generally or in or from particular 366 areas, certificates of clearance or tenders in connection with 367 the transportation or delivery of oil or gas, or any product. 368 (u) To regulate the spacing of wells and to establish 369 drilling units. 370 (v) To prevent, so far as is practicable, reasonably 371 avoidable drainage from each developed unit which is not 372 equalized by counterdrainage. 373 (w) To require that geophysical operations requiring a 374 permit be conducted in a manner which will minimize the impact 375 on hydrology and biota of the area, especially environmentally 376 sensitive lands and coastal areas. 377 (x) To regulate aboveground crude oil storage tanks in a n. 78 manner which will protect the water resources of the state. 379 (y) To act in a receivership capacity for fractional 380 mineral interests for which the owners are unknown or unlocated 381 and to administratively designate the operator as the lessee. 382 (z) To evaluate the history of past adjudicated violations 383 committed by permit applicants or the applicants' affiliated 384 entities of any substantive and material rule or law pertaining 385 to the regulation of oil or gas. 386 Section 4. Subsections (6) through (9) of section 377.24, 387 Florida Statutes, are renumbered as subsections (5) through (8), 388 respectively, present subsections (1), (2), (4), and (5) are 389 amended, and a new subsection (9) is added to that section, to 390 read: Page 15 of 30 1--l", CODING: Words stFiGkee are deletions; words underlined are additions. hb0191 -00 Packet Page -473- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 391 377.24 Notice of intention to drill well; permits; 392 abandoned wells and dry holes. - 393 (1) Before drilling a well in search of oil or gas, before 394 performing a high - pressure well stimulation, or before storing 395 gas in or recovering gas from a natural gas storage reservoir, 396 the person who desires to drill for, store, or recover gas, e-r- 397 drill for oil or gas, or perform a high - pressure well 398 stimulation shall notify the division upon such form as it may 399 prescribe and shall pay a reasonable fee set by rule of the 400 department not to exceed the actual cost of processing and 401 inspecting for each well or reservoir. The drilling of any well, 402 the performance of any high- pressure well stimulation, and the 403 storing and recovering of gas are prohibited until such notice 404 is given, the fee is paid, and a ire permit is granted. A permit 405 may authorize a single activity or multiple activities. 406 (2) An application for the drilling of a well in search of 407 oil or gas, for the performance of a high - pressure well 408 stimulation, or for the storing of gas in and recovering of gas 409 from a natural gas storage reservoir,— in this state must include 410 the address of the residence of the applicant,— or applicants, 411 which must be the address of each person involved in accordance 412 with the records of the Division of Water Resource Management 413 until such address is changed on the records of the division 414 after written request. 415 (4) Application for permission to drill or abandon any 416 well or perform a high - pressure well stimulation may be denied Page 16 of 30 CODING: Words etfiskee are deletions; words underlined are additions. 110� hb0191 -00 Packet Page -474- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 417 by the division for only just and lawful cause. 418 ( 5) N e p errffti t t- e elL=4:11 a Ej a s ere —w e l l , , �� � la e n ,, :�=ed 419 w i�a- n— lie o�er-aze -1 ei any i 420 421 422 (9) The department may not approve a permit to authorize a 423 high - pressure well stimulation until rules for high - pressure 424 well stimulation are adopted. 425 Section 5. Subsections (5) and (6) are added to section 426 377.241, Florida Statutes, to read: 427 377.241 Criteria for issuance of permits. —The division, in 428 the exercise of its authority to issue permits as hereinafter 429 provided, shall give consideration to and be guided by the 30 following criteria: 431 (5) For high - pressure well stimulations, whether the high - 432 pressure well stimulation as proposed is designed to ensure 433 that: 434 (a) The groundwater through which the well will be or has 435 been drilled is not contaminated by the high - pressure well 436 stimulation; and 437 (b) The high - pressure well stimulation is consistent with 438 the public policy of this state as specified in s. 377.06. 439 (6) As a basis for permit denial or imposition of specific 440 permit conditions, including increased bonding up to five times 441 the applicable limits and increased monitoring, the history of 442 past adjudicated violations committed by the applicant or an Page 17 of 30 ,O'N CODING: Words stFiskee are deletions; words underlined are additions. M0191 -00 Packet Page -475- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S HB 191 2016 443 affiliated entity of the applicant of any substantive and 444 material rule or law pertaining to the regulation of oil or gas, 445 including violations that occurred outside the state. 