La. Admin. Code tit. 43 § XVII-609

Current through Register Vol. 50, No. 11, November 20, 2024

Section XVII-609 - Legal Permit Conditions

A. Applicability. The rules and regulations of this Section set forth legal conditions for Class VI well permits. Permits for owners or operators of Class VI injection wells shall include conditions meeting applicable requirements of §§609, 615, 617, 619, 621, 623, 625, 627, 629, and 631. All conditions applicable to all permits shall be incorporated into the permits either expressly or by reference. If incorporated by reference, a specific citation to these regulations must be given in the permit

B. Signatories. All reports required by permits and other information requested by the commissioner shall be signed as in applications by a person described in §605 D

C. Financial Responsibility

1. The permit shall require the permittee to maintain financial responsibility and resources to close, plug, and abandon the underground injection wells and, where necessary, related surface facility, and for post-injection site care and site closure in a manner prescribed by the commissioner. Class VI well operators must also comply with §609.C.4 The permittee must show evidence of financial responsibility to the commissioner by the submission of:

a. a certificate of deposit issued in sole favor of the Office of Conservation in a form prescribed by the commissioner. A certificate of deposit may not be withdrawn, canceled, rolled over or amended in any manner without the approval of the commissioner;

b. a performance bond (surety bond) in sole favor of the Office of Conservation in a form prescribed by the commissioner;

c. a letter-of-credit in sole favor of the Office of Conservation in a form prescribed by the commissioner;

d. site-specific trust account, or

e. any other instrument of financial assurance acceptable to the commissioner.

2. The amount of funds available in the financial instrument shall be no less than the amount identified in the cost estimate of the closure plan and any required post-injection site care and site closure, and must be approved by the commissioner.

3. Any financial instrument filed in satisfaction of the financial responsibility requirements shall be issued by and drawn on a bank or other financial institution authorized under state or federal law to operate in the State of Louisiana.

4. Class VI well owners, operators, or applicants shall comply with these additional requirements of financial responsibility.

a.

i. Qualifying financial responsibility instruments must be sufficient to cover the cost of meeting the requirements of:

(a). corrective action of §615 C;

(b). injection well plugging of §631;

(c). post-injection site care and site closure of §633; and

(d). emergency and remedial response of §623

ii. The owner/operator shall maintain third party insurance at a sufficient level to respond to any emergency or to perform any remedial action that meets the requirements of §623

b. Financial responsibility instruments must be sufficient to address endangerment of underground sources of drinking water.

c. Qualifying financial responsibility instruments must comprise protective conditions of coverage. Protective conditions of coverage must include at a minimum cancellation, renewal, and continuation provisions, specifications on when the provider becomes liable following a notice of cancellation if there is a failure to renew with a new qualifying financial instrument, and requirements for the provider to meet a minimum rating, minimum capitalization, and ability to pass the bond rating when applicable:

i. cancellation: an owner or operator must provide that their financial mechanism may not cancel, terminate or fail to renew except for failure to pay such financial instrument. If there is a failure to pay the financial instrument, the financial institution may elect to cancel, terminate, or fail to renew the instrument by sending notice by certified mail to the owner or operator and the commissioner. The cancellation must not be final for 120 days after receipt of the cancellation notice. The owner or operator must provide an alternate financial responsibility demonstration within 60 days of notice of cancellation, and if an alternate financial responsibility demonstration is not acceptable or possible, any funds from the instrument being cancelled must be released within 60 days of notification by the commissioner;

ii. renewal: owners or operators must renew all financial instruments, if an instrument expires, for the entire term of the geologic sequestration project. The instrument may be automatically renewed as long as the owner or operator has the option of renewal at the face amount of the expiring instrument. The automatic renewal of the instrument must, at a minimum, provide the holder with the option of renewal at the face amount of the expiring financial instrument;

iii. cancellation, termination, or failure to renew may not occur and the financial instrument will remain in full force and effect in the event that on or before the date of expiration the commissioner deems the facility abandoned; or the permit is terminated or revoked or a new permit is denied; or closure is ordered by the commissioner or a court of competent jurisdiction; or the owner or operator is named as debtor in a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code; or the amount due is paid.

d. Qualifying financial responsibility instruments must be approved by the commissioner:

i. the commissioner shall consider and approve the financial responsibility demonstration for all the phases of the geologic sequestration project before issuing any authorization to begin geologic sequestration of carbon dioxide in a Class VI well;

ii. the owner or operator must provide any updated information related to their financial responsibility instrument(s) annually and if there are any changes, the commissioner must evaluate the financial responsibility demonstration to confirm that the instrument(s) used remain adequate. The owner or operator must maintain financial responsibility requirements regardless of the status of the commissioner's review of the financial responsibility demonstration;

iii. the commissioner may disapprove the use of a financial instrument if he determines it is not sufficient to meet the financial responsibility requirements.

