ARTICLE 4.05 OIL AND GAS DRILLING AND PRODUCTION

Notice and right to cure.

If an operator (or its officers, employees, agents, contractors, subcontractors or representatives) fails to comply with any requirement of an oil/gas drilling permit (including any requirement incorporated by reference as part of the oil/gas drilling permit), the town shall give written notice to the operator specifying the nature of the alleged failure and giving the operator a reasonable time to cure, taking into consideration the nature and extent of the alleged failure, the extent of the efforts required to cure, and the potential impact on the health, safety, and welfare of the community. In no event, however, shall the cure period be less than 14 days unless the alleged failure presents a risk of imminent destruction of property or injury to persons or unless the alleged failure involves the operator’s failure to provide periodic reports. The town may issue a stop work order under the fire code or under circumstances or conditions deemed by the fire official or chief of police to pose a serious threat to public safety.

Notification to railroad commission of uncured violation.

If the operator does not cure the alleged failure within the time specified by the town, the town may notify the railroad commission and request that the railroad commission take appropriate action (with a copy of such notice provided to the operator), and the town may pursue any other remedy available under this article or other law.

Rights of town in event of uncured violation.

If the operator does not cure the alleged failure within the time specified by the town, the town may, in addition to any other remedy:

Suspension of permit.

Suspend the oil/gas drilling permit until the alleged failure is cured; or

Revocation of permit.

If the operator fails to initiate and diligently pursue a cure, revoke the oil/gas drilling permit.

§ 4.05.004 Enforcement; examination of records; inspections; right of entry.

Application for new permit.

If an oil/gas drilling permit is revoked, the operator may submit an application for a new oil/gas drilling permit for the same well.

(Ordinance 06-229, ex. A, sec. 4.418, adopted 10/9/06)

Authority to enforce.

The town engineer, fire official, building official, oil/gas specialist and/or oil and gas inspector are individually and collectively authorized and directed to enforce this article and the provisions of any oil/gas drilling permit. Such persons shall have the authority to issue any orders or directives required to carry out the intent and purposes of this article. Failure of any person to comply with any such order or directive shall constitute an offense under the provisions of this article.

Right to examine records.

The oil and gas inspector shall have the authority to require and receive any records, including any records sent to the railroad commission, relating to the status or condition of any well permitted pursuant to the terms hereof. Failure of any person to provide such requested material shall constitute an offense under the provisions of this article.

Periodic inspections.

The oil and gas inspector shall conduct periodic inspections not less than once a year of all permitted wells within the town to determine that the wells are operating in accordance with the provisions of this article, applicable laws, rules, regulations, standards, or directives of any local, state or federal authority.

Right of entry.

Whenever necessary to enforce any provision of this article or an oil/gas drilling permit, or whenever there is reasonable cause to believe a violation of this article or an oil/gas drilling permit has occurred (or is occurring), the town administrator, town engineer, fire official, building official, oil/gas specialist and/or oil and gas inspector may enter upon any property covered by this article or an oil/gas drilling permit at any reasonable time to inspect or perform any duty imposed by this article. If entry is refused, the town shall have recourse to every remedy provided by law and equity to gain entry. Such refusal shall constitute an offense under the provisions of this article.

(Ordinance 06-229, ex. A, sec. 4.419, adopted 10/9/06; Ordinance 22-010 adopted 8/22/2022)

§ 4.05.005 Violations; penalty.

Violations.

It shall be unlawful and an offense for any person, acting for himself or acting as an agent, employee, independent contractor, or servant for any person, to participate in oil, gas, or other hydrocarbons production activity within the corporate limits of the town without first obtaining an oil/gas drilling permit as required by this article. Additionally, it shall be unlawful and an offense for any person, acting for himself or acting as an agent, employee, independent contractor, or servant for any person, to fail to secure a road usage and damage remediation agreement when access to a drill site, regardless of its location, is by way of a town street or public right-of-way, or to do the following:

Engage in any activity not permitted by the terms of an oil/gas drilling permit issued under this article;

Fail to comply with any conditions set forth in an oil/gas drilling permit issued under this article; or

Violate any provision or requirement set forth under this article or any other applicable town ordinance.

Penalty.

Any violation of this article shall be punished by a fine of not more than two thousand dollars ($2,000.00) per day, subject to applicable state law. Each day a violation occurs constitutes a separate violation.

§ 4.05.006 Appeals, variances and waivers.

Remedies cumulative.

The penalties and remedies provided for in this article are cumulative of all other penalties and enforcement procedures.

(Ordinance 06-229, ex. A, sec. 4.420, adopted 10/9/06)

Oil and gas board of appeals established.

In order to hear and decide appeals of orders, decisions, or determinations made by the town council or other town enforcement authorities relative to the application and interpretation of this article, there shall be and is hereby created an oil and gas board of appeals.

Membership of board of appeals; authority.

The members of the zoning board of adjustment are hereby appointed as the oil and gas board of appeals and shall have and exercise the authority to hear and determine appeals regarding the denial of any requested variance, the denial of an oil/gas drilling permit or the suspension or revocation of any oil/gas drilling permit issued hereunder, and as provided by this article.

Right to appeal.

Any person or entity whose application or any requested variance is denied by the town council or whose oil/gas drilling permit is suspended or revoked or whose well or equipment is deemed by said authorities to be abandoned may file an appeal to the oil and gas board of appeals.

Variances to distance requirements.

Setback variances in general; setback variance between 300 and 1,000 feet for dwellings and human occupancy buildings.

The distance requirements set out in this article may be reduced at the discretion of the town pursuant to this section, but shall never be less than three hundred feet (300') from any dwelling or any other building used, or designed or intended to be used, for human occupancy. All distance reductions shall be documented as variances to the requested oil/gas drilling permit prior to issuance.

Setback variance upon consent of owners within 1,000 feet.

Notwithstanding the provisions of subsection (1) above, the owner(s) of any dwelling or building used, or designed and intended to be used, for human occupancy located within one thousand feet (1,000') of the well bore may sign and file with the town secretary a notarized petition waiving the distance requirements and allowing the well bore to be less than one thousand feet (1,000') from said structures. Upon the filing of such a petition, the form for which must be obtained from the town, the oil and gas board of appeals may consider and grant a waiver of the distance requirements. In such case, a well bore may be less than one thousand feet (1,000') from said structures, but shall not be less than any distance, locational or otherwise applicable siting requirements of the state railroad commission or any other state or federal agency with regulatory authority over such drilling or production activities.