446 Section 6. Section 377.242, Florida Statutes, is amended 447 to read: 448 377.242 Permits for drilling or exploring and extracting 449 through well holes or by other means. -The department is vested 450 with the power and authority: 451 (1)(a) To issue permits for the performance of a high - 452 pressure well stimulation or the drilling for, exploring for, or 453 production of oil, gas, or other petroleum products that 454 are to be extracted from below the surface of the land, 455 including submerged land, only through the well hole drilled for 456 oil, gas, and other petroleum products. 457 1. A �;e structure intended for the drilling for, or 458 production of, oil, gas, or other petroleum products may not be 459 permitted or constructed on any submerged land within any bay or 460 estuary. 461 2. A N-e structure intended for the drilling for, or 462 production of, oil, gas, or other petroleum products may not be 463 permitted or constructed within 1 mile seaward of the coastline 464 of the state. 465 3. A Ne structure intended for the drilling for, or 466 production of, oil, gas, or other petroleum products may not be 467 permitted or constructed within 1 mile of the seaward boundary 468 of any state, local, or federal park or aquatic or wildlife Page 18 of 30 CODING: Words stFiokeR are deletions; words underlined are additions. Packet Page -476- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S /'\ HB 191 2016 469 preserve or on the surface of a freshwater lake, river, or 470 stream. 471 4. A Ne structure intended for the drilling for, or 472 production of, oil, gas, or other petroleum products may not be 473 permitted or constructed within 1 mile inland from the shoreline 474 of the Gulf of Mexico, the Atlantic Ocean, or any bay or estuary 475 or within 1 mile of any freshwater lake, river, or stream unless 476 the department is satisfied that the natural resources of such 477 bodies of water and shore areas of the state will be adequately 478 protected in the event of accident or blowout. 479 S. Without exception, after July 1, 1989, a i-re structure 480 intended for the drilling for, or production of, oil, gas, or 481 other petroleum products may not be permitted or constructed 82 south of 26 000100" north latitude off Florida's west coast and 483 south of 27 °00'00" north latitude off Florida's east coast, 484 within the boundaries of Florida's territorial seas as defined 485 in 43 U.S.C. s. 1301. After July 31, 1990, a i'�e structure 486 intended for the drilling for, or production of, oil, gas, or 487 other petroleum products may not be permitted or constructed 488 north of 26 000100" north latitude off Florida's west coast to 489 the western boundary of the state bordering Alabama as set forth 490 in s. 1, Art. II of the State Constitution, or located north of 491 27 000'00" north latitude off Florida's east coast to the 492 northern boundary of the state bordering Georgia as set forth in 493 s. 1, Art. II of the State Constitution, within the boundaries 494 of Florida's territorial seas as defined in 43 U.S.C. s. 1301. Page 19 of 30 CODING: Words stFiGiee are deletions; words underlined are additions. hb0191 -00 Packet Page -477- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 495 (b) Subparagraphs (a)l. and 4. do not apply to permitting 496 or construction of structures intended for the drilling for, or 497 production of, oil, gas, or other petroleum products pursuant to 498 an oil, gas, or mineral lease of such lands by the state under 499 which lease any valid drilling permits are in effect on the 500 effective date of this act. In the event that such permits 501 contain conditions or stipulations, such conditions and 502 stipulations shall govern and supersede subparagraphs (a)1. and 503 4. 504 (c) The prohibitions of subparagraphs (a)1. -4. in cnis 505 s•,ti....ee ; do not include "infield gathering lines," provided no 506 other placement is reasonably available and all other required 507 permits have been obtained. 508 (2) To issue permits to explore for and extract minerals 509 which are subject to extraction from the land by means other 510 than through a well hole. 511 (3) To issue permits to establish natural gas storage 512 facilities or construct wells for the injection and recovery of 513 any natural gas for storage in natural gas storage reservoirs. 514 515 Each permit shall contain an agreement by the permitholder that 516 the permitholder will not prevent inspection by division 517 personnel at any time, including during installation and 518 cementing of casing, testing of blowout preventers, pressure 519 testing of the casing and casing shoe, and integrity testing of 520 the cement plugs in plugging and abandonment operations. The Page 20 of 30 CODING: Words stF;GkGR are deletions; words underlined are additions. hb0191 -00 Packet Page -478- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S HB 191 2016 521 provisions of this section prohibiting permits for drilling or 522 exploring for oil in coastal waters do not apply to any leases 523 entered into before June 7, 1991. 524 Section 7. Subsection (1) of section 377.2425, Florida 525 Statutes, is amended to read: 526 377.2425 Manner of providing security for geophysical 527 exploration, drilling, and production. - 528 (1) Before Prier to granting a permit for conducting -t-& 529 eendidet geophysical operations; drilling of exploratory, 530 injection, or production wells; producing oil and gas from a 531 wellhead; performing a high - pressure well stimulation; or 532 transporting oil and gas through a field - gathering system, the 533 department shall require the applicant or operator to provide 34 surety that these operations will be conducted in a safe and 535 environmentally compatible manner. 