Ohio § 1509.07

§ 1509.07.

(A)(1)(a) Except as provided in division (A)(1)(b) or (A)(2) of this section, an owner of any

well, except an exempt Mississippian well or an exempt domestic well, shall obtain

liability insurance coverage from a company authorized or approved to do business

in this state in an amount of not less than one million dollars bodily injury coverage

and property damage coverage to pay damages for injury to persons or damage to property

caused by the drilling, operation, or plugging of all the owner's wells in this state.  However, if any well is located within an urbanized area, the owner shall obtain

liability insurance coverage in an amount of not less than three million dollars for

bodily injury coverage and property damage coverage to pay damages for injury to persons

or damage to property caused by the drilling, operation, or plugging of all of the

owner's wells in this state. (b) A board of county commissioners of a county that is an owner of a well or a board

of township trustees of a township that is an owner of a well may elect to satisfy

the liability coverage requirements specified in division (A)(1)(a) of this section

by participating in a joint self-insurance pool in accordance with the requirements

established under section 2744.081 of the Revised Code .  Nothing in division (A)(1)(b) of this section shall be construed to allow an entity,

other than a county or township, to participate in a joint self-insurance pool to

satisfy the liability coverage requirements specified in division (A)(1)(a) of this

section. (2) An owner of a horizontal well shall obtain liability insurance coverage from an insurer

authorized to write such insurance in this state or from an insurer approved to write

such insurance in this state under section 3905.33 of the Revised Code in an amount of not less than five million dollars bodily injury coverage and property

damage coverage to pay damages for injury to persons or damage to property caused

by the production operations of all the owner's wells in this state.  The insurance policy shall include a reasonable level of coverage available for

an environmental endorsement. (3) An owner shall maintain the coverage required under division (A)(1) or (2) of this

section until all the owner's wells are plugged and abandoned or are transferred to

an owner who has obtained insurance as required under this section and who is not

under a notice of material and substantial violation or under a suspension order.  The owner shall provide proof of liability insurance coverage to the chief of the

division of oil and gas resources management upon request.  Upon failure of the owner to provide that proof when requested, the chief may order

the suspension of any outstanding permits and operations of the owner until the owner

provides proof of the required insurance coverage. (B)(1) Except as otherwise provided in this section, an owner of any well, before being

issued a permit under section 1509.06 of the Revised Code or before operating or producing from a well, shall execute and file with the division

of oil and gas resources management a surety bond conditioned on compliance with the

restoration requirements of section 1509.072, the plugging requirements of section

1509.12, the permit provisions of section 1509.13 of the Revised Code , and all rules and orders of the chief relating thereto, in an amount set by rule

of the chief. (2) The owner may deposit with the chief, instead of a surety bond, cash in an amount

equal to the surety bond as prescribed pursuant to this section or negotiable certificates

of deposit or irrevocable letters of credit, issued by any bank organized or transacting

business in this state, having a cash value equal to or greater than the amount of

the surety bond as prescribed pursuant to this section.  Cash or certificates of deposit shall be deposited upon the same terms as those

upon which surety bonds may be deposited.  If the owner deposits cash, the cash shall be credited to the performance cash bond

refunds fund created in section 1501.16 of the Revised Code .  If the owner deposits certificates of deposit, the chief shall require the bank

that issued any such certificate to pledge securities of a cash value equal to the

amount of the certificate that is in excess of the amount insured by the federal deposit

insurance corporation.  The securities shall be security for the repayment of the certificate of deposit. Upon a deposit of cash, certificates of deposit, or letters of credit with the chief,

the chief shall hold them in trust for the purposes for which they have been deposited. (3) Instead of a surety bond, the chief may accept proof of financial responsibility

consisting of a sworn financial statement showing a net financial worth within this

state equal to twice the amount of the bond for which it substitutes and, as may be

required by the chief, a list of producing properties of the owner within this state

or other evidence showing ability and intent to comply with the law and rules concerning

restoration and plugging that may be required by rule of the chief.  The owner of an exempt Mississippian well is not required to file scheduled updates

of the financial documents, but shall file updates of those documents if requested

to do so by the chief.  The owner of a nonexempt Mississippian well shall file updates of the financial

documents in accordance with a schedule established by rule of the chief.  The chief, upon determining that an owner for whom the chief has accepted proof

of financial responsibility instead of bond cannot demonstrate financial responsibility,

shall order that the owner execute and file a bond or deposit cash, certificates of

deposit, or irrevocable letters of credit as required by this section for the wells

specified in the order within ten days of receipt of the order.  If the order is not complied with, all wells of the owner that are specified in

the order and for which no bond is filed or cash, certificates of deposit, or letters

of credit are deposited shall be plugged.  No owner shall fail or refuse to plug such a well.  Each day on which such a well remains unplugged thereafter constitutes a separate

offense. (4) The surety bond provided for in this section shall be executed by a surety company

authorized to do business in this state. The chief shall not approve any bond until it is personally signed and acknowledged

by both principal and surety, or as to either by the principal's or surety's attorney

in fact, with a certified copy of the power of attorney attached thereto.  The chief shall not approve a bond unless there is attached a certificate of the

superintendent of insurance that the company is authorized to transact a fidelity

and surety business in this state. All bonds shall be given in a form to be prescribed by the chief and shall run to

the state as obligee. (5) An owner of an exempt Mississippian well or an exempt domestic well, in lieu of filing

a surety bond, cash in an amount equal to the surety bond, certificates of deposit,

irrevocable letters of credit, or a sworn financial statement, may file a one-time

fee of fifty dollars, which shall be deposited in the oil and gas well plugging fund

created in section 1509.071 of the Revised Code . (C) An owner, operator, producer, or other person shall not operate a well or produce

from a well at any time if the owner, operator, producer, or other person has not

satisfied the requirements established in this section.