Florida Senate - 2013                              CS for SB 958
       
       
       
       By the Committee on Environmental Preservation and Conservation;
       and Senators Richter and Smith
       
       
       
       592-04031A-13                                          2013958c1
    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; amending s. 377.24, F.S.; providing for the
   18         notice and permitting of storage in and recovery from
   19         natural gas storage reservoirs; creating s. 377.2407,
   20         F.S.; establishing a natural gas storage facility
   21         permit application process; specifying requirements
   22         for an application, including fees; amending s.
   23         377.241, F.S.; providing criteria that the division
   24         must consider in issuing permits; amending s. 377.242,
   25         F.S.; granting authority to the department to issue
   26         permits to establish natural gas storage facilities;
   27         creating s. 377.2431, F.S.; establishing conditions
   28         and procedures for granting natural gas storage
   29         facility permits; limiting the right of a county or
   30         municipality to regulate natural gas storage
   31         facilities; prohibiting a permit for certain natural
   32         gas storage facilities; creating s. 377.2432, F.S.;
   33         providing for the protection of water supplies at
   34         natural gas storage facilities; providing that a
   35         natural gas storage facility operator is presumed
   36         responsible for pollution of an underground water
   37         supply under certain circumstances; creating s.
   38         377.2433, F.S.; providing for the protection of
   39         natural gas storage facilities through a requirement
   40         of notice, compliance with certain standards, and a
   41         right of entry to monitor activities; 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.; modifying
   50         situations in which the department is required to
   51         issue an order requiring unit operation; amending s.
   52         377.30, F.S.; providing that limitations on the amount
   53         of oil or gas taken do not apply to nonnative gas
   54         recovered from a permitted natural gas storage
   55         facility; amending s. 377.34, F.S.; providing for
   56         legal action against a person who appears to be
   57         violating a rule that relates to the storage or
   58         recovery of natural gas; amending s. 377.37, F.S.;
   59         expanding penalties to reach persons who violate the
   60         terms of a permit relating to storage of gas in a
   61         natural gas storage facility; amending s. 377.371,
   62         F.S.; providing that a person storing gas in a natural
   63         gas storage facility may not pollute or otherwise
   64         damage certain areas and that a person who pollutes
   65         water by storing natural gas is liable for cleanup or
   66         other costs incurred by the state; amending s.
   67         403.973, F.S.; allowing expedited permitting for
   68         natural gas storage facilities permitted under ch.
   69         377, F.S., and for certain projects to construct
   70         interstate natural gas pipelines; providing that
   71         natural gas storage facilities are subject to certain
   72         requirements; requiring the Department of
   73         Environmental Protection to adopt rules; providing an
   74         effective date.
   75  
   76  Be It Enacted by the Legislature of the State of Florida:
   77  
   78         Section 1. This act may be cited as the “Florida
   79  Underground Natural Gas Storage Act.”
   80         Section 2. Subsection (7) is added to section 211.02,
   81  Florida Statutes, to read:
   82         211.02 Oil production tax; basis and rate of tax; tertiary
   83  oil and mature field recovery oil.—An excise tax is hereby
   84  levied upon every person who severs oil in the state for sale,
   85  transport, storage, profit, or commercial use. Except as
   86  otherwise provided in this part, the tax is levied on the basis
   87  of the entire production of oil in this state, including any
   88  royalty interest. Such tax shall accrue at the time the oil is
   89  severed and shall be a lien on production regardless of the
   90  place of sale, to whom sold, or by whom used, and regardless of
   91  the fact that delivery of the oil may be made outside the state.
   92         (7) As used in this section, the term “oil” does not
   93  include gas-phase hydrocarbons that are transported into the
   94  state, injected in the gaseous phase into a natural gas storage
   95  facility permitted under part I of chapter 377, and later
   96  recovered as a liquid hydrocarbon.
   97         Section 3. Subsection (6) is added to section 211.025,
   98  Florida Statutes, to read:
   99         211.025 Gas production tax; basis and rate of tax.—An
  100  excise tax is hereby levied upon every person who severs gas in
  101  the state for sale, transport, profit, or commercial use. Except
  102  as otherwise provided in this part, the tax shall be levied on
  103  the basis of the entire production of gas in this state,
  104  including any royalty interest. Such tax shall accrue at the
  105  time the gas is severed and shall be a lien on production
  106  regardless of the place of sale, to whom sold, or by whom used
  107  and regardless of the fact that delivery of the gas may be made
  108  outside the state.
  109         (6) This section applies only to native gas as defined in
  110  s. 377.19.
  111         Section 4. Subsection (36) of section 376.301, Florida
  112  Statutes, is amended to read:
  113         376.301 Definitions of terms used in ss. 376.30-376.317,
  114  376.70, and 376.75.—When used in ss. 376.30-376.317, 376.70, and
  115  376.75, unless the context clearly requires otherwise, the term:
  116         (36) “Pollutants” includes any “product” as defined in s.
  117  377.19(11), pesticides, ammonia, chlorine, and derivatives
  118  thereof, excluding liquefied petroleum gas.
  119         Section 5. Section 377.06, Florida Statutes, is amended to
  120  read:
  121         377.06 Public policy of state concerning natural resources
  122  of oil and gas.—It is hereby declared to be the public policy of
  123  this the state to conserve and control the natural resources of
  124  oil and gas in this said state, and the products made from oil
  125  and gas in this state therefrom; to prevent waste of said
  126  natural resources; to provide for the protection and adjustment
  127  of the correlative rights of the owners of the land in which the
  128  wherein said natural resources lie, of and the owners and
  129  producers of oil and gas resources and the products made from
  130  oil and gas therefrom, and of others interested in these
  131  resources and products therein; to safeguard the health,
  132  property, and public welfare of the residents citizens of this
  133  said state and other interested persons and for all purposes
  134  indicated by the provisions in this section herein. Further, it
  135  is declared that underground storage of natural gas is in the
  136  public interest because underground storage promotes
  137  conservation of natural gas; makes gas more readily available to
  138  the domestic, commercial, and industrial consumers of this
  139  state; and allows the accumulation of large quantities of gas in
  140  reserve for orderly withdrawal during emergencies or periods of
  141  peak demand. It is not the intention of this section to limit,
  142  or restrict, or modify in any way the provisions of this law.