Requirements for construction of new structures within 1,000 feet of existing well.

A new dwelling or a new building used, or designed or intended to be used, for human occupancy may be built within one thousand feet (1,000') of an existing oil or gas well; however, prior to the issuance of a building permit by the town for said structure(s), the owner or developer of any lot or tract for which a building permit is issued shall have the following notation placed on any deed, plat or site plan for said lot or tract: “This tract or lot is located less than one thousand feet (1,000') from an existing oil or gas well and is subject to the Codes and Ordinances of the Town of Copper Canyon Ordinance.” Nothing in this subsection shall modify or supersede any distance, locational or otherwise, specified by applicable siting requirements of the railroad commission or any other state or federal agency with regulatory authority over such drilling or production activities.

Notice.

In the event a request is made for a waiver or variance from the distance requirements set out in this article, any person owning property located within the setback area, as referenced in section 4.05.007 of this article, as amended, from which a waiver or variance is sought shall be deemed a party in interest and shall be entitled to notice of the hearing before the oil and gas board of appeals. Notice shall be pursuant to the procedures outlined in section 9-103 of the zoning ordinance, as amended.

Review; burden of persuasion.

The oil and gas board of appeals shall review the appeal and any other related information. The burden of persuasion relative to the following shall lie with the applicant.

Factors to be considered.

The following shall be considered by the town council in deciding whether to grant a variance. The oil and gas board of appeals shall also consider these provisions in deciding whether to grant an appeal from an adverse decision of the town council.

Special circumstances presented by the property.

There are special circumstances existing on the property on which the application is made related to size, shape, area, topography, surrounding conditions and location that do not apply generally to other property in the vicinity;

Variance necessary for equal rights of enjoyment.

A variance is necessary to permit the applicant the same rights in the use of his property that are presently enjoyed by other properties in the vicinity, but which rights are denied to the property on which the application is made;

No adverse impact to town master plan.

The granting of the variance on the specific property will not adversely affect any other feature of the master plan of the town;

No material detriment to public interest or property rights.

The variance, if granted, will be no material detriment to the public welfare or injury to the use, enjoyment, or value of property in the vicinity;

Reasonableness under prevailing circumstances and conditions.

Whether the operations proposed are reasonable under the circumstances and conditions prevailing in the vicinity considering the particular location and the character of the improvements located there;

Possibility of conflict with orderly growth and development.

Whether the drilling of such wells would conflict with the orderly growth and development of the town;

Availability of alternative locations.

Whether there are other alternative drill site locations;

Consistency with public interest.

Whether the operations proposed are consistent with the health, safety and welfare of the public when and if conducted in accordance with the oil/gas drilling permit conditions to be imposed;

(9)

Environmental impact.

Whether the operations proposed are consistent with protecting the ecological integrity and environmental quality, including protection of surface and ground water sources, of potentially impacted environmentally sensitive areas;

(10)

Emergency access.

Whether there is reasonable access for fire personnel and firefighting equipment;

(11)

Balancing of interests.

Whether the impact upon the adjacent property and the general public by operations conducted in compliance with the oil/gas drilling permit conditions is reasonable and justified, balancing the following factors:

The reasonable use of the mineral estate by the mineral estate owner(s) to explore, develop, and produce the minerals; and

The availability of alternative drill sites; and

(12)

Recommendations of town officials.

The recommendations of the oil/gas or other specialists and/or other town enforcement authorities.

No variance or waiver in certain circumstances.

In no event shall a variance or waiver be granted to an applicant that impairs or otherwise lowers property values on adjacent tracts or lessens the enjoyment of adjacent tracts. For purposes of this section, “adjacent tracts” mean those tracts contiguous to or in the setback area, as referenced in section 4.05.007 of this article, as amended, from which a waiver or variance is sought. Further, for purposes of this article, “impairs or otherwise lowers property values on adjacent tracts or lessens the enjoyment of adjacent tracts” includes but is not limited to such action that will or may result in lower assessed values or the diminution in property values for such adjacent tract(s), the use of the property by the applicant that will result in, hinder or otherwise impede legally authorized development or development rights on such adjacent tracts, or the use of the property by the applicant that will interfere with the peaceful possession of such tracts free from noise, sound, vibration, smoke, exhaust, lighting and other detrimental impacts. The burden of persuasion relative hereto shall lie with the applicant and in no event shall the owner of an adjacent tract be required to show that the development, development rights or value of his or her property will be impaired or otherwise lowered or that his or her enjoyment of the property will be lessened; however, the oil and gas board of appeals shall consider any testimony or evidence to that effect if the owner of an adjacent tract provides such testimony or evidence.

Right of appeal of adverse decision.

Any person or entity aggrieved by any decision of the oil and gas board of appeals may present to a court of record a petition, duly verified, setting forth that such decision is illegal, in whole or in part, and specifying the grounds of the illegality. Such petition shall be presented within ten (10) days after the date on which the decision of the oil and gas board of appeals was rendered and not thereafter, and judicial review of the petition shall be pursuant to section 211.011 of the Texas Local Government Code, as amended. The oil and gas board of appeals’ decision shall be deemed filed in the town secretary’s office on the first business day following the date on which action was taken by the board.

Decision authority; required vote.

The oil and gas board of appeals may reverse or affirm, in whole or in part, or modify the town council’s or other town enforcement authority’s order, requirement, decision or determination from which an appeal is taken and make the correct order, requirement, decision or determination. Any action under this subsection shall require a three-fourths vote of the entire oil and gas board of appeals.

§ 4.05.007 Spacing and general requirements.

Appeal fees.

Appeal fees shall be required for every appeal in the amount as provided for in the fee schedule in appendix A of this code.

(Ordinance 06-229, ex. A, sec. 4.421, adopted 10/9/06; Ordinance 2008-243 adopted 2/11/08)

Compliance.

The drilling and production of an oil and/or gas well shall be permitted within the corporate limits of the town, provided that all terms, conditions, and requirements of this article have been met and complied with.

Spacing requirements.

