Florida Senate - 2013                                     SB 958
       
       
       
       By Senator Richter
       
       
       
       
       23-01231-13                                            2013958__
    1                        A bill to be entitled                      
    2         An act relating to underground natural gas storage;
    3         providing a short title; amending s. 211.02, F.S.;
    4         narrowing the use of the term “oil”; amending s.
    5         211.025, F.S.; narrowing the scope of the gas
    6         production tax to apply only to native gas; amending
    7         s. 376.301, F.S.; conforming a cross-reference;
    8         amending s. 377.06, F.S.; making grammatical changes;
    9         declaring underground natural gas storage to be in the
   10         public interest; amending s. 377.18, F.S.; clarifying
   11         common sources of oil and gas; amending s. 377.19,
   12         F.S.; modifying and providing definitions; amending s.
   13         377.21, F.S.; extending the jurisdiction of the
   14         Division of Resource Management of the Department of
   15         Environmental Protection; amending s. 377.22, F.S.;
   16         expanding the scope of the department’s rules and
   17         orders; providing that the department’s authority must
   18         be self-executing and that a regulatory action may not
   19         be deemed invalid solely because the department has
   20         not yet adopted a certain rule; amending s. 377.24,
   21         F.S.; providing for the notice and permitting of
   22         storage in and recovery from natural gas storage
   23         reservoirs; creating s. 377.2407, F.S.; establishing a
   24         natural gas storage facility permit application
   25         process; specifying requirements for an application,
   26         including fees; amending s. 377.241, F.S.; providing
   27         criteria that the division must consider in issuing
   28         permits; amending s. 377.242, F.S.; granting authority
   29         to the department to issue permits to establish
   30         natural gas storage facilities; creating s. 377.2431,
   31         F.S.; establishing conditions and procedures for
   32         granting natural gas storage facility permits;
   33         limiting the right of a county or municipality to
   34         regulate natural gas storage facilities; creating s.
   35         377.2432, F.S.; providing for the protection of water
   36         supplies at natural gas storage facilities; providing
   37         that an operator is presumed responsible for pollution
   38         of an underground water supply under certain
   39         circumstances; creating s. 377.2433, F.S.; providing
   40         for the protection of natural gas storage facilities
   41         through an administrative hearing; creating s.
   42         377.2434, F.S.; providing that property rights to
   43         injected natural gas are with the injector or the
   44         injector’s heirs, successors, or assigns; providing
   45         for compensation to the owner of the stratum and the
   46         owner of the surface for use of or damage to the
   47         surface or substratum; amending s. 377.25, F.S.;
   48         limiting the scope of certain drilling unit
   49         requirements; amending s. 377.28, F.S.; providing that
   50         the department may consider the need for the operation
   51         as a unit for the storage of natural gas; modifying
   52         situations in which the department is required to
   53         issue an order requiring unit operation; amending s.
   54         377.29, F.S.; authorizing certain agreements between
   55         owners and operators of a natural gas storage
   56         facility; amending s. 377.30, F.S.; providing that
   57         limitations on the amount of oil or gas taken do not
   58         apply to nonnative gas recovered from a permitted
   59         natural gas storage facility; amending s. 377.34,
   60         F.S.; providing for legal action against a person who
   61         appears to be violating a rule that relates to the
   62         storage or recovery of natural gas; amending s.
   63         377.37, F.S.; expanding penalties to reach persons who
   64         violate the terms of a permit relating to storage of
   65         gas in a natural gas storage facility; amending s.
   66         377.371, F.S.; providing that a person storing gas in
   67         a natural gas storage facility may not pollute or
   68         otherwise damage certain areas and that a person who
   69         pollutes water by storing natural gas is liable for
   70         cleanup or other costs incurred by the state; amending
   71         s. 403.973, F.S.; allowing expedited permitting for
   72         natural gas storage facilities permitted under ch.
   73         377, F.S.; providing that natural gas storage
   74         facilities are subject to certain requirements;
   75         providing an effective date.
   76  
   77  Be It Enacted by the Legislature of the State of Florida:
   78  
   79         Section 1. This act may be cited as the “Florida
   80  Underground Natural Gas Storage Act.”
   81         Section 2. Subsection (7) is added to section 211.02,
   82  Florida Statutes, to read:
   83         211.02 Oil production tax; basis and rate of tax; tertiary
   84  oil and mature field recovery oil.—An excise tax is hereby
   85  levied upon every person who severs oil in the state for sale,
   86  transport, storage, profit, or commercial use. Except as
   87  otherwise provided in this part, the tax is levied on the basis
   88  of the entire production of oil in this state, including any
   89  royalty interest. Such tax shall accrue at the time the oil is
   90  severed and shall be a lien on production regardless of the
   91  place of sale, to whom sold, or by whom used, and regardless of
   92  the fact that delivery of the oil may be made outside the state.
   93         (7) As used in this section, the term “oil” does not
   94  include gas-phase hydrocarbons that are transported into the
   95  state, injected in the gaseous phase into a natural gas storage
   96  facility permitted under part I of chapter 377, and later
   97  recovered as a liquid hydrocarbon.
   98         Section 3. Subsection (6) is added to section 211.025,
   99  Florida Statutes, to read:
  100         211.025 Gas production tax; basis and rate of tax.—An
  101  excise tax is hereby levied upon every person who severs gas in
  102  the state for sale, transport, profit, or commercial use. Except
  103  as otherwise provided in this part, the tax shall be levied on
  104  the basis of the entire production of gas in this state,
  105  including any royalty interest. Such tax shall accrue at the
  106  time the gas is severed and shall be a lien on production
  107  regardless of the place of sale, to whom sold, or by whom used
  108  and regardless of the fact that delivery of the gas may be made
  109  outside the state.
  110         (6) This section applies only to native gas as defined in
  111  s. 377.19.
  112         Section 4. Subsection (36) of section 376.301, Florida
  113  Statutes, is amended to read:
  114         376.301 Definitions of terms used in ss. 376.30-376.317,
  115  376.70, and 376.75.—When used in ss. 376.30-376.317, 376.70, and
  116  376.75, unless the context clearly requires otherwise, the term:
  117         (36) “Pollutants” includes any “product” as defined in s.
  118  377.19(11), pesticides, ammonia, chlorine, and derivatives
  119  thereof, excluding liquefied petroleum gas.
