Florida Senate - 2013                        COMMITTEE AMENDMENT
       Bill No. SB 958
       
       
       
       
       
       
                                Barcode 370216                          
       
                              LEGISLATIVE ACTION                        
                    Senate             .             House              
                  Comm: RCS            .                                
                  04/10/2013           .                                
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       The Committee on Environmental Preservation and Conservation
       (Gardiner) recommended the following:
       
    1         Senate Amendment (with title amendment)
    2  
    3         Delete everything after the enacting clause
    4  and insert:
    5         Section 1. This act may be cited as the “Florida
    6  Underground Natural Gas Storage Act.”
    7         Section 2. Subsection (7) is added to section 211.02,
    8  Florida Statutes, to read:
    9         211.02 Oil production tax; basis and rate of tax; tertiary
   10  oil and mature field recovery oil.—An excise tax is hereby
   11  levied upon every person who severs oil in the state for sale,
   12  transport, storage, profit, or commercial use. Except as
   13  otherwise provided in this part, the tax is levied on the basis
   14  of the entire production of oil in this state, including any
   15  royalty interest. Such tax shall accrue at the time the oil is
   16  severed and shall be a lien on production regardless of the
   17  place of sale, to whom sold, or by whom used, and regardless of
   18  the fact that delivery of the oil may be made outside the state.
   19         (7) As used in this section, the term “oil” does not
   20  include gas-phase hydrocarbons that are transported into the
   21  state, injected in the gaseous phase into a natural gas storage
   22  facility permitted under part I of chapter 377, and later
   23  recovered as a liquid hydrocarbon.
   24         Section 3. Subsection (6) is added to section 211.025,
   25  Florida Statutes, to read:
   26         211.025 Gas production tax; basis and rate of tax.—An
   27  excise tax is hereby levied upon every person who severs gas in
   28  the state for sale, transport, profit, or commercial use. Except
   29  as otherwise provided in this part, the tax shall be levied on
   30  the basis of the entire production of gas in this state,
   31  including any royalty interest. Such tax shall accrue at the
   32  time the gas is severed and shall be a lien on production
   33  regardless of the place of sale, to whom sold, or by whom used
   34  and regardless of the fact that delivery of the gas may be made
   35  outside the state.
   36         (6) This section applies only to native gas as defined in
   37  s. 377.19.
   38         Section 4. Subsection (36) of section 376.301, Florida
   39  Statutes, is amended to read:
   40         376.301 Definitions of terms used in ss. 376.30-376.317,
   41  376.70, and 376.75.—When used in ss. 376.30-376.317, 376.70, and
   42  376.75, unless the context clearly requires otherwise, the term:
   43         (36) “Pollutants” includes any “product” as defined in s.
   44  377.19(11), pesticides, ammonia, chlorine, and derivatives
   45  thereof, excluding liquefied petroleum gas.
   46         Section 5. Section 377.06, Florida Statutes, is amended to
   47  read:
   48         377.06 Public policy of state concerning natural resources
   49  of oil and gas.—It is hereby declared to be the public policy of
   50  this the state to conserve and control the natural resources of
   51  oil and gas in this said state, and the products made from oil
   52  and gas in this state therefrom; to prevent waste of said
   53  natural resources; to provide for the protection and adjustment
   54  of the correlative rights of the owners of the land in which the
   55  wherein said natural resources lie, of and the owners and
   56  producers of oil and gas resources and the products made from
   57  oil and gas therefrom, and of others interested in these
   58  resources and products therein; to safeguard the health,
   59  property, and public welfare of the residents citizens of this
   60  said state and other interested persons and for all purposes
   61  indicated by the provisions in this section herein. Further, it
   62  is declared that underground storage of natural gas is in the
   63  public interest because underground storage promotes
   64  conservation of natural gas; makes gas more readily available to
   65  the domestic, commercial, and industrial consumers of this
   66  state; and allows the accumulation of large quantities of gas in
   67  reserve for orderly withdrawal during emergencies or periods of
   68  peak demand. It is not the intention of this section to limit,
   69  or restrict, or modify in any way the provisions of this law.
   70         Section 6. Section 377.18, Florida Statutes, is amended to
   71  read:
   72         377.18 Common sources of oil and gas.—All common sources of
   73  supply of oil or native and gas or either of them shall have the
   74  production therefrom controlled or regulated in accordance with
   75  the provisions of this law.
   76         Section 7. Section 377.19, Florida Statutes, is reordered
   77  and amended to read:
   78         377.19 Definitions.—As used Unless the context otherwise
   79  requires, the words defined in this section shall have the
   80  following meanings when found in ss. 377.06, 377.07, and 377.10
   81  377.40, the term:
   82         (3)(1) “Division” means the Division of Resource Management
   83  of the Department of Environmental Protection.
   84         (28)(2) “State” means the State of Florida.
   85         (20)(3) “Person” means a any natural person, corporation,
   86  association, partnership, receiver, trustee, guardian, executor,
   87  administrator, fiduciary, or representative of any kind.
   88         (15)(4) “Oil” means crude petroleum oil and other
   89  hydrocarbons, regardless of gravity, which are produced at the
   90  well in liquid form by ordinary production methods, and which
   91  are not the result of condensation of gas after it leaves the
   92  reservoir.
   93         (5) “Gas” means all natural gas, including casinghead gas,
   94  and all other hydrocarbons not defined as oil in subsection (4).
   95         (21)(6) “Pool” means an underground reservoir containing or
   96  appearing to contain a common accumulation of oil or gas or
   97  both. Each zone of a general structure which is completely
   98  separated from any other zone on the structure is considered a
   99  separate pool as used herein.
  100         (4)(7) “Field” means the general area that which is
  101  underlaid, or appears to be underlaid, by at least one pool. The
  102  term; and “field” includes the underground reservoir, or
  103  reservoirs, containing oil or gas, or both. The terms words
  104  “field” and “pool” mean the same thing if when only one
  105  underground reservoir is involved; however, the term “field,”
  106  unlike the term “pool,” may relate to two or more pools.
