Florida Senate - 2016 PROPOSED COMMITTEE SUBSTITUTE
Bill No. CS for SB 318
Proposed Committee Substitute by the Committee on Appropriations
(Appropriations Subcommittee on General Government)
1 A bill to be entitled
2 An act relating to the regulation of oil and gas
3 resources; amending s. 377.06, F.S.; preempting the
4 regulation of all matters relating to the exploration,
5 development, production, processing, storage, and
6 transportation of oil and gas; declaring ordinances
7 and regulations relating thereto void; providing an
8 exception for certain zoning or land use requirements;
9 ordinances and regulations relating thereto void;
10 providing an exception for certain zoning ordinances;
11 amending s. 377.19, F.S.; applying the definitions of
12 certain terms to additional sections of ch. 377, F.S.;
13 revising the definition of the term “division”;
14 conforming a cross-reference; defining the term “high
15 pressure well stimulation”; amending s. 377.22, F.S.;
16 revising the rulemaking authority of the Department of
17 Environmental Protection; amending s. 377.24, F.S.;
18 requiring that a permit be obtained before the
19 performance of a high-pressure well stimulation;
20 specifying that a permit may authorize single or
21 multiple activities; revising provisions that prohibit
22 the Division of Water Resource Management from
23 granting permits to drill gas or oil wells; providing
24 notice requirements for an application of such permit;
25 prohibiting the department from approving permits for
26 high-pressure well stimulation until certain rules are
27 adopted and take effect; requiring legislative
28 ratification of such rules; amending s. 377.241, F.S.;
29 requiring the Division of Water Resource Management to
30 give consideration to and be guided by certain
31 additional criteria when issuing permits; amending s.
32 377.242, F.S.; authorizing the department to issue
33 permits for the performance of a high-pressure well
34 stimulation; revising permit requirements that
35 permitholders agree not to prevent division
36 inspections; amending s. 377.2425, F.S.; requiring an
37 applicant or operator to provide surety that
38 performance of a high-pressure well stimulation will
39 be conducted in a safe and environmentally compatible
40 manner; creating s. 377.2436, F.S.; requiring the
41 department to conduct a study on high-pressure well
42 stimulation; providing study criteria; requiring the
43 study to be submitted to the Governor and Legislature
44 and posted on the department website; prohibiting the
45 department from adopting rules until the study has
46 been submitted to the Legislature; requiring the
47 department to adopt rules under certain conditions by
48 a specified date; amending s. 377.37, F.S.; increasing
49 the maximum amount of a civil penalty; creating s.
50 377.45, F.S.; requiring the department to designate
51 the national chemical disclosure registry as the
52 state’s registry; requiring service providers,
53 vendors, and well owners or operators to report
54 certain information to the department; requiring the
55 department to report certain information to the
56 national chemical registry; providing applicability;
57 requiring the department to adopt rules; amending ss.
58 377.07, 377.10, 377.243, and 377.244, F.S.; making
59 technical changes; conforming provisions to changes
60 made by the act; providing an appropriation; providing
61 an effective date.
63 Be It Enacted by the Legislature of the State of Florida:
65 Section 1. Section 377.06, Florida Statutes, is amended to
67 377.06 Public policy of state concerning natural resources
68 of oil and gas; preemption.—
69 (1) It is
hereby declared the public policy of this state
70 to conserve and control the natural resources of oil and gas in
71 this state, and the products made from oil and gas in this
72 state; to prevent waste of natural resources; to provide for the
73 protection and adjustment of the correlative rights of the
74 owners of the land in which the natural resources lie, of the
75 owners and producers of oil and gas resources and the products
76 made from oil and gas, and of others interested in these
77 resources and products; and to safeguard the health, property,
78 and public welfare of the residents of this state and other
79 interested persons and for all purposes indicated by the
80 provisions in this section.
81 (2) Further, It is the public policy of this state declared
82 that underground storage of natural gas is in the public
83 interest because underground storage promotes conservation of
84 natural gas, ; makes gas more readily available to the domestic,
85 commercial, and industrial consumers of this state, ; and allows
86 the accumulation of large quantities of gas in reserve for
87 orderly withdrawal during emergencies or periods of peak demand.
88 It is not the intention of this section to limit, restrict, or
89 modify in any way the provisions of this law.
90 (3) The Legislature declares that all matters relating to
91 the regulation of the exploration, development, production,
92 processing, storage, and transportation of oil and gas are
93 preempted to the state, to the exclusion of all existing and
94 future ordinances or regulations relating thereto adopted by any
95 county, municipality, or other political subdivision of the
96 state. All such ordinances or regulations are hereby declared
97 void as a matter of law, including those that impose a
98 moratorium or effect a ban on one or more of these activities. A
99 county or municipality may, however, adopt and enforce zoning or
100 land use requirements which affect the use of property for the
101 exploration, development, production, processing, storage or
102 transportation of oil and gas, with the exception of geophysical
103 operations pursuant to s. 377.2424(3), so long as such zoning or
104 land use requirements would not impose a moratorium on,
105 effectively prohibit, or inordinately burden one or more of
106 these activities on a subject property.