  120         Section 5. Section 377.06, Florida Statutes, is amended to
  121  read:
  122         377.06 Public policy of state concerning natural resources
  123  of oil and gas.—It is hereby declared to be the public policy of
  124  this the state to conserve and control the natural resources of
  125  oil and gas in this said state, and the products made from oil
  126  and gas in this state therefrom; to prevent waste of said
  127  natural resources; to provide for the protection and adjustment
  128  of the correlative rights of the owners of the land in which the
  129  wherein said natural resources lie, of and the owners and
  130  producers of oil and gas resources and the products made from
  131  oil and gas therefrom, and of others interested in these
  132  resources and products therein; to safeguard the health,
  133  property, and public welfare of the residents citizens of this
  134  said state and other interested persons and for all purposes
  135  indicated by the provisions in this section herein. Further, it
  136  is declared that underground storage of natural gas is in the
  137  public interest because underground storage promotes
  138  conservation of natural gas; makes gas more readily available to
  139  the domestic, commercial, and industrial consumers of this
  140  state; and allows the accumulation of large quantities of gas in
  141  reserve for orderly withdrawal during emergencies or periods of
  142  peak demand. It is not the intention of this section to limit,
  143  or restrict, or modify in any way the provisions of this law.
  144         Section 6. Section 377.18, Florida Statutes, is amended to
  145  read:
  146         377.18 Common sources of oil and gas.—All common sources of
  147  supply of oil or native and gas or either of them shall have the
  148  production therefrom controlled or regulated in accordance with
  149  the provisions of this law.
  150         Section 7. Section 377.19, Florida Statutes, is reordered
  151  and amended to read:
  152         377.19 Definitions.—As used Unless the context otherwise
  153  requires, the words defined in this section shall have the
  154  following meanings when found in ss. 377.06, 377.07, and 377.10
  155  377.40, the term:
  156         (3)(1) “Division” means the Division of Resource Management
  157  of the Department of Environmental Protection.
  158         (28)(2) “State” means the State of Florida.
  159         (20)(3) “Person” means a any natural person, corporation,
  160  association, partnership, receiver, trustee, guardian, executor,
  161  administrator, fiduciary, or representative of any kind.
  162         (15)(4) “Oil” means crude petroleum oil and other
  163  hydrocarbons, regardless of gravity, which are produced at the
  164  well in liquid form by ordinary production methods, and which
  165  are not the result of condensation of gas after it leaves the
  166  reservoir.
  167         (5) “Gas” means all natural gas, including casinghead gas,
  168  and all other hydrocarbons not defined as oil in subsection (4).
  169         (21)(6) “Pool” means an underground reservoir containing or
  170  appearing to contain a common accumulation of oil or gas or
  171  both. Each zone of a general structure which is completely
  172  separated from any other zone on the structure is considered a
  173  separate pool as used herein.
  174         (4)(7) “Field” means the general area that which is
  175  underlaid, or appears to be underlaid, by at least one pool. The
  176  term; and “field” includes the underground reservoir, or
  177  reservoirs, containing oil or gas, or both. The terms words
  178  “field” and “pool” mean the same thing if when only one
  179  underground reservoir is involved; however, the term “field,”
  180  unlike the term “pool,” may relate to two or more pools.
  181         (19)(8) “Owner” means the person who has the right to drill
  182  into and to produce from any pool and to appropriate the
  183  production either for the person or for the person and another,
  184  or others.
  185         (22)(9) “Producer” means the owner or operator of a well or
  186  wells capable of producing oil or gas, or both.
  187         (31)(10) “Waste,” in addition to its ordinary meaning,
  188  means “physical waste” as that term is generally understood in
  189  the oil and gas industry. The term “waste” includes:
  190         (a) The inefficient, excessive, or improper use or
  191  dissipation of reservoir energy; and the locating, spacing,
  192  drilling, equipping, operating, or producing of any oil or gas
  193  well or wells in a manner that which results, or tends to
  194  result, in reducing the quantity of oil or gas ultimately to be
  195  stored or recovered from any pool in this state.
  196         (b) The inefficient storing of oil; and the locating,
  197  spacing, drilling, equipping, operating, or producing of any oil
  198  or gas well or wells in a manner that causes, or tends causing,
  199  or tending to cause, unnecessary or excessive surface loss or
  200  destruction of oil or gas.
  201         (c) The producing of oil or gas in such a manner that
  202  causes as to cause unnecessary water channeling or coning.
  203         (d) The operation of any oil well or wells with an
  204  inefficient gas-oil ratio.
  205         (e) The drowning with water of any stratum or part thereof
  206  capable of producing oil or gas.
  207         (f) The underground waste, however caused and whether or
  208  not defined, which does not include seepage or migration of
  209  injected nonnative gas from a natural gas storage reservoir.
  210         (g) The creation of unnecessary fire hazards.
  211         (h) The escape into the open air, from a well producing
  212  both oil and gas, of gas in excess of the amount that which is
  213  necessary in the efficient drilling or operation of the well.
  214         (i) The use of gas for the manufacture of carbon black.
  215         (j) The unnecessary escape into the air of Permitting gas
  216  produced from a gas well to escape into the air.
  217         (k) The abuse of the correlative rights and opportunities
  218  of each owner of oil and gas in a common reservoir due to
  219  nonuniform, disproportionate, and unratable withdrawals, causing
  220  undue drainage between tracts of land.
  221         (23)(11) “Product” means a any commodity made from oil or
  222  gas and includes refined crude oil, crude tops, topped crude,
  223  processed crude petroleum, residue from crude petroleum,
  224  cracking stock, uncracked fuel oil, fuel oil, treated crude oil,
  225  residuum, gas oil, casinghead gasoline, natural gas gasoline,
  226  naphtha, distillate, condensate, gasoline, waste oil, kerosene,
  227  benzine, wash oil, blended gasoline, lubricating oil, blends or
  228  mixtures of oil with one or more liquid products or byproducts
  229  derived from oil or gas, and blends or mixtures of two or more
  230  liquid products or byproducts derived from oil or gas, whether
  231  hereinabove enumerated or not.
