(225 ILCS 725/1) (from Ch. 96 1/2, par. 5401)
Sec. 1. Unless the context otherwise requires, the words defined in this Section have the following meanings as used in this Act.
"Person" means any natural person, corporation, association, partnership, governmental agency or other legal entity, receiver, trustee, guardian, executor, administrator, fiduciary or representative of any kind.
"Oil" means natural crude oil or petroleum and other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods or by the use of an oil and gas separator and which are not the result of condensation of gas after it leaves the underground reservoir.
"Gas" means all natural gas, including casinghead gas, and all other natural hydrocarbons not defined above as oil.
"Pool" means a natural, underground reservoir containing in whole or in part, a natural accumulation of oil or gas, or both. Each productive zone or stratum of a general structure, which is completely separated from any other zone or stratum in the structure, is deemed a separate "pool" as used herein.
"Field" means the same general surface area which is underlaid or appears to be underlaid by one or more pools.
"Permit" means the Department's written authorization allowing a well to be drilled, deepened, converted, or operated by an owner.
"Permittee" means the owner holding or required to hold the permit, and who is also responsible for paying assessments in accordance with Section 19.7 of this Act and, where applicable, executing and filing the bond associated with the well as principal and who is responsible for compliance with all statutory and regulatory requirements pertaining to the well.
When the right and responsibility for operating a well is vested in a receiver or trustee appointed by a court of competent jurisdiction, the permit shall be issued to the receiver or trustee.
"Orphan Well" means a well for which: (1) no fee assessment under Section 19.7 of this Act has been paid or no other bond coverage has been provided for 2 consecutive years; (2) no oil or gas has been produced from the well or from the lease or unit on which the well is located for 2 consecutive years; and (3) no permittee or owner can be identified or located by the Department. Orphaned wells include wells that may have been drilled for purposes other than those for which a permit is required under this Act if the well is a conduit for oil or salt water intrusions into fresh water zones or onto the surface which may be caused by oil and gas operations.
"Owner" means the person who has the right to drill into and produce from any pool, and to appropriate the production either for the person or for the person and another, or others, or solely for others, excluding the mineral owner's royalty if the right to drill and produce has been granted under an oil and gas lease. An owner may also be a person granted the right to drill and operate an injection (Class II UIC) well independent of the right to drill for and produce oil or gas. When the right to drill, produce, and appropriate production is held by more than one person, then all persons holding these rights may designate the owner by a written operating agreement or similar written agreement. In the absence of such an agreement, and subject to the provisions of Sections 22.2 and 23.1 through 23.16 of this Act, the owner shall be the person designated in writing by a majority in interest of the persons holding these rights.
"Department" means the Department of Natural Resources.
"Director" means the Director of Natural Resources.
"Mining Board" means the State Mining Board in the Department of Natural Resources, Office of Mines and Minerals.
"Mineral Owner's Royalty" means the share of oil and gas production reserved in an oil and gas lease free of all costs by an owner of the minerals whether denominated royalty or overriding royalty.
"Waste" means "physical waste" as that term is generally understood in the oil and gas industry, and further includes:
(1) the locating, drilling and producing of any oil |
| or gas well or wells drilled contrary to the valid order, rules and regulations adopted by the Department under the provisions of this Act. | |
(2) permitting the migration of oil, gas, or water |
| from the stratum in which it is found, into other strata, thereby ultimately resulting in the loss of recoverable oil, gas or both; | |
(3) the drowning with water of any stratum or part |
| thereof capable of producing oil or gas, except for secondary recovery purposes; | |
(4) the unreasonable damage to underground, fresh or |
| mineral water supply, workable coal seams, or other mineral deposits in the operations for the discovery, development, production, or handling of oil and gas; | |
(5) the unnecessary or excessive surface loss or |
| destruction of oil or gas resulting from evaporation, seepage, leakage or fire, especially such loss or destruction incident to or resulting from the escape of gas into the open air in excessive or unreasonable amounts, provided, however, it shall not be unlawful for the operator or owner of any well producing both oil and gas to burn such gas in flares when such gas is, under the other provisions of this Act, lawfully produced, and where there is no market at the well for such escaping gas; and where the same is used for the extraction of casinghead gas, it shall not be unlawful for the operator of the plant after the process of extraction is completed, to burn such residue in flares when there is no market at such plant for such residue gas; | |
(6) permitting unnecessary fire hazards;
(7) permitting unnecessary damage to or destruction |
| of the surface, soil, animal, fish or aquatic life or property from oil or gas operations. | |
"Drilling Unit" means the surface area allocated by an order or regulation of the Department to the drilling of a single well for the production of oil or gas from an individual pool.
