5. and still some claim this isn’t about
trial lawyers hitting it rich
6.
7. Legacy Facts
• DNR report given to House and Senate Natural Resource
Committees
• 271 Legacy Lawsuits Filed
• 61 have data submitted to DNR as required by the ACT
• 2 have been identified to have long term risk
• 64 Notices of Settlement
• 35 required no further action
• 3 have been remediated
• 26 various stages of assessment, evaluation and remediation
8. Legacy Legislation
• Over 20 bills were pre-filed
• Industry coalition (LOGA, LABI, LMOGA)
• Industry wanted 3 things
1. Ability to admit responsibility for regulatory damages
2. Have a pre-trial public hearing at DNR
3. Have the plan developed be admissible in trial
• Final compromise accomplished all three goals that
industry laid out
10. Legacy Legislation
HB 618 - Abramson
• Allows parties to limit admission
• Allows pre-trial public hearing at DNR following an
admission
• Parties pre-pay DNR for hearing costs
• Allows for a party to request Environmental Management
Order from the Court
11. Legacy Legislation
SB 555 - Adley
• Allows parties to subpoena Department officials involved in development of the plan
• Allows a party to request preliminary hearing requiring plaintiff to provide some
evidentiary proof of contamination
• Allows for Notice of Intent to Investigate to suspend prescription for one year
• Prohibits Ex-Parte communication during the Departments development of the plan
• Allows for the Secretaries of DNR and DEQ and the Commissioner of Agriculture to
review and comment on any plan with an exception to 29B standards
• Any party admitting responsibility cannot enforce any indemnity agreements relative to
punitive damages
12. 2012 Legislative Issues
• Legacy Lawsuits • Oysters
• Non-consent & Risk
Charge
• Motor Truck Carrier
Indemnity
• Ultra Deep Units • Transportation
• Landowner/Leasing • Licensing
• Hydraulic Fracturing • Mineral Lease Offers
• Water
• Alternative Fuels
• Coastal Issues
14. Non-Consent Risk Charge
SB 505 - Sen. Robert Adley
• Current Situation
• Risk Charge is 200% on Unit Well
• No-Risk Charge on additional wells in a unit
(debated by some)
• Non-Consenting party has contractual
obligation to pay royalty, not the operator
(Recent Case Law)
15. Non-Consent Risk Charge
SB 505 - Sen. Robert Adley
• 2011 Legislative Session
• Bill was introduced by Senator Buddy Shaw to address who
pays royalty when a party goes non-consent
• LOGA opposed bill in committee as it was presented
• LOGA made a commitment to the Senate Natural
Resource Committee that we would work on a solution,
and bring that solution back to the legislature
16. Non-Consent Risk Charge
SB 505 - Sen. Robert Adley
• Starting in August a team began meeting to
consider revisions to section 30:10
• Focus was first to ensure that royalties get paid
• Secondly, to address the question of risk charge
on additional wells in a unit
17. Non-Consent Risk Charge
SB 505 - Sen. Robert Adley
• Legislation that was approved by the committee
accomplished both of the goals
• Legislation was presented to Senator Adley for
consideration
• All parties and Senator Adley ultimately agreed to
a compromise
18. Non-Consent Risk Charge
SB 505 - Sen. Robert Adley
• Legislation as considered by the committee
• Operator will pay to the non-consenting party an amount on behalf
of the royalty owners
• Amount determined as follows
• All original royalty owed to mineral owner will be paid
• Overrides are limited by the average total burdens of the
operator
• Operator is not liable for non-payment to royalty owners by the
non-consenting party
• Risk charge is 100% for additional wells drilled in a unit
19. Non-Consent Risk Charge
SB 505 - Sen. Robert Adley
• The language in SB 505 was added as an
amendment to HB 504 in the Senate Natural
Resource Committee
• This was done with the full support of both authors
• HB 504 passed the Senate with the Non-Consent
amendment
21. Ultra Deep
HB 504 by Rep. Dove
• Current statutes exist to incentivize deep drilling
• Adds an additional process for creating a units at depths in excess
of 22,000 Feet
• Allows large units to be formed based on geologic structures
• Commissioner may define unit based on data submitted to the
Office of Conservation
• Data submitted to the OOC for the formation of the unit will be
public information
• Unit may be formed prior to the drilling of a unit well
23. Subsequent Purchaser Doctrine
HB 862 - Rep. Lambert
• Overturns Eagle Pipe decision
• This bill allows a current owner to sue an oil and
gas company environmental damage that already
existed on the property when they bought it.