  143         Section 6. Section 377.18, Florida Statutes, is amended to
  144  read:
  145         377.18 Common sources of oil and gas.—All common sources of
  146  supply of oil or native and gas or either of them shall have the
  147  production therefrom controlled or regulated in accordance with
  148  the provisions of this law.
  149         Section 7. Section 377.19, Florida Statutes, is reordered
  150  and amended to read:
  151         377.19 Definitions.—As used Unless the context otherwise
  152  requires, the words defined in this section shall have the
  153  following meanings when found in ss. 377.06, 377.07, and 377.10
  154  377.40, the term:
  155         (3)(1) “Division” means the Division of Resource Management
  156  of the Department of Environmental Protection.
  157         (28)(2) “State” means the State of Florida.
  158         (20)(3) “Person” means a any natural person, corporation,
  159  association, partnership, receiver, trustee, guardian, executor,
  160  administrator, fiduciary, or representative of any kind.
  161         (15)(4) “Oil” means crude petroleum oil and other
  162  hydrocarbons, regardless of gravity, which are produced at the
  163  well in liquid form by ordinary production methods, and which
  164  are not the result of condensation of gas after it leaves the
  165  reservoir.
  166         (5) “Gas” means all natural gas, including casinghead gas,
  167  and all other hydrocarbons not defined as oil in subsection (4).
  168         (21)(6) “Pool” means an underground reservoir containing or
  169  appearing to contain a common accumulation of oil or gas or
  170  both. Each zone of a general structure which is completely
  171  separated from any other zone on the structure is considered a
  172  separate pool as used herein.
  173         (4)(7) “Field” means the general area that which is
  174  underlaid, or appears to be underlaid, by at least one pool. The
  175  term; and “field” includes the underground reservoir, or
  176  reservoirs, containing oil or gas, or both. The terms words
  177  “field” and “pool” mean the same thing if when only one
  178  underground reservoir is involved; however, the term “field,”
  179  unlike the term “pool,” may relate to two or more pools.
  180         (19)(8) “Owner” means the person who has the right to drill
  181  into and to produce from any pool and to appropriate the
  182  production either for the person or for the person and another,
  183  or others.
  184         (22)(9) “Producer” means the owner or operator of a well or
  185  wells capable of producing oil or gas, or both.
  186         (31)(10) “Waste,” in addition to its ordinary meaning,
  187  means “physical waste” as that term is generally understood in
  188  the oil and gas industry. The term “waste” includes:
  189         (a) The inefficient, excessive, or improper use or
  190  dissipation of reservoir energy; and the locating, spacing,
  191  drilling, equipping, operating, or producing of any oil or gas
  192  well or wells in a manner that which results, or tends to
  193  result, in reducing the quantity of oil or gas ultimately to be
  194  stored or recovered from any pool in this state.
  195         (b) The inefficient storing of oil; and the locating,
  196  spacing, drilling, equipping, operating, or producing of any oil
  197  or gas well or wells in a manner that causes, or tends causing,
  198  or tending to cause, unnecessary or excessive surface loss or
  199  destruction of oil or gas.
  200         (c) The producing of oil or gas in such a manner that
  201  causes as to cause unnecessary water channeling or coning.
  202         (d) The operation of any oil well or wells with an
  203  inefficient gas-oil ratio.
  204         (e) The drowning with water of any stratum or part thereof
  205  capable of producing oil or gas.
  206         (f) The underground waste, however caused and whether or
  207  not defined.
  208         (g) The creation of unnecessary fire hazards.
  209         (h) The escape into the open air, from a well producing
  210  both oil and gas, of gas in excess of the amount that which is
  211  necessary in the efficient drilling or operation of the well.
  212         (i) The use of gas for the manufacture of carbon black.
  213         (j) Permitting gas produced from a gas well to escape into
  214  the air.
  215         (k) The abuse of the correlative rights and opportunities
  216  of each owner of oil and gas in a common reservoir due to
  217  nonuniform, disproportionate, and unratable withdrawals, causing
  218  undue drainage between tracts of land.
  219         (23)(11) “Product” means a any commodity made from oil or
  220  gas and includes refined crude oil, crude tops, topped crude,
  221  processed crude petroleum, residue from crude petroleum,
  222  cracking stock, uncracked fuel oil, fuel oil, treated crude oil,
  223  residuum, gas oil, casinghead gasoline, natural gas gasoline,
  224  naphtha, distillate, condensate, gasoline, waste oil, kerosene,
  225  benzine, wash oil, blended gasoline, lubricating oil, blends or
  226  mixtures of oil with one or more liquid products or byproducts
  227  derived from oil or gas, and blends or mixtures of two or more
  228  liquid products or byproducts derived from oil or gas, whether
  229  hereinabove enumerated or not.
  230         (8)(12) “Illegal oil” means oil that which has been
  231  produced within the state from any well or wells in excess of
  232  the amount allowed by rule, regulation, or order of the
  233  division, as distinguished from oil produced within the state
  234  from a well not producing in excess of the amount so allowed,
  235  which is “legal oil.”
  236         (7)(13) “Illegal gas” means gas that which has been
  237  produced within the state from any well or wells in excess of
  238  the amount allowed by any rule, regulation, or order of the
  239  division, as distinguished from gas produced within the State of
  240  Florida from a well not producing in excess of the amount so
  241  allowed, which is “legal gas.”
