Louisiana Hydrocarbon Storage Wells in Salt Dome Cavities – Proposed Rule Change

(LAC 43:XVII.Chapter 3)

The Department of Natural Resources, Office of Conservation proposes to amend LAC 43:XVII. Chapter 3. The proposed action will adopt Statewide Order No. 29-M (Revision 3), which provides comprehensive regulations for hydrocarbon storage wells in salt dome cavities, and will amend existing Statewide Order No. 29-M, as enacted by Act 368 and Act 369 of the 2013 Legislative Session.

The proposed rule change makes changes regarding the location, operational and reporting requirements for both proposed and existing Class II injection wells used for the storage of hydrocarbons in solution-mined salt caverns. Changes found in the proposed rule include:

1. Documentation of the method by which proof of financial security is to be maintained for closure and post closure costs;
2. Maintaining an updated site assessment to include a geological, geomechanical and engineering assessment of the stability of salt stock and overlying/surrounding sediment based on past, current and planned well and cavern operations;
3. Locations of caverns and proposed caverns in relation to other caverns and the periphery of the salt stock are to be provided on maps and cross-section depictions based on the best available information and updated at least every five years;
4. Mandatory setback distance locations for salt caverns in relation to the periphery of salt stock and in relation to other man-made structures within salt stock;
5. Mandatory monitoring plan implementation for existing caverns within the requirement for setback distance to periphery of salt stock;
6. Provisions for consideration of approval to plug and abandon hydrocarbon storage cavern wells;
7. Mandatory submission and maintenance of an updated post-closure plan to include subsidence monitoring, corrective action, site remediation, etc., as may be necessary following plugging and abandonment, and
8. Increases to minimum testing and monitoring requirements for hydrocarbon storage wells and related caverns.

The proposed Rule change will result in increased costs to the regulated community subject to the proposed Rule change. These costs are a result of: 1) an increase in frequency of required sonar tests, and 2) a vapor detection plan. A majority of cavern operators and/or owners are currently meeting these standards as required by specific provisions of permits issued by the Office of Conservation.

A significant increase to all operators will be the casing inspection log, which is required every 10 years for liquid storage and every 15 years for natural gas storage. Updated maps and cross-sections of caverns in relation to the periphery of salt stock and other man-made structures within the salt stock are required to be submitted every five years to the Office of Conservation, potentially including 3-D seismic data.