Louisiana Administrative Code
Title 43 - NATURAL RESOURCES
Part XIX - Office of Conservation-General Operations
Subpart 1 - Statewide Order No. 29-B
Chapter 5 - Off-Site Storage, Treatment and/or Disposal of Exploration and Production Waste Generated from Drilling and Production of Oil and Gas Wells
Section XIX-511 - Financial Responsibility

Universal Citation: LA Admin Code XIX-511

Current through Register Vol. 50, No. 9, September 20, 2024

A. Each permitted commercial facility and transfer station must maintain evidence of financial responsibility for any liability for damages which may be caused to any party by the escape or discharge of any material or E and P Waste offsite from the commercial facility or transfer station. Such evidence must be provided by the applicant prior to issuance of a permit. Failure to maintain such evidence shall lead to initiation of procedures for permit suspension. If suspended, the permit shall remain suspended until financial responsibility has been confirmed.

B. Financial responsibility may be evidenced by filing a letter of credit, bond, certificates of deposit issued by and drawn on Louisiana banks, or any other evidence of equivalent financial responsibility acceptable to the commissioner.

C. In no event shall the amount and extent of such financial responsibility be less than the face amounts per occurrence and/or aggregate occurrences as set by the commissioner below:

1. $500,000 minimum financial responsibility for any commercial facility (excluding transfer stations) which stores, treats or disposes of E and P Waste solids (i.e. oil- or water-base drilling fluids, etc.); or

2. $250,000 minimum financial responsibility for a commercial salt water disposal facility which utilizes underground injection and a closed storage system; and

3. $100,000 minimum financial responsibility for each transfer station operated in conjunction with a legally permitted commercial facility subject to the guidelines of this Section.

Note: The commissioner retains the right to increase the face amounts set forth above as needed in order to prevent waste and to protect public health, safety, and welfare or the environment.

D. If insurance coverage is proposed and accepted to meet the financial responsibility requirement, it must be provided by an insurer that is licensed to transact the business of insurance, or eligible to provide insurance as an excess of surplus lines insurer, in one or more states, and is authorized to conduct insurance business in the state of Louisiana.

1. For a commercial facility which operates land treatment cells, such insurance must provide sudden and accidental pollution liability coverage as well as environmental impairment liability coverage.

2. For any commercial facility or transfer station which does not operate land treatment cells, such insurance must provide sudden and accidental pollution liability coverage.

E. Proof of insurance must be provided by a certificate of liability insurance which must be worded as follows, except that the instructions in brackets are to be replaced with the relevant information and the brackets deleted.

Commercial Facility Certificate of Liability Insurance

1. [Name of Insurer], (the "Insurer") of [address of Insurer] hereby certifies that it has issued liability insurance covering bodily injury and property damage to [name of insured], (the "insured"), of [address of insured] in connection with the insured's obligation to demonstrate financial responsibility under LAC 43:XIX.511. The coverage applies at [site code or address for each facility] for [insert "sudden and accidental pollution liability" or "environmental impairment"]. The limits of liability are [insert the dollar amount of "each occurrence" and "annual aggregate" limits of the Insurer's liability], exclusive of legal defense costs. The coverage is provided under policy number _______, issued on [date]. The effective date of said policy is [date].

2. The insurer further certifies the following with respect to the insurance described in LAC 43:XIX.511.E.1.
a. Bankruptcy or insolvency of the insured shall not relieve the insurer of its obligation under the policy.

b. The insurer is liable for the payment of amounts within any deductible applicable to the policy, with a right of reimbursement by the insured for any such payment made by the insurer. This provision does not apply with respect to that amount of any deductible for which coverage is demonstrated.

c. Whenever requested by the Commissioner of Conservation, the insurer agrees to furnish to the commissioner a signed duplicate original of the policy and all endorsements.

d. Cancellation of the insurance, whether by the insurer, the insured, a parent corporation providing insurance coverage for its subsidiary, or by a firm having an insurable interest in and obtaining liability insurance on behalf of the owner or operator of the commercial facility or transfer station, will be effective only upon written notice and only after the expiration of 60 days after a copy of such written notice is received by the Commissioner of Conservation.

e. Any other termination of the insurance will be effective only upon written notice and only after the expiration of 30 days after a copy of such written notice is received by the Commissioner of Conservation.

I hereby certify that the wording of this instrument is identical to the wording specified in LAC 43:XIX.511.E as such regulation was constituted on the date this certificate was issued, as indicated below, and that the insurer is licensed to transact the business of insurance, or eligible to provide insurance as an excess of surplus lines insurer, in one or more states, and is authorized to conduct insurance business in the state of Louisiana.

[Signature of authorized representative of Insurer]

[Type name]

[Title], Authorized Representative of [Name of Insurer]

[Address of Representative]

Date of Issuance:_________________________.

F. A commercial facility or transfer station application shall contain documentation of the method by which proof of financial responsibility will be provided by the applicant. Where applicable, the application must include copies of a draft letter of credit, bond, or any other evidence of financial responsibility acceptable to the commissioner.

G. Documentation of financial responsibility must be submitted to and approved by the commissioner prior to beginning construction.

H. Financial responsibility must be renewable on April 1 of each year. Documentation that the required financial responsibility has been renewed must be received by March 15 of each year or procedures to initiate permit suspension will be initiated. If suspended, the permit shall remain suspended until insurance coverage has been confirmed.

AUTHORITY NOTE: Promulgated in accordance with R.S. 30:4 et seq.

Disclaimer: These regulations may not be the most recent version. Louisiana may have more current or accurate information. We make no warranties or guarantees about the accuracy, completeness, or adequacy of the information contained on this site or the information linked to on the state site. Please check official sources.
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