1 STATE OF OKLAHOMA
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2 1st Session of the 59th Legislature (2023)
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3 SENATE BILL 443 By: Montgomery
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6 AS INTRODUCED
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7 An Act relating to the Corporation Commission;
7 defining terms; creating Orphaned Well Bitcoin Mining
8 Partnership Program; authorizing Commission to
8 promulgate rules; requiring Commission to publish
9 certain program-relevant information; providing for
9 competitive bidding process; providing for
10 confidentiality of certain submitted information;
10 requiring participating company submit certain
11 orphaned well site information; providing for good
11 faith negotiation with mineral rights owner;
12 providing for due diligence process; allowing for
12 certain companies to be released from program
13 liability under certain circumstances; establishing
13 provisions for plugging, remediating, or reclaiming
14 well; allowing company to take legal ownership of
14 well under certain circumstances; providing maximum
15 costs to be incurred for plugging, remediating, or
15 reclaiming well; creating the Orphaned Well Bitcoin
16 Mining Partnership Program Revolving Fund;
16 establishing Fund source; providing for companies to
17 pay monies owed to Fund in Bitcoin; exempting certain
17 payments and proceeds from state income and capital
18 gains tax; providing for codification; and providing
18 an effective date.
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21 BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
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22 SECTION 1. NEW LAW A new section of law to be codified
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23 in the Oklahoma Statutes as Section 53.101 of Title 17, unless there
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24 is created a duplication in numbering, reads as follows:
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 1 A. As used in this section:
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2 1. “Bitcoin mining” means using a generation device to turn
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3 energy into electricity to be run through a computer for the purpose
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4 of securing the Bitcoin network;
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5 2. “Commission” means the Corporation Commission;
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6 3. “Company” means a Bitcoin mining company; and
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7 4. “Orphaned well” means an oil or natural gas well located on
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8 private or public land which has not been properly plugged according
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9 to the laws of this state and administrative rules promulgated by
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10 the Commission, and the lease holder, wellbore operator, or
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11 otherwise responsible party cannot be located.
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12 B. There is hereby established an Orphaned Well Bitcoin Mining
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13 Partnership Program to be administered by the Commission. The
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14 Program shall partner with Bitcoin mining companies, who shall
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15 assume the liability of plugging, remediating, or reclaiming an
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16 orphaned well in return for temporary control of the energy from the
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17 well. The Commission shall promulgate rules to effectuate the
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18 provisions of this act and establish the framework of the program.
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19 C. The Commission shall, on a publicly accessible webpage:
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20 1. Make accessible the reporting information required by the
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21 federal Infrastructure Investment and Jobs Act along with any other
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22 relevant information; and
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23 2. Publish relevant information related to orphaned wells in
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24 this state, including the following as it is reasonably possible:
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 1 a. an estimate of the amount of methane or any other
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2 natural gas that can be reasonably expected to be
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3 produced from an orphaned well,
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4 b. the locations of wells to be employed under this act,
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5 c. how long wells to be employed under this act have been
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6 abandoned without an owner of record,
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7 d. a best cost estimate for plugging, remediating, or
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8 reclaiming an orphaned well to environmental standards
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9 in this state based on available data,
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10 e. whether orphaned wells to be employed under this act
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11 are on public or private land,
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12 f. information on the last known operator of each well to
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13 be employed under this act,
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14 g. information regarding the integrity and casing of the
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15 wells to be employed under this act, and
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16 h. any other information deemed relevant by the
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17 Commission for the purposes of the Program.
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18 D. 1. The Commission shall, subject to competitive bidding
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19 procedures prescribed by Section 85.7 of Title 74 of the Oklahoma
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20 Statutes and administrative rules published by the Office of
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21 Management and Enterprise Services, enter into a competitive bidding
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22 process to request bids from any company wishing to participate in
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23 the Program. Such process shall commence at least once per calendar
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24 year, but may occur more often at the discretion of the Commission.