  242         (9)(14) “Illegal product” means a any product of oil or
  243  gas, any part of which was processed or derived, in whole or in
  244  part, from illegal gas or illegal oil or from any product
  245  thereof, as distinguished from “legal product,” which is a
  246  product processed or derived to no extent from illegal oil or
  247  illegal gas.
  248         (24)(15) “Reasonable market demand” means the amount of oil
  249  reasonably needed for current consumption, together with a
  250  reasonable amount of oil for storage and working stocks.
  251         (30)(16) “Tender” means a permit or certificate of
  252  clearance for the transportation or the delivery of oil, gas, or
  253  products, approved and issued or registered under the authority
  254  of the division.
  255         (17) The use of the word “and” includes the word “or” and
  256  the use of “or” includes “and,” unless the context clearly
  257  requires a different meaning, especially with respect to such
  258  expressions as “oil and gas” or “oil or gas.”
  259         (32)(18) “Well site” means the general area around a well,
  260  which area has been disturbed from its natural or existing
  261  condition, as well as the drilling or production pad, mud and
  262  water circulation pits, and other operation areas necessary to
  263  drill for or produce oil or gas, or to inject gas into and
  264  recover gas from a natural gas storage facility.
  265         (17)(19) “Oil and gas administrator” means the State
  266  Geologist.
  267         (18)(20) “Operator” means the entity who:
  268         (a) Has the right to drill and to produce a well; or
  269         (b) As part of a natural gas storage facility, injects, or
  270  is engaged in the work of preparing to inject, gas into a
  271  natural gas storage reservoir; or stores gas in, or removes gas
  272  from, a natural gas storage reservoir.
  273         (1)(21) “Completion date” means the day, month, and year
  274  that a new productive well, a previously shut-in well, or a
  275  temporarily abandoned well is completed, repaired, or
  276  recompleted and the operator begins producing oil or gas in
  277  commercial quantities.
  278         (26)(22) “Shut-in well” means an oil or gas well that has
  279  been taken out of service for economic reasons or mechanical
  280  repairs.
  281         (29)(23) “Temporarily abandoned well” means a permitted
  282  well or wellbore that has been abandoned by plugging in a manner
  283  that allows reentry and redevelopment in accordance with oil or
  284  gas rules of the Department of Environmental Protection.
  285         (14)(24) “New field well” means an oil or gas well
  286  completed after July 1, 1997, in a new field as designated by
  287  the Department of Environmental Protection.
  288         (6)(25) “Horizontal well” means a well completed with the
  289  wellbore in a horizontal or nearly horizontal orientation within
  290  10 degrees of horizontal within the producing formation.
  291         (2) “Department” means the Department of Environmental
  292  Protection.
  293         (10) “Lateral storage reservoir boundary” means the
  294  projection up to the land surface of the maximum horizontal
  295  extent of the gas volume contained in a natural gas storage
  296  reservoir.
  297         (11) “Native gas” means gas that occurs naturally within
  298  this state and does not include gas produced outside the state,
  299  transported to this state, and injected into a permitted natural
  300  gas storage facility.
  301         (12) “Natural gas storage facility” means an underground
  302  reservoir from which oil or gas has previously been produced and
  303  which is used or intended to be used for the underground storage
  304  of natural gas, and any surface or subsurface structure, or
  305  infrastructure, except wells. The term also includes a right or
  306  appurtenance necessary or useful in the operation of the
  307  facility for the underground storage of natural gas, including
  308  any necessary or reasonable reservoir protective area as
  309  designated for the purpose of ensuring the safe operation of the
  310  storage of natural gas or protecting the natural gas storage
  311  facility from pollution, invasion, escape, or migration of gas,
  312  or any subsequent extension thereof. The term does not mean a
  313  transmission, distribution, or gathering pipeline or system that
  314  is not used primarily as integral piping for a natural gas
  315  storage facility.
  316         (13) “Natural gas storage reservoir” means a pool or field
  317  from which oil or gas has previously been produced and which is
  318  suitable for or capable of being made suitable for the
  319  injection, storage, and recovery of gas, as identified in a
  320  permit application submitted to the department under s.
  321  377.2407.
  322         (16) “Oil and gas” has the same meaning as the term “oil or
  323  gas.”
  324         (25) “Reservoir protective area” means the area extending
  325  up to and including 2,000 feet surrounding a natural gas storage
  326  reservoir.
  327         (27) “Shut-in bottom hole pressure” means the pressure at
  328  the bottom of a well when all valves are closed and no oil or
  329  gas has been allowed to escape for at least 24 hours.
  330         Section 8. Subsection (1) of section 377.21, Florida
  331  Statutes, is amended to read:
  332         377.21 Jurisdiction of division.—
  333         (1) The division shall have jurisdiction and authority over
  334  all persons and property necessary to administer and enforce
  335  effectively the provisions of this law and all other laws
  336  relating to the conservation of oil and gas or to the storage of
  337  gas in and recovery of gas from natural gas storage reservoirs.
  338         Section 9. Subsection (2) of section 377.22, Florida
  339  Statutes, is amended to read:
  340         377.22 Rules and orders.—
  341         (2) The department shall issue orders and adopt rules
  342  pursuant to ss. 120.536(1) and 120.54 to implement and enforce
  343  the provisions of this chapter. Such rules and orders shall
  344  ensure that all precautions are taken to prevent the spillage of
  345  oil or any other pollutant in all phases of the drilling for,
  346  and extracting of, oil, gas, or other petroleum products, or
  347  during the injection of gas into and recovery of gas from a
  348  natural gas storage reservoir. The department shall revise such
  349  rules from time to time as necessary for the proper
  350  administration and enforcement of this chapter. Rules adopted
  351  and orders issued in accordance with this section are shall be
  352  for, but shall not be limited to, the following purposes:
  353         (a) To require the drilling, casing, and plugging of wells
  354  to be done in such a manner as to prevent the pollution of the
  355  fresh, salt, or brackish waters or the lands of the state and to
  356  protect the integrity of natural gas storage reservoirs.