  107         (19)(8) “Owner” means the person who has the right to drill
  108  into and to produce from any pool and to appropriate the
  109  production either for the person or for the person and another,
  110  or others.
  111         (22)(9) “Producer” means the owner or operator of a well or
  112  wells capable of producing oil or gas, or both.
  113         (31)(10) “Waste,” in addition to its ordinary meaning,
  114  means “physical waste” as that term is generally understood in
  115  the oil and gas industry. The term “waste” includes:
  116         (a) The inefficient, excessive, or improper use or
  117  dissipation of reservoir energy; and the locating, spacing,
  118  drilling, equipping, operating, or producing of any oil or gas
  119  well or wells in a manner that which results, or tends to
  120  result, in reducing the quantity of oil or gas ultimately to be
  121  stored or recovered from any pool in this state.
  122         (b) The inefficient storing of oil; and the locating,
  123  spacing, drilling, equipping, operating, or producing of any oil
  124  or gas well or wells in a manner that causes, or tends causing,
  125  or tending to cause, unnecessary or excessive surface loss or
  126  destruction of oil or gas.
  127         (c) The producing of oil or gas in such a manner that
  128  causes as to cause unnecessary water channeling or coning.
  129         (d) The operation of any oil well or wells with an
  130  inefficient gas-oil ratio.
  131         (e) The drowning with water of any stratum or part thereof
  132  capable of producing oil or gas.
  133         (f) The underground waste, however caused and whether or
  134  not defined.
  135         (g) The creation of unnecessary fire hazards.
  136         (h) The escape into the open air, from a well producing
  137  both oil and gas, of gas in excess of the amount that which is
  138  necessary in the efficient drilling or operation of the well.
  139         (i) The use of gas for the manufacture of carbon black.
  140         (j) Permitting gas produced from a gas well to escape into
  141  the air.
  142         (k) The abuse of the correlative rights and opportunities
  143  of each owner of oil and gas in a common reservoir due to
  144  nonuniform, disproportionate, and unratable withdrawals, causing
  145  undue drainage between tracts of land.
  146         (23)(11) “Product” means a any commodity made from oil or
  147  gas and includes refined crude oil, crude tops, topped crude,
  148  processed crude petroleum, residue from crude petroleum,
  149  cracking stock, uncracked fuel oil, fuel oil, treated crude oil,
  150  residuum, gas oil, casinghead gasoline, natural gas gasoline,
  151  naphtha, distillate, condensate, gasoline, waste oil, kerosene,
  152  benzine, wash oil, blended gasoline, lubricating oil, blends or
  153  mixtures of oil with one or more liquid products or byproducts
  154  derived from oil or gas, and blends or mixtures of two or more
  155  liquid products or byproducts derived from oil or gas, whether
  156  hereinabove enumerated or not.
  157         (8)(12) “Illegal oil” means oil that which has been
  158  produced within the state from any well or wells in excess of
  159  the amount allowed by rule, regulation, or order of the
  160  division, as distinguished from oil produced within the state
  161  from a well not producing in excess of the amount so allowed,
  162  which is “legal oil.”
  163         (7)(13) “Illegal gas” means gas that which has been
  164  produced within the state from any well or wells in excess of
  165  the amount allowed by any rule, regulation, or order of the
  166  division, as distinguished from gas produced within the State of
  167  Florida from a well not producing in excess of the amount so
  168  allowed, which is “legal gas.”
  169         (9)(14) “Illegal product” means a any product of oil or
  170  gas, any part of which was processed or derived, in whole or in
  171  part, from illegal gas or illegal oil or from any product
  172  thereof, as distinguished from “legal product,” which is a
  173  product processed or derived to no extent from illegal oil or
  174  illegal gas.
  175         (24)(15) “Reasonable market demand” means the amount of oil
  176  reasonably needed for current consumption, together with a
  177  reasonable amount of oil for storage and working stocks.
  178         (30)(16) “Tender” means a permit or certificate of
  179  clearance for the transportation or the delivery of oil, gas, or
  180  products, approved and issued or registered under the authority
  181  of the division.
  182         (17) The use of the word “and” includes the word “or” and
  183  the use of “or” includes “and,” unless the context clearly
  184  requires a different meaning, especially with respect to such
  185  expressions as “oil and gas” or “oil or gas.”
  186         (32)(18) “Well site” means the general area around a well,
  187  which area has been disturbed from its natural or existing
  188  condition, as well as the drilling or production pad, mud and
  189  water circulation pits, and other operation areas necessary to
  190  drill for or produce oil or gas, or to inject gas into and
  191  recover gas from a natural gas storage facility.
  192         (17)(19) “Oil and gas administrator” means the State
  193  Geologist.
  194         (18)(20) “Operator” means the entity who:
  195         (a) Has the right to drill and to produce a well; or
  196         (b) As part of a natural gas storage facility, injects, or
  197  is engaged in the work of preparing to inject, gas into a
  198  natural gas storage reservoir; or stores gas in, or removes gas
  199  from, a natural gas storage reservoir.
  200         (1)(21) “Completion date” means the day, month, and year
  201  that a new productive well, a previously shut-in well, or a
  202  temporarily abandoned well is completed, repaired, or
  203  recompleted and the operator begins producing oil or gas in
  204  commercial quantities.
  205         (26)(22) “Shut-in well” means an oil or gas well that has
  206  been taken out of service for economic reasons or mechanical
  207  repairs.
  208         (29)(23) “Temporarily abandoned well” means a permitted
  209  well or wellbore that has been abandoned by plugging in a manner
  210  that allows reentry and redevelopment in accordance with oil or
  211  gas rules of the Department of Environmental Protection.
  212         (14)(24) “New field well” means an oil or gas well
  213  completed after July 1, 1997, in a new field as designated by
  214  the Department of Environmental Protection.
  215         (6)(25) “Horizontal well” means a well completed with the
  216  wellbore in a horizontal or nearly horizontal orientation within
  217  10 degrees of horizontal within the producing formation.
