Committee backs voluntary industry-funded bonding pool to help small oil operators meet federal bond increases

The Minerals, Business & Economic Development Committee voted to give Senate File 20 a due-pass recommendation after extended testimony from the Oil and Gas Conservation Commission, industry representatives and small operators.

The bill establishes a voluntary, industry-funded financial-assurance program administered or contracted by the Oil and Gas Conservation Commission. The program would let participating operators pool resources and receive third-party-backed financial assurance as an alternative to individually posting larger surety bonds or letters of credit.

Tom Kropatch, state oil and gas supervisor, told the committee the bill is a response to a federal rule (issued June 2024) that raised minimum bond amounts for fluid mineral leases. Under the federal rule, a single-lease bond rose from $10,000 to $150,000 and a statewide bond rose from $25,000 to $500,000; the…