Financial assurance (“FA”) is from the project proposer is required to ensure Minnesota’s taxpayers do not have to pay the cost of cleaning-up gas production sites or sealing abandoned gas wells if an operator fails to do so. An operator won’t be issued a gas resource development permit until they set aside enough funds to pay for both potential corrective actions during operation, and the full cost of reclamation and site closure. Oftentimes, an FA package is vetted not only by internal DNR staff but also by independent financial experts. These funds are held by the State for the duration of the project and would only be released once reclamation and well sealing activities are completed and the permit is closed.
Minnesota’s financial assurance regulations for gas resource development will require cost estimates that reflect the full 100% cost for well sealing and site reclamation. This will be more protective than the financial assurance requirements of many other U.S. states that require a bond amount for a gas well that is typically less than the full cost of sealing the well.