107 Section 2. Section 377.19, Florida Statutes, is amended to
109 377.19 Definitions.—As used in ss. 377.06, 377.07, and
110 377.10-377.45 377.10-377.40, the term:
111 (1) “Completion date” means the day, month, and year that a
112 new productive well, a previously shut-in well, or a temporarily
113 abandoned well is completed, repaired, or recompleted and the
114 operator begins producing oil or gas in commercial quantities.
115 (2) “Department” means the Department of Environmental
117 (3) “Division” means the Division of Water Resource
118 Management of the Department of Environmental Protection.
119 (4) “Field” means the general area that is underlaid, or
120 appears to be underlaid, by at least one pool. The term includes
121 the underground reservoir, or reservoirs, containing oil or gas,
122 or both. The terms “field” and “pool” mean the same thing if
123 only one underground reservoir is involved; however, the term
124 “field,” unlike the term “pool,” may relate to two or more
126 (5) “Gas” means all natural gas, including casinghead gas,
127 and all other hydrocarbons not defined as oil in subsection (16)
129 (6) “High-pressure well stimulation” means all stages of a
130 well intervention performed by injecting fluids into a rock
131 formation at high pressure that exceeds the fracture gradient of
132 the rock formation in order to propagate fractures in such
133 formation to increase production at an oil or gas well by
134 improving the flow of hydrocarbons from the formation into the
135 wellbore. The term does not include well stimulation or
136 conventional workover procedures that may incidentally fracture
137 the formation near the wellbore.
138 (7) (6) “Horizontal well” means a well completed with the
139 wellbore in a horizontal or nearly horizontal orientation within
140 10 degrees of horizontal within the producing formation.
141 (8) (7) “Illegal gas” means gas that has been produced
142 within the state from any well or wells in excess of the amount
143 allowed by any rule, regulation, or order of the division, as
144 distinguished from gas produced within the State of Florida from
145 a well not producing in excess of the amount so allowed, which
146 is “legal gas.”
147 (9) (8) “Illegal oil” means oil that has been produced
148 within the state from any well or wells in excess of the amount
149 allowed by rule, regulation, or order of the division, as
150 distinguished from oil produced within the state from a well not
151 producing in excess of the amount so allowed, which is “legal
153 (10) (9) “Illegal product” means a product of oil or gas,
154 any part of which was processed or derived, in whole or in part,
155 from illegal gas or illegal oil or from any product thereof, as
156 distinguished from “legal product,” which is a product processed
157 or derived to no extent from illegal oil or illegal gas.
158 (11) (10) “Lateral storage reservoir boundary” means the
159 projection up to the land surface of the maximum horizontal
160 extent of the gas volume contained in a natural gas storage
162 (12) (11) “Native gas” means gas that occurs naturally
163 within this state and does not include gas produced outside the
164 state, transported to this state, and injected into a permitted
165 natural gas storage facility.
166 (13) (12) “Natural gas storage facility” means an
167 underground reservoir from which oil or gas has previously been
168 produced and which is used or to be used for the underground
169 storage of natural gas, and any surface or subsurface structure,
170 or infrastructure, except wells. The term also includes a right
171 or appurtenance necessary or useful in the operation of the
172 facility for the underground storage of natural gas, including
173 any necessary or reasonable reservoir protective area as
174 designated for the purpose of ensuring the safe operation of the
175 storage of natural gas or protecting the natural gas storage
176 facility from pollution, invasion, escape, or migration of gas,
177 or any subsequent extension thereof. The term does not mean a
178 transmission, distribution, or gathering pipeline or system that
179 is not used primarily as integral piping for a natural gas
180 storage facility.
181 (14) (13) “Natural gas storage reservoir” means a pool or
182 field from which gas or oil has previously been produced and
183 which is suitable for or capable of being made suitable for the
184 injection, storage, and recovery of gas, as identified in a
185 permit application submitted to the department under s.
187 (15) (14) “New field well” means an oil or gas well
188 completed after July 1, 1997, in a new field as designated by
189 the Department of Environmental Protection.
190 (16) (15) “Oil” means crude petroleum oil and other
191 hydrocarbons, regardless of gravity, which are produced at the
192 well in liquid form by ordinary production methods, and which
193 are not the result of condensation of gas after it leaves the
195 (17) (16) “Oil and gas” has the same meaning as the term
196 “oil or gas.”
197 (18) (17) “Oil and gas administrator” means the State
199 (19) (18) “Operator” means the entity who:
200 (a) Has the right to drill and to produce a well; or
201 (b) As part of a natural gas storage facility, injects, or
202 is engaged in the work of preparing to inject, gas into a
203 natural gas storage reservoir; or stores gas in, or removes gas
204 from, a natural gas storage reservoir.