e. The owner or operator may demonstrate financial responsibility by using one or multiple qualifying financial instruments for specific phases of the geologic sequestration project:

i. in the event that the owner or operator combines more than one instrument for a specific geologic sequestration phase (e.g., well plugging), such combination must be limited to instruments that are not based on financial strength or performance, for example trust funds, certificates of deposit, surety bonds guaranteeing payment into a trust fund, and letters of credit. In this case, it is the combination of mechanisms, rather than the single mechanism, which must provide financial responsibility for an amount at least equal to the current cost estimate.

f. The requirement to maintain adequate financial responsibility and resources is directly enforceable regardless of whether the requirement is a condition of the permit. The owner or operator must maintain financial responsibility and resources until:

i. the commissioner receives and approves the completed post-injection site care and site closure plan; and

ii. the commissioner approves site closure.

g. The owner or operator may be released from a financial instrument in the following circumstances:

i. the owner or operator has completed the phase of the geologic sequestration project for which the financial instrument was required and has fulfilled all its financial obligations as determined by the commissioner, including obtaining financial responsibility for the next phase of the geologic sequestration project, if required; or

ii. the owner or operator has submitted a replacement financial instrument and received written approval from the commissioner accepting the new financial instrument and releasing the owner or operator from the previous financial instrument.

h. The owner or operator must have a detailed written estimate, in current dollars, of the cost of performing corrective action on wells in the area of review, plugging the injection well(s), post-injection site care and site closure, and emergency and remedial response:

i. the cost estimate must be performed for each phase separately and must be based on the costs to the Office of Conservation of contracting a third party to perform the required activities. A third party is a party who is not within the corporate structure of the owner or operator;

ii. during the active life of the geologic sequestration project, the owner or operator must adjust the cost estimate for inflation within 60 days before the anniversary date of the establishment of the financial instrument(s) and provide this adjustment to the commissioner. The owner or operator must also provide the commissioner written updates of adjustments to the cost estimate within 60 days of any amendments to the area of review and corrective action plan, the injection well plugging plan, the post-injection site care and site closure plan, and the emergency and remedial response plan;

iii. the commissioner must approve any decrease or increase to the initial cost estimate. During the active life of the geologic sequestration project, the owner or operator must revise the cost estimate no later than 60 days after the commissioner has approved the request to modify the area of review and corrective action plan, the injection well plugging plan, the post-injection site care and site closure plan, and the emergency and response plan, if the change in the plan increases the cost. If the change to the plans decreases the cost, any withdrawal of funds must be approved by the commissioner. Any decrease to the value of the financial assurance instrument must first be approved by the commissioner. The revised cost estimate must be adjusted for inflation as specified at §609.C.4.h ii. above;

iv. whenever the current cost estimate increases to an amount greater than the face amount of a financial instrument currently in use, the owner or operator, within 60 days after the increase, must either cause the face amount to be increased to an amount at least equal to the current cost estimate and submit evidence of such increase to the commissioner, or obtain other financial responsibility instruments to cover the increase. Whenever the current cost estimate decreases, the face amount of the financial assurance instrument may be reduced to the amount of the current cost estimate only after the owner or operator has received written approval from the commissioner.

i. The owner or operator must notify the commissioner by certified mail of adverse financial conditions such as bankruptcy that may affect the ability to carry out injection well plugging and post-injection site care and site closure:

i. in the event that the owner or operator or the third party provider of a financial responsibility instrument is going through a bankruptcy, the owner or operator must notify the commissioner by certified mail of the commencement of a voluntary or involuntary proceeding under Title 11 (Bankruptcy), U.S. Code, naming the owner or operator as debtor, within 10 days after commencement of the proceeding.

ii. An owner or operator who fulfills the financial responsibility requirements by obtaining an approved instrument of financial assurance will be deemed to be without the required financial assurance in the event of bankruptcy of the trustee or issuing institution, or a suspension or revocation of the authority of the trustee institution to act as trustee of the institution issuing the financial assurance instrument. The owner or operator must establish other financial assurance within 60 days after such an event.

j. The owner or operator must provide the commissioner with an adjustment of the cost estimate within 60 days of notification by the commissioner, if the commissioner determines during the annual evaluation of the qualifying financial responsibility instrument(s) that the most recent demonstration is no longer adequate to cover the cost of corrective action, injection well plugging, post-injection site care and site closure, and emergency and remedial response.

k. The commissioner must approve the use and length of pay-in-periods for trust funds or escrow accounts.