No well, tank battery, gathering station or equipment shall be located within one thousand feet (1,000') of a dwelling or any other building used, or designed or intended to be used, for human occupancy, as defined herein;

No well shall be located within five hundred feet (500') from any public park or cemetery;

No well shall be located within five hundred feet (500') from any recorded property, lot or tract line;

No well shall be located within five hundred feet (500') from any existing storage tank, or source of potential ignition;

No well shall be located within five hundred feet (500') from any public street, road, highway, or right-of-way line;

No well shall be located within one hundred feet (100') from any building accessory to but not necessary to the operation of the well;

No well shall be located within one thousand feet (1,000') from any freshwater well whose owner does not have a mineral interest in the permit application; and

No well shall be located within five hundred feet (500') from any freshwater well whose owner does have a mineral interest in the permit application.

General requirements.

No well shall be located within an environmentally sensitive area, nor shall any portion of the drill site extend into an environmentally sensitive area. Oil/gas wells may have a target location or bottom-hole location that is under an environmentally sensitive area when the oil/gas well is drilled directionally from a location outside the environmentally sensitive area;

All applicable standards and requirements have been met as set forth in this article;

All applicable federal, state, and local requirements and standards have been met and/or complied with; and

An oil/gas drilling permit has been issued by the town.

Measurement.

The measurement of all distances set forth herein shall be calculated from the proposed well bore, in a straight line, without regard to intervening structures or objects, to the closest exterior point of the object.

Corporate and ETJ limits not applicable to distances.

The distances set forth herein are without regard to whether any of such items listed are situated inside or outside the town’s corporate limits or its ETJ.

(Ordinance 06-229, ex. A, sec. 4.403, adopted 10/9/06; Ordinance 2008-243, sec. 2, adopted 2/11/08)

§ 4.05.008 Permit requirements.

Drilling permit required.

No person, acting for himself or acting as an agent, employee, independent contractor, or servant for any person, shall engage in drilling or production of an oil or gas well within the corporate limits of the town without first obtaining an oil/gas drilling permit as required by this article.

Road usage and damage remediation agreement required.

A road usage and damage remediation agreement shall be required when access to a drill site, regardless of its location, is by way of a town street or public right-of-way.

Right-of-way permit required.

A right-of-way permit shall be required whenever any work is to be conducted on a public street, road, highway, or right-of-way.

Pipeline permit required.

No operator shall excavate or construct any pipelines for the conveyance of fuel, water, or minerals on, under, or through the streets or alleys or other land of the town without an easement and permit approved by the town council and then only in strict compliance with this article and with other ordinances of the town, including the town’s pipeline ordinance and right-of-way ordinance, as amended from time to time, and pursuant to specifications established by the town engineer.

Drainage or extraction of minerals from town property.

Nothing herein shall permit the drainage or extraction of minerals from any property owned by the town without the express written consent of the town council as evidenced by a duly notarized oil and/or gas lease.

Application requirements.

Applications for permits shall be in writing, shall be on forms provided by the town, shall be signed by an authorized party, shall include the application fee, and shall include all required attachments.

Authority to file application.

An application for a permit for the drilling and production of an oil/gas well shall be filed by the person having legal authority to do so. An applicant shall execute a sworn, notarized statement as part of the application certifying that he/she has the authority to file such application. For an application for an oil/gas drilling permit, the person having legal authority to file is presumed to be the mineral owner, or the duly authorized agent of the mineral owner.

Acceptance of application.

No application shall be accepted for filing until it is complete and all required fees have been paid.

Other permits; registration of contractors.

An oil/gas drilling permit does not constitute an omnibus permit. All other permits required by town ordinances and the fire code shall be obtained prior to commencement of drilling.

It shall be the responsibility of any person, upon submittal of an application for a building permit for work regulated by the current code adopted by the town, to register as a general contractor with the town. Work regulated includes but is not limited to construction and/or installation of plumbing, irrigation, electricity, roadways and culverts, compressors and buildings. Such registration shall be upon forms supplied by the building official and shall become null and void 12 months from the date of issuance. An appropriate fee for registration shall be assessed in accordance with the provisions of the Code of Ordinances. All work performed within the town shall be performed by properly licensed contractors and/or subcontractors and shall conform to all applicable federal, state and local codes and ordinances.

Intersecting roadway study required.

No street, roadway, driveway or access drive from a drill site or an operation site shall project into the corporate limits of the town or tie into or have access onto existing town roadways or streets without the approval of the town. An applicant for an oil/gas drilling permit shall be required to conduct and provide studies to the town relative to the effects or anticipated effects of drill site and operation site traffic directly or indirectly caused by or relating to drill site and operation site traffic upon the town’s thoroughfare system.

The applicant shall prepare, or have prepared, and submit complete engineering plans in accordance with the requirements of all town ordinances, for the design and construction of any street, roadway, driveway or access drive that is proposed to extend into the town’s transportation system.

The construction of any street, roadway, driveway or access drive that adjoins or otherwise touches a town road or street shall be done in accordance with the town’s general design standards, from the point of such touching the existing road or street to the entryway into the drill site or operation site.

The applicant shall pay a plans review and inspection fee in the amount of $200.00 upon submission of any study or plans required in this subsection.

The applicant shall provide as-built drawings and an appropriate maintenance bond, if required by the town in the event no such security otherwise has been given the town.

§ 4.05.009 Application for drilling permit; well development plat.

The applicant shall be responsible for all construction costs of extensions of town roads and streets and modifications to existing town roads and streets. If such construction is determined by the town to be impractical, then sufficient escrow funds shall be provided to the town in lieu of construction of the required paving.

(Ordinance 06-229, ex. A, sec. 4.404, adopted 10/9/06; Ordinance 2008-253, sec. 2, adopted 6/23/08)

Application and plat required.

Any person who proposes drilling and/or the production of oil or gas on a tract of land located within the corporate limits of the town must file an application for oil/gas drilling permit. To obtain a permit, an oil/gas well development plat must be prepared and filed with the application for oil/gas drilling permit, regardless of whether the property has previously been platted.

Processing.

The oil/gas drilling permit application and oil/gas well development plat shall be processed and approved in accordance with the provisions of this article. No new oil or gas development may begin on a property until the oil/gas drilling permit application, and all required attachments, including an oil/gas well development plat, are approved by the town council, an oil/gas drilling permit is issued and all other requirements of this article have been met.

Conflicts with other ordinances.

Where the provisions of this article conflict with those set forth in the town’s zoning ordinance or any other ordinance of the town, the provisions of this article will prevail.

