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Home My WebLink AboutORDINANCE 1151-1986 SubstituteSUBSTITUTE 3 Suggested by: Administration CITY Of KENAI ORDINANCE NO. 1151-86 AN ORDINANCE Of THE COUNCIL OF THE CITY OF KENA19 ALASKA* AMENDING KENAI MUNICIPAL CODE CHAPTER 5,35 ENTITLED "OIL AND GAS WELLS" BY REPEALING SECTION 5.35.090 ENTITLED "PERMITTEE'S INSURANCE AND BOND" AND DECLARING AN EMERGENCY, WHEREAS, KMC 5.35.090 entitled "Permittss's Insurance and Bond" relevant to gas wello is in largo part duplicitous of State rules and regulationsi and, WHEREAS, the State has a comprehensive scheme of rules and regulations covering this subject; and, �a a WHEREAS, the City of Kenai has neither the resources nor expertise for effective# comprehensive regulation; end, WHEREAS, the State of Alaska has personnel, resources and purported expertise for the comprehensive regulation of oil and gas wells; end, WHEREAS, the existing municipal regulatory scheme works to the disadvantage of small operators and to the advantage of large corporate entities; and, WHEREAS, in the judgment of the Council of the City of Kensi, it is necessary for the promotion and immediate preservation of the public peace, health or safety, that the repeal of KMC 5-35.090 become effective as soon as possible, thereby necessitating the delineation of ttie ordinance as an emergency pursuant to KMC 1.15.070(4) and.''harter Section 2-13. NOW, THEREFORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF KENAI, ALASKA, that KMC 5.35.090 entitled "Permittee°e Insurance and Bond" is hereby repealed. PASSED BY THE COUNCIL OF THE CITY OF 7KAIv AL SKAs this second day of July, 1966- Zw� -Tow WAGONER-VAYOR ATT sT:t e en,hyer First Reeding: July 29 1986 Second Reading: July 2, 1986 Effective Date: July 20 1906 6/26/06 0 C MMMLAXI 5.35(index) S.35.010 f f i A. "Gump 5.35.010 Definitions. 5.35.020 Permit. �s u 5.35,030 Streets and alleys. J 5.35040 Well location. 5.35:050 Application and filing 'fee. - 5.35.060 issuance or refusal of permit. 5,35,070 Termination of permit.T- 5.35.060 Shut-in. -•; a 5.35.090 Permittee's insurance and bond. 5.35.100 Permit required for conduits on streets and alleys._ 5,35,110 Deeper drilling. 5,35,120 Derrick and r•ig. A -. 5.35,130 Pits. _ .- 5,35,140 Drilling operationst equipment. 5.35.150 Premises to be kept clean and sanitary. 5.35,160 Mufflers required. 5.35.170 Storage tanks and separators. v ; 5.35.160 5.35.190 Fence. Noise and other nuisances. -` 5935.200 Plaring or burning of gas. �• � -P �'( 5 5.35.210 Me prevention. _ 5.35,220 Abandonment and plugging. 5.35.230 Disposal of salt water. 5.35.240 Violation of laws or regulations. ,. 5.35.250 Penalty. i.A r .. 5.05.010 Ram LLWA= (a) The word "person" shall include ' ' 1hdividual, firm, partnership, association, corporation, or �`—, ' >.•z = cooperative. (b) The word "well" shall include and mean any WIG ar D holes, bore or bores, to any sand, formation, strata, or depth oil, liquid <' for the purpose of producing and recovering any gas 5-17 �( (City of Kenai ..:. ;" t Bupp. #10 - 9/20/82) A — ,r��..� . - jj j r•--vr _ _ _�—. e.:4• L—_ -', rF: 1C. y. .. ;1`'- '`.^•ter V • b ..` 11 .. v c , - ,u . �` m -; -dam.:. ,if- ZF 5.35.410-5.35.080 hydrocarbon, or any of them. (a) The word "permittee" shall mean the person to whom is issued a permit for the drilling and operation of a well under this ordinance, and his or its administrators, executors, heirs, successors, and assigns. (d) All technical or oil and gas industry words or phrases used herein and not specifically defined herein shall have that meaning custamarlIX attributable thereto by prudent operators in the oil and gas industry. (e) The word "lease" as that term is used herein shall mean any tract of land subject to an oil, gas and mineral lease, or other oil and gas development contract, or any unit composed of several tracts and leases but operated as one lease, and any tract of land in which the minerals are owned by an operator or someone holding under it or him, but which, due to the free royalty ownership is developed and operated as a separate tract. (Ords 122, 508) 5.35.020 gg=U: it shall be unlawful and an offense for any person acting either for himself or actin, as agent, employee, independent contractor, or servant of any other person, to commence to drill, or to operate, any well within the City limits of the City or to work upon or assist in any way in the production or operation of any such well, without a permit for the drilling and operation of such well having first been ise.eed by the authority of the City Manager in accordance with the terms of this ordinance. (Orris 508, 800) 5,35.030 $ : No well shall be drilled and no permit shall be issued for any well to be drilled at any location which is within any of the streets or alleys of the Cityy and no street or alley shall be blocked or incumbered or closed in any drilling or production operation except by special permit by order of the City Manager, and then only temporarily. (Ords 508, 800) 5#35.040 UlljaaaUgos No well shall be drilled and no permit shall be issued for any well to be drilled at any location which is nearer than 200 feet of any residence or commercial building without the applicant having first secured the written permission of the owner or owners thereof. (Ord 508) 5-18 (City of Kenai Sapp. 818 - 9/20/82) .f. ��:�_-+. ✓ '.ram-r---�..... .. i. �.