5. The permit shall require the permittee to maintain financial responsibility as specified at §609.C.1 until:

a. the well has been plugged and abandoned in accordance with an approved plugging and abandonment plan pursuant to §631 and submitted a plugging and abandonment report pursuant to §631.A 5;

b. the well has been converted in compliance with the requirements of §609.L 7; or

c. the transferor of a permit has received notice from the commissioner that the owner or operator receiving transfer of the permit, the new permittee, has demonstrated financial responsibility for the well.

D. Duty to Comply. The permittee must comply with all conditions of a permit. Any permit noncompliance constitutes a violation of the act and is grounds for enforcement action or permit termination, revocation and reissuance, or modification; or for denial of a permit renewal application if the commissioner determines that such noncompliance endangers underground sources of drinking water.

E. Duty to Reapply. If the permittee wishes to continue an activity regulated by a permit after the expiration date of this permit, the permittee must apply for and obtain a new permit.

F. Duty to Halt or Reduce Activity. It shall not be a defense for a permittee in an enforcement action that it would have been necessary to halt or reduce the permitted activity in order to maintain compliance with the conditions of this permit.

G. Duty to Mitigate. The permittee shall take all reasonable steps to minimize or correct any adverse impact on the environment such as the contamination of underground sources of drinking water resulting from noncompliance with this permit.

H. Proper Operation and Maintenance. The permittee shall at all times properly operate and maintain all facilities and systems of treatment and control (and related appurtenances) which are installed or used by the permittee to achieve compliance with the conditions of his permit. Proper operation and maintenance includes effective performance, adequate funding, adequate operation staffing and training, and adequate laboratory process controls, including appropriate quality assurance procedures. This provision requires the operation of back-up or auxiliary facilities or similar systems only when necessary to achieve compliance with the conditions of the permit.

I. Inspection and Entry. Inspection and entry shall be allowed as prescribed in R.S. of 1950, Title 30, Section 4

J. Compliance. Compliance with a permit during its term constitutes compliance, for purposes of enforcement, with the act and these regulations.

K. Property Rights. The issuance of a permit does not convey any property rights of any sort, or any exclusive privilege or servitude.

L. Notification Requirements

1. Planned Changes. The permittee shall give notice to the commissioner as soon as possible of any planned physical alterations or additions to the permitted facility.

2. Notice of Well Completion. A new injection well injection well may not commence injection until construction is complete, a notice of completion has been submitted to the commissioner, the commissioner has inspected or otherwise reviewed the injection well and finds it is in compliance with the conditions of the permit, and the commissioner has given approval to begin injection.

3. Anticipated Noncompliance. The permittee shall give advance notice to the commissioner of any planned changes in the permitted facility or activity which may result in noncompliance with permit requirements.

4. Transfers. A permit is not transferable to any person except after notice to the commissioner. The commissioner may require modification or revocation and reissuance of the permit to change the name of the permittee and incorporate such other requirements as may be necessary under the Safe Drinking Water Act. (See §613)

5. Compliance Schedules. Report of compliance or noncompliance with, or any progress reports on, interim and final requirements contained in any compliance schedule in these regulations shall be submitted to the commissioner no later than 14 days following each schedule date.

6. Twenty-Four Hour Reporting

a. The permittee shall report to the commissioner any noncompliance which may endanger health or the environment. Any information pertinent to the noncompliance shall be reported by telephone at (225) 342-5515 within 24 hours from the time the permittee becomes aware of the circumstances. A written submission shall also be provided within five days of the time the permittee becomes aware of the circumstances and shall contain a description of the noncompliance and its cause; the period of noncompliance, including exact dates and times, and if the noncompliance has not been corrected, the anticipated time it is expected to continue; and steps taken or planned to reduce, eliminate, and prevent reoccurrence of the non-compliance.

b. The following additional information must be reported within the 24-hour period provided above:

i. any monitoring or other information which indicates that any contaminant may cause an endangerment to a USDW;

ii. any noncompliance with a permit condition or malfunction of the injection system which may cause fluid migration into or between USDWs.

7. The permittee shall notify the commissioner at such times as the permit requires before conversion or abandonment of the well or before closure of the project.