  218         (2) “Department” means the Department of Environmental
  219  Protection.
  220         (10) “Lateral storage reservoir boundary” means the
  221  projection up to the land surface of the maximum horizontal
  222  extent of the gas volume contained in a natural gas storage
  223  reservoir.
  224         (11) “Native gas” means gas that occurs naturally within
  225  this state and does not include gas produced outside the state,
  226  transported to this state, and injected into a permitted natural
  227  gas storage facility.
  228         (12) “Natural gas storage facility” means an underground
  229  reservoir from which oil or gas has previously been produced and
  230  which is used or intended to be used for the underground storage
  231  of natural gas, and any surface or subsurface structure, or
  232  infrastructure, except wells. The term also includes a right or
  233  appurtenance necessary or useful in the operation of the
  234  facility for the underground storage of natural gas, including
  235  any necessary or reasonable reservoir protective area as
  236  designated for the purpose of ensuring the safe operation of the
  237  storage of natural gas or protecting the natural gas storage
  238  facility from pollution, invasion, escape, or migration of gas,
  239  or any subsequent extension thereof. The term does not mean a
  240  transmission, distribution, or gathering pipeline or system that
  241  is not used primarily as integral piping for a natural gas
  242  storage facility.
  243         (13) “Natural gas storage reservoir” means a pool or field
  244  from which oil or gas has previously been produced and which is
  245  suitable for or capable of being made suitable for the
  246  injection, storage, and recovery of gas, as identified in a
  247  permit application submitted to the department under s.
  248  377.2407.
  249         (16) “Oil and gas” has the same meaning as the term “oil or
  250  gas.”
  251         (25) “Reservoir protective area” means the area extending
  252  up to and including 2,000 feet surrounding a natural gas storage
  253  reservoir.
  254         (27) “Shut-in bottom hole pressure” means the pressure at
  255  the bottom of a well when all valves are closed and no oil or
  256  gas has been allowed to escape for at least 24 hours.
  257         Section 8. Subsection (1) of section 377.21, Florida
  258  Statutes, is amended to read:
  259         377.21 Jurisdiction of division.—
  260         (1) The division shall have jurisdiction and authority over
  261  all persons and property necessary to administer and enforce
  262  effectively the provisions of this law and all other laws
  263  relating to the conservation of oil and gas or to the storage of
  264  gas in and recovery of gas from natural gas storage reservoirs.
  265         Section 9. Subsection (2) of section 377.22, Florida
  266  Statutes, is amended to read:
  267         377.22 Rules and orders.—
  268         (2) The department shall issue orders and adopt rules
  269  pursuant to ss. 120.536(1) and 120.54 to implement and enforce
  270  the provisions of this chapter. Such rules and orders shall
  271  ensure that all precautions are taken to prevent the spillage of
  272  oil or any other pollutant in all phases of the drilling for,
  273  and extracting of, oil, gas, or other petroleum products, or
  274  during the injection of gas into and recovery of gas from a
  275  natural gas storage reservoir. The department shall revise such
  276  rules from time to time as necessary for the proper
  277  administration and enforcement of this chapter. Rules adopted
  278  and orders issued in accordance with this section are shall be
  279  for, but shall not be limited to, the following purposes:
  280         (a) To require the drilling, casing, and plugging of wells
  281  to be done in such a manner as to prevent the pollution of the
  282  fresh, salt, or brackish waters or the lands of the state and to
  283  protect the integrity of natural gas storage reservoirs.
  284         (b) To prevent the alteration of the sheet flow of water in
  285  any area.
  286         (c) To require that appropriate safety equipment be
  287  installed to minimize the possibility of an escape of oil or
  288  other petroleum products in the event of accident, human error,
  289  or a natural disaster during drilling, casing, or plugging of
  290  any well and during extraction operations.
  291         (d) To require the drilling, casing, and plugging of wells
  292  to be done in such a manner as to prevent the escape of oil or
  293  other petroleum products from one stratum to another.
  294         (e) To prevent the intrusion of water into an oil or gas
  295  stratum from a separate stratum, except as provided by rules of
  296  the division relating to the injection of water for proper
  297  reservoir conservation and brine disposal.
  298         (f) To require a reasonable bond, or other form of security
  299  acceptable to the department, conditioned upon the performance
  300  of the duty to plug properly each dry and abandoned well and the
  301  full and complete restoration by the applicant of the area over
  302  which geophysical exploration, drilling, or production is
  303  conducted to the similar contour and general condition in
  304  existence prior to such operation.
  305         (g) To require and carry out a reasonable program of
  306  monitoring or inspection of all drilling operations, or
  307  producing wells, or injecting wells, including regular
  308  inspections by division personnel.
  309         (h) To require the making of reports showing the location
  310  of all oil and gas wells; the making and filing of logs; the
  311  taking and filing of directional surveys; the filing of
  312  electrical, sonic, radioactive, and mechanical logs of oil and
  313  gas wells; if taken, the saving of cutting and cores, the cuts
  314  of which shall be given to the Bureau of Geology; and the making
  315  of reports with respect to drilling and production records.
  316  However, such information, or any part thereof, at the request
  317  of the operator, shall be exempt from the provisions of s.
  318  119.07(1) and held confidential by the division for a period of
  319  1 year after the completion of a well.
  320         (i) To prevent wells from being drilled, operated, or
  321  produced in such a manner as to cause injury to neighboring
  322  leases, or property, or natural gas storage reservoirs.
  323         (j) To prevent the drowning by water of any stratum, or
  324  part thereof, capable of producing oil or gas in paying
  325  quantities and to prevent the premature and irregular
  326  encroachment of water which reduces, or tends to reduce, the
  327  total ultimate recovery of oil or gas from any pool.
  328         (k) To require the operation of wells with efficient gas
  329  oil ratio, and to fix such ratios.
  330         (l) To prevent “blowouts,” “caving,” and “seepage,” in the
  331  sense that conditions indicated by such terms are generally
  332  understood in the oil and gas business.
  333         (m) To prevent fires.