-�t �. _. _ �. •rl C 5.35.050-5.35.060 ' 5935.050 �pit�,i 1AU"_aOd-@ilib eB= (a) Every application for a permit to drill and operate a well shall be in ;. writing, signed by the applicant or by acme person duly , authorized to sign same on his behalf, and it shall be filed with the cityClerk and be accompanied with a filing fee of 0500 in f n ..0 1. cash. No application shall request a permit to drill and operate P more than one well. The said application shall include full . information, including the followingg: t1) the date of said applications t2) name of the applicants (3) address of the applicants (4) proposed site of the well, including: name of the mineral owner and surface ownert name of the lease owners 4 and brief description of the lands - - •_ _4 _;_'�;.___, (5) type of derrick to be useds (6) the proposed depth of the well. (Ord 508) 5.35.060 issuance 03 Refusa],f$@rajht (a) The City Ranger, within 20 days after the filing of the application fora permit to drill and operate a well shall determine whether or not said application complies in all respects with the provisions of :. this ordinance, and if it does, the City Manager shall then fix the amount of the princi pal of the bond and insurance in accordance with the provision of KMC 5.35.090, and after such F determination shall issue a permit for the drilling and operation of the well applied for. Each permit issued under this ordinance =sf, shall: :- (1) by reference have incorporated therein all the provisions of this ordinance with the same force and effect a c if thio ordinance were copied verbatim in said permits .2) specify the well location with particularity to lot number, block number, name of addition or subdivision, or other available correct legal descriptions (3) contain and specify that the term of such permit shall be for a period of one year from the date of the permit and as long thereafter as the permittee is engaged in drilling operations with no cessations of such operations for more than 120 days, or oil or gas is produced in commercial quantities from the well drilled pursuant to such permit, - a provided that if at any time after discovery of oil or gas the production thereof in commercial quantities shall cease, Y the term shall not terminate if the permittee commenced ____-•-_ _ _ _ _i.__':u_•: 5-19 (City of Kenai 8upp. i18 - 9/20/82). t 41 r. 5..35.060-5.35.070 additional reworking operations within 120 days thereafter - as oil or gas is produced in commercial quantities from said. well except that for good cause the City Manager upon application may extend the 120 day requirements for additional periods of 60 days but for not more than the aggregate of one years `f (d) contain and specify such conditions as are by this ordinance author ized t (5) specify the total depth to which the well may be drilled, not exceeding the projected depths and, (6) contain that = and specify no actual operations shall be commenced until the permittee shall file and have approved an indemnity bond in the designated principal amount as so determined by the City Manager and conditioned as specified in the section below. Said permit, in duplicate originals, .� shall be signed by the City Manager of the City, and prior -._JA to delivery to the permittee shall be signed by the permittee (with one original to be retained by the City and... one by the permittee)t and when so signed shall constitute the pemittee's drilling and operating license and the 4`- - contractual obligation of the permittee to comply with the terms of such permit, and such bond, and this ordinance. (b) If the permit for the well be refused, or if the applicant notifies the City Manager in writing that he does not elect to accept the permit as tendered and wishes to withdraw his application, if the bond the be or of applicant not approved and =:P._} the applicant notifies the City Manager in writing that he wishes his to withdrew application, then upon the happening of said - { events the cash deposit provided for to be filed with the - application shall be returned to the applicant, except that there shall be retained therefrom by the City $100 as a processing fee. (Ords 508, 800) = 5.35.070 When a permit shall be issuedp the same shall terminate and become inoperative w!Lhout any action on the part of the Cit unless within 120 da s from y y the date issuance drilling of actual of the well shall have commenced except during a suspension or shut-in as provided in INC 5.35.080, the cessation for a like period of the drilling .