SB 665 — Allowing for expedited oil and gas well permitting

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Green = existing Code.

Red = new code to be enacted WEST virginia legislature regular session Originating Senate Bill 665 By Senator Smith [Originating in the Committee on Energy, Industry, and Mining;

Reported on February 21, 2019] A BILL to amend and reenact §22-6A-7 of the Code of West Virginia, 1931, as amended, relating to allowing for expedited oil and gas well permitting and expedited oil and gas well permit modifications upon the payment of applicable expedited fees;

designating the proceeds of such expedited fees;

providing for the daily pro rata refund of the expedited fees if the permit is not approved between day 45 and day 60 after the submission of a permit application;

providing for the daily pro rata refund of one half of the modification fees between day 10 and day after the submission of a permit modification application;

and relating generally to horizontal well oil and gas permitting.

Be it enacted by the Legislature of West Virginia:

(h)(h)(1) An applicant may enter into an expedited permit application process with the secretary for a well permit byand payingpay an additional expedited permit fee of $20,000$30,000 for the initial horizontal well drilled at a location,location and for an additional expedited permit fee of $10,000$15,000 for each additional horizontal well drilled on a single well pad at the same location.location;

UponProvided, enteringThat intodeep anwell expeditedpermitting permitis timeline,excluded andfrom meeting all the criteria set forth in this article,expedited the secretary shall issue a permit withinprocess 45due daysto of the submissionindependent ofboard areview permitand applicationapproval underrequirement this article, unless the secretary denies the permit, or seeks additional information or modification from the applicant, which wouldis tolloutside the 45secretary’s dayscontrol. until the secretary received the required responsive information from the applicant.

Based(2) uponUpon objectiveentering criteriainto rating an applicant’sexpedited compliancepermit history,process toand bemeeting determinedall andthe publishedcriteria byset theforth secretaryin asthis guidance,article, the secretary mayshall furtherissue reduceor thedeny expediteda timeframepermit forwithin approving45 days of the submission of a permit toapplication lessunder thanthis 45article, days,unless butthe nosecretary lessseeks thanadditional 30information days,or ifmodification from the secretaryapplicant, determineswhich thatwould toll the applicant’s45 complianceday historyperiod meritsuntil suchthe acceleratedsecretary approval:receives the required responsive information from the applicant.

Provided,(3) ThatEach deepday well permitting is excluded from this expedited permit processing due to the independentagency boardexceeds: review and approval required the time frame for which is outside the authority of the secretary to dictate:

Provided,(A) however,The That:45-day deadline for approval or denial of an expedited initial horizontal well drilled, the secretary shall refund $2,000 per day up to and including day 60 after the submission of a permit application until the expedited fee is reduced to the normal permit fee amount;

(1)or One(B) half of the permit45-day feedeadline revenuefor ofapproval thisor subsectiondenial shallof bean dedicatedexpedited topermit fundingfor theany Oiladditional andhorizontal Gaswell Operatingdrilled Permiton anda Processingsingle Fundwell andpad earmarkedat specificallythe forsame agencylocation, permit review staffing costs of the secretary which staffing shall be dedicatedrequired to therefund permit$1,000 review,per processing,day andup approvalto ofand theincluding applicableday horizontal60 wellsafter pending before the agency,submission notof toa exceedpermit $1,000,000application, annuallyuntil inthe combinationexpedited withfee proceedsis receivedreduced throughto §22-6A-7(i)(1)the ofnormal thispermit code, any residuary fee proceedsamount. to be distributed as set forth in §22-6A-7(h)(2) of this code;

and(4)(A) (2)After Oneall refunds are paid by the secretary, one half of the additional expedited permit fee revenueshall ofbe thisdeposited subsection,in plusthe anyOil residuaryand asGas setOperating forthPermit inand §22-6A-7(h)(1)Processing ofFund thisand code, shall be dedicatedused by the agency to fundingcover thecosts Oilto review, process, and Gasapprove Reclamationor Funddeny earmarkedthe specificallyapplicable forhorizontal thewell reclamationpermit applications and pluggingmodifications pending before the agency, but not to exceed $1,000,000 annually in combination with proceeds received through §22-6A-7(i)(4)(A) of orphanedthis oilcode orand gasany wells;residuary fee proceeds to be distributed as set forth in §22-6A-7(h)(4)(B) of this code.

(3)(B) forAfter eachall dayrefunds are paid by the agencysecretary, exceeds:one half of the additional expedited permit fee, plus any residuary as set forth in §22-6A-7(h)(4)(A) of this code, shall be deposited in the Oil and Gas Reclamation Fund and used specifically for the reclamation and plugging of orphaned oil or gas wells.

(A)(i)(1) TheAn 45-dayapplicant deadlinemay forenter approvalinto of an expedited initialpermit horizontalmodification wellapplication drilled,process with the secretary shallfor bea requiredwell topermit refundand $1,333.33pay peran dayexpedited uppermit tomodification andfee includingof day$5,000 60for after the submissionmodification of athe permit application,for upany tohorizontal thewell $20,000drilled additionalat feea amountlocation. until reduced to the normal permit fee amount;

and/orProvided, (B)That thedeep 45-daywell deadlinepermit formodifications approvalare ofexcluded anfrom this expedited permit formodification anyprocess additionalif horizontal well drilled on a single well pad at the samemodification location,is thesubject secretary shall be required to refundindependent $666.66board perreview day up to and includingapproval. day 60 after the submission of a permit application, up to the $10,000 additional fee amount until reduced to the normal permit fee amount.