  232         (8)(12) “Illegal oil” means oil that which has been
  233  produced within the state from any well or wells in excess of
  234  the amount allowed by rule, regulation, or order of the
  235  division, as distinguished from oil produced within the state
  236  from a well not producing in excess of the amount so allowed,
  237  which is “legal oil.”
  238         (7)(13) “Illegal gas” means gas that which has been
  239  produced within the state from any well or wells in excess of
  240  the amount allowed by any rule, regulation, or order of the
  241  division, as distinguished from gas produced within the State of
  242  Florida from a well not producing in excess of the amount so
  243  allowed, which is “legal gas.”
  244         (9)(14) “Illegal product” means a any product of oil or
  245  gas, any part of which was processed or derived, in whole or in
  246  part, from illegal gas or illegal oil or from any product
  247  thereof, as distinguished from “legal product,” which is a
  248  product processed or derived to no extent from illegal oil or
  249  illegal gas.
  250         (24)(15) “Reasonable market demand” means the amount of oil
  251  reasonably needed for current consumption, together with a
  252  reasonable amount of oil for storage and working stocks.
  253         (30)(16) “Tender” means a permit or certificate of
  254  clearance for the transportation or the delivery of oil, gas, or
  255  products, approved and issued or registered under the authority
  256  of the division.
  257         (17) The use of the word “and” includes the word “or” and
  258  the use of “or” includes “and,” unless the context clearly
  259  requires a different meaning, especially with respect to such
  260  expressions as “oil and gas” or “oil or gas.”
  261         (32)(18) “Well site” means the general area around a well,
  262  which area has been disturbed from its natural or existing
  263  condition, as well as the drilling or production pad, mud and
  264  water circulation pits, and other operation areas necessary to
  265  drill for or produce oil or gas, or to inject gas into and
  266  recover gas from a natural gas storage facility.
  267         (17)(19) “Oil and gas administrator” means the State
  268  Geologist.
  269         (18)(20) “Operator” means the entity who:
  270         (a) Has the right to drill and to produce a well; or
  271         (b) As part of a natural gas storage facility, injects, or
  272  is engaged in the work of preparing to inject, gas into a
  273  natural gas storage reservoir; or stores gas in, or removes gas
  274  from, a natural gas storage reservoir.
  275         (1)(21) “Completion date” means the day, month, and year
  276  that a new productive well, a previously shut-in well, or a
  277  temporarily abandoned well is completed, repaired, or
  278  recompleted and the operator begins producing oil or gas in
  279  commercial quantities.
  280         (26)(22) “Shut-in well” means an oil or gas well that has
  281  been taken out of service for economic reasons or mechanical
  282  repairs.
  283         (29)(23) “Temporarily abandoned well” means a permitted
  284  well or wellbore that has been abandoned by plugging in a manner
  285  that allows reentry and redevelopment in accordance with oil or
  286  gas rules of the Department of Environmental Protection.
  287         (14)(24) “New field well” means an oil or gas well
  288  completed after July 1, 1997, in a new field as designated by
  289  the Department of Environmental Protection.
  290         (6)(25) “Horizontal well” means a well completed with the
  291  wellbore in a horizontal or nearly horizontal orientation within
  292  10 degrees of horizontal within the producing formation.
  293         (2) “Department” means the Department of Environmental
  294  Protection.
  295         (10) “Lateral storage reservoir boundary” means the
  296  projection up to the land surface of the maximum horizontal
  297  extent of the gas volume contained in a natural gas storage
  298  reservoir.
  299         (11) “Native gas” means gas that occurs naturally within
  300  this state and does not include gas produced outside the state,
  301  transported to this state, and injected into a permitted natural
  302  gas storage facility.
  303         (12) “Natural gas storage facility” means an underground
  304  reservoir used or to be used for the underground storage of
  305  natural gas, and any surface or subsurface structure,
  306  infrastructure, right, or appurtenance necessary or useful in
  307  the operation of the facility for the underground storage of
  308  natural gas, including any necessary or reasonable reservoir
  309  protective area as designated for the purpose of ensuring the
  310  safe operation of the storage of natural gas or protecting the
  311  natural gas storage facility from pollution, invasion, escape,
  312  or migration of gas, or any subsequent extension thereof.
  313         (13) “Natural gas storage reservoir” means a pool or field
  314  suitable for or capable of being made suitable for the
  315  injection, storage, and recovery of gas.
  316         (16) “Oil and gas” has the same meaning as the term “oil or
  317  gas.”
  318         (25) “Reservoir protective area” means the area extending
  319  up to and including 2,000 feet surrounding a natural gas lateral
  320  storage reservoir boundary.
  321         (27) “Shut-in wellhead pressure” means the pressure at the
  322  casinghead or wellhead when all valves are closed and no oil or
  323  gas has been allowed to escape for at least 24 hours.
  324         Section 8. Subsection (1) of section 377.21, Florida
  325  Statutes, is amended to read:
  326         377.21 Jurisdiction of division.—
  327         (1) The division shall have jurisdiction and authority over
  328  all persons and property necessary to administer and enforce
  329  effectively the provisions of this law and all other laws
  330  relating to the conservation of oil and gas or to the storage of
  331  gas in and recovery of gas from natural gas storage reservoirs.
  332         Section 9. Subsection (2) of section 377.22, Florida
  333  Statutes, is amended, and subsection (3) is added to that
  334  section, to read:
  335         377.22 Rules and orders.—
  336         (2) The department shall issue orders and adopt rules
  337  pursuant to ss. 120.536(1) and 120.54 to implement and enforce
  338  the provisions of this chapter. Such rules and orders shall
  339  ensure that all precautions are taken to prevent the spillage of
  340  oil or any other pollutant in all phases of the drilling for,
  341  and extracting of, oil, gas, or other petroleum products, or
  342  during the injection of gas into and recovery of gas from a
  343  natural gas storage reservoir. The department shall revise such
  344  rules from time to time as necessary for the proper
  345  administration and enforcement of this chapter. Rules adopted
  346  and orders issued in accordance with this section are shall be
  347  for, but shall not be limited to, the following purposes:
  348         (a) To require the drilling, casing, and plugging of wells
  349  to be done in such a manner as to prevent the pollution of the
  350  fresh, salt, or brackish waters or the lands of the state and to
  351  protect the integrity of natural gas storage reservoirs.
  352         (b) To prevent the alteration of the sheet flow of water in
  353  any area.
