Chapter V · Business Regulations

ARTICLE 3. OIL AND GAS

Sections 5-301 to 5-316 · 16 sections

5-301 Licenses, permits, fees.

It shall be unlawful for any person, firm or corporation to drill or commence operations for the drilling of an oil or gas well or to operate the same within the city limits without having first obtained from the governing body one of the following licenses or permits:

(a)Original License Application, Before commencing the drilling of an oil or gas well within the city, the person, firm or corporation desiring to drill a well shall first obtain a license from the city. The applicant shall, at the time of making application for the drilling license, deposit with the city clerk a fee of $500, payable to the city. If the city grants the application, the fee shall be retained by the city. If a license is not granted, the city shall retain the sum of $100 for administrative expenses and the balance of the fee shall be returned to the applicant.

(b)License Transfer. No license or renewal license shall be assigned or transferred to any other person, firm or corporation unless a notice of transfer is filed with the city, giving the name of the assignee. A fee of $100 shall accompany the notice of transfer and a transfer of any bond, security or other requirement for the licensing of wells within the city shall be made. No transfer shall be complete until all of the requirements of this section shall have been met.

(c)Dry Well-Reworking License. The license for any well that has been determined to be a dry well by the licensee is terminated upon such determination. The licensee shall furnish the city with such information. If any well that has been determined to be a dry well is reworked; reopened or work done to make it a producing well, the owner of such well shall first obtain an original license for drilling a well before commencing such rework, reopening of any similar activity.

(d)Annual Renewal Fee. All persons, firms, or corporations having obtained a drilling license for oil or gas wells within the city, which wells are producing oil or gas, shall pay an annual license renewal fee of $250 per each well which continues to produce oil or gas at any time during the calendar year. Such fee shall be due and payable by December 31st of each year beginning with 1984 and shall be paid to the city clerk.

(Ord. 1309; Ord. 1310)

5-302 Evidence to be presented by licensee.

No such permit shall be granted by the governing body until the applicant therefor shall have submitted satisfactory evidence as follows:

(a)The applicant has a valid oil and gas lease or leases signed by the person or persons owning at least 51% of the territory in the area attributable to or which might be attributed to the location which it proposes to develop. The lease or leases shall contain a provision, or shall be accompanied by an agreement in writing, which stipulates, that all mineral rights within each drilling unit shall be pooled. This pooling shall include all interests arising from leases or from production in each drilling unit. It shall provide that all revenue from minerals produced be distributed among the owners and lessees of the minerals in accordance with the number of square feet owned by each property owner and lessee in the area or territory, none of whom may be excluded. The pooling of mineral rights in this manner shall be in all drilling units in which there is no production prior to the effective date of Ordinance 1301 (passed by governing body on August 16, 1983).

(b)An agreement with the lessors and with the lessee or lessees giving to the city, the option to purchase all natural gas produced from the leasehold estate.

(c)A map or plat of the area covered by the oil and gas lease, showing, the proposed location of each well, together with the written consent of the owner of the land on which the well is proposed to be located, consenting to the drilling of the well on the land, which map or plat shall also show the location of all residences, buildings and other structures in the immediate vicinity of such proposed location.

(d)A map or plat of the area covered by the oil and gas lease showing the proposed location of each well, together with the written consent of the owner of the land on which the well is proposed to be located, consenting to the drilling of the well on such land, which map or plat shall also show the location of all residences, buildings and other structures, including municipal water supply wells, in the immediate vicinity of such proposed location.

(e)The application must agree to provide protection to all persons who might be affected with such drilling operations, including the handling of slush, drilling mud, sediments, salt water and other material produced in connection with drilling such well. An artificial liner shall be placed in all pits receiving oil, salt water or refuse accumulated during drilling operations. Any fluid remaining in such pits shall be removed immediately upon completion of drilling operations.

(f)The application shall agree that no crude oil shall be stored within the city limits unless agreed to in writing by all parties involved including the applicant, the property owner, the city and the owners of existing buildings located within 300 feet of the storage site.

(g)The applicant shall agree that, in the event the well is nonproductive, all tools, equipment .and machinery used in connection with the drilling thereof shall be removed within 60 days after completion thereof, ) and the premises restored to their original condition.

(h)Any tank or tank battery for storage of oil within the city shall be protected by dikes of sufficient height to prevent oil from escaping in the event of the leaking or bursting of the tanks.

(i)No oil or gas well will be drilled within 100 feet of a municipal water supply well.

(j)The applicant shall submit a proposed agreement authorizing the construction of an oil pipeline along city streets. The agreement application form shall be approved by the governing body and located in the city manager’s office. The form shall stipulate all pipeline construction requirements as approved by the governing body.

(Ord. 1269; Ord. 1287; Ord. 1297; Ord. 1301)

5-303 Bond required.

No person shall drill or operate any oil or gas well in or near a populated area or an area occupied by buildings and other structures, until he or she has deposited with the city a good and sufficient bond in the amount of $10,000, conditioned that the applicant will comply with the provisions of this article.