  334         (n) To identify the ownership of all oil or gas wells,
  335  producing leases, refineries, tanks, plants, structures, and
  336  storage and transportation equipment and facilities.
  337         (o) To regulate the “shooting,” perforating and chemical
  338  treatment of wells.
  339         (p) To regulate secondary recovery methods, including the
  340  introduction of gas, air, water, or other substance into
  341  producing formations.
  342         (q) To regulate gas cycling operations.
  343         (r) To regulate the storage and recovery of gas injected
  344  into natural gas storage facilities.
  345         (s)(r) If necessary for the prevention of waste, as herein
  346  defined, to determine, limit, and prorate the production of oil
  347  or gas, or both, from any pool or field in the state.
  348         (t)(s) To require, either generally or in or from
  349  particular areas, certificates of clearance or tenders in
  350  connection with the transportation or delivery of oil or gas, or
  351  any product.
  352         (u)(t) To regulate the spacing of wells and to establish
  353  drilling units.
  354         (v)(u) To prevent, so far as is practicable, reasonably
  355  avoidable drainage from each developed unit which is not
  356  equalized by counterdrainage.
  357         (w)(v) To require that geophysical operations requiring a
  358  permit be conducted in a manner which will minimize the impact
  359  on hydrology and biota of the area, especially environmentally
  360  sensitive lands and coastal areas.
  361         (x)(w) To regulate aboveground crude oil storage tanks in a
  362  manner which will protect the water resources of the state.
  363         (y)(x) To act in a receivership capacity for fractional
  364  mineral interests for which the owners are unknown or unlocated
  365  and to administratively designate the operator as the lessee.
  366         Section 10. Subsections (1) and (2) of section 377.24,
  367  Florida Statutes, are amended to read:
  368         377.24 Notice of intention to drill well; permits;
  369  abandoned wells and dry holes.—
  370         (1) Before drilling a any well in search of oil or gas, or
  371  before storing gas in or recovering gas from a natural gas
  372  storage reservoir shall be drilled, the person who desires
  373  desiring to drill for, store, or recover gas, or drill for oil,
  374  the same shall notify the division upon such form as it may
  375  prescribe and shall pay a reasonable fee set by rule of the
  376  department not to exceed the actual cost of processing and
  377  inspecting for each well or reservoir. The drilling of any well
  378  and the storing and recovering of gas are is hereby prohibited
  379  until such notice is given, the and such fee is has been paid,
  380  and the permit is granted.
  381         (2) An Each application for the drilling of a well in
  382  search of oil or gas, or for the storing of gas in and
  383  recovering of gas from a natural gas storage reservoir, in this
  384  state must shall include the address of the residence of the
  385  applicant, or applicants each applicant, which must address
  386  shall be the address of each person involved in accordance with
  387  the records of the Division of Resource Management until such
  388  address is changed on the records of the division after written
  389  request.
  390         Section 11. Section 377.2407, Florida Statutes, is created
  391  to read:
  392         377.2407Natural gas storage facility permit application to
  393  inject gas into and recover gas from a natural gas storage
  394  reservoir.—
  395         (1) Before drilling a well to inject gas into and recover
  396  gas from a natural gas storage reservoir, the person who desires
  397  to conduct such operation shall apply to the department in the
  398  manner described in this section using such form as the
  399  department may prescribe to obtain a natural gas storage
  400  facility permit. The Department of Environmental Protection
  401  shall also require any applicant seeking to obtain such permit
  402  to pay a reasonable permit application fee. Such fee must be in
  403  an amount necessary to cover the costs associated with
  404  permitting, processing, issuing, and recertifying the permit
  405  application, and inspecting for compliance with the permit.
  406         (2) Each application must contain:
  407         (a) A detailed, three-dimensional description of the
  408  natural gas storage reservoir, including geologic-based
  409  descriptions of the reservoir boundaries, and the horizontal and
  410  vertical dimensions.
  411         (b) A geographic description of the lateral reservoir
  412  boundary.
  413         (c) A general description and location of all injection,
  414  recovery, withdrawal-only, and observation wells.
  415         (d) A description of the reservoir protective area.
  416         (e) Information demonstrating that the proposed natural gas
  417  storage reservoir is suitable for the storage and recovery of
  418  gas.
  419         (f) Information identifying all known abandoned or active
  420  wells within the natural gas storage facility.
  421         (g) A field-monitoring plan that requires, at a minimum,
  422  monthly field inspections of all wells that are part of the
  423  natural gas storage facility.
  424         (h) A monitoring and testing plan for the well integrity.
  425         (i) A well inspection plan that requires, at a minimum, the
  426  inspection of all wells that are part of the natural gas storage
  427  facility and plugged wells within the natural gas storage
  428  facility boundary.
  429         (j) A spill prevention and response plan.
  430         (k) A well spacing plan.
  431         (l) An operating plan for the natural gas storage
  432  reservoir, which must include gas capacities, anticipated
  433  operating conditions, and maximum storage pressure.
  434         (m) A gas migration response plan.
  435         (n) A location plat and general facility map surveyed and
  436  prepared by a registered land surveyor licensed under chapter
  437  472.
  438         (3) The department may require additional information that
  439  is deemed necessary to permit the development of the natural gas
  440  storage facility. Each well related to the natural gas storage
  441  facility shall be authorized and permitted individually upon the
  442  applicant satisfying applicable well construction and operation
  443  criteria under this part; however, notwithstanding any other
  444  provision under this chapter, well spacing requirements do not
  445  apply.
  446         Section 12. Subsection (4) is added to section 377.241,
  447  Florida Statutes, to read:
  448         377.241 Criteria for issuance of permits.—The division, in
  449  the exercise of its authority to issue permits as hereinafter
  450  provided, shall give consideration to and be guided by the
  451  following criteria:
  452         (4) For activities and operations concerning a natural gas
  453  storage facility, the nature, structure, and proposed use of the
  454  natural gas storage reservoir is suitable for the storage and
  455  recovery of gas without adverse effect to public health or
  456  safety or the environment.