Filing of information.

An application for an oil/gas drilling permit shall be filed with the town secretary at least thirty (30) days prior to the date the council is to consider the completed application and shall include the application form and all required attachments, including eleven (11) sets of the oil/gas development plat plus one (1) additional copy of the plat, no larger than 11" x 17", and one (1) electronic copy (PDF format) of the original plat.

Attachments to permit.

The application for an oil/gas drilling permit shall have attached to it the following:

Well site development plat. An oil/gas well development plat, which shall be prepared by a professional engineer licensed to practice in the state and shall bear the engineer’s seal. The oil/gas well development plat shall be drawn at a scale of one hundred feet to the inch (1" = 100') with contour intervals of two feet (2') with reference to mean sea level datum. The following information is to be included on the plat:

The surface tract designation and other legal description according to the real estate records of the town, county, or central appraisal district for each tract of land contained within the drill site.

Name and contact information of the surveyor responsible for the surveying design.

North point.

Primary control points or descriptions, and reference to ties to such control points to which all dimensions, angles, bearings, block numbers, and similar data [are referenced].

Scale and date.

(F)

Boundary lines of the entire area covered by the oil/gas well development plat, indicated by heavy lines, and the computed acreage of the parcel.

(G)

Any proposed changes in topography shall be illustrated on the plat by contours at an interval of two-foot elevations unless otherwise specified by the town council.

(H)

Schematics of typical site showing layout during drilling and upon completion of drilling, including general use, lot arrangements, building sites and elevations, and the location and design of all planned or existing internal streets, drives, bridges, railway facilities, parking areas, uses, and pipelines along with all physical features of the drill site, structures, tanks and all areas where equipment is to be stored, planned or existing watercourses, culverts, sewers, water mains, gas, electric, and telephone lines, fire hydrants, and other similar structures or improvements, whether above or below ground, with pipe sizes and grades, including any within 200' of plat lines.

(I)

The widths and names of all existing or platted streets or other public rights-of-way or easements within or adjacent to the tract and the design, location, and arrangement of all points of ingress and egress to the drill site, which must provide for the safe and convenient movement of vehicular and pedestrian traffic without adversely affecting the general public or adjacent properties.

(J)

The limits of any floodplain as currently shown on FEMA maps relative to the drill site.

(K)

The existing or planned location and distance to the well of any structure or item the distance to which is restricted by section 4.05.007.

Area overview and town map showing well. A map showing the location of town limits, including abstract lines, reflecting the location of the well site.

Pipeline easement map. Map of all proposed underground pipelines, including identification of pipelines currently or to be connected with a gas distribution or gathering system.

Railroad commission W-1 (permit). A copy of the approved W-1 issued by the railroad commission in the name of the applicant.

Railroad commission P-12 (pooling information). A copy of the P-12 filed by the operator, if any part of the oil and gas development site will contain pooled or unitized leases, reflecting the unit participants and property boundaries.

Tax certificates. Tax certificates (indicating that all taxes on the land covered by the plat have been paid to the current year) must be submitted with the application for an oil/gas drilling permit.

Signage, fencing, screening and landscaping plan. A signage, fencing, screening and landscaping plan meeting the standards and conditions of division 2 of this article.

§ 4.05.010 Terms and conditions of drilling permit.

Drainage and erosion control plan. A drainage and erosion control plan meeting the standards and conditions of division 2 of this article.

(9)

Noise management plan. A noise management plan meeting the standards and conditions of division 2 of this article.

(10)

Road usage and damage remediation agreement. A road usage and damage remediation agreement, with approved vehicle route map providing access to the drill site, meeting the requirements of section 4.05.008 hereof.

(11)

Hazardous materials management plan. A hazardous materials management plan meeting the standards and conditions of division 2 of this article.

(12)

Emergency response plan. An emergency response plan, including a letter acknowledging a hazardous materials cleanup contract, meeting the standards and conditions of division 2 of this article.

(13)

Emergency evacuation plan. An emergency evacuation plan meeting the standards and conditions of division 2 of this article.

(14)

Stormwater pollution plan. A stormwater pollution plan, if required by the EPA.

(15)

Tree preservation and mitigation plan. A tree preservation and mitigation plan complying with the requirements of the town’s tree preservation ordinance.

(16)

TCEQ surface casing letter, well location search and BWSC location letter. A TCEQ letter stating where the freshwater sands are found in the area or field in which the well is to be drilled and setting the minimum depth of surface casing to protect all freshwater sands. The applicant shall also provide a well location search of the TCEQ database of freshwater wells within 1000' of the proposed well bore or evidence that the applicant has polled all property owners within such distance as to the presence of a freshwater well on their property. The applicant shall also provide a letter from BWSC locating any public water well within one-fourth mile of the proposed well or stating that there are no such public water wells within such distance.

(17)

List of water sources. List of proposed sources of water for all drilling and other well-related operations (including but not limited to all water sources for fracing operations) and any other public utilities required as a result of a permit issued pursuant to the provisions of this article.

(18)

Insurance certificates and policies. Insurance certificates and policies meeting the requirements of section 4.05.011 of this article.

(19)

Security instrument. Security instruments meeting the requirements of section 4.05.012 of this article.

(20)

Requests for variances or waivers, if applicable.

(21)

Surface owners/residents within 1000'. The names and lot patterns of subdivisions and the names and contact information of all surface owners of land within one thousand feet (1,000') of the proposed well. If a variance is requested, written agreement(s), with notarized signatures, of persons residing in a dwelling or any other building used, or designed or intended to be used, for human occupancy, as defined herein, located within one thousand feet (1,000') of a well, granting authorization to drill within one thousand (1,000') of said dwelling or any other building used, or designed or intended to be used, for human occupancy, as defined herein.

(22)

Copies of railroad commission documentation. Copies of all forms, applications and other documents filed with the railroad commission pertaining to the proposed oil/gas well shall be filed with the application for an oil/gas drilling permit.

(23)

Other permits, if applicable.

(Ordinance 06-229, ex. A, sec. 4.405, adopted 10/9/06)

Authority granted.