  357         (b) To prevent the alteration of the sheet flow of water in
  358  any area.
  359         (c) To require that appropriate safety equipment be
  360  installed to minimize the possibility of an escape of oil or
  361  other petroleum products in the event of accident, human error,
  362  or a natural disaster during drilling, casing, or plugging of
  363  any well and during extraction operations.
  364         (d) To require the drilling, casing, and plugging of wells
  365  to be done in such a manner as to prevent the escape of oil or
  366  other petroleum products from one stratum to another.
  367         (e) To prevent the intrusion of water into an oil or gas
  368  stratum from a separate stratum, except as provided by rules of
  369  the division relating to the injection of water for proper
  370  reservoir conservation and brine disposal.
  371         (f) To require a reasonable bond, or other form of security
  372  acceptable to the department, conditioned upon the performance
  373  of the duty to plug properly each dry and abandoned well and the
  374  full and complete restoration by the applicant of the area over
  375  which geophysical exploration, drilling, or production is
  376  conducted to the similar contour and general condition in
  377  existence prior to such operation.
  378         (g) To require and carry out a reasonable program of
  379  monitoring or inspection of all drilling operations, or
  380  producing wells, or injecting wells, including regular
  381  inspections by division personnel.
  382         (h) To require the making of reports showing the location
  383  of all oil and gas wells; the making and filing of logs; the
  384  taking and filing of directional surveys; the filing of
  385  electrical, sonic, radioactive, and mechanical logs of oil and
  386  gas wells; if taken, the saving of cutting and cores, the cuts
  387  of which shall be given to the Bureau of Geology; and the making
  388  of reports with respect to drilling and production records.
  389  However, such information, or any part thereof, at the request
  390  of the operator, shall be exempt from the provisions of s.
  391  119.07(1) and held confidential by the division for a period of
  392  1 year after the completion of a well.
  393         (i) To prevent wells from being drilled, operated, or
  394  produced in such a manner as to cause injury to neighboring
  395  leases, or property, or natural gas storage reservoirs.
  396         (j) To prevent the drowning by water of any stratum, or
  397  part thereof, capable of producing oil or gas in paying
  398  quantities and to prevent the premature and irregular
  399  encroachment of water which reduces, or tends to reduce, the
  400  total ultimate recovery of oil or gas from any pool.
  401         (k) To require the operation of wells with efficient gas
  402  oil ratio, and to fix such ratios.
  403         (l) To prevent “blowouts,” “caving,” and “seepage,” in the
  404  sense that conditions indicated by such terms are generally
  405  understood in the oil and gas business.
  406         (m) To prevent fires.
  407         (n) To identify the ownership of all oil or gas wells,
  408  producing leases, refineries, tanks, plants, structures, and
  409  storage and transportation equipment and facilities.
  410         (o) To regulate the “shooting,” perforating and chemical
  411  treatment of wells.
  412         (p) To regulate secondary recovery methods, including the
  413  introduction of gas, air, water, or other substance into
  414  producing formations.
  415         (q) To regulate gas cycling operations.
  416         (r) To regulate the storage and recovery of gas injected
  417  into natural gas storage facilities.
  418         (s)(r) If necessary for the prevention of waste, as herein
  419  defined, to determine, limit, and prorate the production of oil
  420  or gas, or both, from any pool or field in the state.
  421         (t)(s) To require, either generally or in or from
  422  particular areas, certificates of clearance or tenders in
  423  connection with the transportation or delivery of oil or gas, or
  424  any product.
  425         (u)(t) To regulate the spacing of wells and to establish
  426  drilling units.
  427         (v)(u) To prevent, so far as is practicable, reasonably
  428  avoidable drainage from each developed unit which is not
  429  equalized by counterdrainage.
  430         (w)(v) To require that geophysical operations requiring a
  431  permit be conducted in a manner which will minimize the impact
  432  on hydrology and biota of the area, especially environmentally
  433  sensitive lands and coastal areas.
  434         (x)(w) To regulate aboveground crude oil storage tanks in a
  435  manner which will protect the water resources of the state.
  436         (y)(x) To act in a receivership capacity for fractional
  437  mineral interests for which the owners are unknown or unlocated
  438  and to administratively designate the operator as the lessee.
  439         Section 10. Subsections (1) and (2) of section 377.24,
  440  Florida Statutes, are amended to read:
  441         377.24 Notice of intention to drill well; permits;
  442  abandoned wells and dry holes.—
  443         (1) Before drilling a any well in search of oil or gas, or
  444  before storing gas in or recovering gas from a natural gas
  445  storage reservoir shall be drilled, the person who desires
  446  desiring to drill for, store, or recover gas, or drill for oil,
  447  the same shall notify the division upon such form as it may
  448  prescribe and shall pay a reasonable fee set by rule of the
  449  department not to exceed the actual cost of processing and
  450  inspecting for each well or reservoir. The drilling of any well
  451  and the storing and recovering of gas are is hereby prohibited
  452  until such notice is given, the and such fee is has been paid,
  453  and the permit is granted.
  454         (2) An Each application for the drilling of a well in
  455  search of oil or gas, or for the storing of gas in and
  456  recovering of gas from a natural gas storage reservoir, in this
  457  state must shall include the address of the residence of the
  458  applicant, or applicants each applicant, which must address
  459  shall be the address of each person involved in accordance with
  460  the records of the Division of Resource Management until such
  461  address is changed on the records of the division after written
  462  request.