  354         (c) To require that appropriate safety equipment be
  355  installed to minimize the possibility of an escape of oil or
  356  other petroleum products in the event of accident, human error,
  357  or a natural disaster during drilling, casing, or plugging of
  358  any well and during extraction operations.
  359         (d) To require the drilling, casing, and plugging of wells
  360  to be done in such a manner as to prevent the escape of oil or
  361  other petroleum products from one stratum to another.
  362         (e) To prevent the intrusion of water into an oil or gas
  363  stratum from a separate stratum, except as provided by rules of
  364  the division relating to the injection of water for proper
  365  reservoir conservation and brine disposal.
  366         (f) To require a reasonable bond, or other form of security
  367  acceptable to the department, conditioned upon the performance
  368  of the duty to plug properly each dry and abandoned well and the
  369  full and complete restoration by the applicant of the area over
  370  which geophysical exploration, drilling, or production is
  371  conducted to the similar contour and general condition in
  372  existence prior to such operation.
  373         (g) To require and carry out a reasonable program of
  374  producing or injecting wells, or monitoring or inspection of all
  375  drilling operations or producing wells, including regular
  376  inspections by division personnel.
  377         (h) To require the making of reports showing the location
  378  of all oil and gas wells; the making and filing of logs; the
  379  taking and filing of directional surveys; the filing of
  380  electrical, sonic, radioactive, and mechanical logs of oil and
  381  gas wells; if taken, the saving of cutting and cores, the cuts
  382  of which shall be given to the Bureau of Geology; and the making
  383  of reports with respect to drilling and production records.
  384  However, such information, or any part thereof, at the request
  385  of the operator, shall be exempt from the provisions of s.
  386  119.07(1) and held confidential by the division for a period of
  387  1 year after the completion of a well.
  388         (i) To prevent wells from being drilled, operated, or
  389  produced in such a manner as to cause injury to neighboring
  390  leases, or property, or natural gas storage reservoirs.
  391         (j) To prevent the drowning by water of any stratum, or
  392  part thereof, capable of producing oil or gas in paying
  393  quantities and to prevent the premature and irregular
  394  encroachment of water which reduces, or tends to reduce, the
  395  total ultimate recovery of oil or gas from any pool.
  396         (k) To require the operation of wells with efficient gas
  397  oil ratio, and to fix such ratios.
  398         (l) To prevent “blowouts,” “caving,” and “seepage,” in the
  399  sense that conditions indicated by such terms are generally
  400  understood in the oil and gas business.
  401         (m) To prevent fires.
  402         (n) To identify the ownership of all oil or gas wells,
  403  producing leases, refineries, tanks, plants, structures, and
  404  storage and transportation equipment and facilities.
  405         (o) To regulate the “shooting,” perforating and chemical
  406  treatment of wells.
  407         (p) To regulate secondary recovery methods, including the
  408  introduction of gas, air, water, or other substance into
  409  producing formations.
  410         (q) To regulate gas cycling operations.
  411         (r) To regulate the storage and recovery of gas injected
  412  into natural gas storage facilities.
  413         (s)(r) If necessary for the prevention of waste, as herein
  414  defined, to determine, limit, and prorate the production of oil
  415  or gas, or both, from any pool or field in the state.
  416         (t)(s) To require, either generally or in or from
  417  particular areas, certificates of clearance or tenders in
  418  connection with the transportation or delivery of oil or gas, or
  419  any product.
  420         (u)(t) To regulate the spacing of wells and to establish
  421  drilling units.
  422         (v)(u) To prevent, so far as is practicable, reasonably
  423  avoidable drainage from each developed unit which is not
  424  equalized by counterdrainage.
  425         (w)(v) To require that geophysical operations requiring a
  426  permit be conducted in a manner which will minimize the impact
  427  on hydrology and biota of the area, especially environmentally
  428  sensitive lands and coastal areas.
  429         (x)(w) To regulate aboveground crude oil storage tanks in a
  430  manner which will protect the water resources of the state.
  431         (y)(x) To act in a receivership capacity for fractional
  432  mineral interests for which the owners are unknown or unlocated
  433  and to administratively designate the operator as the lessee.
  434         (3) Notwithstanding the grant of rulemaking authority in
  435  this section, the authority of the department to regulate the
  436  activities described in this section must be self-executing. A
  437  regulatory action taken by the department, including, but not
  438  limited to, the receipt and processing of permit applications or
  439  the issuance of permits, may not be deemed invalid solely
  440  because the department has not yet adopted rules regarding such
  441  regulatory action.
  442         Section 10. Subsections (1) and (2) of section 377.24,
  443  Florida Statutes, are amended to read:
  444         377.24 Notice of intention to drill well; permits;
  445  abandoned wells and dry holes.—
  446         (1) Before drilling a any well in search of oil or gas, or
  447  before storing gas in or recovering gas from a natural gas
  448  storage reservoir shall be drilled, the person who desires
  449  desiring to drill, store, or recover oil or gas the same shall
  450  notify the division upon such form as it may prescribe and shall
  451  pay a reasonable fee set by rule of the department not to exceed
  452  the actual cost of processing and inspecting for each well or
  453  reservoir. The drilling of any well and the storing and
  454  recovering of gas are is hereby prohibited until such notice is
  455  given, the and such fee is has been paid, and the permit is
  456  granted.
  457         (2) An Each application for the drilling of a well in
  458  search of oil or gas, or for the storing of gas in and
  459  recovering of gas from a natural gas storage reservoir, in this
  460  state must shall include the address of the residence of the
  461  applicant, or applicants each applicant, which must address
  462  shall be the address of each person involved in accordance with
  463  the records of the Division of Resource Management until such
  464  address is changed on the records of the division after written
  465  request.
  466         Section 11. Section 377.2407, Florida Statutes, is created
  467  to read:
  468         377.2407Natural gas storage facility permit application to
  469  inject gas into and recover gas from a natural gas storage
  470  reservoir.—
  471         (1) Before drilling a well to inject gas into and recover
  472  gas from a natural gas storage reservoir, the person who desires
  473  to conduct such operation shall apply to the department in the
  474  manner described in this section or using such form as the
  475  department may prescribe and shall pay a reasonable fee for
  476  processing to obtain a natural gas storage facility permit.