Subject to the conditions of this article, an oil/gas drilling permit shall constitute authority for drilling, operation, production, gathering of production, maintenance, repair, reworking, testing, site preparation consisting of rigs or tank batteries, plugging and abandonment, and any other activity authorized by this article associated with drilling or production by the operator and their respective employees, agents, and contractors. An oil/gas drilling permit shall also, subject to the conditions of this article, constitute authority for the construction and use of all facilities reasonably necessary in connection therewith, including gathering lines and discharge lines, by the operator and its respective employees, agents, contractors and subcontractors, provided all such facilities not located on the oil/gas development site shall be subject to valid permits and/or easements as required by the terms hereof.

No permit required for exploration.

An oil/gas drilling permit shall not be required for exploration for oil or gas, provided that said exploration does not include the drilling of any well. Exploration for oil/gas means geologic or geophysical activities, including but not limited to surveying and seismic exploration, related to the search for oil, gas, or other subsurface hydrocarbons.

Retroactive applicability.

Any well that has been annexed into the town shall be required to meet the requirements of this article and the operator thereof shall apply for an oil/gas drilling permit on the effective date of the annexation. Any well that has obtained an oil/gas drilling permit issued by the town prior to the effective date of this article shall provide all information required for an oil/gas drilling permit under this article unless the information has been previously provided to the town. Oil/gas drilling permits issued prior to the effective date of this article shall comply with the following requirements of this article:

Standards and conditions;

Insurance and security requirements;

Periodic reports;

Road usage and damage remediation agreement, unless already provided; and

Advance notice of activities.

No authority to reenter abandoned well.

An oil/gas drilling permit shall not constitute authority for the reentering and drilling of an abandoned well. Reentry and drilling of an abandoned well shall require a new oil/gas drilling permit.

§ 4.05.011 Indemnification and insurance.

Issuance of permit.

An oil/gas drilling permit shall not be issued until such time that the oil/gas drilling permit has been approved by the town council and any appeals have been finally resolved.

(Ordinance 06-229, ex. A, sec. 4.409, adopted 10/9/06)

The operator shall provide or cause to be provided the insurance described below for each well for which an oil/gas drilling permit is issued, such insurance to continue until the well is abandoned and the site restored:

General requirements.

Indemnification and express negligence provisions.

Each oil/gas drilling permit issued by the town shall include the following language: “Operator does hereby expressly release and discharge all claims, demands, actions, judgments, and executions which it ever had, or now has or may have, or its successors or assigns may have, or claim to have, against the Town of Copper Canyon, and/or its departments, its agents, officers, servants, successors, assigns, sponsors, volunteers, or employees, created by or arising out of personal injuries, known or unknown, and injuries to property, real or personal, or in any way incidental to or in connection with the performance of the work performed by the Operator under an Oil/Gas Drilling Permit issued by the Town or caused by or arising out of that sequence of events which occur from the Operator’s actions under the Oil/Gas Drilling Permit or work performed by the Operator. The Operator shall fully defend, protect, indemnify, and hold harmless the Town of Copper Canyon, Texas, and/or its departments, agents, officers, servants, successors, assigns, sponsors, or volunteers, or employees from and against each and every claim, demand, or cause of action and any and all liability, damages, obligations, judgments, losses, fines, penalties, costs, fees, and expenses incurred in defense of the Town of Copper Canyon, Texas, and/or its departments, its agents, officers, servants, successors, assigns, sponsors, volunteers, or employees, including, without limitation, personal injuries and death in connection therewith which may be made or asserted by Operator, its agents, assigns, or any third parties on account of, arising out of, or in any way incidental to or in connection with the performance of the work performed by the Operator under an Oil/Gas Drilling Permit and the Operator agrees to indemnify and hold harmless the Town of Copper Canyon, Texas, and/or its departments, its agents, officers, servants, successors, assigns, sponsors, volunteers, or employees from any liabilities or damages suffered as a result of claims, demands, costs, or judgments against the Town and/or its departments, its agents, officers, servants, successors, assigns, sponsors, volunteers, or employees, created by, or arising out of the acts or omissions of the Town of Copper Canyon occurring on the Drill Site or Operation Site or in the course and scope of inspecting and permitting the oil/gas wells INCLUDING, BUT NOT LIMITED TO, CLAIMS AND DAMAGES ARISING IN WHOLE OR IN PART FROM THE SOLE NEGLIGENCE OF THE TOWN OF COPPER CANYON OCCURRING ON THE DRILL SITE OR OPERATION SITE OR IN THE COURSE AND SCOPE OF INSPECTING AND PERMITTING THE OIL/GAS WELLS. IT IS UNDERSTOOD AND AGREED THAT THE INDEMNITY PROVIDED FOR IN THIS SECTION IS AN INDEMNITY EXTENDED BY THE OPERATOR TO INDEMNIFY AND PROTECT THE TOWN OF COPPER CANYON, TEXAS AND/OR ITS DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, SUCCESSORS, ASSIGNS, SPONSORS, VOLUNTEERS, OR EMPLOYEES FROM THE CONSEQUENCES OF THE NEGLIGENCE OF THE TOWN OF COPPER CANYON, TEXAS, ITS DEPARTMENTS, AGENTS, OFFICERS, SERVANTS, SUCCESSORS, ASSIGNS, SPONSORS, VOLUNTEERS, OR EMPLOYEES, WHETHER THAT NEGLIGENCE IS THE SOLE OR CONTRIBUTING CAUSE OF THE RESULTANT INJURY, DEATH, AND/OR DAMAGE. LIABILITY FOR THE SOLE NEGLIGENCE OF THE TOWN IN THE COURSE AND SCOPE OF ITS DUTY TO INSPECT AND PERMIT THE OIL/GAS WELL IS LIMITED TO THE MAXIMUM AMOUNT OF RECOVERY UNDER THE TORT CLAIMS ACT.”

No cancellation without notification.

All policies shall be endorsed to read, “This policy will not be cancelled or nonrenewed without 30 days’ advance written notice to the town except when this policy is being cancelled for nonpayment of premium, in which case 10 days’ advance written notice is required.”

Required carrier ratings.

Liability policies shall be written by carriers licensed to conduct business in the state and with companies rated A (VIII) or better rating in accordance with the current A.M. Best Key Rating Guide and licensed to conduct business in the state and approved by the town. The required rating shall be maintained for the policy period.

Town as additional insured.

Liability policies shall name as “additional insured” the town and its officials, agents, employees, and volunteers.

Waivers of subrogation.

Written waivers of subrogation shall be provided in favor of the town.

