SB 1976: Oil and gas; authorizing certain operators to make voluntary election. Emergency. - Oklahoma

Floor (House) → Floor (Senate) · 5 edits

MODERATE

This bill updates Oklahoma's oil and gas surety requirements, effectively replacing the old 'Category A' financial statement option with a new 'Category B' system based on the number of wells an operator manages. It establishes specific dollar amounts for surety bonds that increase annually until 2028, ensuring operators have sufficient financial backing for well plugging and environmental cleanup.

Scope change

The bill expands the scope of financial requirements by eliminating the voluntary financial statement option for new operators and mandating a tiered bond structure based on well count for all operators.

ELIGIBILITY

Removed the 'Category A' surety option, which allowed operators to prove financial ability via a financial statement showing a net worth of at least $50,000.

Allowed current operators with valid Category A surety to voluntarily switch to the new Category B system, with the right to revert to Category A within three years without penalty.

REQUIREMENT

Added 'Category B' surety requirements, mandating operators post specific dollar amounts in cash, bonds, or letters of credit based on their number of wells.

Authorized the Corporation Commission to increase surety amounts beyond the standard tiers if an operator has a history of poor compliance or performance.

TIMELINE

Established a phased-in schedule where surety amounts increase annually from 2026 through 2028, reaching full amounts by the end of 2028.

Enrolled (final version) → Floor (House) · 4 edits

MODERATE

This bill updates Oklahoma's oil and gas surety requirements by phasing out the 'Category A' financial statement option for new operators starting November 1, 2025, while allowing current operators to voluntarily switch to the stricter 'Category B' requirements. It establishes a multi-year schedule to increase surety amounts based on the number of wells an operator manages, ensuring full compliance by 2028. The changes aim to strengthen financial guarantees for well plugging and site cleanup, protecting the state from potential environmental liabilities.

Scope change

The bill applies to all persons drilling or operating oil, gas, injection, or disposal wells within Oklahoma. It specifically targets new operators starting in late 2025 and existing operators who choose to convert their surety status.

ELIGIBILITY

Removed the option for new operators to use a 'Category A' surety (financial statement proving $50,000 net worth) starting November 1, 2025.

Modified the rules for existing operators, allowing them to voluntarily elect to switch from Category A to Category B surety, with a provision to revert to Category A within three years.

TIMELINE

Added a phased schedule requiring operators to increase their 'Category B' surety amounts over three years (2026, 2027, and 2028) based on the number of wells they operate.

REQUIREMENT

Updated the specific dollar amounts for surety bonds and letters of credit, increasing them progressively until they reach full amounts by the end of 2028.

Engrossed → Enrolled (final version) · 4 edits · Apr 29, 2026

MODERATE

The bill transitions from a draft version to its final enrolled form, confirming it will become law. The core policy change involves tightening financial requirements for oil and gas operators by phasing out a low-net-worth surety option for new operators starting in 2025. Additionally, the final version adds a specific requirement for new operators, those with outstanding fines, and affiliates of violators to post higher-level surety, ensuring stricter financial accountability for high-risk entities.

Scope change

The bill's scope regarding who must post higher-level surety has expanded to explicitly include new operators, operators with outstanding fines or contempt citations, and operators whose insiders or affiliates have such violations.

ELIGIBILITY

The 'Category A' surety option (requiring only a $50,000 net worth) will no longer be available for new operators starting November 1, 2025, forcing them to use the more rigorous 'Category B' options.

A new mandatory requirement was added for 'Category B' surety for specific high-risk groups: new operators, operators with outstanding fines or contempt citations, and operators whose insiders or affiliates have such violations as of June 7, 1989.

REQUIREMENT

The final version clarifies that the Commission can require higher surety amounts based on an operator's past performance and the history of their insiders and affiliates, with a maximum cap of $150,000.

TECHNICAL

The text was updated from 'Engrossed' to 'Enrolled' status, which is the final legal form of a bill before it is signed into law, and minor formatting corrections were applied.

Introduced → Engrossed · 5 edits · Mar 17, 2026

MODERATE

This bill updates the Oklahoma oil and gas surety requirements by phasing out the 'Category A' financial statement option for new operators starting November 1, 2025. New operators must now use 'Category B' surety, which includes cash, bonds, or letters of credit, with amounts that increase over time based on the number of wells operated. Existing operators with valid Category A surety can keep it or voluntarily switch to Category B, but they will be permanently required to use Category B after three years.

Scope change

The scope of applicability changed by restricting the 'Category A' surety option exclusively to current operators who already hold it, while mandating 'Category B' for all new operators beginning in 2025.

ELIGIBILITY

Removed the option for new operators to use a financial statement (Category A) as proof of financial ability.

Added a three-year window for existing operators to voluntarily switch from Category A to Category B before being permanently required to use Category B.

TIMELINE

Established a hard cutoff date of November 1, 2025, after which new operators must use Category B surety.

REQUIREMENT

Modified surety requirements to include a phased-in schedule for Category B amounts based on the number of wells operated, reaching full amounts by 2028.

ENFORCEMENT

Added authority for the Commission to require higher surety amounts for operators with a history of non-compliance, up to a maximum of $150,000.

Oil and gas; authorizing certain operators to make voluntary election. Emergency.

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