  477         (2) Each application must contain:
  478         (a) A detailed, three-dimensional description of the
  479  natural gas storage reservoir, including geologic-based
  480  descriptions of the reservoir boundaries, and the horizontal and
  481  vertical dimensions.
  482         (b) A geographic description of the lateral reservoir
  483  boundary.
  484         (c) A description and location of all injection, recovery,
  485  and observation wells, including casing and cementing plans for
  486  each well.
  487         (d) A description of the reservoir protective area.
  488         (e) Information demonstrating that the proposed natural gas
  489  storage reservoir is suitable for the storage and recovery of
  490  gas.
  491         (f) Information identifying all known abandoned or active
  492  wells within the natural gas storage facility.
  493         (g) A field-monitoring plan that requires, at a minimum,
  494  monthly field inspections of all wells that are part of the
  495  natural gas storage facility.
  496         (h) A monitoring and testing plan for the well integrity.
  497         (i) A well inspection plan that requires, at a minimum, the
  498  inspection of all wells that are part of the natural gas storage
  499  facility and plugged wells within the natural gas storage
  500  facility boundary.
  501         (j) A casing inspection plan.
  502         (k) A spill prevention and response plan.
  503         (l) A well spacing plan.
  504         (m) An operating plan for the natural gas storage
  505  reservoir, which must include gas capacities, anticipated
  506  operating conditions, and maximum storage pressure.
  507         (n) A gas migration response plan.
  508         (3) Each application may require additional information
  509  that is deemed necessary to permit the development of wells;
  510  drilling of wells; and operation of exploratory investigation,
  511  injection of gas into and recovery of gas from reservoirs, and
  512  monitoring of wells. Each well may be authorized under the
  513  natural gas storage facility permit subject to each well
  514  individually satisfying applicable well construction and
  515  operation criteria under this part.
  516         Section 12. Subsection (4) is added to section 377.241,
  517  Florida Statutes, to read:
  518         377.241 Criteria for issuance of permits.—The division, in
  519  the exercise of its authority to issue permits as hereinafter
  520  provided, shall give consideration to and be guided by the
  521  following criteria:
  522         (4) For activities and operations concerning a natural gas
  523  storage facility, the nature, structure, and proposed use of the
  524  natural gas storage reservoir is suitable for the storage and
  525  recovery of gas without adverse effect to public health or
  526  safety or the environment.
  527         Section 13. Subsection (3) of section 377.242, Florida
  528  Statutes, is amended to read:
  529         377.242 Permits for drilling or exploring and extracting
  530  through well holes or by other means.—The department is vested
  531  with the power and authority:
  532         (3) To issue permits to establish natural gas storage
  533  facilities or construct wells for the injection and recovery of
  534  any natural gas for temporary storage in natural gas storage
  535  subsurface reservoirs.
  536  
  537  Each permit shall contain an agreement by the permitholder that
  538  the permitholder will not prevent inspection by division
  539  personnel at any time. The provisions of this section
  540  prohibiting permits for drilling or exploring for oil in coastal
  541  waters do not apply to any leases entered into before June 7,
  542  1991.
  543         Section 14. Section 377.2431, Florida Statutes, is created
  544  to read:
  545         377.2431Conditions for granting permits for natural gas
  546  storage facilities.—
  547         (1) A natural gas storage facility permit must be issued
  548  for the life of the facility, subject to recertification every 5
  549  years.
  550         (2) Before issuing or reissuing a permit, the division
  551  shall require satisfactory evidence of the following:
  552         (a) The applicant has implemented, or is in the process of
  553  implementing, programs for the control and mitigation of
  554  pollution related to oil, petroleum products or their
  555  byproducts, and other pollutants.
  556         (b) The applicant or operator has acquired a lawful right
  557  to drill, explore, or develop a natural gas storage reservoir
  558  from a majority of the property interests, which may be acquired
  559  through eminent domain or by any legal instrument conveying to
  560  the applicant or operator such property interests or the right
  561  to develop the natural gas storage reservoir; or the applicant
  562  or operator has obtained a certificate of public convenience and
  563  necessity for the natural gas storage reservoir from the Federal
  564  Energy Regulatory Commission pursuant to the Natural Gas Act, 15
  565  U.S.C. ss. 717 et seq.
  566         (c) The applicant has used all reasonable means to identify
  567  known wells that have been drilled into or through the natural
  568  gas storage reservoir to determine the status of the wells and
  569  whether inactive or abandoned wells have been properly plugged.
  570  For any well that has not been properly plugged, before
  571  conducting injection operations and after issuance of the
  572  permit, the applicant must plug or recondition the well to
  573  ensure the integrity of the storage reservoir.
  574         (d) The applicant has tested the quality of water produced
  575  by all water supply wells within the lateral boundary of the
  576  natural gas storage facility and complied with all requirements
  577  under s. 377.2432. The applicant shall provide to the department
  578  and the owner of the water supply well a written copy of the
  579  water quality data collected under this paragraph.
  580         (3) All inspections and other reports required under this
  581  section must be submitted to the department in the manner
  582  prescribed by rule.
  583         (4) A natural gas storage facility operator shall request
  584  approval of a maximum storage pressure for a natural gas storage
  585  reservoir in accordance with the following:
  586         (a) The maximum shut-in wellhead pressure may not exceed
  587  the highest shut-in wellhead pressure found to exist during the
  588  production history of the reservoir, unless a higher pressure is
  589  established by the department based on testing of caprock and
  590  pool containment. The methods used for determining the higher
  591  pressure must be approved by the department.
  592         (b) If the shut-in wellhead pressure of the original
  593  discovery or of the highest production is not known, or a higher
  594  pressure has not been established through a method approved by
  595  the department pursuant to paragraph (a), the maximum storage
  596  reservoir pressure must be limited to a freshwater hydrostatic
  597  gradient.
  598         (5) The department may issue a permit to an applicant
  599  regardless of whether the department has adopted rules for the
  600  activities or operations authorized under this section, or rules
  601  prescribing the forms of the application for a permit.
  602         (6) A county or municipality may not adopt an ordinance,
  603  resolution, comprehensive plan, or land development regulation,
  604  or otherwise attempt to regulate or enforce any matter
  605  concerning natural gas storage facilities governed under this
  606  part.
