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Taylor Porter
August 2014
Regulatory Alert

LDNR Regulation
 
Office of Conservation - Fees
LAC 43:XIX.Chapter 7         
 
PROPOSED RULE – 8/20/2014
 
The proposed rule revises the LDNR fee schedule for the 2014-2015 fiscal years. The revisions establish the annual regulatory fee for a Type A facility at $6,496 per facility, Type B facility at $3,248 per facility, non-commercial class II injection/disposal wells at $651 per well, class III and storage wells at $651 per well and class I wells at $11,940 per well. The following annual production fee tiers are established for operators of capable oil and gas wells.
 
Tier Annual Production (Barrel Oil Equivalent) Fee ($ per Well)
Tier 1 0 17
Tier 2 1-5,000 94
Tier 3 5,001-15,000 267
Tier 4 15,001-30,000 443
Tier 5 30,001-60,000 700
Tier 6 60,001-110,000 974
Tier 7 110,001-9,999,999 1,202
 
 
 
PUBLIC HEARING
9/24/2014
9:00 AM
 
PUBLIC COMMENT
9/29/2014
4:30 PM
 
________________________________________________
 
LDNR Regulation
 
Statewide Order No. 29-B - Two Well Tests Per Year Requirement
LAC 43:XIX.121 and 137
           
PROPOSED RULE – 8/20/2014
 
LDNR states that the proposed rule codifies a long-standing practice, requiring certain oil and gas operators to conduct two well tests per year. More specifically, no later than the first day of May and November of each year, all producing/service wells will be required to report well test results on the approved forms: DM-1-R, oil well deliverability test or DT-1, gas well deliverability test or other method prescribed by the Office of Conservation. The proposed rule requires the well tests to be conducted a minimum of 60 days prior to the required filing date. Furthermore, all wells which are “shut in” shall also be noted on the form and the date of last production or date the service well ceased to be used indicated. The rule proposes an exception for wells drilled to or completed in the Monroe gas rock or stripper oil lease wells.
 
PUBLIC HEARING
9/29/2014
9:00 AM
 
PUBLIC COMMENT
10/6/2014
4:30 PM
_________________________________________________
                                                           
LDNR Regulation
 
Statewide Order No. 29-M - Class II Hydrocarbon Storage Wells in Salt Dome Cavities
LAC 43:XVII.Chapter 3
 
PROPOSED RULE – 8/20/2014
 
The proposed rule revises the requirements for Class II hydrocarbon storage wells in salt dome cavities.
 
Existing Hydrocarbon Storage Caverns
Existing hydrocarbon storage caverns that are in compliance with Statewide Order No. 29-M, but not in compliance with Statewide Order No. 29-M (revision 3) as of the effective date of these rules:
 
1) may continue to operate for one year under Statewide Order No. 29-M, and
 
2) will submit, in one year, an alternate means of compliance or a request for a variance pursuant to §303.F and/or present a corrective action plan to meet the requirements of Statewide Order No. 29-M (revision 3).
 
During the submittal review period until a final determination is made regarding the alternate means of compliance or variance and/or corrective action plan, the affected hydrocarbon storage well may continue to operate in compliance with Statewide Order No. 29-M.
 
Existing hydrocarbon storage caverns that are in compliance with any variance previously authorized by the Office of Conservation:
 
1) will submit, within one year after the effective date of these rules, documentation of the variance to LDNR for review, and
 
2) based on that review, the commissioner may terminate, modify, or revoke and reissue the existing permit with the variance if it is determined that continued operations cannot be conducted in a way that is protective of the environment, or the health, safety, and welfare of the public.
 
During the submittal review period the affected hydrocarbon storage well may continue to operate in compliance with such variance. If the commissioner does not terminate, modify, or revoke and reissue the existing permit, the affected solution-mining well may continue to operate in compliance with such variance.
 
Permit Conditions
The proposed rules amend the legal permit language of the following sections:
 
1) Section 309.B.3 / Assistance to Residents: requires assistance to residents in areas deemed to be at immediate potential risk in the event of a sinkhole developing or other incident requiring evacuation.
 
2) Section 309.B.4 / Reimbursement: requires reimbursement to state and/or political subdivisions for emergency/disaster response and to noncommercial residential immovable property within an evacuation area.
 
3) Section 309.F.3 / Proper Operation and Maintenance: LDNR may immediately prohibit operations if it determines that continued operations at a hydrocarbon storage well may cause unsafe operating conditions, or endanger the environment, or the health, safety and welfare of the public.
 
4) Section 309.M / Area or Project Permit Authorization: If the commissioner determines that any well constructed pursuant to §309.M.3 does not satisfy any of the requirements of §309.M.3.a and b, the commissioner may modify, terminate, or take enforcement action.
 
5) Section 309.N / Recordation of Notice of Existing Hydrocarbon Storage Caverns: Within six (6) months of rule’s effective date, owner/operator of an existing hydrocarbon storage cavern will record a certified survey plat of the well location for the cavern in the mortgage and conveyance records of the parish in which the property is located and furnish a date/file-stamped copy of the recorded notice to the Office of Conservation within 15 days of its recording.
 
Inspections/Surveys
Liquid hydrocarbon storage caverns will be required to perform:
  • casing inspections (or similar logs) will be required on the entire length of the cemented casing in each well at least once every 10 years;
  • sonar caliper survey, or other approved survey, will be performed at least once every 5 years; and
  • at least once every 10 years, a sonar caliper survey or other approved survey will be performed that logs the roof of the cavern.
 
Natural gas storage caverns will be required to perform:
  • casing inspections (or similar logs) will be required on the entire length of the cemented casing in each well at least once every 15 years;
  • sonar caliper survey or other approved survey will be performed at least once every 5 years; and
  • at least once every 15 years, a sonar caliper survey or other approved survey will be performed that logs the roof of the cavern.
 
Lastly, amendments are proposed to clarify the public hearing process for permitting and closure/post-closure requirements.
 
PUBLIC HEARING
9/29/2014
9:00 AM
 
PUBLIC COMMENT
10/6/2014
4:30 PM
 
_________________________________________________
 
 
LDNR Regulation
 
Statewide Order No. 29-M-3 - Class III Solution-Mining Injection Wells
LAC 43:XVII.Chapter 33
 
PROPOSED RULE – 8/20/2014
 
The proposed rules amend the legal permit language of the following sections:
 
1) Section 3309.B.3 / Assistance to Residents: requires assistance to residents in areas deemed to be at immediate potential risk in the event of a sinkhole developing or other incident requiring evacuation.
 
2) Section 3309.B.4 / Reimbursement: requires reimbursement to state and/or political subdivisions for emergency/disaster response and to noncommercial residential immovable property within an evacuation area.
 
3) Section 3309.F.3 / Proper Operation and Maintenance: LDNR may immediately prohibit operations if it determines that continued operations at a hydrocarbon storage well may cause unsafe operating conditions, or endanger the environment, or the health, safety and welfare of the public.
 
In addition, the proposed rule clarifies that the Commissioner may prescribe additional requirements for Class III wells or projects in order to protect underground sources of drinking water (USDWs), makes changes to the public hearing process for permitting and states that no new permits to inject will be issued until all required corrective actions obligations are fulfilled at a site.
 
PUBLIC HEARING
9/29/2014
9:00 AM
 
PUBLIC COMMENT
10/6/2014
4:30 PM
 

 
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