536 (a) The applicant for a drilling, production, high - 537 pressure well stimulation, or injection well permit or a 538 geophysical permit may provide the following types of surety to 539 the department for this purpose: 540 1. A deposit of cash or other securities made payable to 541 the Minerals Trust Fund. Such cash or securities so deposited 542 shall be held at interest by the Chief Financial Officer to 543 satisfy safety and environmental performance provisions of this 544 chapter. The interest shall be credited to the Minerals Trust 545 Fund. Such cash or other securities shall be released by the 546 Chief Financial Officer upon request of the applicant and Page 21 of 30 CODING: Words StFiGkeR are deletions; words underlined are additions. hb0191 -00 Packet Page -479- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 547 certification by the department that all safety and 548 environmental performance provisions established by the 549 department for permitted activities have been fulfilled. 550 2. A bond of a surety company authorized to do business in 551 the state in an amount as provided by rule. 552 3. A surety in the form of an irrevocable letter of credit 553 in an amount as provided by rule guaranteed by an acceptable 554 financial institution. 555 (b) An applicant for a drilling, production, high - pressure 556 well stimulation, or injection well permit, or a permittee who 557 intends to continue participating in long -term production 558 activities of such wells, has the option to provide surety to 559 the department by paying an annual fee to the Minerals Trust 560 Fund. For an applicant or permittee choosing this option the 561 following shall apply: 562 1. For the first year, or part of a year, of a drilling, 563 production, or injection well permit, or change of operator, the 564 fee is $4,000 per permitted well. 565 2. For each subsequent year, or part of a year, the fee is 566 $1,500 per permitted well. 567 3. The maximum fee that an applicant or permittee may be 568 required to pay into the trust fund is $30,000 per calendar 569 year, regardless of the number of permits applied for or in 570 effect. 571 4. The fees set forth in subparagraphs 1., 2., and 3. 572 shall be reviewed by the department on a biennial basis and Page 22 of 30 CODING: Words stP+skE?R are deletions; words underlined are additions. hb0191 -00 Packet Page -480- n 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S 14�1 HB 191 2016 573 adjusted for the cost of inflation. The department shall 574 establish by rule a suitable index for implementing such fee 575 revisions. 576 (c) An applicant for a drilling or operating permit for 577 operations planned in coastal waters that by their nature 578 warrant greater surety shall provide surety only in accordance 579 with paragraph (a), or similar proof of financial responsibility 580 other than as provided in paragraph (b). For all such 581 applications, including applications pending at the effective 582 date of this act and notwithstanding }he previsd:e s of. paragraph 583 (b), the Governor and Cabinet in their capacity as the 584 Administration Commission, at the recommendation of the 585 department ef Sn-,4Eenfftental Pieteeti-e r, shall set a reasonable 86 amount of surety required under this subsection. The surety 587 amount shall be based on the projected cleanup costs and natural 588 resources damages resulting from a maximum oil spill and adverse 589 hydrographic and atmospheric conditions that would tend to 590 transport the oil into environmentally sensitive areas, as 591 determined by the department of -nv-:e nt-a "rreteet; _• 592 Section 8. Section 377.2436, Florida Statutes, is created 593 to read: 594 377.2436 Study on high - pressure well stimulation. - 595 (1) The department shall conduct a study on high - pressure 596 well stimulation. The study shall: 597 (a) Evaluate the underlying geologic features present in 598 the counties where oil wells have been permitted and analyze the Page 23 of 30 CODING: Words FtFiGkeR are deletions; words underlined are additions. hb0191 -00 Packet Page -481- 10/13/2015 11.C. F L O R I D A H O U •S E O F R E P R E S E N T A T I V E S HB 191 1 599 potential impact that high - pressure well stimulation and 600 wellbore construction may have on the underlying geologic 601 features. 602 (b) Evaluate the potential hazards and risks that high - 603 pressure well stimulation poses to surface water or groundwater 604 resources. The study shall assess the potential impacts of high - 605 pressure well stimulation on drinking water resources and 606 identify the main factors affecting the severity and frequency 607 of impacts and shall analyze the potential for the use or reuse 608 of recycled water in well stimulation fluids while meeting 609 appropriate water quality standards. 