205 (20) (19) “Owner” means the person who has the right to
206 drill into and to produce from any pool and to appropriate the
207 production for the person or for the person and another, or
209 (21) (20) “Person” means a natural person, corporation,
210 association, partnership, receiver, trustee, guardian, executor,
211 administrator, fiduciary, or representative of any kind.
212 (22) (21) “Pool” means an underground reservoir containing
213 or appearing to contain a common accumulation of oil or gas or
214 both. Each zone of a general structure which is completely
215 separated from any other zone on the structure is considered a
216 separate pool as used herein.
217 (23) (22) “Producer” means the owner or operator of a well
218 or wells capable of producing oil or gas, or both.
219 (24) (23) “Product” means a commodity made from oil or gas
220 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 (25) (24) “Reasonable market demand” means the amount of oil
231 reasonably needed for current consumption, together with a
232 reasonable amount of oil for storage and working stocks.
233 (26) (25) “Reservoir protective area” means the area
234 extending up to and including 2,000 feet surrounding a natural
235 gas storage reservoir.
236 (27) (26) “Shut-in bottom hole pressure” means the pressure
237 at the bottom of a well when all valves are closed and no oil or
238 gas has been allowed to escape for at least 24 hours.
239 (28) (27) “Shut-in well” means an oil or gas well that has
240 been taken out of service for economic reasons or mechanical
242 (29) (28) “State” means the State of Florida.
243 (30) (29) “Temporarily abandoned well” means a permitted
244 well or wellbore that has been abandoned by plugging in a manner
245 that allows reentry and redevelopment in accordance with oil or
246 gas rules of the Department of Environmental Protection.
247 (31) (30) “Tender” means a permit or certificate of
248 clearance for the transportation or the delivery of oil, gas, or
249 products, approved and issued or registered under the authority
250 of the division.
251 (32) (31) “Waste,” in addition to its ordinary meaning,
252 means “physical waste” as that term is generally understood in
253 the oil and gas industry. The term “waste” includes:
254 (a) The inefficient, excessive, or improper use or
255 dissipation of reservoir energy; and the locating, spacing,
256 drilling, equipping, operating, or producing of any oil or gas
257 well or wells in a manner that results, or tends to result, in
258 reducing the quantity of oil or gas ultimately to be stored or
259 recovered from any pool in this state.
260 (b) The inefficient storing of oil; and the locating,
261 spacing, drilling, equipping, operating, or producing of any oil
262 or gas well or wells in a manner that causes, or tends to cause,
263 unnecessary or excessive surface loss or destruction of oil or
265 (c) The producing of oil or gas in a manner that causes
266 unnecessary water channeling or coning.
267 (d) The operation of any oil well or wells with an
268 inefficient gas-oil ratio.
269 (e) The drowning with water of any stratum or part thereof
270 capable of producing oil or gas.
271 (f) The underground waste, however caused and whether or
272 not defined.
273 (g) The creation of unnecessary fire hazards.
274 (h) The escape into the open air, from a well producing
275 both oil and gas, of gas in excess of the amount that is
276 necessary in the efficient drilling or operation of the well.
277 (i) The use of gas for the manufacture of carbon black.
278 (j) Permitting gas produced from a gas well to escape into
279 the air.
280 (k) The abuse of the correlative rights and opportunities
281 of each owner of oil and gas in a common reservoir due to
282 nonuniform, disproportionate, and unratable withdrawals, causing
283 undue drainage between tracts of land.
284 (33) (32) “Well site” means the general area around a well,
285 which area has been disturbed from its natural or existing
286 condition, as well as the drilling or production pad, mud and
287 water circulation pits, and other operation areas necessary to
288 drill for or produce oil or gas, or to inject gas into and
289 recover gas from a natural gas storage facility.
290 Section 3. Subsection (2) of section 377.22, Florida
291 Statutes, is amended to read:
292 377.22 Rules and orders.—
293 (2) The department shall issue orders and adopt rules
294 pursuant to ss. 120.536 and 120.54 to implement and enforce the
295 provisions of this chapter. Such rules and orders shall ensure
296 that all precautions are taken to prevent the spillage of oil or
297 any other pollutant in all phases of the drilling for, and
298 extracting of, oil, gas, or other petroleum products, including
299 high-pressure well stimulations, or during the injection of gas
300 into and recovery of gas from a natural gas storage reservoir.
301 The department shall revise such rules from time to time as
302 necessary for the proper administration and enforcement of this
303 chapter. Rules adopted and orders issued in accordance with this
304 section are for, but not limited to, the following purposes:
305 (a) To require the drilling, casing, and plugging of wells
306 to be done in such a manner as to prevent the pollution of the
307 fresh, salt, or brackish waters or the lands of the state and to
308 protect the integrity of natural gas storage reservoirs.
309 (b) To prevent the alteration of the sheet flow of water in
310 any area.
