Article 5. Oil and Gas Well Drilling

3.5.1.     Definitions.

Oil for the purposes of this Article shall mean crude oil or petroleum and shall include all waste oil.

A well or wells for the purposes of this Article shall mean any well drilled, or to be drilled, or used, for the production of oil, natural gas or the disposal of waste liquids produced therefrom.

(Ord. 59)

3.5.2.     Drilling prohibited.

Well drilling shall be prohibited in all areas within the corporate limits of the City except those areas defined by this Article and shown on the Oil and Gas Well District Map. It shall be unlawful to drill a well in any area not permitted.

(Ord. 59)

3.5.3.     Oil and gas well district map.

The Planning and Zoning Commission shall cause to be prepared a map describing the areas in which the drilling and operation of wells may be lawful. Such map is to be marked "Oil and Gas Well District Map" and shall be kept and maintained by the Planning and Zoning Commission and shall be available for inspection and examination by members of the public at all reasonable times.

(Ord. 59)

3.5.4.     Special and drilling permits required.

It shall be unlawful for any person to drill or commence operations for the drilling of a well, at any place where otherwise lawful within the corporate limits of the City, without first having obtained a special permit from the City and a drilling permit as hereinafter provided.

(Ord. 59)

3.5.5.     Drilling permit application.

After approval of the special permit by the City, the applicant for a drilling permit shall file with the City Inspector of Bel Aire, Kansas an application for a drilling permit in writing conforming to the further provisions of this Article, and shall at such time deposit with the City Inspector of Bel Aire, Kansas, a fee of $500.00 which shall, upon granting of the drilling permit, be paid into the City treasury of Bel Aire, Kansas, to the credit of the general operating fund.

(Ord. 59)

3.5.6.     Drilling permit issuance.

The City Inspector of Bel Aire, Kansas, shall, upon determination that the application for a well drilling permit conforms to the conditions of this Article, authorize the issuance of a permit granting authority to drill the proposed well. Such drilling permit shall be conditioned to conform to the special permit as approved by the City; provided, that upon the completion of the well the permittee shall file a completion report with the City Inspector of Bel Aire, Kansas, showing the drilled depth of the well, the depth of the surface casing and the producing horizon being developed. Not more than once well shall be completed in the same producing horizon in a drilling unit.

(Ord. 59)

3.5.7.     Information and evidence to be submitted.

The applicant for any permit to drill a well in the City shall submit the following information and evidence as a condition for the granting of a drilling permit hereunder.

Evidence that all owners of record of mineral interests or oil and gas leasehold interests or oil and gas leasehold interests in the area attributable or which might be attributed by unitization or declaration to drill-unit, where it is proposed to drill a well, have had an opportunity to join in the execution of the oil and gas lease of the applicant covering the land excluded in such unit or attributed areas, and that such owners of mineral interests or oil and gas leasehold interests have been notified in writing that the applicants propose to seek a permit for the drilling of a well on the unit described in such notice. In the event that such owners cannot with reasonable diligence be located, then affidavits setting forth the facts thereof may be substituted for the required proof of written notice.

Statements that the applicant has a valid oil and gas lease executed by persons owning at least fifty-one percent of the mineral interest included in the unit or attributed thereto, exclusive of streets and alleys, subject, however, to the provisions of the zoning regulations relating to the drilling of wells.

Statements that the lease provide or is accompanied by an agreement in writing providing substantially as follows: That a royalty of at least one-eighth of the gross production of the well shall be distributed to the respective owners of the minerals rights within the unit pro rata.

Statements that any lease with any governmental subdivision of the state, quasi- municipal corporation, public agency, or other entity as defined in K.S.A. 55-211a, or any amendments thereto, contain a provision for spacing of producing wells in accordance with rules and regulations of the Kansas Corporation Commission.

Agreements or statements showing reasonable and adequate plans for the handling and disposal, in accordance with all applicable state laws and City Codes and Ordinances, of all drilling fluids, basic sediment, brines and other deleterious substances and wastes that may be produced in connection with the drilling and operation of the proposed well.

Plans and drawings showing the facilities for the handling or storing of production of the proposed well.