"Enhanced Recovery Method" means any method used in an effort to recover hydrocarbons from a pool by injection of fluids, gases or other substances to maintain, restore or augment natural reservoir energy, or by introducing immiscible or miscible gases, chemicals, other substances or heat or by in‑situ combustion, or by any combination thereof.
"Well‑Site Equipment" means any production‑related equipment or materials specific to the well, including motors, pumps, pump jacks, tanks, tank batteries, separators, compressors, casing, tubing, and rods.
(Source: P.A. 89‑243, eff. 8‑4‑95; 89‑445, eff. 2‑7‑96.) |
(225 ILCS 725/1.2) (from Ch. 96 1/2, par. 5403)
Sec. 1.2. The Director shall appoint an Oil and Gas Board consisting of 7 members, 6 of whom shall be actively engaged in the oil and gas industry. In appointing the 6 members representing the oil and gas industry, the Director shall give due consideration to the recommendations of organizations and associations representing the various interests of the oil and gas industry and shall appoint individuals in such a manner as to assure representation of petroleum engineering, petroleum geology, oil and gas operations and production, and the servicing of oil and gas operations and production. The one remaining member shall be appointed by the Director upon consultation with the Illinois Farm Bureau and the member must be active in production agriculture. Members shall be appointed to 2 year terms commencing on the third Monday in January of odd numbered years, and may be reappointed for additional terms provided that no member may be reappointed for a term which would cause his continued service to exceed 8 years. Any appointment to fill a vacancy shall be for the unexpired portion of the term. The Director may remove any member who fails to attend 2 consecutive meetings of the Board without sufficient excuse or for any other good cause as determined by the Director.
Members of the Oil and Gas Board shall be reimbursed for all reasonable and necessary expenses incurred in attending Board meetings and may receive a per diem stipend as determined by the Director from appropriations made available for that purpose.
The Oil and Gas Board shall meet at least quarterly and at such other times as the Department or the Board deems necessary to:
(1) Review all federal and State rules and laws |
| affecting the oil and gas industry in Illinois. | |
(2) Advise and consult with the Director concerning |
| the adoption of rules pertaining to the conservation of oil and gas. | |
(3) Review technical information and operations |
| concerning the improvement of methods, conditions, and equipment for the production of oil and gas. | |
(4) Advise and consult with the Director concerning |
| the proper drilling, casing and plugging of oil wells. | |
(5) Review the methods and procedures for the |
| issuance of proper permits to drill oil and gas wells. | |
(6) Advise and consult with the Director in the |
| administration of the Oil and Gas Well Site Plugging and Restoration Program. | |
(7) Advise and consult with the Director on any and |
| all other subjects about which the Department should seek information in relation to the oil and gas industry. | |
The Oil and Gas Board, by a record vote of a majority of its membership, may make specific recommendations to the Department on any of the matters enumerated above, but the Board shall act solely as an advisory body to the Department and its recommendations shall have no binding effect on the Department.
Before proposing any new rule or any changes to existing rules implementing the provisions of this Act under Section 5.01 of the Illinois Administrative Procedure Act, and prior to adopting any new form or changing any existing form required to be completed by a person regulated under this Act, the Department shall first present the proposed rule or form to the Oil and Gas Board for its review and recommendations. If the Oil and Gas Board, by a unanimous record vote of its membership, makes specific objection to a proposed new rule or proposed change to an existing rule, the Department shall set forth the objection in its notice of proposed rulemaking together with the reasons for proposing the rule notwithstanding the objection of the Oil and Gas Board.