� o erations or the cessation of the production of oil or gas from the well after shall have -E• . -" ' -T:::-:: production commenced, shall operate to terminate and cancel the permit, and the well shall be considered :..• :..:? (City of Kenai Supp. 818 - 9/20/82) 5-20 M Je• 79 It 5.35.070-5.35.090 ,,-`- as Abandoned for all purposes of this ordinance, and it shall be unlawful thereafter to continue the operation or drilling of such well without the issuance of another permit except upon application to the City Council said periods may be extended for 160 day periods but not more than the aggregate of one year. (Ord 508) 5,359080 WM=1D: if a well has been drilled which is or can be made capable of producing gas or oil in commercial quantities but for which there is a lack of either a market at the well or of an available pipeline outlet in the field, said well may be suspended or shut in while the drilling and is in and the production permit issued hereunder still effect, is - - drilling and operation permit shall remain effective, and - automatically continued, during such period or periods of suspension or shut-in. The permittee shall give written notice .,5>' = .- •- to the City of his intent to suspend or to shut in the well which indicate the notice shall present the reasons therefor and good .,.; faith attempts that were made in securing a market or providing for the transportation of the oil or gas. Said suspension or shut-in will be effective for one year from the date of the notice to the City and may be renewed for additional one year intervals upon review and public resolution by the City Council. Outing the suspension or shut in the well shall be secured by fence, locks, or other security devices as approved by the City Manager. (Orris 508, 800; ....:-_ -ems-;; �.•.� 5.35.090 2201ttee a nce and gong: (a) in the event a permit be issued by the City Manager under the terms of this ordinance for the drilling and operations of a well, no actual drilling operations chall be commenced until the permittee shall file with the City Clerk a. bond and a certificate of insurance,. as follows: = 5-21 (City of Kenai P, Supp. #18 - 9/20/62) a n ' .771 r, 5.35490 F (1) A bond must be filed with the City Clerk in the pr incipal sum of $25#000 at such greater amount as may have Seim fixed by the City Council. Said bond must be executed b a reliable insurance campany authorized to do business In 0 an the state, as surety, and with applicant as principal, running to the City for the benefit of the City and all persons concerned, conditioned that the permittee will comply with the terms and conditions of this ordinance In the drilling and operation of the well. Said bond shall become effective on or before the date the same is filed with the City Clerk and remain In force and effect for at least a period of six months subsequent to the expiration of the term of the permit issued, and in addition the bond will be conditioned that the permittee will promptly pay off finest penalties, and other assessments imposed upon permittee by reason of his breach of any of the terms, provisions, and conditions of this ordinance, and that the permittee will promptly restore the streets and sidewalks and other public property of the City, which may be disturbed or damaged in the operations, to their former coaditionsi and that the permittee will promptly clear all premises of all litter, trash, waste, and other substances used, allowed, or occurring in the drilling or producing operations, and will, after abandonment, grade, level, and restore said property to the same surface condition, as nearl, as possible, as existed when operations for the drilling of the well or wells were first commenced) and that the permittee will indemnify and hold the City harmless from any and all liability growing out of or attributable to the granting of such permit. If at any time the City Manager shall deem any permittee's bond to be insufficient for any reason, it may require the permittee to file a new bond. (2) if, after completion of a well, permittee has complied -kl with all of the provisions of this ordinance such as to removing derrick, clearing premises, eta., he may apply to the City Manager to have said bond reduced to a sum of not less than $10#000 for the remainder of the time said well produces without reworking. During reworking operations the amount of the bond shall be increased to the original amount. (3) in addition to the