311 (c) To require that appropriate safety equipment be
312 installed to minimize the possibility of an escape of oil or
313 other petroleum products in the event of accident, human error,
314 or a natural disaster during drilling, casing, or plugging of
315 any well and during extraction operations.
316 (d) To require the drilling, casing, and plugging of wells
317 to be done in such a manner as to prevent the escape of oil or
318 other petroleum products from one stratum to another.
319 (e) To prevent the intrusion of water into an oil or gas
320 stratum from a separate stratum, except as provided by rules of
321 the division relating to the injection of water for proper
322 reservoir conservation and brine disposal.
323 (f) To require a reasonable bond, or other form of security
324 acceptable to the department, conditioned upon properly
325 drilling, casing, producing, and operating each well and
326 properly plugging the performance of the duty to plug properly
327 each dry and abandoned well and upon the full and complete
328 restoration by the applicant of the area over which geophysical
329 exploration, drilling, or production is conducted to the similar
330 contour and general condition in existence before prior to such
332 (g) To require and carry out a reasonable program of
333 monitoring and inspecting or inspection of all drilling
334 operations, high-pressure well stimulations, producing wells, or
335 injecting wells, and well sites, including regular inspections
336 by division personnel. Inspections are required during the
337 testing of blowout preventers, during the pressure testing of
338 the casing and casing shoe, and during the integrity testing of
339 the cement plugs in plugging and abandonment operations.
340 (h) To require the making of reports showing the location
341 of all oil and gas wells; the making and filing of logs; the
342 taking and filing of directional surveys; the filing of
343 electrical, sonic, radioactive, and mechanical logs of oil and
344 gas wells; if taken, the saving of cutting and cores, the cuts
345 of which shall be given to the Bureau of Geology; and the making
346 of reports with respect to drilling and production records.
347 However, such information, or any part thereof, at the request
348 of the operator, shall be exempt from the provisions of s.
349 119.07(1) and held confidential by the division for a period of
350 1 year after the completion of a well.
351 (i) To prevent wells from being drilled, operated, or
352 produced in such a manner as to cause injury to neighboring
353 leases, property, or natural gas storage reservoirs.
354 (j) To prevent the drowning by water of any stratum, or
355 part thereof, capable of producing oil or gas in paying
356 quantities and to prevent the premature and irregular
357 encroachment of water which reduces, or tends to reduce, the
358 total ultimate recovery of oil or gas from any pool.
359 (k) To require the operation of wells with efficient gas
360 oil ratio, and to fix such ratios.
361 (l) To prevent “blowouts,” “caving,” and “seepage,” in the
362 sense that conditions indicated by such terms are generally
363 understood in the oil and gas business.
364 (m) To prevent fires.
365 (n) To identify the ownership of all oil or gas wells,
366 producing leases, refineries, tanks, plants, structures, and
367 storage and transportation equipment and facilities.
368 (o) To regulate the “shooting,” perforating, and chemical
369 treatment, and high-pressure stimulations of wells.
370 (p) To regulate secondary recovery methods, including the
371 introduction of gas, air, water, or other substance into
372 producing formations.
373 (q) To regulate gas cycling operations.
374 (r) To regulate the storage and recovery of gas injected
375 into natural gas storage facilities.
376 (s) If necessary for the prevention of waste, as herein
377 defined, to determine, limit, and prorate the production of oil
378 or gas, or both, from any pool or field in the state.
379 (t) To require, either generally or in or from particular
380 areas, certificates of clearance or tenders in connection with
381 the transportation or delivery of oil or gas, or any product.
382 (u) To regulate the spacing of wells and to establish
383 drilling units.
384 (v) To prevent, so far as is practicable, reasonably
385 avoidable drainage from each developed unit which is not
386 equalized by counterdrainage.
387 (w) To require that geophysical operations requiring a
388 permit be conducted in a manner which will minimize the impact
389 on hydrology and biota of the area, especially environmentally
390 sensitive lands and coastal areas.
391 (x) To regulate aboveground crude oil storage tanks in a
392 manner which will protect the water resources of the state.
393 (y) To act in a receivership capacity for fractional
394 mineral interests for which the owners are unknown or unlocated
395 and to administratively designate the operator as the lessee.
396 (z) To evaluate the history of prior adjudicated,
397 uncontested, or settled violations committed by permit
398 applicants or the applicants’ affiliated entities of any
399 substantive and material rule or law pertaining to the
400 regulation of oil or gas.