Statement of agreement that in the event the well is either nonproductive or abandoned, within sixty days after the determination thereof, that all tools, equipment, and machinery used in connection with the drilling of the well shall be removed, and that the premises shall be fully restored to their original condition as soon as practicable and in no case more than sixty (60) days after such determination.

Statements of agreement that if such well is productive, only the tools, machinery, structures and equipment necessary for the operation thereof shall be maintained at such well and that the premises surrounding the same shall be restored to their original condition as nearly as practicable and within Sixty (60) days after completion of the well.

Statements of agreement that all drilling wastes shall be removed from storage facilities within thirty (30) days of completion of the well.

All of the preceding information and evidence shall be in a form satisfactory to the City Inspector of Bel Aire, Kansas and shall be in addition to information required for a special permit.

(Ord. 59)

3.5.8.     Permit duration.

The permits authorized by this Article shall be valid only in the event and for so long as the permittee shall faithfully comply with the conditions of this Article and of the permits authorized in accordance therewith, and only so long as there is production from or other lawful use made of the well.

(Ord. 59)

3.5.9.     Assignment of permit.

No permit, authorized by this Article, shall be assignable or assigned without the approval of the City Council.

(Ord. 59)

3.5.10.     Pipeline authorization.

If any applicant or any other party shall desire to lay pipelines in the streets, public grounds, or alleys in the City for transmission of oil or gas or any waste fluid from any well or drilling location within the boundaries of the City, authorization therefore, as provided by law, shall be obtained from the City Council and as a prerequisite to such authorization, the person seeking same shall provide detailed plans and specifications for constructing and maintaining such pipelines and for restoration, so far as practicable, of streets, grounds and alleys, wherever damaged by such construction, to as good condition as existed immediately prior to the damage, which plans and specifications shall be approved by the Code Enforcement Officer prior to granting such authorization.

(Ord. 59)

3.5.11.     Surety bonds required.

The applicant shall at the time of filing an application for a drilling permit, submit for approval a corporate surety bond executed by some bonding or surety company authorized to do business in the state, or a personal surety bond, in the amount of one hundred thousand dollars payable to the City, conditioned for the full and faithful compliance with all the terms and provisions of this Article and the conditions of the permit authorized thereby, and to save and hold the City free and harmless from all suits or damages sustained by the City in the event that any claim for damage or injury is maintained against the City as a result of the activities of the applicant in drilling or operating a well. A copy or certificate of the bond shall be deposited with the City Clerk. All such bonds shall be renewed immediately prior to their termination and shall remain in force and be binding upon the principal and surety unless cancelled by giving thirty (30) days notice in writing to the City Clerk, and the surety shall not be liable for any loss after the expiration of thirty (30) days from the date specified in the notice, except for loss occurring while the bond is in full force and effect. Upon the expiration of any such bond, a new bond shall be filed by the principal in such amount as in the case of an original bond.

In the event that any permittee shall have furnished such bond as required for a permit and there shall be no unsatisfied claim upon such bond at the time of the application for a subsequent permit to drill a well, no further bond shall be required for any subsequent permit, but in such event there shall be endorsed on the bond the identification of the subsequent permit for which the bond is made applicable; provided, that if there shall be an unsatisfied claim against the existing bond at the time of the application for a subsequent permit, the City Council, at its discretion, may require an additional bond in the aforesaid amount or any lesser amount as may be determined.

The amount of the surety bond heretofore may be reduced by ten thousand dollars from and after the completion of any well upon filing a new or amended bond conditioned and approved as in the case of the original bond, except for the amount. Such bond shall be renewed and filed during the continued operation of the well and for a period of six months thereafter or until the premises have been cleared of obstructions and restored to their original condition as required by this Article.

(Ord. 59)

3.5.12.     Indemnity or casualty insurance.

The applicant for a drilling permit shall submit a policy of indemnity or casualty insurance, issued by some responsible insurance company authorized to do business in the state, and naming the City as co-insured, insuring against injuries, loss or damage for which the applicant may be liable as the result of the drilling, operation or maintenance of any well or any structure or machinery appurtenant thereto. Such insurance coverage shall be in the following amounts: $500,000.00 for injury to any one person in any occurrence; $500,000.00 for injury to more than one person in any occurrence; $100,000.00 for loss or damage to property in any one occurrence, and additional excess coverage in the amount of $2.0 million.