8. Other Noncompliance. The permittee shall report all instances of noncompliance not reported under §609.L.5 6, at the time quarterly reports are submitted. The reports shall contain the information listed in §609.L 6

9. Other Information. Where the permittee becomes aware that it failed to submit any relevant facts in a permit application, or submitted incorrect information in a permit application or in any report to the commissioner, it shall promptly submit such facts or information.

M. Duration of Permits

1. UIC permits for Class VI wells shall be issued for the operating life of the facility and the post-injection site care period. The commissioner shall review each issued Class VI well permit at least once every five years to determine whether it should be modified, revoked and reissued, terminated, or a minor modification made.

2. The term of a permit shall not be extended by modification beyond the maximum duration specified in this Section, except as provided in §609.M.4 below.

3. The commissioner may issue, for cause, any permit for a duration that is less than the full allowable term under this Section.

4. The conditions of an expired permit may continue in force until the effective date of a new permit if the permittee has submitted a timely and a complete application for a new permit, and the commissioner, through no fault of the permittee, does not issue a new permit with an effective date on or before the expiration date of the previous permit (e.g., when issuance is impracticable due to time or resource constraints).

a. Permits continued under this Section remain fully effective and enforceable.

b. When the permittee is not in compliance with the conditions of the expiring or expired permit, the commissioner may choose to do any or all of the following:

i. initiate enforcement action based upon the permit which has been continued;

ii. issue a notice of intent to deny the new permit. If the permit is denied, the owner or operator would then be required to cease the activities authorized by the continued permit or be subject to enforcement action for operating without a permit;

iii. issue a new permit under the requirements of these rules for issuing a new permit with appropriate conditions; or

iv. take other actions authorized by these regulations.

N. Schedules of Compliance. The permit may, when appropriate, specify a schedule of compliance leading to compliance with the act and these regulations.

1. Time for Compliance. Any schedules of compliance under this Section shall require compliance as soon as possible but not later than three years after the effective date of the permit.

2. Interim Dates. Except as provided in §609N.2.b, if a permit establishes a schedule of compliance which exceeds one year from the date of permit issuance, the schedule shall set forth interim requirements and the dates for their achievement.

a. The time between interim dates shall not exceed one year.

b. If the time necessary for completion of any interim requirements (such as the construction of a control facility) is more than one year and is not readily divisible into stages for completion, the permit shall specify interim dates for submission of reports of progress toward completion of the interim requirements and indicate a projected completion date.

3. Reporting. The permit shall be written to require that progress reports be submitted no later than 30 days following each interim date and the final date of compliance.

O. Additional Conditions. The commissioner shall impose on a case-by-case basis such additional conditions as are necessary to protect underground sources of drinking water.

P. Duty to Establish and Maintain Mechanical Integrity. The permittee of a Class VI injection well shall establish mechanical integrity prior to commencing injection and on a schedule determined by these rules or the commissioner. Thereafter, the owner or operator of Class VI injection wells must maintain mechanical integrity as defined in §627 The Class VI injection well owner or operator shall give notice to the commissioner when it is determined the injection well is lacking mechanical integrity. Upon receiving such notice, the operator shall immediately cease injection into the well. The well shall remain out of injection service until such time as well mechanical integrity is restored to the satisfaction of the commissioner. The owner or operator may resume injection upon written notification from the Director that the owner or operator has demonstrated mechanical integrity pursuant to §627

Q. The issuance of a permit does not authorize any injury to persons or property or invasion of other private rights, or any infringement of State or local law or regulations.

R. In addition to conditions required in all permits the commissioner shall establish conditions in permits as required on a case-by-case basis, to provide for and assure compliance with all applicable requirements of the SDWA and 40 CFR Parts 144, 145, 146 and 124.

S. New permits, and to the extent allowed under §613 modified or revoked and reissued permits, shall incorporate each of the applicable requirements referenced in this section. An applicable requirement is a State statutory or regulatory requirement that takes effect prior to final administrative disposition of the permit. An applicable requirement is also any requirement that takes effect prior to the modification or revocation and reissuance of a permit, to the extent allowed in §613

T. Incorporation. All permit conditions shall be incorporated either expressly or by reference. If incorporated by reference, a specific citation to the applicable regulations or requirements must be given in the permit.

La. Admin. Code tit. 43, § XVII-609

Promulgated by the Department of Natural Resources, Office of Conservation, LR 4761 (1/1/2021).

AUTHORITY NOTE: Promulgated in accordance with R.S. 30:4 et seq., 30:22 et seq., and 30:1101 et seq.