HB 364 — An Act amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, in development, further providing for bonding.

PRINTER'S NO.   320

                      THE GENERAL ASSEMBLY OF PENNSYLVANIA



                           HOUSE BILL
                           No. 364
                                                 Session of
                                                   2025

     INTRODUCED BY VITALI, SAMUELSON, BRENNAN, PIELLI, HOHENSTEIN,
        HILL-EVANS, CIRESI, CEPEDA-FREYTIZ, FREEMAN AND STEELE,
        JANUARY 27, 2025

     REFERRED TO COMMITTEE ON ENVIRONMENTAL AND NATURAL RESOURCE
        PROTECTION, JANUARY 27, 2025


                                      AN ACT
 1   Amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated
 2      Statutes, in development, further providing for bonding.
 3      The General Assembly of the Commonwealth of Pennsylvania
 4   hereby enacts as follows:
 5      Section 1.     Section 3225(a)(1) introductory paragraph and
 6   (iii) and (2) of Title 58 of the Pennsylvania Consolidated
 7   Statutes are amended to read:
 8   § 3225.    Bonding.
 9      (a)    General rule.--The following shall apply:
10             (1)   Except as provided in subsection (d), upon filing an
11      application for a well permit and before continuing to
12      operate an oil or gas well, the owner or operator of the well
13      shall file with the department a bond covering the well and
14      well site on a form to be prescribed and furnished by the
15      department. A bond filed with an application for a well
16      permit shall be payable to the Commonwealth and conditioned
17      upon the operator's faithful performance of all drilling,
 1    water supply replacement, restoration and plugging
 2    requirements of this chapter. A bond for a well in existence
 3    on April 18, 1985, shall be payable to the Commonwealth and
 4    conditioned upon the operator's faithful performance of all
 5    water supply replacement, restoration and plugging
 6    requirements of this chapter. The amount of the bond required
 7    shall be in the following amounts and [amounts under
 8    subparagraphs (i) and (ii)] may be adjusted by the
 9    Environmental Quality Board every two years to reflect the
10    projected costs to the Commonwealth of plugging the well:
11              * * *
12              (iii)    For a well other than an unconventional well,
13        $2,500 per well. [For 10 years following the effective
14        date of this subparagraph, the Environmental Quality
15        Board and the department shall have no authority to
16        adjust the amount under this subparagraph.]
17        (2)   The following apply:
18              (i)    Except as provided under subparagraph (ii), in
19        lieu of individual bonds for each well, an owner or
20        operator may file a blanket bond for the applicable
21        amount under paragraph (1)(i) or (ii), on a form prepared
22        by the department, covering all of its wells in this
23        Commonwealth, as enumerated on the bond form.
24              (ii)    As follows:
25                     (A)    An operator may file a blanket bond of
26              $25,000 for all of the operator's wells in this
27              Commonwealth that are not unconventional wells.
28                     [(B)    For every new well that is not an
29              unconventional well drilled after six months after
30              the effective date of this subsection, the bond

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 1             amount for that operator shall increase by $1,000.
 2                  (C)   The total blanket bond for an operator's
 3             wells that are not unconventional wells shall not
 4             exceed $100,000.
 5                  (D)   The blanket bond increase of $1,000 shall be
 6             waived by the department for a new well drilled under
 7             this subsection if the operator provides evidence to
 8             the department that the operator has plugged an
 9             orphan well at the operator's own expense for which
10             the operator was not the responsible party within the
11             previous 365 days that the operator has not yet
12             received credit for under this subsection by the
13             department.
14                  (E)   For 10 years following the effective date of
15             this clause, the bond amounts for wells that are not
16             unconventional wells may only be revised by the
17             General Assembly. The Environmental Quality Board and
18             the department shall have no authority to adjust bond
19             amounts related to wells that are not unconventional
20             wells during that time period.]
21                  (F)   The department shall conduct a study of its
22             experience in implementing this section, report its
23             findings to the Governor and the General Assembly and
24             make recommendations for program amendments within 12
25             months of the effective date of this clause. The
26             report shall contain information relating to:
27                        (I)    the cost to the Commonwealth to plug
28                  orphan and improperly abandoned wells;
29                        (II)    evaluation of industry trends relating
30                  to compliance with plugging and reclamation

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 1                  requirements under existing law;
 2                      (III)    evaluation of the effectiveness of
 3                  existing enforcement authority in avoiding
 4                  improper abandonment, including civil penalty
 5                  authority and forfeiting oil and gas well bonds;
 6                      (IV)    the system for reviewing operators'
 7                  requests for regulatory inactive status approval
 8                  and permit transfers and what impact approving
 9                  those actions under current requirements have on
10                  future improper abandonment of active wells;
11                      (V)    the number of identified orphan and
12                  improperly abandoned wells eligible for plugging;
13                      (VI)    any recommendation on effective
14                  alternative financial assurance mechanisms,
15                  including, but not limited to, increased bond
16                  amounts for conventional oil and gas wells; and
17                      (VII)    the potential applicability of the
18                  mechanisms to oil and gas wells drilled prior to
19                  April 18, 1985.
20        * * *
21    Section 2.    This act shall take effect in 60 days.




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