HomeMy WebLinkAboutORDINANCE 0508-1979
CITY OF KENAI
ORDZNi~NCE NO. 508-79
AN ORDINANCE OF THE COUNCIL OF THE CITY OF' KENAI, ALASKA
AMENDING ORDINANCE NO. 122 REGULATING OIL AND GAS WELL
DRILLING WITHIN THE CITY OF KENAI AND ADDING SUCH F2EGULATIONS
TO THE KENAI CODE.
WHEREAS, Ordinance 122 of the City of Kenai adopted emergency
regulations of oil and gas well drilling within the Kenai
City limits, and
WHEREAS, it was the intent of that ordinance that comprehensive
regulations be drafted and added to the Kenai Code, and
WHEREAS, practical experience with oil companies who have
sought to abide by said regulations demonstrate that certain
amendments to the regulations are required in order to make
the drilling operations feasible as for example, (a) the
need for a shut-in provision giving the oil company extra
time under a permit to dispose of oil or gas discovered
because of the lack of a ready market or pipeline trans-
portation facilities (5.35.080); (b) the need for reason-
able, additional time to commence drilling operations from
grant of permit, (5.35.070); and the need to grant additional
leeway to allow for other than steel slush pits (5.35.130).
NOW, THEREPORE, BE IT ORDAINED BY THE COUNCIL OF THE CITY OF
KENAI, ALASKA as follows:
Section is Ordinance No. 122 is hereby repealed in its
entirety and a3 codified in the Kenai Code.
Section 2s The attached chapter of code provisions
entitled O~II, AND GA3 WELLS," numbered 5.35.010 through
5.35.250 are hereby adopted bj *_he C~unefl o~ the City of
Kenai and shall be codified in the Kenai Code as amended.
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PARSED BY THE COUNCIL OF THE CITY OF K~ AI, ALASKA this 5th .~p~`~
day of July, 1979. ~ f
VINCENT O' REILLY~-iKAYOR
ATTE$T: r
,~!
3U C. PETER, CITY CLERK First Readings Jun~i 20, 1979
'~ Second Readings July 5, 1979
~ Effective Dates August 5, 1979
5.35.010 DIL AND GA5 WELLS; Definitions: 1. The word
"person" shall include any nd vidual, f rte-partnership,
association, corporation or cooperative.
2. The word "well" shall include and mean any hole or
holes, bore or bores, to an;~ sand, formation, strata or
depth for the purpose of producing and recovering any oil,
gas liquid hydrocarbon or any of them.
3. Tne 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.
4. All technical or oil and gas industry words or
~ihrases used herein and not specifically defined herein
shall have that meaning customarily attributable thereto by
prudent operators in the oil and gas industry.
5. 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 tree*_ of land in which the minerals arc 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.
5.35.020 Permit: it shall be unlawful and an offense
for any person acts g either for himself or acting as agent,
employee, independent contractor, or servant of any other
person, to commence to drill, or to :;perate, 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 dri],linq and operation of such well having
first been issued by the authority of the City Council in
aacoz~dance with the terms of this ordinance.
5.35.030 Streets and Alle s: No well shall be drilled
and no pern~it s a 1 e .ssue or any well to be drilled at
;i any location which is within any of the streets or alloys of
the citys and no street or alley is within any of the streets
or alleys of the cityt and no street or alley shall be
I' blocked or fncumbered or closed fn any drilling or production
I` operation except by special permit by order of the City
~ Councii, and then only temporarily.
5.35.040 well Location: No well shall be drilled and
no permit shall a ssue or 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.
5.35.050 A lication and Filin Fee: Every application
for a permit to r an operate a wc~ shall be in writing,
signed by the applicant or by some person duly authorized to
sign samo on hie behalf, anc] it shall be filed with tho City
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Clerk and he accompanied with a f.iiing `~;; of $500 in cash.