(F)

Certificates and policies of insurance.

Certificates of insurance must be presented to the town evidencing all coverage and endorsements required by this section with the oil and gas drilling permit application, and the acceptance of a certificate without the required limits and/or coverage shall not be deemed a waiver of these requirements. Copies of original policies confirming coverage must be provided prior to the issuance of a permit.

(G)

Claims made policies not allowed.

Claims made policies will not be accepted except for excess policies or unless otherwise provided by this article.

Required insurance coverage.

General liability insurance.

Commercial general liability insurance.

Coverage should be a minimum combined single limit of $1,000,000.00 per occurrence for bodily injury and property damage with a maximum deductible of $25,000.00 per occurrence. This coverage must include premises, operations, blowout or explosion, products, completed operations, blanket contractual liability, underground property damage, broad form property damage, independent contractors’ protective liability, and personal injury.

Automobile liability insurance.

Minimum combined single limit of $500,000.00 per occurrence for bodily injury and property damage. Such coverage shall include owned, non-owned, and hired vehicles with a maximum deductible of $5,000.00 per occurrence. The policy must show Symbol 1 in the Covered Autos portion of the liability section of item 2 on the Declarations page evidencing coverage of all owned vehicles, whether or not scheduled.

(iii)

Worker’s compensation insurance.

In addition to the minimum statutory requirements, coverage shall include employer’s liability limits of at least $100,000.00 for each accident, $100,000.00 for each employee, and a $500,000.00 policy limit for occupational disease, and the insurer must agree to waive rights of subrogation against the town, its departments, its agents, officers, servants, successors, assigns, sponsors, volunteers, or employees, for any work performed for the town by the operator.

(iv)

Excess (or umbrella) liability insurance.

In addition to the other requirements of this article, coverage shall include excess liability insurance coverage above the limits of automobile liability and business or personal policies. The excess or umbrella policy shall provide liability coverage for exposures not covered under the primary liability insurance policies and not excluded by the umbrella liability insurance policy, with a minimum limit of $10,000,000.00 per occurrence.

(v)

Control of well insurance.

Minimum limit of $5,000,000.00 per occurrence.

The policy shall cover the cost of controlling a well that is out of control, redrilling or restoration expenses. Damage to property in the operator’s care, custody, and control with a sublimit of $500,000.00 may be added.

Environmental pollution liability coverage.

Environmental impairment (or seepage and pollution) shall be either included in the coverage or written as separate coverage applicable to bodily injury, property damage, including loss of use of that damaged property or of property that has not been physically injured or destroyed, cleanup costs, and defense, including costs and expenses incurred in the investigation, defense or settlement of claims, all in connection with a loss arising from the insured site. Such coverage shall not exclude damage to the lease site. Coverage shall apply to sudden and non-sudden pollution conditions resulting from the escape or release of smoke, vapors, fumes, acids, alkalis, toxic chemicals, liquids or gases, waste material or other irritants, contaminants or pollutants. Coverage shall be a minimum combined single limit of one million dollars ($1,000,000.00) per occurrence with a deductible of no greater than twenty-five thousand dollars ($25,000.00) per occurrence. The operator shall maintain continuous coverage and shall purchase extended coverage period insurance when necessary. The extended coverage period insurance must provide that any retroactive date applicable to coverage under the policy precedes the effective date of the issuance of the permit by the town.

(Ordinance 06-229, ex. A, sec. 4.410, adopted 10/9/06)

§ 4.05.012 Security.

Security instrument required.

Evidence of a security instrument for each permitted well must be provided with the oil and gas permit application. The original of such instrument must be delivered to the town before the issuance of the oil/gas well oil/gas drilling permit for the well. The instrument shall secure the obligations of the operator related to the well to:

Performance of operator.

Performance and compliance with the requirements of this article; and

Payment of fines.

Pay any and all fines and penalties imposed upon the operator by the town for any breach of the oil/gas drilling permit or other violation of this article.

Form.

The security instrument may be in the form of cash, an irrevocable letter of credit or a payment bond issued by a bank or surety authorized to conduct business in the state and approved by the town. The instrument shall run to the town for the benefit of the town, shall become effective on or before the date the oil/gas drilling permit is issued, and shall remain in effect until the well is abandoned and the site restored.

Amount.

The amount of the security shall be a minimum of $50,000.00 for any single well. Any operator whose well is in the producing stage and upon which all drilling operations have ceased may submit an application to the town to reduce the existing bond to an amount approved by the town council.

Required ratings or financial strength of issuer.

The security instrument must be provided by a surety company with an A (VIII) or better rating in accordance with the current A.M. Best Key Rating Guide that is licensed to conduct business in the state and approved by the town. The security instrument shall be payable to the town. Such surety company shall maintain the required rating for the policy period. If an irrevocable letter of credit is provided in lieu of a payment bond, financial statements for the issuer may be provided in lieu of an A.M. Best rating provided such financial statements are subject to approval of the town and shall be updated with the town on an annual basis to reflect no substantial negative variance in financial strength.

Claim against security.

In the event the town makes claim on the security pursuant to the terms hereof, reinstatement of the full amount of the security shall be a precondition to the cure of the violation leading to such claim.

Term.

Security meeting the requirements of this section shall be maintained until this requirement is released by the town. Failure to renew any security upon expiration of its stated term shall be a violation of this article.

Release.

Release of security may be requested when:

Transfer.

The oil/gas drilling permit is transferred, with respect only as to the operator-transferor, with substitution by the operator-transferee of replacement security that complies with this section.

Abandonment and restoration.

A well is abandoned and the site restored in compliance with this article.

§ 4.05.013 Review of application for drilling permit.

Written consent of town.

The town has consented in writing to such termination.

(Ordinance 06-229, ex. A, sec. 4.411, adopted 10/9/06)

Filing with town secretary and review for completeness.

All applications for oil/gas drilling permits shall be filed with the town secretary, who shall review the application for completeness. Incomplete applications shall be returned to the applicant with a written explanation of the deficiencies. The town secretary may return any application as incomplete if there is a dispute pending before the railroad commission regarding the determination of the operator.

Review by oil/gas development review committee.