  457         Section 13. Subsection (3) of section 377.242, Florida
  458  Statutes, is amended to read:
  459         377.242 Permits for drilling or exploring and extracting
  460  through well holes or by other means.—The department is vested
  461  with the power and authority:
  462         (3) To issue permits to establish natural gas storage
  463  facilities or construct wells for the injection and recovery of
  464  any natural gas for temporary storage in natural gas storage
  465  subsurface reservoirs.
  466  
  467  Each permit shall contain an agreement by the permitholder that
  468  the permitholder will not prevent inspection by division
  469  personnel at any time. The provisions of this section
  470  prohibiting permits for drilling or exploring for oil in coastal
  471  waters do not apply to any leases entered into before June 7,
  472  1991.
  473         Section 14. Section 377.2431, Florida Statutes, is created
  474  to read:
  475         377.2431Conditions for granting permits for natural gas
  476  storage facilities.—
  477         (1) A natural gas storage facility permit shall authorize
  478  the construction and operation of a natural gas storage facility
  479  and must be issued for the life of the facility, subject to
  480  recertification every 10 years.
  481         (2) Before issuing or recertifying a permit, the division
  482  shall require satisfactory evidence of the following:
  483         (a) The applicant has implemented, or is in the process of
  484  implementing, programs for the control and mitigation of
  485  pollution related to oil, petroleum products or their
  486  byproducts, and other pollutants.
  487         (b) The applicant or operator has acquired a lawful right
  488  to drill, explore, or develop a natural gas storage reservoir
  489  from owners of at least 75 percent of the storage rights within
  490  the natural gas storage reservoir, or the applicant or operator
  491  has obtained a certificate of public convenience and necessity
  492  for the natural gas storage reservoir from the Federal Energy
  493  Regulatory Commission pursuant to the Natural Gas Act, 15 U.S.C.
  494  ss. 717 et seq.
  495         (c) The applicant has used all reasonable means to identify
  496  known wells that have been drilled into or through the natural
  497  gas storage reservoir or reservoir protective area to determine
  498  the status of the wells and whether inactive or abandoned wells
  499  have been properly plugged. For any well that has not been
  500  properly plugged, before conducting injection operations and
  501  after issuance of the permit, the applicant must plug or
  502  recondition the well to ensure the integrity of the storage
  503  reservoir or reservoir protective area.
  504         (d) The applicant has tested the quality of water produced
  505  by all water supply wells within the lateral boundary of the
  506  natural gas storage facility and complied with all requirements
  507  under s. 377.2432. The applicant shall provide to the department
  508  and the owner of the water supply well a written copy of the
  509  water quality data collected under this paragraph.
  510         (e) A determination has been made regarding whether native
  511  gas or oil will be severed from below the soil or water of this
  512  state in the recovery of injected gas. If native gas or oil will
  513  be severed, the applicant or operator must acquire a lawful
  514  right to develop the native gas or oil before injecting gas into
  515  the natural gas storage reservoir.
  516         (3) The applicant shall maintain records of well pressures
  517  recorded monthly, and monthly volumes of gas injected into and
  518  withdrawn from the reservoir. These records shall be maintained
  519  at the natural gas storage facility and shall be made available
  520  for inspection by the department at any reasonable time.
  521         (4)(a) The maximum storage pressure for a natural gas
  522  storage reservoir shall be the highest shut-in bottom hole
  523  pressure found to exist during the production history of the
  524  reservoir, unless a higher pressure is established by the
  525  department based on testing of caprock and pool containment. The
  526  methods used for determining the higher pressure must be
  527  approved by the department.
  528         (b) If the shut-in bottom hole pressure of the original
  529  discovery or of the highest production is not known, or a higher
  530  pressure has not been established through a method approved by
  531  the department pursuant to paragraph (a), the maximum storage
  532  reservoir pressure must be limited to a freshwater hydrostatic
  533  gradient.
  534         (5) A county or municipality may not adopt an ordinance,
  535  resolution, comprehensive plan, or land development regulation,
  536  or otherwise attempt to regulate or enforce any matter
  537  concerning natural gas storage facilities governed under this
  538  part.
  539         (6) A permit may not be issued for a natural gas storage
  540  facility that includes a natural gas storage reservoir located
  541  beneath an underground source of drinking water unless the
  542  applicant demonstrates that the injection or recovery of natural
  543  gas will not cause or allow natural gas to migrate into the
  544  underground source of drinking water; or in any offshore
  545  location in the Gulf of Mexico, the Straits of Florida, or the
  546  Atlantic Ocean; or in any solution-mined cavern within a salt
  547  formation.
  548         Section 15. Section 377.2432, Florida Statutes, is created
  549  to read:
  550         377.2432Natural gas storage facilities; protection of
  551  water supplies.—
  552         (1) An operator of a natural gas storage facility who
  553  affects a public or private underground water supply by
  554  pollution or diminution shall restore or replace the affected
  555  supply with an alternate source of water adequate in quantity
  556  and quality for the purposes served by the supply. The
  557  department shall ensure that the quality of restored or replaced
  558  water is comparable to the quality of the water before it was
  559  affected by the operator.
  560         (2) Unless rebutted by a defense established in subsection
  561  (4), a natural gas storage facility operator is presumed
  562  responsible for pollution of an underground water supply if:
  563         (a) The water supply is within the lateral boundary of the
  564  natural gas storage facility; and
  565         (b) The pollution occurred within 6 months after completion
  566  of drilling or alteration of any well under or associated with
  567  the natural gas storage facility permit or after the initial
  568  injection of gas into the natural gas storage reservoir,
  569  whichever is later.
  570         (3) If the affected underground water supply is within the
  571  rebuttable presumption area as provided in subsection (2) and
  572  the rebuttable presumption applies, the natural gas storage
  573  facility operator shall provide a temporary water supply if the
  574  water user is without a readily available alternative source of
  575  water at no cost to the owner of the affected water supply. The
  576  temporary water supply provided under this subsection must be
  577  adequate in quantity and quality for the purposes served by the
  578  affected supply.