401 Section 4. Subsections (1), (2), (4), and (5) of section
402 377.24, Florida Statutes, are amended, and subsections (10) and
403 (11) are added to that section, to read:
404 377.24 Notice of intention to drill well; permits;
405 abandoned wells and dry holes.—
406 (1) Before drilling a well in search of oil or gas, before
407 performing a high-pressure well stimulation, or before storing
408 gas in or recovering gas from a natural gas storage reservoir,
409 the person who desires to drill for, store, or recover gas, or
410 drill for oil or gas, or perform a high-pressure well
411 stimulation shall notify the division upon such form as it may
412 prescribe and shall pay a reasonable fee set by rule of the
413 department not to exceed the actual cost of processing and
414 inspecting for each well or reservoir. The drilling of any well,
415 the performance of any high-pressure well stimulation, and the
416 storing and recovering of gas are prohibited until such notice
417 is given, the fee is paid, and a the permit is granted. A permit
418 may authorize a single activity or multiple activities.
419 (2) An application for the drilling of a well in search of
420 oil or gas, for the performance of a high-pressure well
421 stimulation, or for the storing of gas in and recovering of gas
422 from a natural gas storage reservoir , in this state must include
423 the address of the residence of the applicant , or applicants,
424 which must be the address of each person involved in accordance
425 with the records of the Division of Water Resource Management
426 until such address is changed on the records of the division
427 after written request.
428 (4) Application for permission to drill or abandon any well
429 or perform a high-pressure well stimulation may be denied by the
430 division for only just and lawful cause.
431 (5) No permit to drill a gas or oil well shall be granted
432 within the jurisdictional boundaries of any municipality or
433 county, unless the applicant provides notice of the permit
434 application, by certified mail, to the corporate limits of any
435 municipality, unless the governing authority of the county or
436 municipality. The applicant shall include a copy of the notice
437 with the permit application shall have first duly approved the
438 application for such permit by resolution.
439 (10) The department may not approve a permit to authorize a
440 high-pressure well stimulation until the department adopts rules
441 for high-pressure well stimulations which are based upon the
442 findings of the study required pursuant to s. 377.2436 and such
443 rules take effect.
444 (11) The rules for high-pressure well stimulation shall be
445 submitted to the President of the Senate and Speaker of the
446 House of Representatives and such rules may not take effect
447 until they are ratified by the Legislature.
448 Section 5. Subsections (5), (6), and 7 are added to section
449 377.241, Florida Statutes, to read:
450 377.241 Criteria for issuance of permits.—The division, in
451 the exercise of its authority to issue permits as hereinafter
452 provided, shall give consideration to and be guided by the
453 following criteria:
454 (5) For high-pressure well stimulations, whether the high
455 pressure well stimulation as proposed is designed to ensure
457 (a) The groundwater near the well location, including
458 groundwater through which the well will be or has been drilled,
459 is not contaminated as a result of the high-pressure well
460 stimulation; and
461 (b) The high-pressure well stimulation is consistent with
462 the public policy of this state as specified in s. 377.06.
463 (6) As a basis for permit denial or imposition of specific
464 permit conditions, including increased bonding up to five times
465 the applicable limits and increased monitoring, the history of
466 prior adjudicated, uncontested, or settled violations committed
467 by the applicant or an affiliated entity of the applicant of any
468 substantive and material rule or law pertaining to the
469 regulation of oil or gas, including violations that occurred
470 outside the state.
471 (7) Matters raised in comments timely submitted by a
472 municipality or county to the division pursuant to s. 377.24(5).
473 Section 6. Section 377.242, Florida Statutes, is amended to
475 377.242 Permits for drilling or exploring and extracting
476 through well holes or by other means.—The department is vested
477 with the power and authority:
478 (1)(a) To issue permits for the performance of a high
479 pressure well stimulation or the drilling for, exploring for, or
480 production of oil, gas, or other petroleum products that which
481 are to be extracted from below the surface of the land,
482 including submerged land, only through the well hole drilled for
483 oil, gas, and other petroleum products.
484 1. A No structure intended for the drilling for, or
485 production of, oil, gas, or other petroleum products may not be
486 permitted or constructed on any submerged land within any bay or
488 2. A No structure intended for the drilling for, or
489 production of, oil, gas, or other petroleum products may not be
490 permitted or constructed within 1 mile seaward of the coastline
491 of the state.
492 3. A No structure intended for the drilling for, or
493 production of, oil, gas, or other petroleum products may not be
494 permitted or constructed within 1 mile of the seaward boundary
495 of any state, local, or federal park or aquatic or wildlife
496 preserve or on the surface of a freshwater lake, river, or
498 4. A No structure intended for the drilling for, or
499 production of, oil, gas, or other petroleum products may not be
500 permitted or constructed within 1 mile inland from the shoreline
501 of the Gulf of Mexico, the Atlantic Ocean, or any bay or estuary
502 or within 1 mile of any freshwater lake, river, or stream unless
503 the department is satisfied that the natural resources of such
504 bodies of water and shore areas of the state will be adequately
505 protected in the event of accident or blowout.