bond required in paragraph I of this section, the permittee shall carry a policy or policies of 5-22 (City of Kenai Supp. #10 9/20/82) 7 r L J jl 5.35.090-5.35.110 standard comprehensive public liability ineurence, including contractual liability covering bodily injuries and property damage, naming the permittee and the City, in an insurance id policy orthorized to do business within the e policies in the aggregateshallprovidefa or cyorthe following minimum coverages' (I) bodily injuries $250,000 one person; $500,000 ane accident. (ii) property damage $200,000. (III) workmen's compensation ineuranco and shall furnish a certificate thereof to City; (iv) the permittee shall also execute an agreement to save the City harmless from all actions, suits, liebilitiee, or damages resulting from or arising out of any acts of commission or omission by the permittee, its agents, employees, invitees, or arLaing from the permittee's operation and privileges granted hereby and pay all costs connected therewith. (b) Permittee shall file with the City Clerk certificates of said insurance as above stated, and shall obtain the written approval thereof by the City Manager, who shall act thereon within ten days from the date of such filing. Said certificates shall recite that the insurance policy or policies shell not be modified or cancelled without written notice delivered to the City Clerk at least 30 days prior to the effective date of such cancellation. In the event said insurance policy or policies are cancelled, the permit granted shall terminate, and permittee'e rights to operate under said permit shall cases until permittee files additional insurance as provided herein. (Ords 508, 000) 5.35.100 Permit Required for Conduits on Streets and Alloys; No perm ee shall Make any excavations or cone ruct any neo for the conveyance of fuel, water, or minerals, an, under, or through the streets and alleys of the City without express permission of the City Manager, in writing, and then only in strict compliance with the ordinances. (Orris 508, 800) 5,35.110 Deeper Drillina: (a) Once any well has either been completed sea producer or abandoned as a dry hole, it shall be unlawful and an offense for any person to drill such well to a deeper depth then that reached in the prior drilling operations without the permittee as to such well obtaining a supplemental permit after filing a supplemental application with the City Clerk specifying% 5-23 (City of Kenai Supp. 035 - 4/6/85) - - - _ — -- -Y�-- �-- A ' �'�' r•T'i•.'cr u . /fit r .. - -... f_ 1 • _ • ll 5.35.110-5.35.130 0) the then condition of the well and the casing therein; an (2) the depth to which it is proposed such well be deepened; (3) the proposed casing program to be used In connection with proposed deepening operations; .✓V', (4) an evidence of adequate current tests showing that the casing strings in said well currently passed the same tests-'. as are in this ordinance provided for in toss of the drilling of the original well. (b)- In the event the City Manager is satisfied that said well may be deepened with the same degree of safety as existed in :^ - IL' - the original well, a supplemental permit may be issued without an - •_-_- additional filing fee to the permitter authorising the deepening and operation of the well to such specified depth as applied for. (a) In any deeper drilling or any deeper completion of any deeper production operations, the permittee shall comply with all other provisions contained in this ordinance and applicable to the drilling, completion, and operation of a well or wells. (Ords $089- 800) 5.35.120 Derrick and Riot It shall be unlawful and an offense for any person to or operate in connection with the drilling or reworking of any well within the City limitse any wooden derrick or any ateam-powered rig, and all engines shell be equipped with adequate mufflers approved by the y Manager. or PP City to permit any drilling rig or derrick to remain on the promisee or drilling site for a period longer then 60 days after com- pletion or abandonment of the well. At all times from the start of erection of a derrick, meet, or a gin -pole, until the well Is abandoned and plugged or completed as a producer and enclosed with a fence as herein provided, the permittee shall keep a a : watchman on duty on the promisee at all times; provided, however, it shall not be necessary to keep an extra watchmen on duty on _ -.:- the promisee when other workmen of permittee are on said premises. (Ord 508) 5.35.130 Pite: (a) Steel reserve and storage pits shall be used in conne"Mon with all drilling and reworking operstione. shall be removed from the drilling site Such pits and contents `.' and the City of Kenai within 60 days after completion of the stall or cessation of drilling activity. (Ord 