Enrolled SB 109: Relating to the regulation and permitting of drilling and other operations by the Alaska Oil and Gas Conservation Commission, to civil penalties assessed by the commission, to reconsideration and appeal of decisions and the allocation of costs in investigations and hearings before the commission, and to information filed with and fees of the commission; and providing for an effective date.
00Enrolled SB 109 01 Relating to the regulation and permitting of drilling and other operations by the Alaska Oil 02 and Gas Conservation Commission, to civil penalties assessed by the commission, to 03 reconsideration and appeal of decisions and the allocation of costs in investigations and 04 hearings before the commission, and to information filed with and fees of the commission; 05 and providing for an effective date. 06 _______________ 07 * Section 1. The uncodified law of the State of Alaska is amended by adding a new section 08 to read: 09 LEGISLATIVE INTENT OF SECS. 10, 14, AND 15 OF THIS ACT. (a) It is the 10 intent of the legislature through secs. 10 and 15 of this Act to confirm by clarification that 11 AS 22.10.020(d), or court rules, have superseded inconsistent provisions of AS 31.05.080(b) 12 as they existed the day before the effective date of this Act. 13 (b) It is the intent of the legislature through the enactment of AS 31.05.150(f) in sec.
01 14 of this Act to confirm by clarification the long-standing interpretation of AS 31.05.150(d), 02 as that section read before the effective date of this Act, by the Alaska Oil and Gas 03 Conservation Commission that civil penalties may be administratively assessed by the 04 commission and if not paid are recoverable by suit in the appropriate superior court as 05 determined by court rules. 06 * Sec. 2. AS 31.05.030(d) is repealed and reenacted to read: 07 (d) The commission may require 08 (1) identification of ownership of wells, producing leases, tanks, 09 plants, and drilling structures; 10 (2) the making and filing of reports, well logs, drilling logs, electric 11 logs, lithologic logs, directional surveys, and all other subsurface information on a 12 well for which a permit to drill has been issued by the commission, subject to the 13 following: 14 (A) the reports required to be filed by the commission under 15 this paragraph shall be filed within 30 days after the completion, abandonment, 16 or suspension of the well; and 17 (B) the well logs, drilling logs, electric logs, lithologic logs, 18 directional surveys, and all other information required to be filed by the 19 commission under this paragraph shall be filed within 90 days after the 20 completion, abandonment, or suspension of the well, unless extended by the 21 commission on request; 22 (3) the drilling, casing, and plugging of wells in a manner that will 23 prevent the escape of oil or gas out of one stratum into another, the intrusion of water 24 into an oil or gas stratum, the pollution of fresh water supplies by oil, gas, or salt 25 water, and prevent blowouts, cavings, seepages, and fires; 26 (4) the furnishing of a reasonable bond with sufficient surety 27 conditions for the performance of the duty to plug each dry or abandoned well or the 28 repair of wells causing waste; 29 (5) the operation of wells with efficient gas-oil and water-oil ratios, 30 and may fix these ratios; 31 (6) the gauging or other measuring of oil and gas to determine the
01 quality and quantity of oil and gas; 02 (7) every person who produces oil or gas in the state to keep and 03 maintain for a period of five years in the state complete and accurate records of the 04 quantities of oil and gas produced, which shall be available for examination by the 05 commission at all reasonable times; 06 (8) the measuring and monitoring of oil and gas pool pressures; 07 (9) the filing and approval of a plan of development and operation for 08 a field or pool to prevent waste, ensure a greater ultimate recovery of oil and gas, and 09 protect the correlative rights of persons owning interests in the tracts of land affected. 10 * Sec. 3. AS 31.05.030(e) is amended to read: 11 (e) The commission may regulate 12 (1) for conservation purposes and, to the extent not in conflict with 13 regulation by the Department of Labor and Workforce Development or the 14 Department of Environmental Conservation, for public health and safety 15 purposes, 16 (A) the drilling, producing, and plugging of wells; 17 (B) the perforating, fracture simulation, [SHOOTING] and 18 chemical treatment of wells; 19 (C) the spacing of wells; 20 (D) the disposal of salt water, nonpotable water, and oil field 21 wastes; 22 (E) the contamination or waste of underground water; 23 (F) the quantity and rate of the production of oil and gas from a 24 well or property; this authority shall also apply to a well or property in a 25 voluntary cooperative or unit plan of development or operation entered into in 26 accordance with AS 38.05.180(p); 27 (G) the underground injection of gas for purposes of 28 storage; 29 (2) the disposal of drilling mud, cuttings, and nonhazardous drilling 30 operation wastes in the annular space of a [AN OIL OR GAS] well for which a 31 permit to drill has been issued by the commission [OR IN THE ANNULAR