  579         (4) A natural gas storage facility operator rebuts the
  580  presumption in subsection (2) by affirmatively proving any of
  581  the following:
  582         (a) The pollution existed before the drilling or alteration
  583  activity as determined by a predrilling or prealteration survey.
  584         (b) The landowner or water purveyor refused to allow the
  585  operator access to conduct a predrilling or prealteration
  586  survey.
  587         (c) The water supply well is not within the lateral
  588  boundary of the natural gas storage facility.
  589         (d) The pollution occurred more than 6 months after
  590  completion of drilling or alteration of any well under or
  591  associated with the natural gas storage facility permit.
  592         (e) The pollution occurred as the result of a cause other
  593  than activities authorized under the natural gas storage
  594  facility permit.
  595         (5) A natural gas storage facility operator electing to
  596  preserve a defense under subsection (4) must retain an
  597  independent certified laboratory to conduct a predrilling or
  598  prealteration survey of the water supply. A copy of survey
  599  results must be submitted to the department and the landowner or
  600  water purveyor in the manner prescribed by the department.
  601         (6) A natural gas storage facility operator must provide
  602  written notice to the landowner or water purveyor indicating
  603  that the presumption established under subsection (2) may be
  604  void if the landowner or water purveyor refused to allow the
  605  operator access to conduct a predrilling or prealteration
  606  survey. Proof of written notice to the landowner or water
  607  purveyor must be provided to the department in order for the
  608  operator to retain the protections under subsection (4).
  609         (7) This section does not prevent a landowner or water
  610  purveyor who claims pollution or diminution of a water supply
  611  from seeking any other remedy at law or in equity.
  612         Section 16. Section 377.2433, Florida Statutes, is created
  613  to read:
  614         377.2433Protection of natural gas storage facilities.—
  615         (1) The department may not authorize the drilling of any
  616  well into or through a permitted natural gas storage reservoir
  617  or reservoir protective area, except upon conditions deemed by
  618  the department to be sufficient to prevent the loss, migration,
  619  or escape of gas from the natural gas storage reservoir. The
  620  department shall provide written notice to the natural gas
  621  storage facility operator of any application filed with the
  622  department and any agency action taken related to drilling a
  623  well into or through a permitted natural gas storage facility
  624  boundary or reservoir protective area.
  625         (2) As a condition for the issuance of a permit by the
  626  department, an applicant seeking to drill a well into or through
  627  a permitted natural gas storage facility boundary or reservoir
  628  protective area must provide the affected natural gas storage
  629  facility operator a reasonable right of entry to observe and
  630  monitor all drilling activities.
  631         (3) The department shall ensure that any well drilled into
  632  or through a permitted natural gas storage reservoir or
  633  reservoir protective area is cased and cemented in a manner
  634  sufficient to protect the integrity of the natural gas storage
  635  reservoir.
  636         Section 17. Section 377.2434, Florida Statutes, is created
  637  to read:
  638         377.2434Property rights to injected natural gas.—
  639         (1) All natural gas that has previously been reduced to
  640  possession and that is subsequently injected into a natural gas
  641  storage facility is at all times the property of the injector or
  642  the injector’s heirs, successors, or assigns, whether owned by
  643  the injector or stored under contract.
  644         (2) Such gas may not be subject to the right of the owner
  645  of the surface of the lands or of any mineral interest therein,
  646  under which the natural gas storage facilities lie, or to the
  647  right of any person, other than the injector or the injector’s
  648  heirs, successors, or assigns, to waste or otherwise interfere
  649  with or exercise control over such gas, to produce, to take, or
  650  to reduce to possession, by means of the law of capture or
  651  otherwise. This subsection does not affect the ownership of
  652  hydrocarbons occurring naturally within this state or the right
  653  of the owner of the surface of the lands or of any mineral
  654  interest therein to drill or bore through the natural gas
  655  storage facilities in a manner that will protect the facilities
  656  against pollution or the escape of stored natural gas.
  657         (3) With regard to natural gas that has migrated to
  658  adjoining property or to a stratum, or portion thereof, which
  659  has not been condemned or otherwise purchased:
  660         (a) The injector or the injector’s heirs, successors, or
  661  assigns:
  662         1. May not lose title to or possession of the gas if the
  663  injector or the injector’s heirs, successors, or assigns can
  664  prove by a preponderance of the evidence that the gas was
  665  originally injected into the underground storage; and
  666         2. Have the right to conduct tests on any existing wells on
  667  adjoining property as may be reasonable to determine ownership
  668  of the gas, but the tests are solely at the injector’s risk and
  669  expense.
  670         (b) The owner of the stratum and the owner of the surface
  671  are entitled to compensation, including compensation for use of
  672  or damage to the surface or substratum, as provided by law.
  673         Section 18. Subsection (3) of section 377.25, Florida
  674  Statutes, is amended to read:
  675         377.25 Production pools; drilling units.—
  676         (3) Each well permitted to be drilled upon any drilling
  677  unit shall be drilled approximately in the center thereof, with
  678  such exception as may be reasonably necessary where the division
  679  finds that the unit is partly outside the pool or, for some
  680  other reason, a well approximately in the center of the unit
  681  would be nonproductive or where topographical conditions are
  682  such as to make the drilling approximately in the center of the
  683  unit unduly burdensome or where the operator proposes to
  684  complete the well with a horizontal or nearly horizontal well in
  685  the producing zone. Whenever an exception is granted, the
  686  division shall take such action as will offset any advantage
  687  which the person securing the exception may have over other
  688  producers by reason of the drilling of the well as an exception,
  689  and so that drainage from developed units to the tract, with
  690  respect to which the exception is granted, will be prevented or
  691  minimized, and the producer of the well drilled, as an
  692  exception, will be allowed to produce no more than his or her
  693  just and equitable share of the oil and gas in the pool, as such
  694  share is set forth in this section. This subsection does not
  695  apply to wells associated with a natural gas storage facility.