5089 8009 W13) ;•. r - >. (City of Kenai Supp. 035 - 4/8/85) 5- 24 .. L 5.35.140-5,35.170 ' • � ti'..3 ' 5.35.140 Drilling OROf8tional Equipments All drilling and -- operation at any wall performed by a perm tee under this ordinance shall be conducted in accordance with the beat practices of the reasonably prudent operate:•. Each permitter under this ordinance shall observe and follow the recommendations and/or regulations of the American Petroleum Institute, the State ..; of Alaska Oil and Car Conservation Commiasion, the United Staten__-_-_�--_ :: 'f.y Department of the Interior Geologic Survey Minerals Management Service, and'any other government agency having authority with respect thereto. (Orde 508, 600) -=• .. " - 5.35.150 Premises to be Kept Clean and Seniter s The .77 promisee ;hall be kept in a clean and eanitery cond tion, free from rubbish of every character, to the satisfaction of the City Manager, at all times drilling operations of reworking operations :.......-}, are being conducted, and as long thereafter as oil end/or gee is being produced therefrom. It shell be unlawful for any per- mittee, their agent or employee, to permit within the corporate o ,' limits of the City, any mud, water, waste oil, reserve, or other waste matter from any reserve, pit, storage tank, or oil and/or ;.:_r--• gas well located withii the corporate limits of the City, or from-c any premises within the City, developed or being developed for �. oil and/or gas purposes, into the alleys, streets= lots, land, or 508) ' lessee within the corporate limits of the City. `Ord 5.35.160 Mufflers Required: Motive power for all opera- - tione after com-pTe-tion,o drilling operations shall be electri- cityy or properly muffled gee, gasoline, or diesel engines. (Ord 5.35.170 Store a Tanks and Se Orators: It shall be unlawful and an offense for any person to use, construct, or operate in connection with any producing well within the City -- limits any crude oil storage tanks except to the extent of two ::. steel tanks for oil etorege, not exceeding 500 barrels capacity -, ,-.:'��-�_::=-=_• �''' each and so constructed and maintained es to be vaportight. A permittee may use, construct, and operate a steel conventional -•':' �`"' separator, and such other steel tanks and appurtenances as are necessary for treating oil with each of such facilities to be so„ constructed and maintained as to be vportight. Each oil, gas separator shall be equipped with both a rejulation pressure- relief safety valve and a bursting hed. 11 such tanks and separators shall be placed underground. Any oil or gas produced may be transported outside of the City limits by underground pipelines. (Ord 508) 5-25 (City of Kenai i. Supp. 035 - 4/8/8S) " O mom - -. cam. , �. C�1_. - -., -' - � .. U ._ _. �L•.:. SO 5,35.160-5.35.210 5.35.180 Fences Any person who completes any well ae a id ell together producer shall have the obligation to enclose sa w + with its surface facilities, by a substantial fence sufficiently high and properly built so as to ordinarily keep persons and animals out of the enclosure with all gatoe thereto to be kept a= locked when the permittee or his employees are not within the enclosure. (Ord 508) 5.35.190 Noise and Other Nuisances: All oil operations, drilling, and production operations snail be conducted in each a manner as to eliminate, as Per as precticable, duet, noioe, vibration, or noxioue odors, and shall be in accordance with the boat eccepled practices in to exploration for, drilling for, end production of oil+ gas, and other hydrocarbon sub- " - ---- -' - : -- stances. Proven technological improvements in exploration, :. drilling, and production methods shell be adopted as they become, from time to time, available, tf capable of reducing factors of:'< nuisance and annoyance. (Ord 508) 5.35.200 Flaring or Burning of Goes No permittee engaged in the drilling or opera tiono an oil and/or gas well within the corporate limits of the City, shall permit to escape into the sir or to flare or burn gas from a torch or any similar means within L the corporate limits of the City, except that gag may be burned for a limited time when necessary to complete an oil and/or gas well upon the original completion or upon the recompletion of work over jobs upon oil an gas well, so long as the some does not constitute a fire hazard to the property of others within the vicinity of such oil and/or gas well. (Ord 506) ; 5.35.210 Fire Prevention: (a) It shall hereafter be l - unlawful to Opera� a well for oil and/or gas without a four inch header being laid over the top of the tanks and a 2 1/2 inch line - - extending from the tank battery to a point 200 feet from said'.;„'v.:.