  463         Section 11. Section 377.2407, Florida Statutes, is created
  464  to read:
  465         377.2407Natural gas storage facility permit application to
  466  inject gas into and recover gas from a natural gas storage
  467  reservoir.—
  468         (1) Before drilling a well to inject gas into and recover
  469  gas from a natural gas storage reservoir, the person who desires
  470  to conduct such operation shall apply to the department in the
  471  manner described in this section using such form as the
  472  department may prescribe to obtain a natural gas storage
  473  facility permit. The Department of Environmental Protection
  474  shall also require any applicant seeking to obtain such permit
  475  to pay a reasonable permit application fee. Such fee must be in
  476  an amount necessary to cover the costs associated with
  477  permitting, processing, issuing, and recertifying the permit
  478  application, and inspecting for compliance with the permit.
  479         (2) Each application must contain:
  480         (a) A detailed, three-dimensional description of the
  481  natural gas storage reservoir, including geologic-based
  482  descriptions of the reservoir boundaries, and the horizontal and
  483  vertical dimensions.
  484         (b) A geographic description of the lateral reservoir
  485  boundary.
  486         (c) A general description and location of all injection,
  487  recovery, withdrawal-only, and observation wells.
  488         (d) A description of the reservoir protective area.
  489         (e) Information demonstrating that the proposed natural gas
  490  storage reservoir is suitable for the storage and recovery of
  491  gas.
  492         (f) Information identifying all known abandoned or active
  493  wells within the natural gas storage facility.
  494         (g) A field-monitoring plan that requires, at a minimum,
  495  monthly field inspections of all wells that are part of the
  496  natural gas storage facility.
  497         (h) A monitoring and testing plan for the well integrity.
  498         (i) A well inspection plan that requires, at a minimum, the
  499  inspection of all wells that are part of the natural gas storage
  500  facility and plugged wells within the natural gas storage
  501  facility boundary.
  502         (j) A spill prevention and response plan.
  503         (k) A well spacing plan.
  504         (l) An operating plan for the natural gas storage
  505  reservoir, which must include gas capacities, anticipated
  506  operating conditions, and maximum storage pressure.
  507         (m) A gas migration response plan.
  508         (n) A location plat and general facility map surveyed and
  509  prepared by a registered land surveyor licensed under chapter
  510  472.
  511         (3) The department may require additional information that
  512  is deemed necessary to permit the development of the natural gas
  513  storage facility. Each well related to the natural gas storage
  514  facility shall be authorized and permitted individually upon the
  515  applicant satisfying applicable well construction and operation
  516  criteria under this part; however, notwithstanding any other
  517  provision under this chapter, well spacing requirements do not
  518  apply.
  519         Section 12. Subsection (4) is added to section 377.241,
  520  Florida Statutes, to read:
  521         377.241 Criteria for issuance of permits.—The division, in
  522  the exercise of its authority to issue permits as hereinafter
  523  provided, shall give consideration to and be guided by the
  524  following criteria:
  525         (4) For activities and operations concerning a natural gas
  526  storage facility, the nature, structure, and proposed use of the
  527  natural gas storage reservoir is suitable for the storage and
  528  recovery of gas without adverse effect to public health or
  529  safety or the environment.
  530         Section 13. Subsection (3) of section 377.242, Florida
  531  Statutes, is amended to read:
  532         377.242 Permits for drilling or exploring and extracting
  533  through well holes or by other means.—The department is vested
  534  with the power and authority:
  535         (3) To issue permits to establish natural gas storage
  536  facilities or construct wells for the injection and recovery of
  537  any natural gas for temporary storage in natural gas storage
  538  subsurface reservoirs.
  539  
  540  Each permit shall contain an agreement by the permitholder that
  541  the permitholder will not prevent inspection by division
  542  personnel at any time. The provisions of this section
  543  prohibiting permits for drilling or exploring for oil in coastal
  544  waters do not apply to any leases entered into before June 7,
  545  1991.
  546         Section 14. Section 377.2431, Florida Statutes, is created
  547  to read:
  548         377.2431Conditions for granting permits for natural gas
  549  storage facilities.—
  550         (1) A natural gas storage facility permit shall authorize
  551  the construction and operation of a natural gas storage facility
  552  and must be issued for the life of the facility, subject to
  553  recertification every 10 years.
  554         (2) Before issuing or recertifying a permit, the department
  555  shall require satisfactory evidence of the following:
  556         (a) The applicant has implemented, or is in the process of
  557  implementing, programs for the control and mitigation of
  558  pollution related to oil, petroleum products or their
  559  byproducts, and other pollutants.
  560         (b) The applicant or operator has acquired a lawful right
  561  to drill, explore, or develop a natural gas storage reservoir
  562  from owners of at least 75 percent of the storage rights within
  563  the natural gas storage reservoir, or the applicant or operator
  564  has obtained a certificate of public convenience and necessity
  565  for the natural gas storage reservoir from the Federal Energy
  566  Regulatory Commission pursuant to the Natural Gas Act, 15 U.S.C.
  567  ss. 717 et seq.
  568         (c) The applicant has used all reasonable means to identify
  569  known wells that have been drilled into or through the natural
  570  gas storage reservoir or reservoir protective area to determine
  571  the status of the wells and whether inactive or abandoned wells
  572  have been properly plugged. For any well that has not been
  573  properly plugged, before conducting injection operations and
  574  after issuance of the permit, the applicant must plug or
  575  recondition the well to ensure the integrity of the storage
  576  reservoir or reservoir protective area.
  577         (d) The applicant has tested the quality of water produced
  578  by all water supply wells within the lateral boundary of the
  579  natural gas storage facility and complied with all requirements
  580  under s. 377.2432. The applicant shall provide to the department
  581  and the owner of the water supply well a written copy of the
  582  water quality data collected under this paragraph.
  583         (e) A determination has been made regarding whether native
  584  gas or oil will be severed from below the soil or water of this
  585  state in the recovery of injected gas. If native gas or oil will
  586  be severed, the applicant or operator must acquire a lawful
  587  right to develop the native gas or oil before injecting gas into
  588  the natural gas storage reservoir.