Na application shall request a permit to drill and operate
more than one well. The said application shall include full
info~mation, including the followi:ig:
1. The date of said applica~cion;
2. Name of the applicant;
3. Aduress of the applicant;
4. Proposed site of the well, including: name of the
mineral owner and surface owner; name of the lease owner;
and brief description of the land;
5. Type of dexrick to be ~.~sed;
6. The proposed depth of the well.
5.35.060 Issuance or Refusal of Permit: The City
Council, within 0 days a ter, the 1 ng of the application
fir a permit to drill and operate a well shall determine
whether ~r not said application complies in all respects
with the provisions of this ordinance, and if it does, the
City Council shall then fix the amount of the principal of
the bond and insurance provided for in the section below,
and after such determination shall issue a permit for the
drilling and operation of the well applied for. Each permit
issued under this ordinance shall:
1. By reference have incorporated therein all the
provisions of this ordinancd with the same force and effect
as if this ordinance were copied verbatim i:s said permit;
2. Specify the well location with particularity to lot
number, block number, name of addition or subdivision, or
other available correct legal description;
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 12C days, or oil or gas is produced in commercial
quantities from the well drilled pursuant to such permit,
provided that if at any time after discovery of oil or gas
the production :hereof in commercial quantities shall cease,
the term shall not terminate if the permittee commenced
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 Council upon
application may extend the 120 day requirements for additional
periods of 60 days but for not more than the aggregate of
one years
4. Contain and specify such conditions as are by this
ordinance authorized;
5. Specify the total depth to which the well may be
drilled, not Qxceeding the projected depths and,
6. Contain and specify that no actual operations shall
be commenced until the permittee shall file and have approved
an indemnity bon8 in the designated principal amount as so
determined by the City Council 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
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-_ tr, deli•recy to th ~~eimittee shall be signed the permittee ~
(with one original to be retained by the city and one by the
permitee); and when so signed shall constitute the permittee's ~
drilling and operating license and the contractual obligation ~
of the permittee to comply with the terms of such permit,
.,"; ~; and such bond, and this ordinance. ~
T_f the permit for the well be refused, or if the ap-
plicant notifies the City Council in writing that he does
not elect to accept the permit as tendered and wishes to
withdraw his application, or if the bond of the applicant be
not approved and the applicant notifies the City Council in
writing that he wishes to withdraw his application, then
upon the happenir~g 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.
5.35.070 Termination of Permit: when a permit shall
be issued, the same shall term pate and become inoperative
without any action on the part of the city unless within 120
days from the date of issuance actual drilling of the well
shall have commenced except during a suspension or shut-in
as prowi_dPd in 35.080, the cessation for a like period of
tt-.e drilling operati~~ns or the cessation of the production
of oil or gas from the well after production shall have
commenced, stall operate to terminate and cancel the permit,
and the well shall be considered 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 60 day periods
but not more than the aggregate of one year.
5.35.080 Shut-In: Zf 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 f.feld,
said well may be suspended or shut in while the drilling and
production permit issued hereunder is still in effect. The
permittee shall give written notice to the City of his
intent to suspe;.~ or to shut in the well which notice shall
present the reasons therefore and indicate the good faitY.t
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 otie year from the date of
tt;e notice to the City and may be renewed for additional one
year intervals upon review and public resolution by the City
Council. During the suspension or shut in the well shall be
secured by fence, locks or other security devices as approved
by the City Manager.
5.35.090 Permittee's Insurance and Bond: In the event
a permit be issue~e C ty Counc 1 urdar the terms of
this ordinance for the drilling and operations of a well, no
actual drilling operations shall be commenced until the
permittee shall file with the City Clerk a bond and a cer-
tificate of insurance, as follows:
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1. A bcnd in the principal sum of such number of
collars as has been so determined by the City Council, but
not to be less than $25,000. Said bond to be executed by a
reliable insurance company authorized to do business in 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 6
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 fines, 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 conditions; 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 nearly 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 Council
shall deem any permittee's bond to be insufficient for any
reason, it may require the permittee to file a new bond.
If, after completion of a well, permittee has complied
with all of the provisions of this ordinance such as to
removing derrick, clearing prer+;.ses, etc., he may apply to
the City Council to have said hand 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.
2. In addition to the bond required in paragraph 1 of
this section, the permittee shall carry a policy or policies
of standard comprehensive public liability insurance, including
contractual liability covering bodily injuries and property
damage, naming the permittee and the city, in an insurance
company authorized to do business within the state, said
policy or policies in the aggregate shall provide for the
following minimum coverages: (a) Bodily injuries $250,000
one person; $500,000 one accident. (b) property damage
$200,000. (c) workmen's compensation insurance and shall
furnish a certificate thereof to City; (d) the permittee
shall also execute an agreement to save the City harmless
from all actions, suits, liabil'ties or damages resulting
from or arising out of any acts of commission or omission by
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the permittee, its agents, employees, invitees or arising
from the permittee's operation and privileges granted P:ereby
and pay all costs connected therewith.
