Current through Register Vol. XLI, No. 50, December 13, 2024
Section 35-3-10 - Rules Applicable to Separate Bonds; Blanket Bonds; Financial Responsibility; Financial Security for Stimulation in the Absence of Consent of Affected Coal Operators or Owners; Regulation; Designation of Agent; Transfer of Title and Operator Status; Transfer Procedures; Periodical Circular; Ineffective Bonds; and Financial Responsibility10.1. Separate Bonds - Each permit application filed after the effective date of this rule for a coalbed methane well shall be accompanied by a separate bond with corporate surety or cash or other collateral security in compliance with W. Va. Code § 22-21-8 and shall be submitted with Form OP-7, "Bond for Single Well", except where (a) a blanket bond is being furnished pursuant to W. Va. Code § 22-21-8(c); or (b) the permit application is for a permit to convert an existing oil or gas well to a coalbed methane well or to plug a coalbed methane well which is already subject to corporate surety, cash or collateral security which satisfied applicable requirements at the time such corporate surety, cash or collateral security was furnished. Any corporate surety bond, cash or collateral security furnished prior to the effective date of this rule shall remain in effect for the office until such time as the well operator is issued any new determination of financial responsibility as may be required by this rule.10.2. Blanket Bonds - Any blanket bond for coalbed methane wells furnished after the effective date of this rule, shall have corporate surety or cash or other collateral security and shall be submitted with Form OP-8 "Blanket Bond for Wells." Any blanket bond with corporate surety, cash or collateral security furnished in connection with any coalbed methane permit or permits issued prior to the effective date of this rule, shall remain in effect for the benefit of the office until such time as the well operator is issued any additional permit and such well operator has furnished new or additional corporate surety cash or collateral security complying with W. Va. Code § 22-21-8; provided, that if a blanket bond furnished prior to the effective date of this rule complies with the requirements of W. Va. Code § 22-21-8, a new blanket bond shall not be required to be submitted with a permit application; provided, further, that if a permit application is for a permit to plug a well which is already subject to a corporate surety, cash or collateral security which satisfied applicable requirements at the time such corporate security, cash or collateral security was furnished, no additional corporate security, cash or collateral security shall be required. Any corporate surety bond, cash or collateral security furnished prior to the effective date of this rule shall remain in effect for the office until such time as the well operator is issued any new determination of financial responsibility as may be required by this rule.10.3. Financial Security for Individual Coalbed Methane Wells that will be Stimulated in the Absence of consent of Affected Coal Owners or Operators.10.3.a. In addition to the bond required by W. Va. Code § 22-21-8, where a board order directs the chief to issue a permit authorizing stimulation in the absence of consent of the affected coal operators or owners of workable coal seams, prior to the chief issuing the permit the applicant must file Form OP-10, "Bond to Stimulate Coalbed Methane Well in the Absence of Coal Owner/Operator's Consent" which form shall be accompanied by a separate bond with corporate surety or cash or other collateral security in the amount set by order of the board pursuant to W. Va. Code § 22-21-13(d)(5).10.4. Registration; Designated Agent; Transfer of Title for Coalbed Methane Well. 10.4.a. All persons owning or operating or proposing to own or operate any coalbed methane well in West Virginia shall register with the chief. In all cases an agent or attorney in fact shall be designated on Form OP-1, "Operator Registration and Designation of Agent" by and for each CBM well or operator, upon whom process, notices, orders and other communications issued pursuant to W. Va. Code §22 may also be served; but the designation shall not be effective until it has been accepted in writing by the designee and approved by the office. Every well owner or operator who has designated such agent or attorney in fact shall within five (5) days after termination of such designation, notify the office of such termination and designate a new agent on Form OP-1. This rule applies to all well operators, not merely those whom W. Va. Code § 22-21-6, subsection (e), specifically requires to designate an agent; provided, that a well operator who is a natural person and a resident of the State of West Virginia may list himself instead of an agent for service of all papers.10.4.b. When title to a CBM well or the right to operate a CBM well is transferred from one (1) well owner to another, the chief shall be notified in writing within five (5) days by the transferor well owner of the name and address of the transferee well owner. A copy of such notification shall be delivered to the transferee well owner. Failure to notify the chief of such transfer shall be a violation of this rule by said transferor and shall be punishable under W. Va. Code § 22-21-28; and in addition all bonds of such transferor under W. Va. Code § 22-21-8 shall be forfeited.10.4.c. The transferee well owner shall forthwith register with the office if he has not previously registered such ownership. In any event, said transferee shall forthwith notify the office of his designated agent or attorney in fact pursuant to subdivision 10.4.a of this rule, unless a designation has already been made and approved. The transferee well owner shall file with the office the well name and the permit number of the subject well. The county and district in which the subject well is located, the names and addresses of the transferor well owners and the transferee well owners, a copy of the instrument of assignment or transfer, or a certification of such assignment or transfer acceptable to the chief, and the applicable bond, cash, or collateral security, described in W. Va. Code § 22-21-8.10.4.d. No assignment or transferor owner shall relieve the transferor well owner of any obligation and liabilities pursuant to this rule, or W. Va. Code §22-6 or §22-21, unless and until the transferee well owner files with the office the well name and the permit number of the subject well, the county and addresses of the transferor well owners and the transferee well owners, a copy of the instrument of assignment or transfer acceptable to the chief, the bond, cash or collateral security, which satisfies the requirements of W. Va. Code § 22-21-8, and the name and address of the transferee well owner's designated agent, if the transferee well owner would be required to designate such an agent under W. Va. Code § 22-21-6.10.4.e. Upon compliance with the requirements of subdivisions 10.4.b and 10.4.c. of this rule by the transferor well owner and transferee well owner, the chief shall release the transferor well owner from all duties and requirements of this rule, and the chief shall give written notice of release to the transferor well owner of any bond and return to the transferor well owner any cash or collateral securities deposited pursuant to W. Va. Code §§ 22-21-6, 22-21-9 or 22-21-8.10.5. Filing requirements and procedure for the transfer of operator and declaration of operator status. 10.5.a. General requirements - The procedures of 35 CSR 4, subsections 10.4. and 10.5, shall apply to coalbed methane wells.10.6. Transfer Procedures.10.6.a. If for any reason the bond or other proof of financial responsibility on a well is rendered invalid or ineffective, the operator shall have sixty (60) days in which to replace such bond or other proof of financial responsibility. In the event such bond or other proof of financial responsibility is not replaced, then the chief shall order the well to be shut in and may order the well to be plugged.10.7. Nothing in this section shall prohibit the chief from accepting and holding bonds or other form of financial responsibility from more than one competing interests.