  589         (3) The applicant shall maintain records of well pressures
  590  recorded monthly, and monthly volumes of gas injected into and
  591  withdrawn from the reservoir. These records shall be maintained
  592  at the natural gas storage facility and shall be made available
  593  for inspection by the department at any reasonable time.
  594         (4)(a) The maximum storage pressure for a natural gas
  595  storage reservoir shall be the highest shut-in bottom hole
  596  pressure found to exist during the production history of the
  597  reservoir, unless a higher pressure is established by the
  598  department based on testing of caprock and pool containment. The
  599  methods used for determining the higher pressure must be
  600  approved by the department.
  601         (b) If the shut-in bottom hole pressure of the original
  602  discovery or of the highest production is not known, or a higher
  603  pressure has not been established through a method approved by
  604  the department pursuant to paragraph (a), the maximum storage
  605  reservoir pressure must be limited to a freshwater hydrostatic
  606  gradient.
  607         (5) A county or municipality may not adopt an ordinance,
  608  resolution, comprehensive plan, or land development regulation,
  609  or otherwise attempt to regulate or enforce any matter
  610  concerning natural gas storage facilities governed under this
  611  part.
  612         (6) A permit may not be issued for a natural gas storage
  613  facility that includes a natural gas storage reservoir located
  614  beneath an underground source of drinking water unless the
  615  applicant demonstrates that the injection or recovery of natural
  616  gas will not cause or allow natural gas to migrate into the
  617  underground source of drinking water; or in any offshore
  618  location in the Gulf of Mexico, the Straits of Florida, or the
  619  Atlantic Ocean; or in any solution-mined cavern within a salt
  620  formation.
  621         Section 15. Section 377.2432, Florida Statutes, is created
  622  to read:
  623         377.2432Natural gas storage facilities; protection of
  624  water supplies.—
  625         (1) An operator of a natural gas storage facility who
  626  affects a public or private underground water supply by
  627  pollution or diminution shall restore or replace the affected
  628  supply with an alternate source of water adequate in quantity
  629  and quality for the purposes served by the supply. The
  630  department shall ensure that the quality of restored or replaced
  631  water is comparable to the quality of the water before it was
  632  affected by the operator.
  633         (2) Unless rebutted by a defense established in subsection
  634  (4), a natural gas storage facility operator is presumed
  635  responsible for pollution of an underground water supply if:
  636         (a) The water supply is within the lateral boundary of the
  637  natural gas storage facility; and
  638         (b) The pollution occurred within 6 months after completion
  639  of drilling or alteration of any well under or associated with
  640  the natural gas storage facility permit or after the initial
  641  injection of gas into the natural gas storage reservoir,
  642  whichever is later.
  643         (3) If the affected underground water supply is within the
  644  rebuttable presumption area as provided in subsection (2) and
  645  the rebuttable presumption applies, the natural gas storage
  646  facility operator shall provide a temporary water supply if the
  647  water user is without a readily available alternative source of
  648  water at no cost to the owner of the affected water supply. The
  649  temporary water supply provided under this subsection must be
  650  adequate in quantity and quality for the purposes served by the
  651  affected supply.
  652         (4) A natural gas storage facility operator rebuts the
  653  presumption in subsection (2) by affirmatively proving any of
  654  the following:
  655         (a) The pollution existed before the drilling or alteration
  656  activity as determined by a predrilling or prealteration survey.
  657         (b) The landowner or water purveyor refused to allow the
  658  operator access to conduct a predrilling or prealteration
  659  survey.
  660         (c) The water supply well is not within the lateral
  661  boundary of the natural gas storage facility.
  662         (d) The pollution occurred more than 6 months after
  663  completion of drilling or alteration of any well under or
  664  associated with the natural gas storage facility permit.
  665         (e) The pollution occurred as the result of a cause other
  666  than activities authorized under the natural gas storage
  667  facility permit.
  668         (5) A natural gas storage facility operator electing to
  669  preserve a defense under subsection (4) must retain an
  670  independent certified laboratory to conduct a predrilling or
  671  prealteration survey of the water supply. A copy of survey
  672  results must be submitted to the department and the landowner or
  673  water purveyor in the manner prescribed by the department.
  674         (6) A natural gas storage facility operator must provide
  675  written notice to the landowner or water purveyor indicating
  676  that the presumption established under subsection (2) may be
  677  void if the landowner or water purveyor refused to allow the
  678  operator access to conduct a predrilling or prealteration
  679  survey. Proof of written notice to the landowner or water
  680  purveyor must be provided to the department in order for the
  681  operator to retain the protections under subsection (4).
  682         (7) This section does not prevent a landowner or water
  683  purveyor who claims pollution or diminution of a water supply
  684  from seeking any other remedy at law or in equity.
  685         Section 16. Section 377.2433, Florida Statutes, is created
  686  to read:
  687         377.2433Protection of natural gas storage facilities.—
  688         (1) The department may not authorize the drilling of any
  689  well into or through a permitted natural gas storage reservoir
  690  or reservoir protective area, except upon conditions deemed by
  691  the department to be sufficient to prevent the loss, migration,
  692  or escape of gas from the natural gas storage reservoir. The
  693  department shall provide written notice to the natural gas
  694  storage facility operator of any application filed with the
  695  department and any agency action taken related to drilling a
  696  well into or through a permitted natural gas storage facility
  697  boundary or reservoir protective area.
  698         (2) As a condition for the issuance of a permit by the
  699  department, an applicant seeking to drill a well into or through
  700  a permitted natural gas storage facility boundary or reservoir
  701  protective area must provide the affected natural gas storage
  702  facility operator a reasonable right of entry to observe and
  703  monitor all drilling activities.