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 10 days from the date of such filing. Said
insurance policy or policies shall not be cancelled without
written notice to the City Clerk at least 10 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's rights to operate
under said permit shall cease until permittee files addition-
al insurance as provided herein.
5.35.100 Permit Required for Conduits on Streets
and Alleys: No permittee shall make any excavations or
construct any lines for the conveyance of fuel, water or_
minerals, on, under or through the streets and alleys of the
city without express permission of the City Council, in
writing, and then only in strict compliance with the ordi-
nances.
5.35.110 Deeper Drilling: Once any well has either
been completed as a 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 than that reached in the prior
drilling operations without the perntittee as to such well
obtaining a supplemental permit after filing a supplemental
applicatic: ::ith the City Clerk specifying:
1. The then condition of the well and the casing
therein;
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;
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 case of the
drilling of the original well.
In the event the City Council is satisfied that said
well may be deepened with the same degree of safety as
existed in the original well, a supplemental permit may be
issued without an additional filing fee to the permittee
authorizing the deepening and operation of the well to such
specified depth as applied for.
In any deeper drilling or any deeper completion of any
deeper production operations, the permit~ee shall comply
with all other provisions cor_tained in this ordinance and
applicablt~ to the drilling, completion and operation of a
well or wells.
5.35.120 Derrick and Rig: It shall be unlawful. and an
offense for any person to use or operate in connection with
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the drilling or reworking of any well within the city limits,
any wooden derrick or any steam-powered rig, and all engines
shall be equipped with adequate muffiera approved by the
City Manager, or to permit any drilling rig or derrick to
remain on the, premises or drilling site for a period longer
than 60 days after completion or abandonment of the well.
At all times from the start of erection of a derrick, or a
mast, 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 watchman on duty
on the premises at all Limes; provided, however, it shall
not be necessary to keep an extra watchman ara duty on the
premises when other workmen of permittee are on said premises.
5.35.130 Pits: Steel slush pits shall be used in
connection with alb drilling and reworking operations. Such
pits and contents shall be remo~-sd from the premises and the
drilling site within 60 days after completion of the well.
No earthen slush pits shall be used except as permitted by
the City Council on a case-by-case basis.
5.35.140 Drillin 0 erations; E ui ments All drilling
and operation at any wel per ormed y a permittee under
this ordinance shall be conducted in accordance with the
best practices of the reasonably prudent operaLO*_-. Each
permittee under this ordinance shall observe and follow the
recommendations and/or regulations of the Amer3.can Petroleum
Institute and the commission of the state.
5.35.150 Premises to be Ka t Clem and Sanitar The
premises r~hall a kept n a clean an son tart' con tion,
free fror.~ rubbish of every character, to the satisfaction of
the City Manager, at all times drilling operations or reworking
operations are being conducted, and as long thereafter as
oil and/or gas is being produced therefrom. Zt shall be
unlawful for any permittee, their agent or employee, to
permit within the corporate limits of the city, any mud,
water, waste oil, slush or other waste matter from any
slush, pit, storage tank, or oil and/or gas well located
within the corporate limits of the city, or from any premises
within the city, developed or being developed for oil a,d/or
gas purposes, into the alley:;, streets, lots, land or leases
within the corporate limits of the city.
5.35.160 Mufflers Re uireds Motive power for all
operations after complet on o• drilling operations shall be
electricity or properly muffled gas, gasoline or dieRel
engines.
5.35.170 Stora a Tanks and Se aratorss It shall be
unlawful and an o ense or any person to use, construct- or
operate in connection with any producing well within the
city limits any crudo ail storagA tanks Qxcept to the extent
of 2 steel tanks for oil storage, not exceeding 500 barrels
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capacity each and so constructed and maintained as to be
vaportight. A permitteH may use, construct and operate a
steal corvei:tional separator, anti su:h 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
vaportight. Each oil, gas separator shall be equipped with
both a regulation pressure-relief safety valve and a bursting
head. All such tanks and separators shall be placed underground.
Any oil or gas produced may be transForted outside of th?
city limits by underground pipelines.
5.35.180 Fence: Any person who completes any well as
a producer shall have the obligation to enclose said well,
together 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 gates
thereto to be kept lucked when the permittee or his employees
are n.ot within the enclosure.