A copy or certificate of the policy shall, be deposited with the City Clerk, together with a certificate by the insurance company that such insurance is in force and shall not be cancelled without thirty days' written notice thereof to the City. Such insurance shall be renewed immediately prior to the end of the term thereof and shall be maintained during the entire period of drilling or operation of a well.

(Ord. 59)

3.5.13.     Units established.

The City Council shall, from time to time as drilling requirements develop, in connection with the Oil and Gas Well Drilling Map, determine and establish units for the drilling of wells. Where practicable, in so doing, the City Council shall establish units of forty contiguous acres when allowed by state law and regulation; and provided, that the City Council may waive this requirement as to drilling units of wells permitted or commenced prior to June 21, 1983, and provided, further, that intervening rights of way, streets and alleys within such units and to the center line of the same on the perimeter thereof shall be included in determining such acreage. The territory in such units shall be attributed to the well for the drilling of which a permit may be granted. Each unit shall be appropriately numbered and the number thereof entered on any drilling permit granted for the unit. The production unit shall be coterminous with the drilling unit.

(Ord. 59)

3.5.14.     Location of wells.

Each well commenced or drilled in the corporate limits shall, as nearly as practicable, be drilled in the center of a drilling unit, heretofore provided and established, but the City Council at the time of granting a special permit may authorize such variation therefrom as may be deemed necessary depending upon the location of streets, alleys, residences and other buildings relative to the proposed drill site, geographical and topographical factors, and the size and shape of the unit and available attributable areas; provided, however, that the well location shall otherwise be in accordance with the provisions of any other Zoning Regulations. The approval location of the well shall be described in the permit.

(Ord. 59)

3.5.15.     Applicable state laws and regulations.

Unless otherwise set forth specifically by the Code, all wells shall be spaced, located, drilled, operated, and maintained in accordance with applicable state laws and regulations.

(Ord. 59)

3.5.16.     Drilling and production regulations.

The issuance and continued validity of a permit and the authorization for the drilling or operation of a well, authorized thereby, shall be conditioned upon compliance by the permittee with the following rules and regulations and any departure therefrom shall constitute a violation of this Article.

The surface pipe must be run and set at least ten feet into the Wellington Shale and in no event less than three hundred feet into the ground.

The surface pipe must be solidly cemented from top to bottom on the outside of the pipe.

Adequate precautions shall be taken and necessary well head safety devices be used at all times during the drilling and completion of the well; and all drill stem tests shall be reverse circulated to confine fluids to pits in accordance with the most acceptable practices.

Locations and equipment shall at all times during drilling operations be fenced by either a temporary portable type snow fencing at least four feet high or other fencing equally acceptable.

Upon completion of a well the pumping unit, tank battery and other permanent production equipment shall be enclosed in accordance with the special permit approved by the City Council.

All drilling fluids shall be contained in portable tanks at the drilling site.

All waters produced from any well shall be disposed of underground in accordance with regulations of the Kansas Corporation Commission or the State Board of Health.

At no time shall fluids of any kind be run into or stored in earthen pits. No saltwater or other waste fluids shall be disposed of in waterways or the sanitary sewer system unless approved by the State Board of Health and the Code Enforcement Officer.

All pumping units shall be set on a steel or concrete base and the surface of the ground around the well shall be graded to surrounding ground.

All pumping units must be electrically driven and equipped with belt safety guards.

All oil separator, petroleum and brine storage tanks shall be covered. No gas, odors, fumes from any storage tank, oil separator or casing head shall be vented into the open air without being filtered through a pollution control device containing activated carbon. Such devices shall be maintained on a scheduled basis to maintain their effectiveness.

Burning of gases or fumes by use of flares from wells or storage facilities is not allowable without a specific permit from the State Environmental Health Director.

All storage tanks shall be located within a diked area not less than two feet in height covering an area sufficient to contain and hold one and one-half times the entire liquid capacity of all tanks therein. Rainwater or other fluids shall not be allowed to accumulate within the dikes and shall be removed periodically. Unless tested and approved for disposal by sanitary sewer, the fluids shall be considered as contaminated and disposed of in accordance with regulations of the Kansas Corporation Commission or the State Board of Health.