506 5. Without exception, after July 1, 1989, a no structure
507 intended for the drilling for, or production of, oil, gas, or
508 other petroleum products may not be permitted or constructed
509 south of 26°00′00″ north latitude off Florida’s west coast and
510 south of 27°00′00″ north latitude off Florida’s east coast,
511 within the boundaries of Florida’s territorial seas as defined
512 in 43 U.S.C. s. 1301. After July 31, 1990, a no structure
513 intended for the drilling for, or production of, oil, gas, or
514 other petroleum products may not be permitted or constructed
515 north of 26°00′00″ north latitude off Florida’s west coast to
516 the western boundary of the state bordering Alabama as set forth
517 in s. 1, Art. II of the State Constitution, or located north of
518 27°00′00″ north latitude off Florida’s east coast to the
519 northern boundary of the state bordering Georgia as set forth in
520 s. 1, Art. II of the State Constitution, within the boundaries
521 of Florida’s territorial seas as defined in 43 U.S.C. s. 1301.
522 (b) Subparagraphs (a)1. and 4. do not apply to permitting
523 or construction of structures intended for the drilling for, or
524 production of, oil, gas, or other petroleum products pursuant to
525 an oil, gas, or mineral lease of such lands by the state under
526 which lease any valid drilling permits are in effect on the
527 effective date of this act. In the event that such permits
528 contain conditions or stipulations, such conditions and
529 stipulations shall govern and supersede subparagraphs (a)1. and
531 (c) The prohibitions of subparagraphs (a)1.-4. in this
532 subsection do not include “infield gathering lines,” provided no
533 other placement is reasonably available and all other required
534 permits have been obtained.
535 (2) To issue permits to explore for and extract minerals
536 which are subject to extraction from the land by means other
537 than through a well hole.
538 (3) To issue permits to establish natural gas storage
539 facilities or construct wells for the injection and recovery of
540 any natural gas for storage in natural gas storage reservoirs.
542 Each permit shall contain an agreement by the permitholder that
543 the permitholder will not prevent inspection by division
544 personnel at any time, including during installation and
545 cementing of casing, during the testing of blowout preventers,
546 during the pressure testing of the casing and casing shoe, and
547 during the integrity testing of the cement plugs in plugging and
548 abandonment operations. The provisions of this section
549 prohibiting permits for drilling or exploring for oil in coastal
550 waters do not apply to any leases entered into before June 7,
552 Section 7. Subsection (1) of section 377.2425, Florida
553 Statutes, is amended to read:
554 377.2425 Manner of providing security for geophysical
555 exploration, drilling, and production.—
556 (1) Before Prior to granting a permit for conducting to
557 conduct geophysical operations; drilling of exploratory,
558 injection, or production wells; producing oil and gas from a
559 wellhead; performing a high-pressure well stimulation; or
560 transporting oil and gas through a field-gathering system, the
561 department shall require the applicant or operator to provide
562 surety that these operations will be conducted in a safe and
563 environmentally compatible manner.
564 (a) The applicant for a drilling, production, high-pressure
565 well stimulation, or injection well permit or a geophysical
566 permit may provide the following types of surety to the
567 department for this purpose:
568 1. A deposit of cash or other securities made payable to
569 the Minerals Trust Fund. Such cash or securities so deposited
570 shall be held at interest by the Chief Financial Officer to
571 satisfy safety and environmental performance provisions of this
572 chapter. The interest shall be credited to the Minerals Trust
573 Fund. Such cash or other securities shall be released by the
574 Chief Financial Officer upon request of the applicant and
575 certification by the department that all safety and
576 environmental performance provisions established by the
577 department for permitted activities have been fulfilled.
578 2. A bond of a surety company authorized to do business in
579 the state in an amount as provided by rule.
580 3. A surety in the form of an irrevocable letter of credit
581 in an amount as provided by rule guaranteed by an acceptable
582 financial institution.
583 (b) An applicant for a drilling, production, high-pressure
584 well stimulation, or injection well permit, or a permittee who
585 intends to continue participating in long-term production
586 activities of such wells, has the option to provide surety to
587 the department by paying an annual fee to the Minerals Trust
588 Fund. For an applicant or permittee choosing this option the
589 following shall apply:
590 1. For the first year, or part of a year, of a drilling,
591 production, or injection well permit, or change of operator, the
592 fee is $4,000 per permitted well.
593 2. For each subsequent year, or part of a year, the fee is
594 $1,500 per permitted well.
595 3. The maximum fee that an applicant or permittee may be
596 required to pay into the trust fund is $30,000 per calendar
597 year, regardless of the number of permits applied for or in
599 4. The fees set forth in subparagraphs 1., 2., and 3. shall
600 be reviewed by the department on a biennial basis and adjusted
601 for the cost of inflation. The department shall establish by
602 rule a suitable index for implementing such fee revisions.