5.35.190 Noise and Other Nuisances: All oil operations,
drilling and pro uct on operat ens shall be conducted in
such a manner as to eliminate, as far as practicable, dust,
noise, vibration or noxious odors, and shall be in accordance
with the best accepted practices incident to exploration
for, drilling for and production of oil, gas and other
hydrocarbon substances. Proven technological improvements
in exploration, drilling and production methods shall be
adopted as they become, from time to time, available, if
capable of reducing factors of nuisance and annoyance.
5.35.200 Flarin or Burnin of Gas: No permittee
engaged in the r 11 ng or operat ono an oil and/or gas
well within the corporate limits of the city, shall permit
to escape into the air or to flare or burn gas from a torch
or any similar means within the corporate limits of the
city except that gas 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 and/or gas well, so long as the same does not constitute
a fire haaard to the property of others within the vicinity
of such oil and/or gas well.
5.35.210 Fire Preventions it shall hereafter be
unlawful to operate a we 1 or oil and/or gas without a 4
inch header being laid over the top of the tanks and a 2 1/2
inch lis;~. extending from the tank battery to a point 200
feet from tsai~i tank battery. The manner and method provided
for connection at said point shall be determined by the City
Fire Department so that foamite or other chemicals may be
pumped tr:rough such line a:td the header on the tanks into
such tanks to extinguish fires in the tanks.
Adequate fire fighting apparatus and supplies, approved
by the City Fire Department shall be maintained on the
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drilling site at all times during drilling and production
operations. All machinery, equipment and installations an
all drilling sites within the city limits shall conform with
such requirements as may from time to tame be issued by the
Fire Department.
5.35.220 Abandonment and Pluggin~c: Whenever any well
is abandoned it shall be the obligation of the permittee and
the operator of the well to set a 200 foot cement plug in
the bottom of the surface casing with the botto:c of the plug
100 feet below the surface casing section, and the top of
the plug 100 feet above the surface casing section; and to
set a 50 foot cement plug in the top of the surface casing.
No surface or conductor string of casing may be pulled or
removed from a well. During initial abandonment operations
ft will be the obligation of the permittee and the operator
of the well to flood the well with mud-laden fluid weighing
not less than 10 pounds per gallon, and the well will be
kept filled to the top with said mud-laden fluid at all
times; mud-laden fluid of the above specifications will be
left in the well bore below and between cement plugs. Any
additional provisions or precautionary measures prescribed
by the state or the commissic,n of the state in connection
with the abandonment and plugging of a well shall be complied
with by the permittee.
5.35.230 Dis osal of Salt Water: permittee shall make
adequate provis ons or the d sposal of all salt water or
other impurities which he may bring to the surface, such
disposal to be made in such manner as to not contaminate the
water supply, present or prospective, or to injure surface
vegetation.
5.23.240 Violation of Laws or Re ulations: Any violation
of the Iaws of the state or any rules, regulat ons 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 firewalls, fire protection, blow-out protection, safety
protection, or convenience of persons or property, shall
also be a violation of this ordinance and shall be punishable
in accordance with the provisions hereof.
5.35.250 Pen: It shall be unlawful and an offense
for any person to v olate 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
shall neglect to comply with the terms hereof, shall on
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conviction thereof, be fined in any suin not less than $5 nor
more than $100; and the violation of each separate provision
of this ordinance, and of said permit, ?nd of said bond,
shall be considered a separate offense, and each day's
violation of each sPr+arate provision :.hereof shall be considered
a separate offense. In addition to the foregoing penalties,
it is further provided that the City Council at any regular
or special session or meeting thereof, may, provided 10 days
notice has been given to the permittee that revocation is to
be considered at such meeting, revoke or suspend any permit
issued under this ordinance and under which drilling or
producing operations are being conducted in the went the
permittee thereof has violated any provision of said permit,
said bond, or this ordinance. In the event the permit be
revoked, the permittee may make application to the City
Council for a reissuance of such permit, and the action of
the City Council thereon shall be final.
In addition to or as an alternative to the penalty
aforementioned, any person '';~lating this title shall be
subject to a civil penalty of not more than $100. Each and
every day the violation continues shall be deemed a separate
and distinct violation. Zn addition a civil injunction or
temporary restraining order may be obtained in order to
obtain immediate compliance with the provisions of this
title and the City may apply for its reasonable court costs
and attorney fees in bringing the civil litigation.
NSF