� tank bstLery. She manner and method provided for connection at said point shall be determined by the City Fire Department so that Posmite or other chemicals may be pumped through ouch line and the header on the tanks into such tanks to extinguish tires In the tanks. __ ::........ .._ (b) Adequate fire fighting apparatus and supplies, approved _ „= by the City Fire Department shall be maintained on the drilling '' n site at all times during drilling and production operations. machinery, equipment, and installations on all drilling sites within the Citoolimits beshall ieeuedconform thewith Fireouch Oepartmentmants (Ord: . •..�.�i_._'Q_'__ :- � .=rz may from time 508) (City of Kenai _ Supp. #35 4/8/85) 5.35.220-5.35.250 C5,35.220 Abandonment and Plu in o Whenever any well is abandoned it shall be the, obligation or the permittee and the operator of the well to set a 200 foot cement plug in the bottom of the surface casing with the bottom of the plug 100 feet below the surface casing section, and the top of the plug 100 feet above the eurfeae casing eectionI and to set a 50 foot cement plug in the top of the surface easing. WO surface or conductor string of casing may be pulled or removed from a well. During initial abandonment operations it will be the obligation of the permittee and the operator of the well to flood the well with feud -laden fluid weighing not lose then ten pounds per gallon, and the well will be kept filled to the top with said mud -laden fluid at all timeal mud -laden fluid of the above specifications will be left in the well bore below and between cement plugs. ny additional provisions or precautionary measures prescribed by the state or the commission of the state in connection with the abandonment and pluggging of a well shall be complied with by the permittee. (Ord 508) 5.35.230 Disposal of Salt Wstsr: permittee shall make adequate provis or1s for the d sposal of ell salt water or other Impurities which he may bring to the surface, such disposal to be manner as present ormade incprospective,tornto injureisurfaceevegetatiwater on. Ord C 508 ) 5.35.240 Violation of Laws or Regulations: Any violation' of the lave of he state or any rules, reyu at one, or require- ments of any state or federal regulatory body having jurisdiction In reference to drilling, completing, equipping, operating, producing, maintaining, or abandoning an oil or gas well or related appurtenances, equipment or facilities, or in reference to Pii�ewells, fire protection, blow-out protection, safety protection, or convenience of persons or property, shell also be a violation of this ordinance and shall be punishable in ac- cordance with the provisions hereof. (Ord 9.35.250 Penalt i (a) It shall be unlawful and an offense for any person to violets or neglect to comply with any provision hereof irrespective of whether or not the verbiage of each section hereof contains the specific language that such violation or neglect is unlawful and is an offense. Any person who shall violate any of the provisions of this ordinance, or any of the provisions of a drilling and operating permit issued pursuant hereto, or any condition of the bond filed by the permittee pursuant to this ordinance, or who shell neglect to comply with the terms hereof, shall on conviction thereof, be fined In any sum hnot separate then provisionnor of thisthen ordinance# and'�ofviolation eacao saidpermit, 5-27 =._ `' City of Kenai .._`- Supp. 035 - ., - s.ss.2so and of said bond, shall be considered a separate offense, and each day's violation of each separate provision thereof shall be considered a separate offense. In addition to the foregoing penaltieso it is further provided that the City Council at any regular or special session or meeting thersofp mayp provided ten days notice has been given to the permittes that revocation is to b Id d ! a cans nre to such meeting, revoke or euepend any permit Issued under this ordinance and under which drilling or producing ---- operations are being conducted in the event the permittee thereof has violated any provision of said permit, said bond, or this : ordinance. In the event the permit be revoked, the permittes may make application to the City Council for a reissuance of such permit, and the action of the City Council thereon shall be final. (b) In addition to, or se an alternative to the penalty aforementioned, any person violating this title shall be subject to a civil penally of not more then a100. Each and every day the _ violation continues shall be deemed a separate and distinct violation. In addition a civil injunction or temporary restraining order may be obtained n order to obtain immediate compliance with the provisions of this title and the City may apply for its reasonable court coots and attorney fees in bringing the civil litigation. (Orde 123, 508) ej 5-28 (City of Kenai ,+.. Supp. Nag - 4/8/85) • U - - . ., ., - ' ... 11 _