  704         (3) The department shall ensure that any well drilled into
  705  or through a permitted natural gas storage reservoir or
  706  reservoir protective area is cased and cemented in a manner
  707  sufficient to protect the integrity of the natural gas storage
  708  reservoir.
  709         Section 17. Section 377.2434, Florida Statutes, is created
  710  to read:
  711         377.2434Property rights to injected natural gas.—
  712         (1) All natural gas that has previously been reduced to
  713  possession and that is subsequently injected into a natural gas
  714  storage facility is at all times the property of the injector or
  715  the injector’s heirs, successors, or assigns, whether owned by
  716  the injector or stored under contract.
  717         (2) Such gas may not be subject to the right of the owner
  718  of the surface of the lands or of any mineral interest therein,
  719  under which the natural gas storage facilities lie, or to the
  720  right of any person, other than the injector or the injector’s
  721  heirs, successors, or assigns, to waste or otherwise interfere
  722  with or exercise control over such gas, to produce, to take, or
  723  to reduce to possession, by means of the law of capture or
  724  otherwise. This subsection does not affect the ownership of
  725  hydrocarbons occurring naturally within this state or the right
  726  of the owner of the surface of the lands or of any mineral
  727  interest therein to drill or bore through the natural gas
  728  storage facilities in a manner that will protect the facilities
  729  against pollution or the escape of stored natural gas.
  730         (3) With regard to natural gas that has migrated to
  731  adjoining property or to a stratum, or portion thereof, which
  732  has not been condemned or otherwise purchased:
  733         (a) The injector or the injector’s heirs, successors, or
  734  assigns:
  735         1. May not lose title to or possession of the gas if the
  736  injector or the injector’s heirs, successors, or assigns can
  737  prove by a preponderance of the evidence that the gas was
  738  originally injected into the underground storage; and
  739         2. Have the right to conduct tests on any existing wells on
  740  adjoining property as may be reasonable to determine ownership
  741  of the gas, but the tests are solely at the injector’s risk and
  742  expense.
  743         (b) The owner of the stratum and the owner of the surface
  744  are entitled to compensation, including compensation for use of
  745  or damage to the surface or substratum, as provided by law.
  746         Section 18. Subsection (3) of section 377.25, Florida
  747  Statutes, is amended to read:
  748         377.25 Production pools; drilling units.—
  749         (3) Each well permitted to be drilled upon any drilling
  750  unit shall be drilled approximately in the center thereof, with
  751  such exception as may be reasonably necessary where the division
  752  finds that the unit is partly outside the pool or, for some
  753  other reason, a well approximately in the center of the unit
  754  would be nonproductive or where topographical conditions are
  755  such as to make the drilling approximately in the center of the
  756  unit unduly burdensome or where the operator proposes to
  757  complete the well with a horizontal or nearly horizontal well in
  758  the producing zone. Whenever an exception is granted, the
  759  division shall take such action as will offset any advantage
  760  which the person securing the exception may have over other
  761  producers by reason of the drilling of the well as an exception,
  762  and so that drainage from developed units to the tract, with
  763  respect to which the exception is granted, will be prevented or
  764  minimized, and the producer of the well drilled, as an
  765  exception, will be allowed to produce no more than his or her
  766  just and equitable share of the oil and gas in the pool, as such
  767  share is set forth in this section. This subsection does not
  768  apply to wells associated with a natural gas storage facility.
  769         Section 19. Subsection (2) of section 377.28, Florida
  770  Statutes, is amended to read:
  771         377.28 Cycling, pooling, and unitization of oil and gas.—
  772         (2) The department shall issue an order requiring unit
  773  operation if it finds that:
  774         (a) Unit operation of the field, or of any pool or pools,
  775  portion or portions, or combinations thereof within the field,
  776  is reasonably necessary to prevent waste, to avoid the drilling
  777  of unnecessary wells, or to increase the ultimate recovery of
  778  oil or gas by additional recovery methods; and
  779         (b) The estimated additional cost incident to the conduct
  780  of such operation will not exceed the value of the estimated
  781  additional recovery of oil or gas; and
  782         (c) The additional recovery of oil or gas does not
  783  adversely interfere with the storage or recovery of natural gas
  784  within a natural gas storage reservoir.
  785  
  786  The phrase “additional recovery methods” as used herein
  787  includes, but is not limited to, the maintenance or partial
  788  maintenance of reservoir pressures; recycling; flooding a pool
  789  or pools, or parts thereof, with air, gas, water, liquid
  790  hydrocarbons, any other substance, or any combination thereof;
  791  or any other method of producing additional hydrocarbons
  792  approved by the department.
  793         Section 20. Subsection (4) is added to section 377.30,
  794  Florida Statutes, to read:
  795         377.30 Limitation on amount of oil or gas taken.—
  796         (4) This section does not apply to nonnative gas recovered
  797  from a permitted natural gas storage facility.
  798         Section 21. Subsection (1) of section 377.34, Florida
  799  Statutes, is amended to read:
  800         377.34 Actions and injunctions by division.—
  801         (1) Whenever it appears shall appear that a any person is
  802  violating, or threatening to violate, any statute of this state
  803  with respect to the conservation of oil or gas, or both, or any
  804  provision of this law, or any rule, regulation or order made
  805  thereunder by any act done in the operation of a any well
  806  producing oil or gas, or storing or recovering natural gas, or
  807  by omitting an any act required to be done thereunder, the
  808  division, through its counsel, or the Department of Legal
  809  Affairs on its own initiative, may bring suit against such
  810  person in the Circuit Court in the County of Leon, state, or in
  811  the circuit court in the county in which the well in question is
  812  located, at the option of the division, or the Department of
  813  Legal Affairs, to restrain such person or persons from
  814  continuing such violation or from carrying out the threat of
  815  violation. In such suit, the division, or the Department of
  816  Legal Affairs, may obtain injunctions, prohibitory and
  817  mandatory, including temporary restraining orders and temporary
  818  injunctions, as the facts may warrant, including, when
  819  appropriate, an injunction restraining any person from moving or
  820  disposing of illegal oil, illegal gas or illegal product, and
  821  any or all such commodities may be ordered to be impounded or
  822  placed under the control of a receiver appointed by the court
  823  if, in the judgment of the court, such action is advisable.
