45.1-361.31 - Bonding and financial security required. - Virginia Statutes

§ 45.1-361.31. Bonding and financial security required.

A. To ensure compliance with all laws and regulations pertaining to permittedactivities and the furnishing of reports and other information required bythe Board or Director, all permit applicants shall give bond with suretyacceptable to the Director and payable to the Commonwealth. At the electionof the permit applicant, a cash bond may be given. The amount of the bondrequired shall be sufficient to cover the costs of properly plugging the welland restoring the site, but in no case shall the amount of the bond be lessthan $10,000 per well plus $2,000 per acre of disturbed land, calculated tothe nearest tenth of an acre. Bonds shall remain in force until released bythe Director.

B. Upon receipt of an application for permits for gas or oil operations andat the request of the permit applicant, the Director may, in lieu ofrequiring a separate bond for each permit, require a blanket bond. Theamount of the blanket bond shall be as follows:

1. For one to fifteen wells, $25,000.

2. For sixteen to thirty wells, $50,000.

3. For thirty-one to fifty wells, $75,000.

4. For fifty-one or more wells, $100,000.

For purposes of calculating blanket bond amounts, from one-tenth of an acreto five acres of disturbed land for a separately permitted gathering pipelineshall be equivalent to one well. The Director shall promulgate regulationsfor the release of acreage used to calculate blanket bond amounts forseparately permitted gathering pipelines in cases where sites have beenstabilized.

C. Any gas or oil operator who elects to post a blanket bond shall pay intothe Gas and Oil Plugging and Restoration Fund those fees and assessmentsrequired under the provisions of § 45.1-361.32.

D. This section's minimum requirements for bonding shall be met by allpermitted gas or oil operations by July 1, 1991.

(1990, c. 92.)