The Department shall annually publish and present to the Oil and Gas Board a financial report describing the income, expenditures, and obligations of the Underground Resources Conservation Enforcement Fund and the Plugging and Restoration Fund. The annual report shall provide information on the administration of the Oil and Gas Well Site Plugging and Restoration Program, and shall include the number of orphan wells identified and the status of closure of these wells.
In situations involving drilling or operations through veins or seams of mineable coal, the entire authority and discretion of the Department shall be vested in the Mining Board.
(Source: P.A. 91‑81, eff. 7‑9‑99.) |
(225 ILCS 725/6) (from Ch. 96 1/2, par. 5409)
Sec. 6. The Department shall have the authority to conduct hearings and to make such reasonable rules as may be necessary from time to time in the proper administration and enforcement of this Act, including the adoption of rules and the holding of hearings for the following purposes:
(1) To require the drilling, casing and plugging of |
| wells to be done in such a manner as to prevent the migration of oil or gas from one stratum to another; to prevent the intrusion of water into oil, gas or coal strata; to prevent the pollution of fresh water supplies by oil, gas or salt water. | |
(2) To require the person desiring or proposing to |
| drill, deepen or convert any well for the exploration or production of oil or gas, for injection or water supply in connection with enhanced recovery projects, for the disposal of salt water, brine, or other oil or gas field wastes, or for input, withdrawal, or observation in connection with the storage of natural gas or other liquid or gaseous hydrocarbons before commencing the drilling, deepening or conversion of any such well, to make application to the Department upon such form as the Department may prescribe and to comply with the provisions of this Section. The drilling, deepening or conversion of any well is hereby prohibited until such application is made and the applicant is issued a permit therefor as provided by this Act. Each application for a well permit shall include the following: (A) The exact location of the well, (B) the name and address of the manager, operator, contractor, driller, or any other person responsible for the conduct of drilling operations, (C) the proposed depth of the well, (D) lease ownership information, and (E) such other relevant information as the Department may deem necessary or convenient to effectuate the purposes of this Act. | |
Additionally, each applicant who has not been issued |
| a permit that is of record on the effective date of this amendatory Act of 1991, or who has not thereafter made payments of assessments under Section 19.7 of this Act for at least 2 consecutive years preceding the application, shall execute, as principal, and file with the Department a bond, executed by a surety authorized to transact business in this State, in an amount estimated to cover the cost of plugging the well and restoring the well site, but not to exceed $5000, as determined by the Department for each well, or a blanket bond in an amount not to exceed $100,000 for all wells, before drilling, deepening, converting, or operating any well for which a permit is required that has not previously been plugged and abandoned in accordance with the Act. The Department shall release the bond if the well, or all wells in the case of a blanket bond, is not completed but is plugged and the well site restored in accordance with the Department's rules or is completed in accordance with the Department's rules and the permittee pays assessments to the Department in accordance with Section 19.7 of this Act for 2 consecutive years. | |
In lieu of a surety bond, the applicant may provide |
| cash, certificates of deposit, or irrevocable letters of credit under such terms and conditions as the Department may provide by rule. | |
The sureties on all bonds in effect on the effective |
| date of this amendatory Act of 1991 shall remain liable as sureties in accordance with their undertakings until released by the Department from further liability under the Act. The principal on each bond in effect on the effective date of this amendatory Act of 1991 shall be released from the obligation of maintaining the bond if either the well covered by a surety bond has been plugged and the well site restored in accordance with the Department's rules or the principal of the surety has paid the initial assessment in accordance with Section 19.7 and no well or well site covered by the surety bond is in violation of the Act. | |
No permit shall be issued to a corporation |
| incorporated outside of Illinois until the corporation has been authorized to do business in Illinois. | |
No permit shall be issued to an individual, |
| partnership, or other unincorporated entity that is not a resident of Illinois until that individual, partnership, or other unincorporated entity has irrevocably consented to be sued in Illinois. | |
(3) To require the person assigning, transferring, |
| or selling any well for which a permit is required under this Act to notify the Department of the change of ownership. The notification shall be on a form prescribed by the Department, shall be executed by the current permittee and by the new permittee, or their authorized representatives, and shall be filed with the Department within 30 days after the effective date of the assignment, transfer or sale. Within the 30 day notification period and prior to operating the well, the new permittee shall pay the required well transfer fee and, where applicable, file with the Department the bond required under subsection (2) of this Section. | |
(4) To require the filing with the State Geological |
| Survey of all geophysical logs, a well drilling report and drill cuttings or cores, if cores are required, within 90 days after drilling ceases; and to file a completion report with the Department within 30 days after the date of first production following initial drilling or any reworking, or after the plugging of the well, if a dry hole. A copy of each completion report submitted to the Department shall be delivered to the State Geological Survey. The Department and the State Geological Survey shall keep the reports confidential, if requested in writing by the permittee, for 2 years after the date the permit is issued by the Department. This confidentiality requirement shall not prohibit the use of the report for research purposes, provided the State Geological Survey does not publish specific data or identify the well to which the completion report pertains. | |
(5) To prevent "blowouts", "caving" and "seepage" in |
| the same sense that conditions indicated by such terms are generally understood in the oil and gas business. | |
(6) To prevent fires.
