Current through Register Vol. 50, No. 9, September 20, 2024
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 A certificate of deposit may not be withdrawn, canceled, rolled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.
AUTHORITY NOTE:
Promulgated in accordance with
R.S.
30:4 et seq., 30:22 et seq., and 30:1101 et
seq.