610 (c) Review and evaluate the potential for groundwater 611 contamination from conducting high - pressure well stimulation 612 under wells that have been previously abandoned and plugged and 613 identify a setback radius from previously plugged and abandoned 614 wells that could be impacted by high - pressure well stimulation. 615 (d) Review and evaluate the ultimate disposition of well 616 stimulation fluids after use in well stimulation processes. 617 (2) The department shall continue conventional oil and gas 618 business operations during the performance of the study. There 619 shall not be a moratorium on the evaluation and issuance of 620 permits for conventional drilling, exploration, conventional 621 completions, or conventional workovers during the performance of 622 the study. 623 (3) The study is subject to independent scientific peer 624 review. Page 24 of 30 CODING: Words s-tr-iGWR are deletions; words underlined are additions. hb0191 -00 Packet Page -482- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S HB 191 2016 625 (4) The findings of the study shall be submitted to the 626 Governor, the President of the Senate, and the Speaker of the 627 House of Representatives by June 30, 2017, and shall be 628 prominently posted on the department website. 629 Section 9. Paragraph (a) of subsection (1) of section 630 377.37, Florida Statutes, is amended to read: 631 377.37 Penalties. - 632 (1)(a) A person who violates any provision of this 633 chapter -1 t or any rule, regulation, or order of the division 634 made under this chapter or who violates the terms of any permit 635 to drill for or produce oil, gas, or other petroleum products 636 referred to in s. 377.242(1) or to store gas in a natural gas 637 storage facility, or any lessee, permitholder, or operator of 38 equipment or facilities used in the exploration for, drilling 639 for, or production of oil, gas, or other petroleum products, or 640 storage of gas in a natural gas storage facility, who refuses 641 inspection by the division as provided in this chapter, is 642 liable to the state for any damage caused to the air, waters, or 643 property, including animal, plant, or aquatic life, of the state 644 and for reasonable costs and expenses of the state in tracing 645 the source of the discharge, in controlling and abating the 646 source and the pollutants, and in restoring the air, waters, and 647 property, including animal, plant, and aquatic life, of the 648 state. Furthermore, such person, lessee, permitholder, or 649 operator is subject to the judicial imposition of a civil 650 penalty „} of not more than $25,000 8 for each Page 25 of 30 CODING: Words skeR are deletions; words underlined are additions. hb0191 -00 Packet Page -483- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 651 offense. However, the court may receive evidence in mitigation. 652 Each day during any portion of which such violation occurs 653 constitutes a separate offense. This paragraph does not *?=Ej 654 heEed:n shall give the department the right to bring an action on 655 behalf of a emry private person. 656 Section 10. Section 377.45, Florida Statutes, is created 657 to read: 658 377.45 High - pressure well stimulation chemical disclosure 659 registry. - 660 (1)(a) The department shall designate the national 661 chemical disclosure registry, known as FracFocus, developed by 662 the Ground Water Protection Council and the Interstate Oil and 663 Gas Compact Commission, as the state's registry for chemical 664 disclosure for all wells on which high - pressure well 665 stimulations are performed. The department shall provide a link 666 to FracFocus through the department's website. 667 (b) In addition to providing such information to the 668 department as part of the permitting process, a service 669 provider, vendor, or well owner or operator shall report, by 670 department rule, to the department, at a minimum, the following 671 information: 672 1. The name of the service provider, vendor, or owner or 673 operator. 674 2. The date of completion of the high - pressure well 675 stimulation. 676 3. The county in which the well is located. Page 26 of 30 CODING: Words ski are deletions; words underlined are additions. 51171104TEI Packet Page -484- 10/13/2015 11.C. F L O R I D A H O U S E O F R E P R E S E N T A T I V E S HB 191 2016 677 4. The API number for the well. 678 5. The well name and number. 679 6. The longitude and latitude of the wellhead. 680 7. The total vertical depth of the well. 681 8. The total volume of water used in the high - pressure 682 well stimulation. 683 9. Each chemical ingredient that is subject to 29 C.F.R. 684 s. 1910.1200(g)(2) and the ingredient concentration in the high - 685 pressure well stimulation fluid by mass for each well on which a 686 high - pressure well stimulation is performed. 687 10. The trade or common name and the CAS registry number 688 for each chemical ingredient. 689 (c) The department shall report to FracFocus all 90 information received pursuant to paragraph (b), excluding any 691 information subject to chapter 688. 692 (d) If the chemical disclosure registry cannot accept and 693 make publicly available any information specified in this 694 section, the department shall post the information on the 695 department's website, excluding any information subject to 696 chapter 688. 