Financial Assurance for Underground Injection Control Wells
Owners or operators of hazardous and nonhazardous underground injection control wells should refer to Subchapter Q of Chapter 37 which establishes requirements and mechanisms for demonstrating financial assurance for plugging and abandonment, post closure and third party liability coverage. The amount of financial assurance required is determined by the Underground Injection Control (UIC) Permits Team and is discussed in further detail under Cost Estimates below. An owner or operator of a hazardous waste injection well must also provide financial assurance for bodily injury and property damage to third parties caused by sudden and nonsudden accidental occurrences arising from the operations of the facility.
Our Rules allow the term "plugging and abandonment" to mean the same as "closure" in order to promote consistency among the various financial assurance mechanisms that are used among different programs.
Financial assurance mechanisms must be submitted at least 60 days prior to commencement of drilling operations for new wells.
Questions? We Can Help
If you have questions about financial assurance for UIC permits, please contact us.
Closure and post-closure costs estimates for permitted UIC facilities are reviewed by the UIC Permits Team during the application review process. The required financial assurance amount is included as a provision in the permit. Any cost estimate revisions to the permit must be coordinated through the UIC Permits Team. For more information please contact our Waste Permits Division at 512/239-2334 and ask to speak to a permit project manager in the UIC Permits Team. Additional information regarding cost estimates can also be found under Subchapter I of Chapter 37.
Owners and operators are also subject to many of the requirements of Subchapters A through D of Chapter 37. Subchapter J describes which portions of Subchapters A through D are applicable.
Types of Financial Assurance Mechanisms
Closure, post-closure and corrective action coverages: A description of how various financial assurance mechanisms work and their specific criteria are set out in Subchapter C of Chapter 37. The required wording of the mechanisms can be reviewed and downloaded from Subchapter D of Chapter 37.
Third party liability coverage: A description of how various financial assurance mechanisms work and their specific criteria are set out in Subchapter F of Chapter 37. The required wording of the mechanisms can be reviewed and downloaded from Subchapter G of Chapter 37.
Annual Inflation Adjustments
Annual inflation adjustments are required during the active life of the facility.
Wording of Mechanisms
The financial assurance mechanism you submit to us must be worded exactly as set out in our Rules except that the instructions in parenthesis are to be replaced with the relevant information and the parenthesis deleted. One way to ensure that your mechanism is worded correctly is to download the document from our web site and inform your financial institution not to add or delete language. Please be advised that our agency cannot accept the financial assurance mechanism if it does not incorporate the exact language as set out in our Rules.
Universal Financial Assurance Mechanism
If you are also required to post a financial assurance demonstration for an Industrial and Hazardous Waste Facility (IHW), you may combine both programs (UIC and IHW) closure demonstration on one mechanism. Please ensure that each program area is identified separately. This same methodology can also be applied to the third party liability demonstration.