603 (c) An applicant for a drilling or operating permit for
604 operations planned in coastal waters that by their nature
605 warrant greater surety shall provide surety only in accordance
606 with paragraph (a), or similar proof of financial responsibility
607 other than as provided in paragraph (b). For all such
608 applications, including applications pending at the effective
609 date of this act and notwithstanding the provisions of paragraph
610 (b), the Governor and Cabinet in their capacity as the
611 Administration Commission, at the recommendation of the
612 department of Environmental Protection, shall set a reasonable
613 amount of surety required under this subsection. The surety
614 amount shall be based on the projected cleanup costs and natural
615 resources damages resulting from a maximum oil spill and adverse
616 hydrographic and atmospheric conditions that would tend to
617 transport the oil into environmentally sensitive areas, as
618 determined by the department of Environmental Protection.
619 Section 8. Section 377.2436, Florida Statutes, is created
620 to read:
621 377.2436 Study on high-pressure well stimulations.—
622 (1) The department shall conduct a study on high-pressure
623 well stimulations. The study must:
624 (a) Evaluate the underlying geologic features present in
625 the counties where oil wells have been permitted and analyze the
626 potential impact that high-pressure well stimulation and
627 wellbore construction may have on the underlying geologic
629 (b) Evaluate the potential hazards and risks that high
630 pressure well stimulation poses to surface water or groundwater
631 resources. The study must assess the potential impacts of high
632 pressure well stimulation on drinking water resources and
633 identify the main factors affecting the severity and frequency
634 of impacts and must analyze the potential for the use or reuse
635 of recycled water in well stimulation fluids while meeting
636 appropriate water quality standards.
637 (c) Review and evaluate the potential for groundwater
638 contamination from conducting high-pressure well stimulation
639 under or near wells that have been previously plugged and
640 abandoned and identify a setback radius from previously plugged
641 and abandoned wells that could be impacted by high-pressure well
643 (d) Review and evaluate the ultimate disposition of high
644 pressure well stimulation fluids after use in high-pressure well
645 stimulation processes.
646 (e) Review and evaluate the potential direct and indirect
647 economic benefits resulting from the use of high-pressure well
648 stimulation, including effects on state and local tax revenues,
649 royalty payments, employment opportunities, and demand for goods
650 and services.
651 (f) Review and evaluate potential seismic activity
652 associated with high-pressure well stimulation and the deep-well
653 disposal of oil and gas production wastewater.
654 (g) Review and evaluate the feasibility and impact of
655 waterless fracturing technologies to perform high-pressure well
657 (2) The department shall continue conventional oil and gas
658 business operations during the performance of the study. There
659 may not be a moratorium on the evaluation and issuance of
660 permits for conventional drilling, exploration, conventional
661 completions, or conventional workovers during the performance of
662 the study.
663 (3) The study is subject to independent scientific peer
665 (4) The department shall submit the findings of the study
666 to the Governor, the President of the Senate, and the Speaker of
667 the House of Representatives by June 30, 2017, and shall
668 prominently post the findings on its website.
669 (5) The department may not adopt rules for high-pressure
670 well stimulation until the findings of the study have been
671 submitted to the Legislature. However, by March 1, 2018, the
672 department must adopt rules to implement the findings of the
673 study, if such rules are warranted to protect public health,
674 safety, and the environment.
675 Section 9. Paragraph (a) of subsection (1) of section
676 377.37, Florida Statutes, is amended to read:
677 377.37 Penalties.—
678 (1)(a) A Any person who violates any provision of this
679 chapter law or any rule, regulation, or order of the division
680 made under this chapter or who violates the terms of any permit
681 to drill for or produce oil, gas, or other petroleum products
682 referred to in s. 377.242(1) or to store gas in a natural gas
683 storage facility, or any lessee, permitholder, or operator of
684 equipment or facilities used in the exploration for, drilling
685 for, or production of oil, gas, or other petroleum products, or
686 storage of gas in a natural gas storage facility, who refuses
687 inspection by the division as provided in this chapter, is
688 liable to the state for any damage caused to the air, waters, or
689 property, including animal, plant, or aquatic life, of the state
690 and for reasonable costs and expenses of the state in tracing
691 the source of the discharge, in controlling and abating the
692 source and the pollutants, and in restoring the air, waters, and
693 property, including animal, plant, and aquatic life, of the
694 state. Furthermore, such person, lessee, permitholder, or
695 operator is subject to the judicial imposition of a civil
696 penalty in an amount of not more than $25,000 $10,000 for each
697 offense. However, the court may receive evidence in mitigation.
698 Each day during any portion of which such violation occurs
699 constitutes a separate offense. This paragraph does not Nothing
700 herein shall give the department the right to bring an action on
701 behalf of a any private person.
702 Section 10. Section 377.45, Florida Statutes, is created to
704 377.45 High-pressure well stimulation chemical disclosure
706 (1)(a) The department shall designate the national chemical
707 disclosure registry, known as FracFocus, developed by the Ground
708 Water Protection Council and the Interstate Oil and Gas Compact
709 Commission, as the state’s registry for chemical disclosure for
710 all wells on which high-pressure well stimulations are
711 performed. The department shall provide a link to FracFocus
712 through its website.
