Administrative Rule Review Report  AR08-074

Legislative Service Office

22-Sep-08

AGENCY: Oil & Gas Commission.

DATE SUBMITTED: September 18, 2008.

SUBJECT: Chapter 3, Section 4(c), Bonding Requirements; and Chapter 5, Section 6, Pleadings Required and Right to be Heard.

NATURE OF RULES:                     Legislative, Procedural

STATUTORY AUTHORITY:         W.S. 30-5-104(c)

DETERMINATION OF PROCEDURAL COMPLIANCE BASED UPON INFORMATION

SUBMITTED BY THE AGENCY TO LSO: 

The rules were not submitted in a strike and underline format as required by rules of the Secretary of State.  Otherwise, procedural compliance is apparently complete to date.

SUMMARY OF RULES:

Chapter 3, Section 4(c) increases the additional bonding level for idle wells from "up to $3.00" to "up to $10.00" per foot.  The threshold for when this additional bonding amount is in effect is also modified by these amendments.  Current rules impose the additional bonding at 8,300 or 25,000 footage levels.  These amendments decrease those levels to 2,500 and 7,500 idle feet.  The bond amount will be adjusted as wells are removed from idle status.  The bond amount will be increased by an inflation index amount every three (3) years.  The rules allow the owner/operator to request a different bonding level based on an evaluation of well conditions and circumstances.

Chapter 5 eliminates Section 6, Pleadings Required and Right To Be Heard because of duplication with Chapter 5, Section 12, Hearings Before the Commission as adopted April 2, 2008 and as submitted in AR08‑019.  The elimination of Section 6 does not impact the ability of any interested person to be heard at any hearing.  The amendments then renumber the following sections accordingly.

FINDINGS: 

The rules appear to be within the scope of statutory authority and legislative intent.

Administrative Rule Review Report  AR08-074

Legislative Service Office

22-Sep-08

Page 2

STAFF RECOMMENDATION: 

That the rules be placed on the Consent List and be approved by the Council as submitted by the Agency.  Further, that the Council request the Governor to caution the Agency concerning the need to comply with statutory procedural requirements for adoption of rules, as noted in the rule review report.

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Maxine R. Weaver

Staff Attorney

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David K. Gruver

Assistant Director

MRW/