SB 176: "An Act relating to regulation of certain natural gas exploration facilities for purposes of preparation of discharge prevention and contingency plans and compliance with financial responsibility requirements, and amending the duties of the Alaska Oil and Gas Conservation Commission as they relate to natural gas exploration activities; and providing for an effective date."
00SENATE BILL NO. 176 01 "An Act relating to regulation of certain natural gas exploration facilities for 02 purposes of preparation of discharge prevention and contingency plans and 03 compliance with financial responsibility requirements, and amending the duties of 04 the Alaska Oil and Gas Conservation Commission as they relate to natural gas 05 exploration activities; and providing for an effective date." 06 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 07 * Section 1. AS 31.05.030 is amended by adding a new subsection to read: 08 (i) When requested by a person proposing to explore for gas by drilling a well, 09 the commission may evaluate the likelihood that the well will penetrate a formation 10 containing oil. If the commission concludes with reasonable certainty that the well 11 will not penetrate a formation containing oil, the commission shall so certify. 12 * Sec. 2. AS 46.04.030(b) is amended to read: 13 (b) A person may not cause or permit the operation of a pipeline or [AN 14 EXPLORATION OR] production facility in the state or, except as provided in
01 AS 46.04.050(c), may not cause or permit the operation of an exploration facility 02 in the state unless an oil discharge prevention and contingency plan for the pipeline 03 or facility has been approved by the department and the person is in compliance with 04 the plan. 05 * Sec. 3. AS 46.04.030 is amended by adding a new subsection to read: 06 (s) If a well certified by the Alaska Oil and Gas Conservation Commission 07 under AS 31.05.030(i) penetrates a formation containing oil, the operator of the facility 08 (1) shall notify the department, the Alaska Oil and Gas Conservation 09 Commission, and all other appropriate state agencies; and 10 (2) may not conduct further exploration activity except in compliance 11 with an oil discharge prevention and contingency plan for the facility 12 (A) approved by the department; or 13 (B) pending the department's decision on plan approval. 14 * Sec. 4. AS 46.04.040(b) is amended to read: 15 (b) A person may not cause or permit the operation of a pipeline or [AN 16 EXPLORATION OR] production facility in the state or, except as provided in 17 AS 46.04.050(c) for a well that has not penetrated a formation containing oil, may 18 not cause or permit the operation of an exploration facility in the state unless the 19 person has furnished to the department, and the department has approved, proof of 20 financial ability to respond in damages. Proof of financial responsibility required for 21 (1) a pipeline or an offshore exploration or production facility is 22 $50,000,000 per incident; 23 (2) an onshore production facility is 24 (A) $20,000,000 per incident if the facility produces over 25 10,000 barrels per day of oil; 26 (B) $10,000,000 per incident if the facility produces over 5,000 27 barrels per day but not more than 10,000 barrels per day of oil; 28 (C) $5,000,000 per incident if the facility produces over 2,500 29 barrels per day but not more than 5,000 barrels per day of oil; 30 (D) $1,000,000 per incident if the facility produces 2,500 barrels 31 per day or less of oil;
01 (3) an onshore exploration facility is $1,000,000 per incident. 02 * Sec. 5. AS 46.04.040 is amended by adding a new subsection to read: 03 (n) If a well certified by the Alaska Oil and Gas Conservation Commission 04 under AS 31.05.030(i) penetrates a formation containing oil, the operator of the facility 05 may not conduct further exploration activity until the requirements of (b) of this 06 section are met. 07 * Sec. 6. AS 46.04.050 is amended by adding a new subsection to read: 08 (c) Except as provided in AS 46.04.030(s) and 46.04.040(n), the provisions of 09 AS 46.04.030(b) and 46.04.040(b) do not apply to the operation of an exploration 10 facility to the extent that it is used to explore for gas by means of drilling a well that 11 has been certified by the Alaska Oil and Gas Conservation Commission under 12 AS 31.05.030(i). 13 * Sec. 7. This Act takes effect immediately under AS 01.10.070(c).