01 SPACE OF A WATER WELL ASSOCIATED WITH OIL OR GAS 02 EXPLORATION AND PRODUCTION]; in this paragraph, a "nonhazardous drilling 03 operation waste" means a waste, other than a hazardous waste identified by the 04 Environmental Protection Agency in 40 C.F.R., Part 261, its regulation identifying and 05 listing hazardous wastes, associated with the act of drilling a [AN OIL OR GAS] well 06 for exploratory or production purposes. 07 * Sec. 4. AS 31.05.030(f) is amended to read: 08 (f) The commission may classify a well or a specific portion of a well 09 [WELLS] as an exploratory, development, service, or stratigraphic test well and 10 may classify a development well as an oil or gas well [WELLS] for purposes 11 material to the interpretation or enforcement of this chapter. 12 * Sec. 5. AS 31.05.030(j) is amended to read: 13 (j) For exploration and development operations involving nonconventional 14 gas, the commission 15 (1) may not 16 (A) issue a permit to drill under this chapter if the well would 17 be used to produce gas from an aquifer that serves as a source of water for 18 human consumption or agricultural purposes unless the commission 19 determines that the well will not adversely affect the aquifer as a source of 20 water for human consumption or agricultural purposes; or 21 (B) allow injection of produced water except at depths below 22 known sources of water for human consumption or agricultural purposes; 23 (2) shall 24 (A) regulate hydraulic fracturing in nonconventional gas wells 25 to ensure [ASSURE] protection of drinking water quality; 26 (B) regulate the disposal of wastes produced from the 27 operations unless the disposal is otherwise subject to regulation by the 28 Department of Environmental Conservation or the United States 29 Environmental Protection Agency; 30 (C) [REPEALED 31 (D)] as a condition of approval of a permit to drill a well for
01 regular production [OR PRODUCTION TESTING] of coal bed methane, 02 require the operator to design and implement a water well testing program to 03 provide baseline data on water quality and quantity; the commission shall 04 make the results of the water well testing program available to the public. 05 * Sec. 6. AS 31.05.035(a) is amended to read: 06 (a) For all wells for which a permit to drill has been issued by the commission 07 [SINCE JANUARY 3, 1959], the commission may require [:] 08 (1) the making and filing of reports, well logs, drilling logs, electric 09 logs, lithologic logs, directional surveys, and all other subsurface information on a 10 well for which a permit to drill has been issued by the commission [DRILLED 11 FOR OIL OR GAS, OR FOR THE DISCOVERY OF OIL OR GAS, OR FOR 12 GEOLOGIC INFORMATION]; 13 (2) the filing of flow test information and all logs, except experimental 14 logs and velocity surveys run on a well and not required by (1) of this subsection; and 15 (3) the operator to make available for copying the digitized log 16 information, if it is available, on any log required to be filed under (1) or (2) of this 17 subsection. 18 * Sec. 7. AS 31.05.035(c) is amended to read: 19 (c) The reports and information required in (a) of this section that relate to an 20 exploratory or stratigraphic test well and those portions of an application for a 21 permit to drill an exploratory or stratigraphic test well that the commission 22 determines contain proprietary engineering or geotechnical information shall be 23 kept confidential for 24 months following the 30-day filing period unless the owner of 24 the well gives written permission to release the application and reports and 25 information at an earlier date. If the commissioner of natural resources finds that the 26 required reports and information contain significant information relating to the 27 valuation of unleased land in the same vicinity, the commissioner shall keep the 28 reports and information confidential for a reasonable time after the disposition of all 29 affected unleased land, unless the owner of the well gives written permission to 30 release the reports and information at an earlier date. Well surface and bottom hole 31 locations [LOCATION], well depth, well status, [AND] production data, and