Upon determination of completeness, the town secretary shall forward the oil/gas drilling permit application, the oil/gas well development plat and other attachments, together with any requests for variances, to the oil/gas development review committee. The applicant shall be invited to attend a portion of the meeting at which suggestions and/or recommendations made be offered by the committee to the applicant for the purpose of allowing the applicant the opportunity to address any matters of concern raised by the DRC prior to consideration of the application and any requested variances by the town council. The DRC may make recommendations regarding any aspect of the proposed oil/gas well development, including, but not limited to, recommendations with respect to the standards set forth in this article. The application will be forwarded by the DRC to the town council with any recommendations on the application and any variances requested.

Review and decision by town council.

Upon receipt of the complete application, all attachments thereto, including the oil/gas development plat, and the DRC recommendations, if any, the town council or its designee shall review the application at its next scheduled meeting and shall determine whether the application includes all of the information required by and is in conformance with the requirements of this and all other applicable town ordinances.

Approval if complete and conforming.

If such application is determined by the town council to be complete and in conformance with this article and all other applicable town ordinances, and no variances are requested, the town council shall approve the oil/gas drilling permit application. If the town council approves the oil/gas drilling permit application, the town secretary shall issue an oil/gas drilling permit, which shall be forwarded to the applicant.

Review and decision on requested variances.

If the application contains requests for one or more variances to the terms hereof, the town council shall consider, discuss and take action on the variances prior to its review of the application. Consideration of any requested variances shall be reviewed and considered by the town council in light of the procedures set forth in section 4.05.006 hereof.

Denial if incomplete and/or nonconforming.

If the town council determines that the application is incomplete, the application is not in conformance with the requirements of this article and all other applicable town ordinances or any requested variances are not granted (and the applicant cannot meet the requirements of this article without such variance), the application shall be denied and returned to the applicant with a written explanation of the deficiencies.

Final decision.

Subject to the right to appeal to the oil and gas board of appeals, the town council shall make the final decision regarding approval of any requests for variances and of the oil/gas drilling permit.

Right to appeal.

Any applicant who disagrees with the action taken by the town council has a right of appeal to the oil/gas board of appeals pursuant to the terms of section 4.05.006 of this article and such other rights and remedies as may be accorded by law.

Right of council to hire specialist.

In connection with its review of an application for a permit for the drilling and production of oil/gas wells and thereafter to inspect and monitor activity at the well, the town council may determine that it is necessary to hire an oil/gas or other specialist to assist the council in reviewing the application and inspecting the well. If such a determination is made, the town council will provide the operator a written “scope of work” that the town council proposes for such specialist. The town council and the operator will attempt to agree upon the “scope of work”; however, the decision of the town council shall control. The operator shall be responsible to pay all fees, costs and expenses associated with the retention of and services rendered by the specialist billed at the rate specified in the town’s fee ordinance. If required by the specialist, the operator will provide a retainer; otherwise, the operator will pay for the services of the specialist after they are rendered. All work performed by the specialist shall be itemized on a daily basis (including a description of the work and the amount of time spent), and such itemization shall be provided to the operator with each request for payment.

Checklists and forms.

The town council or its designee has the authority to establish checklists, forms and other application processing and review aids, consistent with this article, to aid in the application process and review of applications.

Failure of council to meet time limits.

The failure of the town council to review and approve an oil/gas drilling permit within a specified time limit shall not cause the application for the amended oil/gas drilling permit to be deemed approved.

Contents and terms of permit.

Each oil/gas drilling permit issued by the town shall:

Identification of well.

Identify the name and railroad commission number of each well and its operator.

Date of issuance.

Specify the date on which the town approved the issuance of the oil/gas drilling permit.

Expiration of permit; extension of time.

Specify that drilling must commence on the well covered by the oil/gas drilling permit within twelve (12) months of approval by the town, after which the oil/gas drilling permit expires if no work has commenced. A six-month extension of time may be granted if existing conditions are the same.

Duration of permit.

Specify that, once drilling has commenced, the oil/gas drilling permit shall continue until the well covered by the oil/gas drilling permit is abandoned and the site restored or within one year of the approval date of the oil/gas drilling permit by the town council, whichever comes later.

Incorporation of documents.

Incorporate, by reference, the oil/gas well development plat, the original application for the oil/gas drilling permit, all attachments required to be submitted by the terms of this article with the original application, the applicable rules and regulations of the railroad commission, including the applicable “field rules,” and all other permits and fees required by the fire code.

Indemnification and release of liability.

Include the full text of the indemnification and release of liability provisions set forth in section 4.05.011 of this article.

Road usage and damage remediation agreement, insurance policies and security documents.

Specify that no drilling operations (including the construction of internal private access roads) shall commence until the operator has provided the originally executed road usage and damage remediation agreement and the insurance policies and originally executed security documents required by this article and by the road usage and damage remediation agreement.

Payment of fees and reimbursable expenses.

All fees, including fees associated with the road use and damage remediation agreement, issuance of permits, amendment of permits, transfer of permits, suspension or revocation of permits, or any other review by town personnel associated with any permit required by this article, shall be paid in full by an applicant, and such fees shall include all reasonable expenses incurred by the town with regard to professional services relative to same, at the rate specified by the town’s fee ordinance.

(9)

Formal contact information.

Contain the name, address, and phone number of the person designated to receive notices from the town, which person must be a resident of the state that can be served in person or by registered or certified mail.

Reapplication after denial.

If the application for an oil/gas drilling permit is denied by the town council, nothing herein contained shall prevent a new permit application from being submitted to the town for the same well.

(Ordinance 06-229, ex. A, sec. 4.412, adopted 10/9/06; Ordinance 08-252, sec. 2, adopted 6/9/08)

§ 4.05.014 Reports.

Change in contact information.

The operator shall notify the town secretary of any changes to the following information immediately, within one business day after the change occurs:

The name, address, and phone number of the operator;

The name, address, and 24-hour phone number of the person(s) with supervisory authority over drilling or operations activities;

The name, address, and phone number of the person designated to receive notices from the town, which person must be a resident of the state that can be served in person or by registered or certified mail.

Change in other information.

Change in any information provided to the town as part of the application for an oil/gas drilling permit.

Annual review and report.

Beginning on December 31st after each well is completed, and continuing on each December 31st thereafter until the operator notifies the town that the well has been abandoned and the site restored, the operator shall review the original application and all attachments thereto, including the oil/gas well development plat, and shall prepare a written report to the town identifying any changes to the information that was provided to the town that have not been previously reported to the town.

§ 4.05.015 Advance notice of activities.