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 1 2. The Commission shall require any company submitting a bid
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2 under this subsection to submit the following information to the
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3 Commission with any proposal:
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4 a. legal documents showing the structure of the company
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5 and a demonstrated ability to mine Bitcoin
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6 successfully,
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7 b. a reasonable estimate of:
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8 (1) the start date on which the company would begin
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9 mining on the orphaned well site and the duration
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10 of such mining,
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11 (2) monies to be requested from the Orphaned Well
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12 Bitcoin Mining Partnership Program Revolving Fund
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13 by the company to deploy mining equipment,
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14 (3) the amount of bitcoin to be mined at the orphaned
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15 well over the life of the agreement,
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16 (4) the breakeven price for Bitcoin mining in order
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17 to be profitable at the orphaned well at subject
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18 in the bid, and
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19 (5) the monies the company shall deposit into the
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20 Orphaned Well Bitcoin Mining Partnership Program
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21 Revolving Fund over the life of its agreement in
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22 the form of Bitcoin,
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23 c. proof of financial responsibility for the ability of
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24 the company to ensure cleanup of the site of the
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 1 orphaned well, regardless of the success of the mining
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2 operation at the site, and
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3 d. any other information deemed relevant by the
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4 Commission.
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5 3. The information provided under paragraph 2 of this
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6 subsection shall be confidential to the Commission. The Commission
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7 may provide to the public on a publicly available webpage the
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8 summary statistic information received within submitted bids.
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9 4. At the conclusion of the bidding period conducted by the
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10 Commission and in accordance with the provisions of paragraph 1 of
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11 this subsection, winning bids may be selected. The Commission shall
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12 take into account the following criteria:
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13 a. the ability of the company to successfully and safely
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14 mine within the orphaned well,
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15 b. the time frame over which the company will mine within
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16 the well, and
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17 c. the initial cost for the company to mine within the
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18 well and the return on investment that the Program may
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19 incur.
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20 5. The Commission may require a surety bond be posted to the
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21 state by any company that is granted a bid under this subsection to
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22 ensure that the site will be plugged, remediated, or reclaimed to
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23 environmental standards as determined by the laws of this state.
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24 The Commission shall require a participating company to provide
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 1 yearly financial statements to ensure its ability to satisfy the
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2 requirements of this act.
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3 6. The Commission shall announce winning bids and a summary of
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4 all proposals submitted in the given period, removing all
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5 confidential material, on a publicly available webpage.
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6 SECTION 2. NEW LAW A new section of law to be codified
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7 in the Oklahoma Statutes as Section 53.102 of Title 17, unless there
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8 is created a duplication in numbering, reads as follows:
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9 A. Before a participating Bitcoin mining company may begin
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10 mining from a well, the company shall, either through the
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11 Corporation Commission or a third-party company, determine the
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12 amount of natural gas emissions currently being emitted from the
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13 well. If a third-party company is used for such determination, the
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14 Bitcoin mining company shall report the findings to the Commission.
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15 B. If the mineral rights of an orphaned well are owned by a
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16 third party or private entity, the company assuming control over the
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17 well shall enter good faith negotiations with the mineral rights
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18 owner to determine the royalty on a per thousand cubic feet
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19 measurement.
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20 C. 1. Within sixty (60) days from the date that the company is
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21 informed of its granted bid, and before mining may commence within
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22 the well, the company shall perform due diligence studies on the
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23 well, including but not limited to running logs for mechanical and
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24 surface integrity and determining the amount of natural gas or oil
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 1 that the well can produce. The Commission may grant extensions to
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2 the due diligence period at its discretion. Data acquired under
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3 this paragraph shall be reported to the Commission within sixty (60)
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4 days following the conclusion of the due diligence period.
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5 2. If, following the sixty-day due diligence process, but
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6 before the conclusion of the sixty-day reporting period, the company
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7 decides to withdraw from the program and no longer assume liability
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8 for plugging, remediating, or reclaiming the orphaned well, the
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9 company shall report such decision to the Commission. A company
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10 electing to cease participation shall include with the report the
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11 reasoning for the decision and all due diligence reporting and data
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12 acquired. The company shall be released from all duties imposed
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13 pursuant to this act and shall not be liable for the state of the
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14 orphaned well. Provided, however, any company that does not report
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15 such decision prior to the conclusion of the reporting period shall
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16 be fully responsible for plugging, remediating, or reclaiming the
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17 orphaned well.