(Ord. 1269, Sec. 3)

5-304 Insurance of operator.

No permit shall be granted by the governing body and no oil or gas well shall be drilled or operated within the city until the operator shall have filed with the city clerk a certification of insurance insuring the operator against bodily injury to persons in an amount not less than $500,000 for each person and $1,000,000 for each accident and insuring the operator against damage to property including city utility lines in an amount not less than $50,000 for each accident and further insuring the operator against bodily injury from motor vehicle and trucking operating in an amount not less than $500,000 for each person and $1,000,000 for each accident and against property damage including damage to city streets, alleys and utility lines by reason of motor vehicle and trucking operations in an amount not less than $50,000 for each accident or incident. Evidence of such insurance shall be kept on file with the city clerk continuously so long as any such well or wells are being drilled or operated within the city.

(Ord. 1269, Sec. 4)

5-305 Drilling oil, gas wells: duty, governing body.

All oil and gas wells hereafter commenced or drilled within the city shall be drilled as nearly as practicable in the center of a 10 acre square geographical location; provided, that the governing body, at the time granting of the license hereinafter provided for, may permit such variations as may be deemed necessary in the amount of acreage required, and the location of the drill site, depending upon geographical factors, upon the location of houses and other buildings, and the area available which might be attributed to such proposed well.

(Ord. 1269, Sec. 5)

5-306 Mapping; locations.

The governing body may from time to time and shall upon the application of any interested person, make a determination of the territory which is to be included in each drilling location within the city, which determination shall follow the standard 10 acre geographical locations as nearly as practicable, but in making such determination the governing body shall not be required to split or divide any platted lot or lots; and the and/or territory to be attributed to the well or wells under a particular lease or leases shall be the territory described in the drilling permit issued therefor.

(Ord. 1269, Sec. 6)

5-307 Fencing of drilling rig; protection from blowing oil.

The entire drilling rig for any oil or gas well, together with its equipment, shall be fenced and adequate measures shall be taken to protect persons and property from blowing oil.

(Ord. 1269, Sec. 7)

5-308 Pumping units, retaining wall or curb.

A retaining wall constructed of at least 4.5 inch pipe shall be placed around the pumping unit of an oil or gas well or, in lieu thereof, a reinforced concrete curb may be erected which shall be approved by the city manager and the area therein shall be filled with material of a highly absorbent quality such as fill sand.

(Ord. 1300)

5-309 Same; fence.

Pumping units of oil or gas wells shall be surrounded or enclosed with a six foot chain fence, and on top of such fence there shall be a protruding extension of three barbed wires at a 45 degree angle to the outside, and the construction and erection of such fence shall be subject to such plans and specifications as may be approved by the city manager.

(Ord. 1269, Sec. 9)

5-310 Same; power.

All pumping units at an oil or gas well must be electrically driven with power belt shield unless otherwise agreed to in writing by the parties involved.

(Ord. 1269, Sec. 10)

5-311 Same; maintenance.

All pumping units at an oil or gas well must be kept in a clean, tidy condition and must be kept well-painted in a manner satisfactory to the governing body.

(Ord. 1269, Sec. 1 1)

5-312 Disposal of salt water.

All salt water produced from any oil or gas well in the city shall be disposed of according to regulations promulgated by the Kansas Corporation Commission and the Kansas Department of Health and Environment. In no case shall salt water be disposed of by surface means including brine disposal ponds or any other disposal on the land surface.

(Ord. 1287)

5-313 Pipelines in streets.

It shall be unlawful for any person to lay or maintain any pipe or pipelines for the transportation of oil or any other substance in or across the streets, alleys, or other public places of the city without having first obtained a franchise ordinance granting permission so to do. All such pipelines shall thereafter be laid, maintained, and operated in accordance with the terms of the franchise.

(Ord. 1269)

5-314 State regulations.

Any oil or gas well drilled within the city shall be constructed in accordance with applicable regulations of the Kansas Corporation Commission and the Kansas Department of Health and Environment. Any person, firm or corporation before commencing drilling operations shall notify the appropriate representatives of the commission and department as to the date when drilling operations will commence.

(Ord. 1287)

5-315 Utility lines.

It shall be the responsibility of persons drilling an oil or gas well or installing crude oil transmission lines to determine the locations, of utility lines including cable television and telephone lines and any existing pipelines. Such transmission lines shall be installed two feet from utility lines and in accordance with existing regulations. The immediate repair of such utility lines or pipelines damaged in the process of drilling on oil or gas well or the installation of crude oil transmission lines shall be the responsibility of the persons.

(Ord. 1269)

5-316 Additional requirements.

At the time of the granting of any permit or license under the provisions of this article the governing body may make such additional requirements by resolution as it may deem necessary for the protection and safety of persons and property in the territory likely to be affected by the drilling of the well.

(Ord. 1269)