• Applies retroactive and prospective overturning 2
Supreme Court decisions
24. Landowner Protection Act
HB 853 - Rep. Montoucet
• “Should be called the Louisiana Oilfield Job Killing
Act”
• Surface Rights
• right to 1/8th royalty or $250,000 bond
• notification - including seismic data
• This bill is a deprivation of Mineral Owners rights
25. Landowner Protection Act, II
HB 1037 - Rep. Montoucet
• Requires operators to bring the property to original condition
with in 90 days from the time operations cease
• Requires operators to give onerous notifications to the landowner
which include copies of the proposed cleanup plan, the mineral
code, a proposed surface use and compensation agreement to the
landowner and many other previsions.
• The bill also requires an operator to enter into a surface use and
compensation agreement or provide excessive bonds
26. Landowner Notice
SB 525 - Senator Allain
• 30 days notice to a Landowner affected by drilling
operation
• Does not apply to any landowner that has a
contractual relationship of any kind with the operator
• Commissioner to promulgate rules
• Was a reasonable alternative to HB 853
• LOGA supported this legislation
27. Mineral Lease Offer
SB 530 - Senator Peacock
• Refers to unsolicited offers only
• Requires specific information in the offer
• Discourages payments with the offer
• Does not apply to actual lease
• Addressing in the 2013 Legislative Session
28. Hydraulic Fracturing
HB 957 Rep. Edwards
• Directs the Commissioner to promulgate rules
regarding the disclosure of HF fluids
• Most is already in place as a rule
• Require reporting of non-MSDS chemicals
• Changes trade secret protection to higher
standard
29. Water Bills
• ACT 955 Renewal
• Natural Gas Storage
• Ground Water Resource Commission
30. Natural Gas Storage
SB 532 - Sen. Fred Mills
• Prohibits the creation of a natural gas storage
cavern that uses 2 million+ gallons/day of water
• AGL Resource project that has been in the
works for years
• Lake Peigneur
31. Act 955 Renewal
HB 532 by Rep. Morris
• ACT 955
• Allows businesses to enter into CEAs with the state in
order to gain access to the running waters of the state
• Expires in June of 2012
• Response to AGs opinions in 1st Qtr 2010
• Agriculture and Aquaculture exempted themselves
from requirement to purchase water in 2010
• Only a 2 year extension
32. Groundwater Resources
Commission
• Draft Statewide Groundwater Management Plan
• Originally intended to be focused on groundwater
• Includes surface water
• Concerns because of singling out industry and
• Haynesville Shale water use
• “Innovative Funding Mechanisms”
• Legislation to follow
33. CNG
HB 1213 by Rep. Stephen Ortego
SB 139 by Sen. Gerald Long
34. CNG
HB 1213 Rep. Stephen Ortego
• Amends law requiring the state to purchase
alternative fuel vehicles
• Flex fuel currently satisfies the state
requirement
• Removed flex fuel qualification as an
alternative fuel
• Must be dedicated or bi fuel and use either
natural gas, LPG or non-ethanol based
advanced bio-fuel
35. CNG
SB 139 by Sen. Gerald Long
• Amends insurance law to allow a company-
owned leasing program to utilize captive
insurance for natural gas vehicles
• Would cover personal use of the vehicles
• Covers both Dual-Fuel and Dedicated
• LNG, CNG or Combination
36. EPA New Rule
Hydraulic Fracturing Reporting
• Company name and contact
• Reporting begins October 15
• r6wellcompletion@epa.gov
• Well location information - site name, API #,
longitude and latitude
• Estimated date of the well completion