  696         Section 19. Subsection (2) of section 377.28, Florida
  697  Statutes, is amended to read:
  698         377.28 Cycling, pooling, and unitization of oil and gas.—
  699         (2) The department shall issue an order requiring unit
  700  operation if it finds that:
  701         (a) Unit operation of the field, or of any pool or pools,
  702  portion or portions, or combinations thereof within the field,
  703  is reasonably necessary to prevent waste, to avoid the drilling
  704  of unnecessary wells, or to increase the ultimate recovery of
  705  oil or gas by additional recovery methods; and
  706         (b) The estimated additional cost incident to the conduct
  707  of such operation will not exceed the value of the estimated
  708  additional recovery of oil or gas; and
  709         (c) The additional recovery of oil or gas does not
  710  adversely interfere with the storage or recovery of natural gas
  711  within a natural gas storage reservoir.
  712  
  713  The phrase “additional recovery methods” as used herein
  714  includes, but is not limited to, the maintenance or partial
  715  maintenance of reservoir pressures; recycling; flooding a pool
  716  or pools, or parts thereof, with air, gas, water, liquid
  717  hydrocarbons, any other substance, or any combination thereof;
  718  or any other method of producing additional hydrocarbons
  719  approved by the department.
  720         Section 20. Subsection (4) is added to section 377.30,
  721  Florida Statutes, to read:
  722         377.30 Limitation on amount of oil or gas taken.—
  723         (4) This section does not apply to nonnative gas recovered
  724  from a permitted natural gas storage facility.
  725         Section 21. Subsection (1) of section 377.34, Florida
  726  Statutes, is amended to read:
  727         377.34 Actions and injunctions by division.—
  728         (1) Whenever it appears shall appear that a any person is
  729  violating, or threatening to violate, any statute of this state
  730  with respect to the conservation of oil or gas, or both, or any
  731  provision of this law, or any rule, regulation or order made
  732  thereunder by any act done in the operation of a any well
  733  producing oil or gas, or storing or recovering natural gas, or
  734  by omitting an any act required to be done thereunder, the
  735  division, through its counsel, or the Department of Legal
  736  Affairs on its own initiative, may bring suit against such
  737  person in the Circuit Court in the County of Leon, state, or in
  738  the circuit court in the county in which the well in question is
  739  located, at the option of the division, or the Department of
  740  Legal Affairs, to restrain such person or persons from
  741  continuing such violation or from carrying out the threat of
  742  violation. In such suit, the division, or the Department of
  743  Legal Affairs, may obtain injunctions, prohibitory and
  744  mandatory, including temporary restraining orders and temporary
  745  injunctions, as the facts may warrant, including, when
  746  appropriate, an injunction restraining any person from moving or
  747  disposing of illegal oil, illegal gas or illegal product, and
  748  any or all such commodities may be ordered to be impounded or
  749  placed under the control of a receiver appointed by the court
  750  if, in the judgment of the court, such action is advisable.
  751         Section 22. Paragraph (a) of subsection (1) of section
  752  377.37, Florida Statutes, is amended to read:
  753         377.37 Penalties.—
  754         (1)(a) Any person who violates any provision of this law or
  755  any rule, regulation, or order of the division made under this
  756  chapter or who violates the terms of any permit to drill for or
  757  produce oil, gas, or other petroleum products referred to in s.
  758  377.242(1), or to store gas in a natural gas storage facility,
  759  or any lessee, permitholder, or operator of equipment or
  760  facilities used in the exploration for, drilling for, or
  761  production of oil, gas, or other petroleum products, or storage
  762  of gas in a natural gas storage facility, who refuses inspection
  763  by the division as provided in this chapter, is liable to the
  764  state for any damage caused to the air, waters, or property,
  765  including animal, plant, or aquatic life, of the state and for
  766  reasonable costs and expenses of the state in tracing the source
  767  of the discharge, in controlling and abating the source and the
  768  pollutants, and in restoring the air, waters, and property,
  769  including animal, plant, and aquatic life, of the state.
  770  Furthermore, such person, lessee, permitholder, or operator is
  771  subject to the judicial imposition of a civil penalty in an
  772  amount of not more than $10,000 for each offense. However, the
  773  court may receive evidence in mitigation. Each day during any
  774  portion of which such violation occurs constitutes a separate
  775  offense. Nothing herein shall give the department the right to
  776  bring an action on behalf of any private person.
  777         Section 23. Subsections (1) and (3) of section 377.371,
  778  Florida Statutes, are amended to read:
  779         377.371 Pollution prohibited; reporting, liability.—
  780         (1) A No person drilling for or producing oil, gas, or
  781  other petroleum products, or storing gas in a natural gas
  782  storage facility, may not shall pollute land or water; damage
  783  aquatic or marine life, wildlife, birds, or public or private
  784  property; or allow any extraneous matter to enter or damage any
  785  mineral or freshwater-bearing formation.
  786         (3) Because it is the intent of this chapter to provide the
  787  means for rapid and effective cleanup and to minimize damages
  788  resulting from pollution in violation of this chapter, if the
  789  waters of the state are polluted by the drilling, storage of
  790  natural gas, or production operations of any person or persons
  791  and such pollution damages or threatens to damage human, animal,
  792  or plant life, public or private property, or any mineral or
  793  water-bearing formation, said person shall be liable to the
  794  state for all costs of cleanup or other damage incurred by the
  795  state. In any suit to enforce claims of the state under this
  796  chapter, it is shall not be necessary for the state to plead or
  797  prove negligence in any form or manner on the part of the person
  798  or persons conducting the drilling or production operations; the
  799  state need only plead and prove the fact of the prohibited
  800  discharge or other polluting condition and that it occurred at
  801  the facilities of the person or persons conducting the drilling
  802  or production operation. A No person or persons conducting the
  803  drilling, storage, or production operation may not shall be held
  804  liable if said person or persons prove that the prohibited
  805  discharge or other polluting condition was the result of any of
  806  the following:
  807         (a) An act of war.
  808         (b) An act of government, either state, federal, or
  809  municipal.
  810         (c) An act of God, which means an unforeseeable act
  811  exclusively occasioned by the violence of nature without the
  812  interference of any human agency.
