An Act amending Title 58 (Oil and Gas) of the Pennsylvania Consolidated Statutes, in development, further providing for bonding.
Summary
HB364 amends Pennsylvania’s Oil and Gas Act bonding requirements for wells. The bill removes existing statutory language that had frozen certain bond amounts and limited administrative adjustment authority, and it revises the bonding framework for non-unconventional wells. Under the bill, the Environmental Quality Board may continue to adjust some bond amounts every two years to reflect projected plugging costs, while the $2,500 per-well bond for wells other than unconventional wells is retained in the amended text.
The bill also preserves the option for operators to use blanket bonds instead of individual well bonds, but it strikes several prior provisions that would have increased blanket bond amounts for new non-unconventional wells, capped total blanket bond exposure, and temporarily barred administrative changes to those amounts. In place of those removed provisions, HB364 adds a requirement that the Department of Environmental Protection study its experience implementing the bonding program and report to the Governor and General Assembly within 12 months, including recommendations on alternative financial assurance mechanisms and possible bond increases for conventional wells. The act would take effect 60 days after enactment.
Impact
HB364 would change Title 58 of the Pennsylvania Consolidated Statutes by revising section 3225 on oil and gas well bonding. Its practical effect is to alter how operators secure financial assurance for drilling, restoration, water supply replacement, and plugging obligations, especially for conventional wells and blanket bonds. The bill would also direct the Department of Environmental Protection to produce a detailed report on orphan and improperly abandoned wells, enforcement effectiveness, permit transfers, inactive status approvals, and possible future bonding reforms, which could influence later legislative or regulatory changes affecting operators, the department, and the Commonwealth’s orphan well plugging liabilities.
Sentiment
The available voting history suggests the bill had support but also some opposition in committee. The House Environmental and Natural Resource Protection Committee reported the bill as committed by a 14-12 vote, indicating a narrow and divided outcome rather than broad consensus. No transcript excerpts are available, so the discussion record does not show specific floor or committee arguments, but the close vote suggests the measure was politically sensitive.
Contention
The main points of contention appear to center on whether bonding requirements for conventional oil and gas wells should be increased or left more flexible, and whether the legislature or administrative agencies should control future bond adjustments. Supporters likely view the bill as a way to reassess financial assurance and improve accountability for plugging orphan and abandoned wells, while opponents may be concerned about higher costs for operators, especially smaller conventional well owners, and about removing prior limits that constrained bond increases. The study/report requirement also signals unresolved debate over whether existing bonding levels are sufficient to protect the Commonwealth from cleanup costs.