01 production reports required by the commission to be filed subsequent to the 30-day 02 filing period shall be considered public information and may not be classified 03 confidential. Production data, as used in this subsection, means volume, gravity, and 04 gas-oil ratio of all production of oil or gas after the well begins regular production. 05 * Sec. 8. AS 31.05.035 is amended by adding a new subsection to read: 06 (f) Confidentiality under (d) of this section is not applicable to information 07 submitted with or as part of a petition for a commission order or to information 08 submitted for or as part of a hearing before the commission. 09 * Sec. 9. AS 31.05.080(a) is amended to read: 10 (a) Within 20 days after written notice of the entry of an order or decision of 11 the commission, or such further time as the commission grants for good cause shown, 12 a person affected by it may file with the commission an application for 13 reconsideration [THE REHEARING IN RESPECT] of the matter determined by the 14 order or decision, setting out [FORTH] the respect in which the order or decision is 15 believed to be erroneous. The commission shall grant or refuse the application in 16 whole or in part within 10 days after it is filed, and failure to act on it within this 17 period is a refusal of it and a final disposition of the application. If reconsideration 18 [THE HEARING] is granted, the commission may enter a new order or decision after 19 reconsideration [REHEARING] as may be required under the circumstances. 20 * Sec. 10. AS 31.05.080(b) is repealed and reenacted to read: 21 (b) A person who has applied for reconsideration and is dissatisfied with the 22 disposition of the application for reconsideration may appeal to the superior court. The 23 questions reviewed on appeal are limited to the questions presented to the commission 24 by the application for reconsideration. 25 * Sec. 11. AS 31.05.085(a) is amended to read: 26 (a) During a hearing or investigation held under this chapter, the commission 27 may allocate the costs of the hearing or investigation among the parties, including the 28 commission, as is just under the circumstances. In allocating costs, the commission 29 shall consider the regulatory cost charge paid by a person under AS 31.05.093 and 30 may consider the results, evidence of good faith, other relevant factors, and mitigating 31 circumstances. The costs allocated may include
01 (1) the costs of any time devoted to the investigation or hearing by 02 hired consultants, whether or not the consultants appear as witnesses or participants; 03 [AND] 04 (2) any out-of-pocket expenses incurred by the commission in the 05 particular proceeding; and 06 (3) when the investigation or hearing relates to a violation of a 07 provision of this chapter, a regulation adopted under this chapter, or an order, 08 stipulation, or term of a permit issued by the commission, the costs of any time 09 devoted to the investigation or hearing by the commission staff. 10 * Sec. 12. AS 31.05.090 is repealed and reenacted to read: 11 Sec. 31.05.090. Permits to drill wells. (a) A person shall apply for and receive 12 a permit from the commission before drilling 13 (1) a well in search of oil or gas; 14 (2) a well in support of the recovery or production of oil or gas; 15 (3) an underground injection well for the purpose of gas storage; or 16 (4) an underground injection well for which the state has acquired 17 primary enforcement responsibility under AS 31.05.030(h). 18 (b) A person must submit a separate permit application for each well. The 19 permit application must be in the form required by the commission and include all 20 information required by the commission. 21 (c) After receiving an application under (b) of this section, the commission 22 shall promptly approve or deny the application for a permit to drill. 23 (d) In making a determination under (c) of this section, the commission shall 24 consider whether the 25 (1) proposed well is contrary to law, a provision of this chapter, a 26 regulation adopted under this chapter, or an order, stipulation, or term of a permit 27 issued by the commission; or 28 (2) applicant is in violation of a provision of this chapter, a regulation 29 adopted under this chapter, or an order, stipulation, or term of a permit issued by the 30 commission and the magnitude of such violation. 31 * Sec. 13. AS 31.05.093(c) is amended to read:
01 (c) The commission shall determine the regulatory cost charges levied under 02 this section so that the total amount to be collected approximately equals the 03 appropriations made for the operating costs of the commission under this chapter for 04 the fiscal year [, LESS THE ESTIMATED TOTAL OF THE FEES TO BE 05 COLLECTED UNDER AS 31.05.090. IF THE AMOUNT THE COMMISSION 06 EXPECTS TO COLLECT UNDER THIS SECTION AND UNDER AS 31.05.090 07 EXCEEDS THE APPROPRIATIONS MADE FOR THE OPERATING COSTS OF 08 THE COMMISSION UNDER THIS CHAPTER, THE COMMISSION SHALL, BY 09 ORDER, ADJUST THE REGULATORY COST CHARGES SO THAT THE TOTAL 10 AMOUNT OF THE REGULATORY COST CHARGES AND FEES THAT ARE 11 COLLECTED APPROXIMATELY EQUALS THE APPROPRIATIONS MADE 12 FOR THE OPERATING COSTS OF THE COMMISSION UNDER THIS CHAPTER 13 FOR THE FISCAL YEAR]. 14 * Sec. 14. AS 31.05.150 is repealed and reenacted to read: 15 Sec. 31.05.150. Penalties. (a) In addition to the penalties in (b) - (e) of this 16 section, a person who violates a provision of this chapter, a regulation adopted under 17 this chapter, or an order, stipulation, or term of a permit issued by the commission is 18 liable for a civil penalty of not more than $100,000 for the initial violation and not 19 more than $10,000 for each day thereafter on which the violation continues. 20 (b) A person who knowingly commits an act specified in AS 11.46.630(a) for 21 the purpose of evading a provision of this chapter, a regulation adopted under this 22 chapter, or an order, stipulation, or term of a permit issued by the commission is guilty 23 of a class A misdemeanor. 24 (c) A person who knowingly aids or abets another person in the violation of a 25 provision of this chapter, a regulation adopted under this chapter, or an order, 26 stipulation, or term of a permit issued by the commission is subject to the same 27 penalty as that prescribed in this chapter for the violation by the other person. 28 (d) In addition to the penalties in (a) - (c) and (e) of this section, the 29 commission may impose a civil penalty for each 1,000 cubic feet of natural gas flared, 30 vented, or otherwise determined to be waste as defined in AS 31.05.170. The penalty 31 shall be twice the fair market value of the natural gas at the point of waste.
01 (e) A person who knowingly violates a provision of this chapter, a regulation 02 adopted under this chapter, or an order, stipulation, or term of a permit issued by the 03 commission is guilty of a misdemeanor punishable by a fine of not more than $10,000 04 a day for each day of violation. 05 (f) The commission may assess the civil penalties provided in this section, 06 and, if not paid, the penalties are recoverable by suit filed by the attorney general in 07 the name and on behalf of the commission in the superior court. The payment of a 08 penalty does not relieve a person on whom the penalty is imposed from liability to any 09 other person for damages arising out of the violation. 10 (g) In determining the amount of a penalty assessed under (a) of this section, 11 the commission shall consider 12 (1) the extent to which the person committing the violation was acting 13 in good faith in attempting to comply; 14 (2) the extent to which the person committing the violation acted in a 15 wilful or knowing manner; 16 (3) the extent and seriousness of the violation and the actual or 17 potential threat to public health or the environment; 18 (4) the injury to the public resulting from the violation; 19 (5) the benefits derived by the person committing the violation from 20 the violation; 21 (6) the history of compliance or noncompliance by the person 22 committing the violation with the provisions of this chapter, the regulations adopted 23 under this chapter, and the orders, stipulations, or terms of permits issued by the 24 commission; 25 (7) the need to deter similar behavior by the person committing the 26 violation and others similarly situated at the time of the violation or in the future; 27 (8) the effort made by the person committing the violation to correct 28 the violation and prevent future violations; and 29 (9) other factors considered relevant to the assessment that are adopted 30 by the commission in regulation. 31 * Sec. 15. AS 31.05.080(c) and 31.05.080(d) are repealed.
01 * Sec. 16. The uncodified law of the State of Alaska is amended by adding a new section to 02 read: 03 REVISOR'S INSTRUCTION. The revisor of statutes is instructed to change the 04 heading of AS 31.05.080 from "Rehearings and appeals" to "Reconsiderations and appeals." 05 * Sec. 17. This Act takes effect immediately under AS 01.10.070(c).