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Senate committee backs bonding pool to help small oil and gas operators meet new federal bond rules
Summary
Senators approved an amendment to permit use of unexpended conservation funds to seed a risk pool and voted the bill out of committee; the measure would authorize the Oil and Gas Conservation Commission to create voluntary bonding options and a risk pool to meet federal bonding requirements that rose sharply in recent federal rule changes.
The Senate passed a committee amendment and the Committee of the Whole recommended passage of Senate File 20, a bill authorizing new bonding options and a bonding pool to help oil and gas operators meet recently increased federal bonding requirements.
Why it matters: federal rules raised minimum per-well bonds from $10,000 to $150,000 and increased statewide blanket bonds from $25,000 to $500,000; senators said those higher requirements could put small operators at risk and threaten a substantial portion of state production produced by smaller firms.
What the bill does: it directs the State Oil and Gas Conservation Commission (OGCC) to promulgate rules establishing voluntary pooling options that allow participating operators to aggregate risk. The commission may contract with a third party to create a bonding pool that can serve as financial assurance for plugging and reclamation obligations, or, if a contractor is unavailable, the commission…
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