  607         Section 15. Section 377.2432, Florida Statutes, is created
  608  to read:
  609         377.2432Natural gas storage facilities; protection of
  610  water supplies.—
  611         (1) An operator of a natural gas storage facility who
  612  affects a public or private underground water supply by
  613  pollution or diminution shall restore or replace the affected
  614  supply with an alternate source of water adequate in quantity
  615  and quality for the purposes served by the supply. The
  616  department shall ensure that the quality of restored or replaced
  617  water is comparable to the quality of the water before it was
  618  affected by the operator.
  619         (2) Unless rebutted by a defense established in subsection
  620  (4), an operator is presumed responsible for pollution of an
  621  underground water supply if:
  622         (a) The water supply is within the horizontal boundary of
  623  the natural gas storage facility; and
  624         (b) The pollution occurred within 6 months after completion
  625  of drilling or alteration of any well under or associated with
  626  the natural gas storage facility permit.
  627         (3) If the affected underground water supply is within the
  628  rebuttable presumption area as provided in subsection (2) and
  629  the rebuttable presumption applies, the operator shall provide a
  630  temporary water supply if the water user is without a readily
  631  available alternative source of water. The temporary water
  632  supply provided under this subsection must be adequate in
  633  quantity and quality for the purposes served by the affected
  634  supply.
  635         (4) A natural gas storage facility operator rebuts the
  636  presumption in subsection (2) by affirmatively proving any of
  637  the following:
  638         (a) The pollution existed before the drilling or alteration
  639  activity as determined by a predrilling or prealteration survey.
  640         (b) The landowner or water purveyor refused to allow the
  641  operator access to conduct a predrilling or prealteration
  642  survey.
  643         (c) The water supply well is not within the lateral
  644  boundary of the natural gas storage facility.
  645         (d) The pollution occurred more than 6 months after
  646  completion of drilling or alteration of any well under or
  647  associated with the natural gas storage facility permit.
  648         (e) The pollution occurred as the result of a cause other
  649  than activities authorized under the natural gas storage
  650  facility permit.
  651         (5) An operator electing to preserve a defense under
  652  subsection (4) must retain an independent certified laboratory
  653  to conduct a predrilling or prealteration survey of the water
  654  supply. A copy of survey results must be submitted to the
  655  department and the landowner or water purveyor in the manner
  656  prescribed by the department.
  657         (6) An operator must provide written notice to the
  658  landowner or water purveyor indicating that the presumption
  659  established under subsection (2) may be void if the landowner or
  660  water purveyor refused to allow the operator access to conduct a
  661  predrilling or prealteration survey. Proof of written notice to
  662  the landowner or water purveyor must be provided to the
  663  department in order for the operator to retain the protections
  664  under subsection (4).
  665         (7) This section does not prevent a landowner or water
  666  purveyor who claims pollution or diminution of a water supply
  667  from seeking any other remedy at law or in equity.
  668         Section 16. Section 377.2433, Florida Statutes, is created
  669  to read:
  670         377.2433Protection of natural gas storage facilities;
  671  remedies.—
  672         (1) The department may not authorize the drilling of any
  673  well into or through a permitted natural gas storage reservoir
  674  or reservoir protective area, except upon conditions deemed by
  675  the department to be sufficient to prevent the loss, migration,
  676  or escape of gas from the natural gas storage reservoir. The
  677  department shall provide written notice to the natural gas
  678  storage facility operator of any application filed with the
  679  department and any agency action taken related to drilling a
  680  well into or through a permitted natural gas storage facility
  681  boundary or reservoir protective area.
  682         (2) As a condition for the issuance of a permit by the
  683  department, an applicant seeking to drill a well into or through
  684  a permitted natural gas storage facility boundary or reservoir
  685  protective area must provide the affected natural gas storage
  686  facility operator a reasonable right of entry to observe and
  687  monitor all drilling activities.
  688         (3) The department shall ensure that any well drilled into
  689  or through a permitted natural gas storage reservoir or
  690  reservoir protective area is cased and cemented in a manner
  691  sufficient to protect the integrity of the natural gas storage
  692  reservoir.
  693         (4) A natural gas storage facility operator may petition
  694  the department for a determination that any other activity is
  695  causing gas migration, escape, or loss, or in any other respect
  696  adversely affecting the integrity and use of the natural gas
  697  storage reservoir. Upon the filing of such petition, the
  698  department shall conduct a preliminary investigation and make a
  699  preliminary determination of whether probable cause exists to
  700  believe that the allegations of the petition may be true and
  701  correct. If the department determines that probable cause
  702  exists, the department shall:
  703         (a)Require the activity allegedly causing the adverse
  704  effect to immediately cease operations or take other steps
  705  necessary to prevent harm pending a final determination.
  706         (b)Refer the petition to the Division of Administrative
  707  Hearings to conduct formal administrative proceedings pursuant
  708  to ss. 120.57 and 120.569 to make findings of fact regarding the
  709  allegations of the petition. Based upon such findings of fact,
  710  the department shall enter a final order granting or denying the
  711  petition. Any final order granting such petition must include
  712  remedial measures to be undertaken by the activity alleged to be
  713  causing gas migration up to and including complete cessation of
  714  such activity. Final orders issued pursuant to this paragraph
  715  are appealable pursuant to s. 120.68.
  716         (5) This section does not prohibit a natural gas storage
  717  facility operator from seeking any other remedy at law or in
  718  equity.
  719         Section 17. Section 377.2434, Florida Statutes, is created
  720  to read:
  721         377.2434Property rights to injected natural gas.—
  722         (1) All natural gas that has previously been reduced to
  723  possession and that is subsequently injected into a natural gas
  724  storage facility, whether the storage rights were acquired by
  725  eminent domain or otherwise, are at all times the property of
  726  the injector or the injector’s heirs, successors, or assigns,
  727  whether owned by the injector or stored under contract.
  728         (2) Such gas may not be subject to the right of the owner
  729  of the surface of the lands or of any mineral interest therein,
  730  under which the natural gas storage facilities lie, or to the
  731  right of any person, other than the injector or the injector’s
  732  heirs, successors, or assigns, to waste or otherwise interfere
  733  with or exercise control over such gas, to produce, to take, or
  734  to reduce to possession, by means of the law of capture or
  735  otherwise. This subsection does not affect the ownership of
  736  hydrocarbons occurring naturally within this state or the right
  737  of the owner of the surface of the lands or of any mineral
  738  interest therein to drill or bore through the natural gas
  739  storage facilities in a manner that will protect the facilities
  740  against pollution or the escape of stored natural gas.