 (i)(2)  AnUpon applicantentering may enter into an expedited permit modification application process withand meeting all the criteria set forth in this article, the secretary forshall aissue wellor deny a permit bymodification payingwithin an20 additionaldays of the submission of a permit modification feeapplication ofunder $5,000this forarticle, unless the secretary seeks additional information or further modification offrom the permitapplicant, forwhich anywould horizontaltoll wellthe drilled20 atday aperiod location.until the secretary receives the required responsive information from the applicant.

Upon(3) enteringEach intoday an expedited permit timeline, and meeting all the criteriaagency setexceeds forth in this article, the secretary20-day shalldeadline issuefor aapproval permitor modificationdenial within 20 days of thean submissionexpedited ofhorizontal awell permit modificationmodification, application under this article, unless the secretary deniesshall therefund modification,$500 orper seeksday additionalup informationto orand furtherincluding modificationday fromafter the applicant,submission whichof wouldan tollexpedited thepermit 20modification daysapplication, until the secretaryexpedited receivedpermit themodification requiredfee responsiveof information$5,000 fromis thereduced applicant:to zero.

Provided,(4)(A) ThatAfter deepall wellrefunds are paid by the secretary, one half of the expedited permit modificationsmodification fee shall be excludeddeposited fromin thisthe expeditedOil and Gas Operating Permit and Processing Fund and shall be used by the agency to cover costs to review, process, and approve or deny the applicable horizontal well permit modificationapplications processingand ifmodifications pending before the modificationagency, isbut subjectnot to independentexceed board$1,000,000 reviewannually in combination with proceeds received through §22-6A-7(h)(4)(A) of this code and approval:any residuary fee proceeds to be distributed as set forth in §22-6A-7(i)(4)(B) of this code.

Provided,(B) however,After That:all refunds are paid by the secretary, one half of the expedited permit modification fee, plus any residuary as set forth in §22-6A-7(i)(4)(A) of this code, shall be deposited in the Oil and Gas Reclamation Fund and used specifically for the reclamation and plugging of orphaned oil or gas wells.

(1)(j) OneAny halfbalance ofin the permit modification fee revenue of this subsection shall be dedicated to funding the Oil and Gas OperatingReclamation PermitFund, and Processing Fund and earmarked specifically for agencythe permitreclamation reviewand staffingplugging costs of theorphaned secretaryoil whichor staffinggas shallwells bepursuant dedicated to the§22-6A-7(h)(4)(B) permitand review,§22-6A-7(i)(4)(B) processing,of andthis approvalcode, ofwhich remains at the applicableend horizontalof wellsany pendingstate beforefiscal theyear agency,does not revert to exceedthe $1,000,000General annuallyRevenue inFund combinationbut withshall proceedsremain receivedin throughthe §22-6A-7(h)(1)special ofrevenue thisaccount code,as anyindicated residuaryand feemay proceeds to be distributedused only as setprovided forth in §22-6A-7(i)(2)§22-6-29(b) of this code;code.

andThe (2)revenues Onedeposited halfin of the permitOil modificationand feeGas revenueReclamation ofFund, thisearmarked subsection,specifically plusfor anythe residuaryreclamation asand setplugging forth in §22-6A-7(i)(1) of thisorphaned code,oil shallor begas dedicatedwells pursuant to funding§22-6A-7(h)(4)(B) theand Oil§22-6A-7(i)(4)(B) andof Gasthis Reclamationcode Fundmay earmarkednot specificallybe fordesignated theas reclamationnonaligned andstate pluggingspecial ofrevenue orphanedfunds oilunder or§11B-2-32 gasof wells;this code.

(3) for each day the agency exceeds the 20-day deadline for approval of an expedited initial horizontal well permit modification, the secretary shall be required to refund $500 per day up to and including day 30 after the submission of a permit modification application, up to the $5,000 additional fee amount until reduced to zero.

(j) Any balance in the Oil and Gas Reclamation Fund, earmarked specifically for the reclamation and plugging of orphaned oil or gas wells pursuant to §22-6A-7(h)(2) and §22-6A-7(i)(2) of this code, which remains  at the end of any state fiscal year does not revert to the General Revenue Fund but shall remain in the special revenue account as indicated and may be used only as provided in §22-6A-7(h)(2) and §22-6A-7(i)(2) of this code.

The revenues deposited in the Oil and Gas Reclamation Fund, earmarked specifically for the reclamation and plugging of orphaned oil or gas wells pursuant to §22-6A-7(h)(2) and §22-6A-7(i)(2) of this code may not be designated as nonaligned state special revenue funds under §11B-2-32 of this code.

  NOTE:   

The purpose of this bill is to allow for expedited oil and gas well permitting and expedited oil and gas well permit modifications upon the payment of applicable expedited fees, the designation of the proceeds of such expedited fees, and the daily pro rata refund of the expedited fees if the permit is not approved between the 45th and 60th days after the submission of a permit application, and daily pro rata refund of one-half of the modification fees between the 10th and 20th days after the submission of a permit modification application;

all generally related to horizontal well oil and gas permitting.

Strike-throughs indicate language that would be stricken from a heading or the present law and underscoring indicates new language that would be added.

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