Virginia Code 45.2-1633: Bonding and financial security required.
A. To ensure compliance with all laws and regulations pertaining to permitted activities and the furnishing of reports and other information required by the Board or Director, each permit applicant shall give bond with surety acceptable to the Director and payable to the Commonwealth. At the election of the permit applicant, a cash bond may be given. The amount of the bond required shall be sufficient to cover the costs of properly plugging the well and restoring the site but in no case shall the amount of the bond be less than $10,000 per well plus $2,000 per acre of disturbed land, calculated to the nearest tenth of an acre. Each bond shall remain in force until released by the Director. The Director may require additional bond or financial security for any well proposed to be drilled in Tidewater Virginia.
Terms Used In Virginia Code 45.2-1633
- Board: means the Virginia Gas and Oil Board. See Virginia Code 45.2-1600
- Bond with surety: includes the payment in cash of the full amount of the required bond and, in such case, no surety shall be required. See Virginia Code 1-205
- Gas or oil operations: means any (i) activity relating to drilling, redrilling, deepening, stimulating, production, enhanced recovery, converting from one type of a well to another, combining or physically changing to allow the migration of fluid from one formation to another, or plugging or replugging any well; (ii) ground-disturbing activity relating to the development, construction, operation, or abandonment of a gathering pipeline; (iii) development, operation, maintenance, or restoration of any site involved with gas or oil operations; or (iv) work undertaken at a facility used for gas or oil operations. See Virginia Code 45.2-1600
- Gas or oil operator: means any person who operates or has been designated to operate any gas or oil well or gathering pipeline. See Virginia Code 45.2-1600
- Gathering pipeline: means a pipeline that is used or intended for use in the transportation of gas or oil from the well to (i) a transmission pipeline regulated by the U. See Virginia Code 45.2-1600
- Oil: means natural crude oil or petroleum and other hydrocarbons, regardless of gravity, that are produced at the well in liquid form by ordinary production methods and are not the result of condensation of gas after it leaves the underground reservoir. See Virginia Code 45.2-1600
- Restoration: means all activity required to return a permitted site to other use after gas, oil, or geophysical operations have ended, as approved in the operations plan for the permitted site. See Virginia Code 45.2-1600
- Well: means any shaft or hole sunk, drilled, bored, or dug into the earth or into underground strata for the extraction, injection, or placement of any gaseous or liquid substance or any shaft or hole sunk or used in conjunction with such extraction, injection, or placement. See Virginia Code 45.2-1600
B. Upon receipt of an application for multiple permits for gas or oil operations and at the request of the permit applicant, the Director may, in lieu of requiring a separate bond for each permit, require a blanket bond. The amount of the blanket bond shall be as follows:
1. For one to 10 wells, $25,000.
2. For 11 to 50 wells, $50,000.
3. For 51 to 200 wells, $100,000.
4. For more than 200 wells, $200,000.
For purposes of calculating blanket bond amounts, from one-tenth of an acre to five acres of disturbed land for a separately permitted gathering pipeline shall be equivalent to one well. The Director shall adopt regulations for the release of acreage used to calculate blanket bond amounts for separately permitted gathering pipelines in cases where sites have been stabilized.
C. Any gas or oil operator who elects to post a blanket bond shall pay into the Gas and Oil Plugging and Restoration Fund those fees and assessments required under the provisions of § 45.2-1634.
1990, c. 92, § 45.1-361.31; 2019, c. 351; 2021, Sp. Sess. I, c. 387.