713 (b) In addition to providing the following information to
714 the department as part of the permitting process, a service
715 provider, vendor, or well owner or operator shall report, as
716 established by department rule, to the department, at a minimum,
717 the following information:
718 1. The name of the service provider, vendor, or owner or
720 2. The date of completion of the high-pressure well
722 3. The county in which the well is located.
723 4. The API Well Number.
724 5. The well name and number.
725 6. The longitude and latitude of the wellhead.
726 7. The total vertical depth of the well.
727 8. The total volume of water used in the high-pressure well
729 9. Each chemical ingredient that is subject to 29 C.F.R. s.
730 1910.1200(g)(2) and the ingredient concentration in the high
731 pressure well stimulation fluid by mass for each well on which a
732 high-pressure well stimulation is performed.
733 10. The trade or common name and the CAS Registry Number
734 for each chemical ingredient.
735 (c) The department shall report to FracFocus all
736 information received under paragraph (b), excluding any
737 information subject to chapter 688.
738 (d) If FracFocus cannot accept and make publicly available
739 any information specified in this section, the department shall
740 post the information on its website, excluding any information
741 subject to chapter 688.
742 (2) A service provider, vendor, or well owner or operator
744 (a) Report the information required under subsection (1) to
745 the department within 60 days after the initiation of the high
746 pressure well stimulation for each well on which such high
747 pressure well stimulation is performed.
748 (b) Notify the department if any chemical ingredient not
749 previously reported is intentionally included and used for the
750 purpose of performing a high-pressure well stimulation.
751 (3) This section does not apply to an ingredient that:
752 (a) Is not intentionally added to the high-pressure well
753 stimulation; or
754 (b) Occurs incidentally or is otherwise unintentionally
755 present in a high-pressure well stimulation.
756 (4) The department shall adopt rules to administer this
758 Section 11. Section 377.07, Florida Statutes, is amended to
760 377.07 Division of Water Resource Management; powers,
761 duties, and authority.—The Division of Water Resource Management
762 of the Department of Environmental Protection is hereby vested
763 with power, authority, and duty to administer, carry out, and
764 enforce the provisions of this part law as directed in s.
766 Section 12. Section 377.10, Florida Statutes, is amended to
768 377.10 Certain persons not to be employed by division.—A No
769 person in the employ of, or holding any official connection or
770 position with any person, firm, partnership, corporation, or
771 association of any kind, engaged in the business of buying or
772 selling mineral leases, drilling wells in the search of oil or
773 gas, producing, transporting, refining, or distributing oil or
774 gas may not shall hold any position under, or be employed by,
775 the Division of Water Resource Management in the prosecution of
776 its duties under this part law.
777 Section 13. Subsection (1) of section 377.243, Florida
778 Statutes, is amended to read:
779 377.243 Conditions for granting permits for extraction
780 through well holes.—
781 (1) Before applying Prior to the application to the
782 Division of Water Resource Management for the permit to drill
783 for oil, gas, and related products referred to in s. 377.242(1),
784 the applicant must own a valid deed, or other muniment of title,
785 or lease granting the said applicant the privilege to explore
786 for oil, gas, or related mineral products to be extracted only
787 through the well hole on the land or lands included in the
788 application. However, unallocated interests may be unitized
789 according to s. 377.27.
790 Section 14. Subsection (1) of section 377.244, Florida
791 Statutes, is amended to read:
792 377.244 Conditions for granting permits for surface
793 exploratory and extraction operations.—
794 (1) Exploration for and extraction of minerals under and by
795 virtue of the authority of a grant of oil, gas, or mineral
796 rights, or which, subsequent to such grant, may be interpreted
797 to include the right to explore for and extract minerals which
798 are subject to extraction from the land by means other than
799 through a well hole, that is by means of surface exploratory and
800 extraction operations such as sifting of the sands, dragline,
801 open pit mining, or other type of surface operation, which would
802 include movement of sands, dirt, rock, or minerals, shall be
803 exercised only pursuant to a permit issued by the Division of
804 Water Resource Management upon the applicant’s compliance
805 applicant complying with the following conditions:
806 (a) The applicant must own a valid deed, or other muniment
807 of title, or lease granting the applicant the right to explore
808 for and extract oil, gas, and other minerals from the said
810 (b) The applicant shall post a good and sufficient surety
811 bond with the division in such amount as the division determines
812 may determine is adequate to afford full and complete protection
813 for the owner of the surface rights of the lands described in
814 the application, conditioned upon the full and complete
815 restoration, by the applicant, of the area over which the
816 exploratory and extraction operations are conducted to the same
817 condition and contour in existence before prior to such
819 Section 15. For the 2016-2017 fiscal year, the sum of $1
820 million in nonrecurring funds is appropriated from the General
821 Revenue Fund to the Department of Environmental Protection to
822 conduct a high-pressure well stimulation study pursuant to s.
823 377.2436, Florida Statutes.
824 Section 16. This act shall take effect July 1, 2016.