  813         (d) An act or omission of a third party without regard to
  814  whether any such act or omission was or was not negligent.
  815         Section 24. Paragraph (b) of subsection (14) and paragraph
  816  (b) of subsection (19) of section 403.973, Florida Statutes, are
  817  amended, and paragraphs (g) and (h) are added to subsection (3)
  818  of that section, to read:
  819         403.973 Expedited permitting; amendments to comprehensive
  820  plans.—
  821         (3)
  822         (g) Projects for natural gas storage facilities that are
  823  permitted under chapter 377 are eligible for the expedited
  824  permitting process.
  825         (h) Projects to construct interstate natural gas pipelines
  826  subject to certification by the Federal Energy Regulatory
  827  Commission are eligible for the expedited permitting process.
  828         (14)
  829         (b) Projects identified in paragraph (3)(f), (3)(g), or
  830  (3)(h) or challenges to state agency action in the expedited
  831  permitting process for establishment of a state-of-the-art
  832  biomedical research institution and campus in this state by the
  833  grantee under s. 288.955 are subject to the same requirements as
  834  challenges brought under paragraph (a), except that,
  835  notwithstanding s. 120.574, summary proceedings must be
  836  conducted within 30 days after a party files the motion for
  837  summary hearing, regardless of whether the parties agree to the
  838  summary proceeding.
  839         (19) The following projects are ineligible for review under
  840  this part:
  841         (b) A project, the primary purpose of which is to:
  842         1. Effect the final disposal of solid waste, biomedical
  843  waste, or hazardous waste in this state.
  844         2. Produce electrical power, unless the production of
  845  electricity is incidental and not the primary function of the
  846  project or the electrical power is derived from a fuel source
  847  for renewable energy as defined in s. 366.91(2)(d).
  848         3. Extract natural resources.
  849         4. Produce oil.
  850         5. Construct, maintain, or operate an oil, petroleum,
  851  natural gas, or sewage pipeline.
  852         Section 25. The Department of Environmental Protection
  853  shall adopt rules relating to natural gas storage before issuing
  854  a natural gas storage facility permit.
  855         Section 26. This act shall take effect July 1, 2013.
  856  
  857  ================= T I T L E  A M E N D M E N T ================
  858         And the title is amended as follows:
  859         Delete everything before the enacting clause
  860  and insert:
  861                        A bill to be entitled                      
  862         An act relating to underground natural gas storage;
  863         providing a short title; amending s. 211.02, F.S.;
  864         narrowing the use of the term “oil”; amending s.
  865         211.025, F.S.; narrowing the scope of the gas
  866         production tax to apply only to native gas; amending
  867         s. 376.301, F.S.; conforming a cross-reference;
  868         amending s. 377.06, F.S.; making grammatical changes;
  869         declaring underground natural gas storage to be in the
  870         public interest; amending s. 377.18, F.S.; clarifying
  871         common sources of oil and gas; amending s. 377.19,
  872         F.S.; modifying and providing definitions; amending s.
  873         377.21, F.S.; extending the jurisdiction of the
  874         Division of Resource Management of the Department of
  875         Environmental Protection; amending s. 377.22, F.S.;
  876         expanding the scope of the department’s rules and
  877         orders; amending s. 377.24, F.S.; providing for the
  878         notice and permitting of storage in and recovery from
  879         natural gas storage reservoirs; creating s. 377.2407,
  880         F.S.; establishing a natural gas storage facility
  881         permit application process; specifying requirements
  882         for an application, including fees; amending s.
  883         377.241, F.S.; providing criteria that the division
  884         must consider in issuing permits; amending s. 377.242,
  885         F.S.; granting authority to the department to issue
  886         permits to establish natural gas storage facilities;
  887         creating s. 377.2431, F.S.; establishing conditions
  888         and procedures for granting natural gas storage
  889         facility permits; limiting the right of a county or
  890         municipality to regulate natural gas storage
  891         facilities; prohibiting a permit for certain natural
  892         gas storage facilities; creating s. 377.2432, F.S.;
  893         providing for the protection of water supplies at
  894         natural gas storage facilities; providing that a
  895         natural gas storage facility operator is presumed
  896         responsible for pollution of an underground water
  897         supply under certain circumstances; creating s.
  898         377.2433, F.S.; providing for the protection of
  899         natural gas storage facilities through a requirement
  900         of notice, compliance with certain standards, and a
  901         right of entry to monitor activities; creating s.
  902         377.2434, F.S.; providing that property rights to
  903         injected natural gas are with the injector or the
  904         injector’s heirs, successors, or assigns; providing
  905         for compensation to the owner of the stratum and the
  906         owner of the surface for use of or damage to the
  907         surface or substratum; amending s. 377.25, F.S.;
  908         limiting the scope of certain drilling unit
  909         requirements; amending s. 377.28, F.S.; modifying
  910         situations in which the department is required to
  911         issue an order requiring unit operation; amending s.
  912         377.30, F.S.; providing that limitations on the amount
  913         of oil or gas taken do not apply to nonnative gas
  914         recovered from a permitted natural gas storage
  915         facility; amending s. 377.34, F.S.; providing for
  916         legal action against a person who appears to be
  917         violating a rule that relates to the storage or
  918         recovery of natural gas; amending s. 377.37, F.S.;
  919         expanding penalties to reach persons who violate the
  920         terms of a permit relating to storage of gas in a
  921         natural gas storage facility; amending s. 377.371,
  922         F.S.; providing that a person storing gas in a natural
  923         gas storage facility may not pollute or otherwise
  924         damage certain areas and that a person who pollutes
  925         water by storing natural gas is liable for cleanup or
  926         other costs incurred by the state; amending s.
  927         403.973, F.S.; allowing expedited permitting for
  928         natural gas storage facilities permitted under ch.
  929         377, F.S., and for certain projects to construct
  930         interstate natural gas pipelines; providing that
  931         natural gas storage facilities are subject to certain
  932         requirements; requiring the Department of
  933         Environmental Protection to adopt rules; providing an
  934         effective date.