697 (2) A service provider, vendor, or well owner or operator 698 shall: 699 (a) Report the information required under subsection (1) 700 to the department within 60 days after the initiation of the 701 high - pressure well stimulation for each well on which such high - 702 pressure well stimulation is performed. Page 27 of 30 CODING: Words sly are deletions; words underlined are additions. hb0191 -00 Packet Page -485- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 703 (b) Notify the department if any chemical ingredient not 704 previously reported is intentionally included and used for the 705 purpose of performing a high - pressure well stimulation. 706 (3) This section does not apply to an ingredient that: 707 (a) Is not intentionally added to the high - pressure well 708 stimulation; or 709 (b) Occurs incidentally or is otherwise unintentionally 710 present in a high - pressure well stimulation. 711 (4) The department shall adopt rules to administer this 712 section. 713 Section 11. Section 377.07, Florida Statutes, is amended 714 to read: 715 377.07 Division of Water Resource Management; powers, 716 duties, and authority. —The Division of Water Resource Management 717 of the Department of Environmental Protection is y vested 718 with power, authority, and duty to administer, carry out, and 719 enforce tie jaL=evisiefis of this part law as d Leet -e E' � s. 720 3:79.n2i3 . 721 Section 12. Section 377.10, Florida Statutes, is amended 722 to read: 723 377.10 Certain persons not to be employed by division. —A 724 4e person in the employ of, or holding any official connection 725 or position with any person, firm, partnership, corporation, or 726 association of any kind, engaged in the business of buying or 727 selling mineral leases, drilling wells in the search of oil or 728 gas, producing, transporting, refining, or distributing oil or Page 28 of 30 CODING: Words stFiskee are deletions; words underlined are additions. hb0191 -00 Packet Page -486- F L O R I D A H 0 U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 729 gas may not ell hold any position under, or be employed by, 730 the Division of Water Resource Management in the prosecution of 731 its duties under this part -1- t. 732 Section 13. Subsection (1) of section 377.243, Florida 733 Statutes, is amended to read: 734 377.243 Conditions for granting permits for extraction 735 through well holes. - 736 (1) Before pieE t--& the application to the Division of 737 Water Resource Management for the permit to drill for oil, gas, 738 and related products referred to in s. 377.242(1), the applicant 739 must own a valid deed, or other muniment of title, or lease 740 granting the said applicant the privilege to explore for oil, 741 gas, or related mineral products to be extracted only through 42 the well hole on the land or lands included in the application. 743 However, unallocated interests may be unitized according to s. 744 377.27. 745 Section 14. Subsection (1) of section 377.244, Florida 746 Statutes, is amended to read: 747 377.244 Conditions for granting permits for surface 748 exploratory and extraction operations. - 749 (1) Exploration for and extraction of minerals under e-n4 750 lay r. =rt._e of the authority of a grant of oil, gas, or mineral 751 rights, or which, subsequent to such grant, may lee =rteY -et—e 752 -t-e include the right to explore for and extract minerals which 753 are subject to extraction from the land by means other than 754 through a well hole, that is by means of surface exploratory and Page 29 of 30 CODING: Words see are deletions; words underlined are additions. hb0191 -00 Packet Page -487- F L O R I D A H O U S E O F HB 191 10/13/2015 11.C. R E P R E S E N T A T I V E S 2016 755 extraction operations such as sifting of the sands, dragline, 756 open pit mining, or other type of surface operation, which would 757 include movement of sands, dirt, rock, or minerals, shall be 758 exercised only pursuant to a permit issued by the Division of 759 Water Resource Management upon the applicant's compliance 760 _pp '- =__.n} __-~ply4 +i- with the following conditions: 761 (a) The applicant must own a valid deed, or other muniment 762 of title, or lease granting the applicant the right to explore 763 for and extract oil, gas, and other minerals from the said 764 lands. 765 (b) The applicant shall post a good and sufficient surety 766 bond with the division in such amount as the division determines 767 ffiay dt }_ =nc =nc is adequate to afford full and complete protection 768 for the owner of the surface rights of the lands described in 769 the application, conditioned upon the full and complete 770 restoration, by the applicant, of the area over which the 771 exploratory and extraction operations are conducted to the same 772 condition and contour in existence before pEi e such 773 operations. 774 Section 15. For the 2016 -2017 fiscal year, the sum of $1 775 million in nonrecurring funds is appropriated from the General 776 Revenue Fund to the Department of Environmental Protection to 777 perform a high - pressure well stimulation study pursuant to s. 778 377.2436, Florida Statutes. 779 Section 16. This act shall take effect July 1, 2016. Page 30 of 30 CODING: Words sea are deletions; words underlined are additions. 111 fill LeiiReif, Packet Page -488-