All production equipment, structures and premises shall at all times be maintained and kept in a clean, sanitary and tidy condition; and all structures shall be of incombustible materials.

Storage tanks shall be equipped with automatic shut off devices linked to the fluid level in the tank to prevent overfilling and spillage. In addition, a single overflow tank shall be provided to contain the overflow from the oil or brine storage tanks in the event that the shutoff devices fail. The capacity of the overflow tank shall be sufficient to hold 24 hours production from the well or wells.

The owners and operators of drilling, pumping or storage equipment shall be responsible for the immediate clean-up and disposal of any spillage of oil or brine at the well site.

All wells shall be equipped with a blowout prevention device of the double ram type.

(Ord. 59)

3.5.17.     Additional requirements.

At the time of granting any permit, under the provisions of this Article, the City Council may make requirements, in addition to those contained therein, as may be reasonably necessary for protection of persons and property in the City.

(Ord. 59)

3.5.18.     Licenses.

A license fee is hereby levied upon the owner or operator of every completed and operated well in the corporate limits in the following amounts:

Producing oil or gas wells.      $150.00

Salt water disposal wells.        $75.00

Such fees shall be paid to the City Clerk within not more than twenty (20) days after completion of any well. The City Clerk shall thereupon issue a license which shall be valid for a period of twelve calendar months from and after the completion date of such well. The license shall not be transferable or prorated for any unused period. The fees so paid shall be deposited in the City treasury to the credit of the General Operating Fund and budgeted for the payment of the costs of administration of this Article.

The license herein required shall be renewed annually and the fee therefor paid at twelve month intervals from the date of the first license and until the operation of any well so licensed shall be discontinued, and the well abandoned, and the premises cleared as provided in this Article.

(Ord. 59)

3.5.19.     Well inspection.

It shall be the duty of Public Works to inspect wells and drilling sites and to otherwise generally administer and enforce, in conjunction with other concerned departments of the City, the provisions of this Article on drilling and operation of well in the City.

(Ord. 59)

3.5.20.     Forms.

The Public Works may prepare and supply such applications, permits, notices licenses, and other forms as may be required by this Article and upon request supply copies of this Article to applicants for any permit or license.

(Ord. 59)

3.5.21.     Revocation.

Upon any substantial violation of the conditions of any permit, license, authorization or of any provisions of this Article, the City Council may, upon a hearing after five days' written notice by mail or personal service, to the permittee or licensee, or if the address of the permittee or licensee is unknown and the permittee or licensee cannot be found in the City, after the expiration of five days from the date of publication of notice of any such hearing in a newspaper authorized to publish legal notices in the City, revoke such permit, license or authorization; provided, however, that if in the judgment of the City Council restitution is made for any damage occasioned by such violation together with adequate provisions to prevent any further violations by such permittee or licensee, the City Council may waive revocation of any permit or license, but the same shall not affect any penalty otherwise provided for the violation of this Article.

(Ord. 59)

3.5.22.     Notices to public works.

It shall be the duty of every permittee or licensee, as the case may be, to give the Public Works notice of the commencement of any drilling of a well, the setting and cementing of the surface casting of any well and of the beginning of other stages of the drilling or operation or abandonment of any well, as may be required by regulations to be approved by the Department of Public Works. The date of completion or abandonment of any well and pertinent information shall be entered of record.

(Ord. 59)

3.5.23.     Use of abandoned wells.

All abandoned wells which shall not be used and equipped for disposal purposes, shall be filled and plugged in accordance with applicable rules of the agencies of the state having jurisdiction thereof.

(Ord. 59)

3.5.24.     Orders to stop work.

The Department of Public Works shall be authorized to order any work stopped or corrected which shall not conform to the conditions required by this Article. A copy of such Order shall be filed with the well permit and preserved as a permanent record open to public inspection.

(Ord. 59)

3.5.25.     Appeals.

Any person aggrieved by any inspection order to stop or correct any work may forthwith appeal to the City Council for a hearing and determination of the matter complained of, within ten days from the decision of the Department of Public Works. Any appeal shall be in writing and filed with the City Clerk to be submitted to the City Council at its next meeting for a hearing and a determination thereof. The decision of the City Council shall be final and conclusive.

(Ord. 59)