  741         (3) With regard to natural gas that has migrated to
  742  adjoining property or to a stratum, or portion thereof, which
  743  has not been condemned or otherwise purchased:
  744         (a) The injector or the injector’s heirs, successors, or
  745  assigns:
  746         1. May not lose title to or possession of the gas if the
  747  injector or the injector’s heirs, successors, or assigns can
  748  prove by a preponderance of the evidence that the gas was
  749  originally injected into the underground storage; and
  750         2. Have the right to conduct tests on any existing wells on
  751  adjoining property as may be reasonable to determine ownership
  752  of the gas, but the tests are solely at the injector’s risk and
  753  expense.
  754         (b) The owner of the stratum and the owner of the surface
  755  are entitled to compensation, including compensation for use of
  756  or damage to the surface or substratum, as provided by law.
  757         Section 18. Subsection (3) of section 377.25, Florida
  758  Statutes, is amended to read:
  759         377.25 Production pools; drilling units.—
  760         (3) Each well permitted to be drilled upon any drilling
  761  unit shall be drilled approximately in the center thereof, with
  762  such exception as may be reasonably necessary where the division
  763  finds that the unit is partly outside the pool or, for some
  764  other reason, a well approximately in the center of the unit
  765  would be nonproductive or where topographical conditions are
  766  such as to make the drilling approximately in the center of the
  767  unit unduly burdensome or where the operator proposes to
  768  complete the well with a horizontal or nearly horizontal well in
  769  the producing zone. Whenever an exception is granted, the
  770  division shall take such action as will offset any advantage
  771  which the person securing the exception may have over other
  772  producers by reason of the drilling of the well as an exception,
  773  and so that drainage from developed units to the tract, with
  774  respect to which the exception is granted, will be prevented or
  775  minimized, and the producer of the well drilled, as an
  776  exception, will be allowed to produce no more than his or her
  777  just and equitable share of the oil and gas in the pool, as such
  778  share is set forth in this section. This subsection does not
  779  apply to injection wells associated with a natural gas storage
  780  facility.
  781         Section 19. Subsections (1), (2), and (4) of section
  782  377.28, Florida Statutes, are amended to read:
  783         377.28 Cycling, pooling, and unitization of oil and gas.—
  784         (1) The department may consider the need for the operation
  785  as a unit of an entire field, or of any pool or pools, portion
  786  or portions, or combinations thereof within a field, for the
  787  storage of natural gas, or for the production of oil or gas, or
  788  both, and other minerals which may be associated and produced
  789  therewith, in order to avoid the drilling of unnecessary wells,
  790  otherwise to prevent waste, or to increase the ultimate storage
  791  of gas and recovery of the unitized minerals by additional
  792  recovery methods.
  793         (2) The department shall issue an order requiring unit
  794  operation if it finds that:
  795         (a) Unit operation of the field, or of any pool or pools,
  796  portion or portions, or combinations thereof within the field,
  797  is reasonably necessary to prevent waste, to avoid the drilling
  798  of unnecessary wells, or to increase the ultimate storage or
  799  recovery of oil or gas by additional recovery methods; and
  800         (b) The estimated additional cost incident to the conduct
  801  of such operation will not exceed the value of the estimated
  802  additional recovery of oil or gas; and
  803         (c) The additional recovery of oil or gas does not
  804  adversely interfere with the storage or recovery of natural gas
  805  within a natural gas storage reservoir.
  806  
  807  The phrase “additional recovery methods” as used herein
  808  includes, but is not limited to, the maintenance or partial
  809  maintenance of reservoir pressures; recycling; flooding a pool
  810  or pools, or parts thereof, with air, gas, water, liquid
  811  hydrocarbons, any other substance, or any combination thereof;
  812  or any other method of producing additional hydrocarbons
  813  approved by the department.
  814         (4) An order requiring unit operation does shall not become
  815  effective unless and until the department makes a finding, in
  816  the order or a supplemental order, of the following:
  817         (a) A contract incorporating the unitization agreement has
  818  been signed or ratified or approved in writing by the owners of
  819  at least 75 percent in interest as costs are shared under the
  820  terms of the order and by 75 percent in interest as production
  821  is to be allocated to the royalty owners in the unit area. If
  822  any entity owns both royalty interests and interests responsible
  823  for costs, such party may vote as an owner responsible for costs
  824  or as a royalty owner, at his or her election, but not as both,
  825  and the entity’s interest that is not voted shall be excluded in
  826  calculating the percentages of consent and nonconsent.
  827         (b) A contract incorporating the required arrangements for
  828  operations has been signed or ratified or approved in writing by
  829  the owners of at least 75 percent in interest as costs are
  830  shared. However, if the contract is incorporating the
  831  unitization agreement or arrangements for operations of a
  832  unitization agreement, only 50 percent of the owners of the pore
  833  space comprising the natural gas storage reservoir must sign or
  834  ratify the contract or approve it in writing.
  835  
  836  , and the department has made a finding to that effect either in
  837  the order or in a supplemental order. Both contracts may be
  838  encompassed in a single document. If In the event the required
  839  percentage interests have not signed, ratified, or approved the
  840  said agreements within 6 months after the date of such order, or
  841  within such extended period as the department may prescribe, it
  842  shall be automatically revoked.
  843         Section 20. Section 377.29, Florida Statutes, is amended to
  844  read:
  845         377.29 Agreements in interest of conservation.—Agreements
  846  made in the interest of conservation of oil or gas, or both, or
  847  for the prevention of waste, between and among owners and
  848  operators, or both, or between and among owners and operators of
  849  a natural gas storage facility, or both, owning separate
  850  holdings in the same oil or gas pool, or in any area that
  851  appears from geological or other data to be underlaid, by a
  852  common accumulation of oil or gas, or both, or between and among
  853  such owners or operators, or both, and royalty owners therein,
  854  of the pool or area, or any part thereof, as a unit for
  855  establishing and carrying out a plan for the cooperative
  856  development and operation thereof, when such agreements are
  857  approved by the division, are hereby authorized and may shall
  858  not be held or construed to violate any of the statutes of this
  859  state relating to trusts, monopolies, or contracts and
  860  combinations in restraint of trade.
