Natural Gas Blowout Prevention, Oversight, and Liability Act of 2020

II 116TH CONGRESS 2D SESSION S. 4523 To regulate large-scale emissions of methane and natural gas, and for other purposes. IN THE SENATE OF THE UNITED STATES AUGUST 12, 2020 Mr. MARKEY introduced the following bill; which was read twice and referred to the Committee on Energy and Natural Resources A BILL To regulate large-scale emissions of methane and natural gas, and for other purposes. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Natural Gas Blowout 4 Prevention, Oversight, and Liability Act of 2020’’. 5 SEC. 2. FINDINGS. 6 Congress finds that— 7 (1) past oil and gas well blowouts, as well as 8 leaks that have released natural gas, have had dam- 9 aging consequences, including— 10 VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS 2 •S 4523 IS (A) the California Aliso Canyon gas leak in 1 2015, which— 2 (i) released 97,000 tons of methane 3 (the primary component of natural gas); 4 and 5 (ii) was the largest leak of 6 uncombusted natural gas in the history of 7 the United States, with a carbon footprint 8 larger than the Deepwater Horizon spill in 9 the Gulf of Mexico; 10 (B) the Ohio Schnegg C–7H gas blowout 11 in 2018, which released 60,000 tons of meth- 12 ane; and 13 (C) the Oklahoma Pryor Trust gas blowout 14 in 2018, which killed 5 workers; 15 (2) an estimated 40 well blowouts occur each 16 year in the United States, causing— 17 (A) environmental pollution; 18 (B) damaging releases of methane, an ex- 19 tremely potent greenhouse gas that contributes 20 to the warming climate; and 21 (C) occasional worker deaths and injuries; 22 (3) permitting and safety rules exist to prevent 23 blowouts and most blowouts are preventable, yet 24 VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS 3 •S 4523 IS there are still major incidents of natural gas well 1 blowouts; 2 (4) taxpayer money goes to paying for emer- 3 gency responses to natural gas well blowouts; 4 (5) there is no Federal record of oil and gas 5 well blowouts or of the causes of those blowouts, 6 which inhibits measures to prevent future blowouts; 7 and 8 (6) there is no mechanism at the Federal level 9 to deter well blowouts or to ensure that companies 10 are held responsible for those blowouts. 11 SEC. 3. DEFINITIONS. 12 In this Act: 13 (1) ADMINISTRATOR.—The term ‘‘Adminis- 14 trator’’ means the Administrator of the Environ- 15 mental Protection Agency. 16 (2) BLOWOUT.—The term ‘‘blowout’’ means the 17 loss of control of any well that leads to the release 18 of combusted or uncombusted natural gas into the 19 atmosphere. 20 (3) NATURAL GAS.— 21 (A) IN GENERAL.—The term ‘‘natural 22 gas’’ means a naturally occurring mixture of 23 hydrocarbon and nonhydrocarbon gases found 24 in geologic formations beneath the surface of 25 VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS 4 •S 4523 IS the Earth, of which the principal constituent is 1 methane. 2 (B) INCLUSIONS.—The term ‘‘natural gas’’ 3 includes— 4 (i) field natural gas and pipeline qual- 5 ity natural gas; and 6 (ii) similarly constituted fuels, such as 7 field gas, refinery gas, and syngas. 8 (4) OPERATOR.— 9 (A) IN GENERAL.—The term ‘‘operator’’ 10 means— 11 (i) if a permit is issued for the well or 12 the well is registered for the purpose of the 13 extraction of oil or gas, the person or enti- 14 ty designated as the well owner or oper- 15 ator, as applicable, on the application for 16 the permit or the registration, as applica- 17 ble; and 18 (ii) if no permit is issued for the well 19 or the well is not registered, the person or 20 entity that— 21 (I) locates, drills, operates, alters, 22 or plugs the well; or 23 VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS 5 •S 4523 IS (II) reconditions a well with the 1 purpose of production of oil or gas 2 from that well. 3 (B) INCLUSION.—The term ‘‘operator’’ in- 4 cludes a storage operator for a well, if the well 5 is used in connection with the underground 6 storage of gas. 7 (5) WELL.—The term ‘‘well’’ means any pro- 8 duction well, storage well, or injection well that is 9 used in the oil and gas industry. 10 SEC. 4. BLOWOUT REPORTING AND FINES. 11 (a) REPORTING.— 12 (1) IN GENERAL.—Subject to paragraph (2), 13 not later than 72 hours after a blowout occurs, the 14 operator of the well that undergoes the blowout shall 15 submit to the Administrator a report describing the 16 blowout, including the source of the blowout. 17 (2) ADDITIONAL REPORTING.— 18 (A) IN GENERAL.—The Administrator may 19 require a follow-up report after the conclusion 20 of a blowout for which a report is required to 21 be submitted under paragraph (1). 22 (B) INCLUSIONS.—In requiring a follow-up 23 report under subparagraph (A), the Adminis- 24 VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS 6 •S 4523 IS trator may require the inclusion of information 1 in that report, including— 2 (i) the cause of the blowout; and 3 (ii) methods by which the blowout 4 may have been prevented. 5 (3) DATABASE.— 6 (A) IN GENERAL.—The Administrator 7 shall establish and maintain a publicly acces- 8 sible database of— 9 (i) each blowout reported under para- 10 graph (1); and 11 (ii) any follow-up reports submitted to 12 the Administrator under paragraph (2). 13 (B) UPDATES.—The Administrator shall 14 update the database under subparagraph (A) 15 not less frequently than once every 180 days. 16 (b) FINES.