(7) To ascertain and identify the ownership of all |
| oil and gas wells, producing leases, refineries, tanks, plants, structures, and all storage and transportation equipment and facilities. | |
(8) To regulate the use of any enhanced recovery |
| method in oil pools and oil fields. | |
(9) To regulate or prohibit the use of vacuum.
(10) To regulate the spacing of wells, the issuance |
| of permits, and the establishment of drilling units. | |
(11) To regulate directional drilling of oil or gas |
|
(12) To regulate the plugging of wells.
(13) To require that wells for which no logs or |
| unsatisfactory logs are supplied shall be completely plugged with cement from bottom to top. | |
(14) To require a description in such form as is |
| determined by the Department of the method of well plugging for each well, indicating the character of material used and the positions and dimensions of each plug. | |
(15) To prohibit waste, as defined in this Act.
(16) To require the keeping of such records, the |
| furnishing of such relevant information and the performance of such tests as the Department may deem necessary to carry into effect the purposes of this Act. | |
(17) To regulate the disposal of salt or |
| sulphur‑bearing water and any oil field waste produced in the operation of any oil or gas well. | |
(18) To prescribe rules, conduct inspections and |
| require compliance with health and safety standards for the protection of persons working underground in connection with any oil and gas operations. For the purposes of this paragraph, oil and gas operations include drilling or excavation, production operations, plugging or filling in and sealing, or any other work requiring the presence of workers in shafts or excavations beneath the surface of the earth. Rules promulgated by the Department may include minimum qualifications of persons performing tasks affecting the health and safety of workers underground, minimum standards for the operation and maintenance of equipment, and safety procedures and precautions, and shall conform, as nearly as practicable, to corresponding qualifications, standards and procedures prescribed under The Coal Mining Act. | |
(19) To deposit the amount of any forfeited surety |
| bond or other security in the Plugging and Restoration Fund, a special fund in the State treasury which is hereby created; to deposit into the Fund any amounts collected, reimbursed or recovered by the Department under Sections 19.5, 19.6 and 19.7 of this Act; to accept, receive, and deposit into the Fund any grants, gifts or other funds which may be made available from public or private sources and all earnings received from investment of monies in the Fund; and to make expenditures from the Fund for the purposes of plugging, replugging or repairing any well, and restoring the site of any well, determined by the Department to be abandoned or ordered by the Department to be plugged, replugged, repaired or restored under Sections 8a, 19 or 19.1 of this Act, including expenses in administering the Fund. | |
For the purposes of this Act, the State Geological Survey shall co‑operate with the Department in making available its scientific and technical information on the oil and gas resources of the State, and the Department shall in turn furnish a copy to the State Geological Survey of all drilling permits as issued, and such other drilling and operating data received or secured by the Department which are pertinent to scientific research on the State's mineral resources.
(Source: P.A. 86‑205; 86‑364; 86‑1177; 87‑744.) |