  861         Section 21. Subsection (4) is added to section 377.30,
  862  Florida Statutes, to read:
  863         377.30 Limitation on amount of oil or gas taken.—
  864         (4) This section does not apply to nonnative gas recovered
  865  from a permitted natural gas storage facility.
  866         Section 22. Subsection (1) of section 377.34, Florida
  867  Statutes, is amended to read:
  868         377.34 Actions and injunctions by division.—
  869         (1) Whenever it appears shall appear that a any person is
  870  violating, or threatening to violate, any statute of this state
  871  with respect to the conservation of oil or gas, or both, or any
  872  provision of this law, or any rule, regulation or order made
  873  thereunder by any act done in the operation of a any well
  874  producing oil or gas, or storing or recovering natural gas, or
  875  by omitting an any act required to be done thereunder, the
  876  division, through its counsel, or the Department of Legal
  877  Affairs on its own initiative, may bring suit against such
  878  person in the Circuit Court in the County of Leon, state, or in
  879  the circuit court in the county in which the well in question is
  880  located, at the option of the division, or the Department of
  881  Legal Affairs, to restrain such person or persons from
  882  continuing such violation or from carrying out the threat of
  883  violation. In such suit, the division, or the Department of
  884  Legal Affairs, may obtain injunctions, prohibitory and
  885  mandatory, including temporary restraining orders and temporary
  886  injunctions, as the facts may warrant, including, when
  887  appropriate, an injunction restraining any person from moving or
  888  disposing of illegal oil, illegal gas or illegal product, and
  889  any or all such commodities may be ordered to be impounded or
  890  placed under the control of a receiver appointed by the court
  891  if, in the judgment of the court, such action is advisable.
  892         Section 23. Paragraph (a) of subsection (1) of section
  893  377.37, Florida Statutes, is amended to read:
  894         377.37 Penalties.—
  895         (1)(a) Any person who violates any provision of this law or
  896  any rule, regulation, or order of the division made under this
  897  chapter or who violates the terms of any permit to drill for or
  898  produce oil, gas, or other petroleum products referred to in s.
  899  377.242(1), or to store gas in a natural gas storage facility,
  900  or any lessee, permitholder, or operator of equipment or
  901  facilities used in the exploration for, drilling for, or
  902  production of oil, gas, or other petroleum products, or storage
  903  of gas in a natural gas storage facility, who refuses inspection
  904  by the division as provided in this chapter, is liable to the
  905  state for any damage caused to the air, waters, or property,
  906  including animal, plant, or aquatic life, of the state and for
  907  reasonable costs and expenses of the state in tracing the source
  908  of the discharge, in controlling and abating the source and the
  909  pollutants, and in restoring the air, waters, and property,
  910  including animal, plant, and aquatic life, of the state.
  911  Furthermore, such person, lessee, permitholder, or operator is
  912  subject to the judicial imposition of a civil penalty in an
  913  amount of not more than $10,000 for each offense. However, the
  914  court may receive evidence in mitigation. Each day during any
  915  portion of which such violation occurs constitutes a separate
  916  offense. Nothing herein shall give the department the right to
  917  bring an action on behalf of any private person.
  918         Section 24. Subsections (1) and (3) of section 377.371,
  919  Florida Statutes, are amended to read:
  920         377.371 Pollution prohibited; reporting, liability.—
  921         (1) A No person drilling for or producing oil, gas, or
  922  other petroleum products, or storing gas in a natural gas
  923  storage facility, may not shall pollute land or water; damage
  924  aquatic or marine life, wildlife, birds, or public or private
  925  property; or allow any extraneous matter to enter or damage any
  926  mineral or freshwater-bearing formation.
  927         (3) Because it is the intent of this chapter to provide the
  928  means for rapid and effective cleanup and to minimize damages
  929  resulting from pollution in violation of this chapter, if the
  930  waters of the state are polluted by the drilling, storage of
  931  natural gas, or production operations of any person or persons
  932  and such pollution damages or threatens to damage human, animal,
  933  or plant life, public or private property, or any mineral or
  934  water-bearing formation, said person shall be liable to the
  935  state for all costs of cleanup or other damage incurred by the
  936  state. In any suit to enforce claims of the state under this
  937  chapter, it is shall not be necessary for the state to plead or
  938  prove negligence in any form or manner on the part of the person
  939  or persons conducting the drilling or production operations; the
  940  state need only plead and prove the fact of the prohibited
  941  discharge or other polluting condition and that it occurred at
  942  the facilities of the person or persons conducting the drilling
  943  or production operation. A No person or persons conducting the
  944  drilling, storage, or production operation may not shall be held
  945  liable if said person or persons prove that the prohibited
  946  discharge or other polluting condition was the result of any of
  947  the following:
  948         (a) An act of war.
  949         (b) An act of government, either state, federal, or
  950  municipal.
  951         (c) An act of God, which means an unforeseeable act
  952  exclusively occasioned by the violence of nature without the
  953  interference of any human agency.
  954         (d) An act or omission of a third party without regard to
  955  whether any such act or omission was or was not negligent.
  956         Section 25. Paragraph (g) is added to subsection (3) of
  957  section 403.973, Florida Statutes, and paragraph (b) of
  958  subsection (14) of that section is amended, to read:
  959         403.973 Expedited permitting; amendments to comprehensive
  960  plans.—
  961         (3) 
  962         (g) Projects for natural gas storage facilities that are
  963  permitted under chapter 377 are eligible for the expedited
  964  permitting process.
  965         (14)
  966         (b) Projects identified in paragraph (3)(f) or paragraph
  967  (3)(g) or challenges to state agency action in the expedited
  968  permitting process for establishment of a state-of-the-art
  969  biomedical research institution and campus in this state by the
  970  grantee under s. 288.955 are subject to the same requirements as
  971  challenges brought under paragraph (a), except that,
  972  notwithstanding s. 120.574, summary proceedings must be
  973  conducted within 30 days after a party files the motion for
  974  summary hearing, regardless of whether the parties agree to the
  975  summary proceeding.
  976         Section 26. This act shall take effect July 1, 2013.