— 17 (1) BLOWOUT.— 18 (A) BASE FINE AMOUNTS.— 19 (i) UNCOMBUSTED NATURAL GAS.— 20 Subject to subparagraphs (B)(i), (C), and 21 (D), in the case of a blowout consisting of 22 uncombusted natural gas, the Adminis- 23 trator shall fine the operator of the well 24 that undergoes the blowout $5,900 for 25 VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS 7 •S 4523 IS each 100,000 standard cubic feet of 1 uncombusted natural gas that was released 2 as a result of the blowout. 3 (ii) COMBUSTED NATURAL GAS.—Sub- 4 ject to subparagraphs (B)(ii), (C), and 5 (D), in the case of a blowout of combusted 6 natural gas during which the natural gas 7 was flared, the Administrator shall fine the 8 operator of the well that undergoes the 9 blowout $450 for each 100,000 standard 10 cubic feet of natural gas that was flared as 11 a result of the blowout. 12 (B) ADJUSTMENT.— 13 (i) UNCOMBUSTED NATURAL GAS.— 14 The Administrator may increase the 15 amount described in subparagraph (A)(i) 16 to not more than $59,000 for each 17 100,000 standard cubic feet of 18 uncombusted natural gas that was released 19 as a result of the blowout. 20 (ii) COMBUSTED NATURAL GAS.—The 21 Administrator may increase the amount 22 described in subparagraph (A)(ii) to not 23 more than $4,500 for each 100,000 stand- 24 VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS 8 •S 4523 IS ard cubic feet of natural gas that was 1 flared as a result of the blowout. 2 (C) GROSS NEGLIGENCE AND WILLFUL 3 MISCONDUCT.—If the Administrator determines 4 that a blowout of a well was a result of gross 5 negligence or willful misconduct on the part of 6 the operator of the well, the Administrator 7 shall, as applicable— 8 (i) increase the amount described in 9 subparagraph (A)(i) to not less than 10 $59,000 for each 100,000 standard cubic 11 feet of uncombusted natural gas that was 12 released as a result of the blowout; and 13 (ii) increase the amount described in 14 subparagraph (A)(ii) to not less than 15 $4,500 for each 100,000 standard cubic 16 feet of natural gas that was flared as a re- 17 sult of the blowout. 18 (D) DETERMINATION OF VOLUME.— 19 (i) IN GENERAL.—For purposes of as- 20 sessing a fine under subparagraph (A), the 21 Administrator shall obtain an estimate of 22 the volume of uncombusted natural gas 23 that was released or the volume of com- 24 VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS 9 •S 4523 IS busted natural gas that was flared, as ap- 1 plicable, as a result of a blowout. 2 (ii) SOURCE OF ESTIMATES.—The Ad- 3 ministrator may obtain an estimate de- 4 scribed in clause (i) from a relevant State 5 regulatory agency or the operator of the 6 well for which the fine is being assessed 7 under subparagraph (A). 8 (2) FAILURE TO FILE REPORT.—If an operator 9 fails to submit a report required under subsection 10 (a), in addition to the fine required under paragraph 11 (1), the Administrator shall fine the operator 12 $100,000. 13 SEC. 5. BLOWOUT PREVENTION AND RESPONSE PREPARA- 14 TION GRANT PROGRAM. 15 (a) IN GENERAL.—The Administrator shall establish 16 a grant program for the purpose of providing grants to 17 eligible entities (which may include States, Indian Tribes, 18 and units of local government) for— 19 (1) reducing the scale and regularity of blow- 20 outs; and 21 (2) reducing the burden to States and units of 22 local government with respect to emergency re- 23 sponses to blowouts. 24 VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS 10 •S 4523 IS (b) USE OF FUNDS.—A grant received under sub- 1 section (a) may be used for— 2 (1) emergency response planning with respect 3 to blowouts; 4 (2) enforcement of well permitting require- 5 ments, requirements for well licenses, and other well 6 regulations; 7 (3) inspection of wells; and 8 (4) carrying out other activities to reduce the 9 regularity of blowouts. 10 (c) FUNDING.— 11 (1) IN GENERAL.—On October 1, 2021, and on 12 each October 1 thereafter, out of any funds in the 13 Treasury not otherwise appropriated, the Secretary 14 of the Treasury shall transfer to the Administrator 15 to carry out this section an amount equal to the sum 16 of all fines collected under section 4(b) during the 17 prior fiscal year. 18 (2) RECEIPT AND ACCEPTANCE.—The Adminis- 19 trator shall be entitled to receive, shall accept, and 20 shall use to carry out this section the funds trans- 21 ferred under paragraph (1), without further appro- 22 priation. 23 VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6201 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS 11 •S 4523 IS SEC. 6. REPORT. 1 Not later than 2 years after the date of enactment 2 of this Act, the Chemical Safety and Hazard Investigation 3 Board shall submit to the Committee on Environment and 4 Public Works of the Senate and the Committee on Energy 5 and Commerce of the House of Representatives a report— 6 (1) describing each blowout during the 10-year 7 period ending on the date of enactment of this Act; 8 and 9 (2) that includes recommendations for the re- 10 duction in the number of blowouts, including rec- 11 ommendations for protective well control practices. 12 Æ VerDate Sep 11 2014 01:40 Aug 28, 2020 Jkt 099200 PO 00000 Frm 00011 Fmt 6652 Sfmt 6301 E:\BILLS\S4523.IS S4523 pamtmann on DSKBC07HB2PROD with BILLS