  824         Section 22. Paragraph (a) of subsection (1) of section
  825  377.37, Florida Statutes, is amended to read:
  826         377.37 Penalties.—
  827         (1)(a) Any person who violates any provision of this law or
  828  any rule, regulation, or order of the division made under this
  829  chapter or who violates the terms of any permit to drill for or
  830  produce oil, gas, or other petroleum products referred to in s.
  831  377.242(1), or to store gas in a natural gas storage facility,
  832  or any lessee, permitholder, or operator of equipment or
  833  facilities used in the exploration for, drilling for, or
  834  production of oil, gas, or other petroleum products, or storage
  835  of gas in a natural gas storage facility, who refuses inspection
  836  by the division as provided in this chapter, is liable to the
  837  state for any damage caused to the air, waters, or property,
  838  including animal, plant, or aquatic life, of the state and for
  839  reasonable costs and expenses of the state in tracing the source
  840  of the discharge, in controlling and abating the source and the
  841  pollutants, and in restoring the air, waters, and property,
  842  including animal, plant, and aquatic life, of the state.
  843  Furthermore, such person, lessee, permitholder, or operator is
  844  subject to the judicial imposition of a civil penalty in an
  845  amount of not more than $10,000 for each offense. However, the
  846  court may receive evidence in mitigation. Each day during any
  847  portion of which such violation occurs constitutes a separate
  848  offense. Nothing herein shall give the department the right to
  849  bring an action on behalf of any private person.
  850         Section 23. Subsections (1) and (3) of section 377.371,
  851  Florida Statutes, are amended to read:
  852         377.371 Pollution prohibited; reporting, liability.—
  853         (1) A No person drilling for or producing oil, gas, or
  854  other petroleum products, or storing gas in a natural gas
  855  storage facility, may not shall pollute land or water; damage
  856  aquatic or marine life, wildlife, birds, or public or private
  857  property; or allow any extraneous matter to enter or damage any
  858  mineral or freshwater-bearing formation.
  859         (3) Because it is the intent of this chapter to provide the
  860  means for rapid and effective cleanup and to minimize damages
  861  resulting from pollution in violation of this chapter, if the
  862  waters of the state are polluted by the drilling, storage of
  863  natural gas, or production operations of any person or persons
  864  and such pollution damages or threatens to damage human, animal,
  865  or plant life, public or private property, or any mineral or
  866  water-bearing formation, said person shall be liable to the
  867  state for all costs of cleanup or other damage incurred by the
  868  state. In any suit to enforce claims of the state under this
  869  chapter, it is shall not be necessary for the state to plead or
  870  prove negligence in any form or manner on the part of the person
  871  or persons conducting the drilling or production operations; the
  872  state need only plead and prove the fact of the prohibited
  873  discharge or other polluting condition and that it occurred at
  874  the facilities of the person or persons conducting the drilling
  875  or production operation. A No person or persons conducting the
  876  drilling, storage, or production operation may not shall be held
  877  liable if said person or persons prove that the prohibited
  878  discharge or other polluting condition was the result of any of
  879  the following:
  880         (a) An act of war.
  881         (b) An act of government, either state, federal, or
  882  municipal.
  883         (c) An act of God, which means an unforeseeable act
  884  exclusively occasioned by the violence of nature without the
  885  interference of any human agency.
  886         (d) An act or omission of a third party without regard to
  887  whether any such act or omission was or was not negligent.
  888         Section 24. Paragraph (b) of subsection (14) and paragraph
  889  (b) of subsection (19) of section 403.973, Florida Statutes, are
  890  amended, and paragraphs (g) and (h) are added to subsection (3)
  891  of that section, to read:
  892         403.973 Expedited permitting; amendments to comprehensive
  893  plans.—
  894         (3)
  895         (g) Projects for natural gas storage facilities that are
  896  permitted under chapter 377 are eligible for the expedited
  897  permitting process.
  898         (h) Projects to construct interstate natural gas pipelines
  899  subject to certification by the Federal Energy Regulatory
  900  Commission are eligible for the expedited permitting process.
  901         (14)
  902         (b) Projects identified in paragraph (3)(f), (3)(g), or
  903  (3)(h) or challenges to state agency action in the expedited
  904  permitting process for establishment of a state-of-the-art
  905  biomedical research institution and campus in this state by the
  906  grantee under s. 288.955 are subject to the same requirements as
  907  challenges brought under paragraph (a), except that,
  908  notwithstanding s. 120.574, summary proceedings must be
  909  conducted within 30 days after a party files the motion for
  910  summary hearing, regardless of whether the parties agree to the
  911  summary proceeding.
  912         (19) The following projects are ineligible for review under
  913  this part:
  914         (b) A project, the primary purpose of which is to:
  915         1. Effect the final disposal of solid waste, biomedical
  916  waste, or hazardous waste in this state.
  917         2. Produce electrical power, unless the production of
  918  electricity is incidental and not the primary function of the
  919  project or the electrical power is derived from a fuel source
  920  for renewable energy as defined in s. 366.91(2)(d).
  921         3. Extract natural resources.
  922         4. Produce oil.
  923         5. Construct, maintain, or operate an oil, petroleum,
  924  natural gas, or sewage pipeline.
  925         Section 25. The Department of Environmental Protection
  926  shall adopt rules relating to natural gas storage before issuing
  927  a natural gas storage facility permit.
  928         Section 26. This act shall take effect July 1, 2013.