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18 SECTION 3. NEW LAW A new section of law to be codified
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19 in the Oklahoma Statutes as Section 53.103 of Title 17, unless there
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20 is created a duplication in numbering, reads as follows:
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21 A. The Corporation Commission shall remove any orphaned well at
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22 the subject of a granted proposal from any required plugging
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23 schedule on which the well may be listed.
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 1 B. 1. Any company participating in the Orphaned Well Bitcoin
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2 Mining Partnership Program shall not incur additional liabilities
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3 outside the duty to plug, remediate, or reclaim an orphaned well
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4 that the company has taken control of pursuant to this act to
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5 environmental standards.
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6 2. Following the agreed upon time period set forth in a granted
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7 proposal pursuant to Section 1 of this act, the company shall plug,
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8 remediate, or reclaim the well using a company to be approved by the
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9 Commission.
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10 3. Following the conclusion of the agreed upon mining period
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11 determined within the granted proposal, the company may take legal
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12 ownership of the well through a process to be promulgated through
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13 the Commission. Taking ownership of the well shall not remove the
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14 duty of the company to plug, remediate, or reclaim the well to
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15 environmental standard. A company wishing to take legal ownership
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16 of the well pursuant to this paragraph shall notify the Commission
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17 of such plans no less than twelve (12) months prior to the date that
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18 the orphaned well is originally projected to be plugged, remediated,
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19 or reclaimed.
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20 C. 1. The cost of plugging, remediating, or reclaiming an
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21 orphaned well shall be capped at three (3) times the initial
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22 estimate by the Commission, unless it is demonstrated that the
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23 company who assumed control of the well caused additional costs to
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 1 be incurred at the site. Any additional costs shall be paid for by
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2 the Orphaned Well Bitcoin Mining Partnership Program Revolving Fund.
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3 2. To qualify for a cap cost on plugging, remediating, or
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4 reclaiming the orphaned well, the company shall use a third-party
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5 company to report the following information to the Commission:
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6 a. all information acquired regarding the integrity of
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7 the well,
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8 b. data on natural gas emissions and any groundwater
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9 contamination, and
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10 c. proof that Bitcoin mining within the well did not
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11 significantly cause the cost of plugging, remediating,
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12 or reclaiming the well to increase.
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13 SECTION 4. NEW LAW A new section of law to be codified
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14 in the Oklahoma Statutes as Section 53.104 of Title 17, unless there
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15 is created a duplication in numbering, reads as follows:
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16 A. There is hereby created in the State Treasury a revolving
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17 fund for the Corporation Commission to be designated the “Orphaned
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18 Well Bitcoin Mining Partnership Program Revolving Fund”. The fund
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19 shall be a continuing fund, not subject to fiscal year limitations,
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20 and shall consist of monies designated by the Commission from the
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21 federal Infrastructure Investment and Jobs Act, the federal
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22 Inflation Reduction Act of 2022, and monies designated by the
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23 Commission for plugging, remediating, or reclaiming orphaned wells
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24 in this state. All monies accruing to the credit of the fund are
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 1 hereby appropriated and may be budgeted and expended by the
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2 Commission for the purpose of funding the Commission’s operations of
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3 the Program and providing up-front capital to companies
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4 participating in the Orphaned Well Bitcoin Mining Partnership
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5 Program. Expenditures from the fund shall be made upon warrants
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6 issued by the State Treasurer against claims filed as prescribed by
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7 law with the Director of State Finance for approval and payment.
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8 B. A Bitcoin mining company may pay any monies owed to the Fund
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9 in Bitcoin. The State Treasurer or their designee may determine
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10 whether the fund will hold bitcoin or immediately transfer the
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11 Bitcoin into American dollars, a stable coin, or some combination
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12 thereof. Such payments or any other Bitcoin generated from the
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13 project shall be exempt from state income and capital gains tax.
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14 SECTION 5. This act shall become effective November 1, 2023.
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16 59-1-379 RD 1/17/2023 9:36:30 AM
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