Copies of incident reports or written complaints.

The operator shall provide a copy of any “incident reports” or written complaints submitted to the railroad commission or any other state or federal agency within 30 days after the operator has notice of the existence of such reports or complaints.

(Ordinance 06-229, ex. A, sec. 4.413, adopted 10/9/06)

Any person who intends to rework a well using a drilling or workover rig, to fracture stimulate a well after initial completion, or to conduct seismic exploration involving explosive charges shall give written notice to the town at least 10 days before the activities begin. The notice shall identify where the activities will be conducted and shall describe the activities in reasonable detail, including but not limited to the duration of the activities and the time of day they will be conducted. The notice must also provide the address and 24-hour phone number of the person conducting the activities. The person conducting the activities will post a sign on the property giving the public notice of the activities, including the name, address, and 24-hour phone number of the person conducting the activities. If the town determines that an inspection by the town is necessary, the operator will pay cost of the oil/gas specialist to conduct such inspection billed at the rate specified in the town’s fee ordinance.

(Ordinance 06-229, ex. A, sec. 4.414, adopted 10/9/06)

§ 4.05.016 Amendments to drilling permit.

Amendment required for certain activities.

An operator shall submit an application to the town to amend an existing oil/gas drilling permit to commence drilling from a new drill site that is not shown on (or incorporated by reference as part of) the existing oil/gas drilling permit, to relocate a drill site or operation site that is shown on (or incorporated by reference as part of) the existing oil/gas drilling permit, or to otherwise amend the existing oil/gas drilling permit.

Application requirements.

An application for an amended oil/gas drilling permit shall meet all the requirements of this article, shall be in writing, shall be on forms provided by the town, shall be signed by the operator, and shall include the following:

The application fee as set by the town’s current fee ordinance.

A description of the proposed amendments.

Any changes to the information previously submitted with the application for the existing oil/gas drilling permit (if such information has not previously been provided to the town).

Such additional information as is reasonably required by the town to demonstrate compliance with the original oil/gas drilling permit and oil/gas well development plat.

Such additional information as is reasonably required by the town to prevent imminent destruction of property or injury to persons.

Review of application.

All applications for an amended oil/gas drilling permit shall be filed and reviewed pursuant to the terms of section 4.05.013 of this article except that the town council may elect to consider the application without the requirement of DRC review.

Standards for review.

No material change from existing permit.

If the activities proposed by the amendment are not materially different from the activities covered by the existing oil/gas drilling permit, and are otherwise in conformance with the requirements of this article, other applicable town ordinances, the oil/gas drilling permit and oil/gas well development plat, then the town council shall approve the amended application.

§ 4.05.017 Transfer of drilling permit.

Material change from existing permit.

If the activities proposed by the amendment are materially different from the activities covered by the existing oil/gas drilling permit and/or oil/gas well development plat, or are not in conformance with the requirements of this article, other applicable town ordinances, the oil/gas drilling permit and oil/gas well development plat, or if, in the judgment of the town council, the activities proposed by the amendment might create a risk of imminent destruction of property or injury to persons that was not associated with the activities covered by the existing oil/gas drilling permit or that was not otherwise taken into consideration by the existing oil/gas drilling permit, the town council may require the amendment to be processed as a new oil/gas drilling permit application.

(Ordinance 06-229, ex. A, sec. 4.415, adopted 10/9/06)

An oil/gas drilling permit may be transferred by the operator with the prior written consent of the town if no outstanding violations of the terms of the article exist, if the transfer is in writing signed by both parties, if the transferee agrees to be bound by the terms and conditions of the transferred oil/gas drilling permit, if all information previously provided to the town as part of the application for the transferred oil/gas drilling permit is updated to reflect any changes, and if the transferee provides the insurance and security required by this article. The insurance and security provided by the transferor shall be released if a copy of a written transfer meeting these requirements is provided to the town. The transfer shall not relieve the transferor from any liability to the town arising out of any activities conducted prior to the transfer. Notwithstanding the foregoing, variances in place with regard to sections 4.05.011 (indemnification and insurance) and 4.05.012 (security) are nontransferable.

(Ordinance 06-229, ex. A, sec. 4.416, adopted 10/9/06)

§ 4.05.018 Compliance with pipeline standards.

The installation, construction, reconstruction, use, operation, maintenance, repair and removal of any and all pipelines, conduit and lines for the conveyance, transmission and delivery of oil and gas within or through the town shall be in conformity with the town’s ordinance on oil and gas pipeline standards, as such may be amended from time to time. A true and correct copy of the oil and gas pipeline standards and any and all amendments thereto shall be maintained in the office of the town secretary. This section and the standards adopted herein shall not apply to pipes, conduit or lines used for the transmission of natural gas (liquefied petroleum gas - LPG) for domestic and household consumption where such transmission of LPG is directly to households.

(Ordinance 06-229, ex. A, sec. 4.417, adopted 10/9/06)

§ 4.05.019 through § 4.05.070. (Reserved)

Division 2 Standards and Conditions

§ 4.05.071 Applicability.

The drilling and production of an oil/gas well shall comply with the following conditions and standards.

(Ordinance 06-229, ex. A, sec. 4.407(a), adopted 10/9/06)

§ 4.05.072 Compliance with permit, plat and applicable regulations.

Any and all drilling and production of an oil/gas well must comply with an applicable oil/gas drilling permit and oil/gas well development plat that has been approved by the town council and must comply with all requirements of this article and any other federal, state, and local requirements.

(Ordinance 06-229, ex. A, sec. 4.407(a)(1), adopted 10/9/06)

§ 4.05.073 Signage, fencing, screening and landscaping.

Plan required.

A signage, fencing, screening and landscaping plan addressing the requirements of this article shall be submitted to the town with the application for an oil/gas drilling permit.

Signage.

A sign identifying the entrance to the drill site shall be placed at the entrance to the drill site in reflecting letters and/or numbers. Permanent weatherproof signs reading “DANGER NO SMOKING ALLOWED” in a minimum of four-inch (4") lettering shall be posted at the entrance of each drill site and operation site. The sign shall include the phone number for emergency services (9-1-1), the name and emergency telephone number for the operator, and the well identification name and number required by the railroad commission in two-inch (2") lettering.

Fencing.

During operations.

No fencing shall be required during drilling, completion or reworking operations provided the operator maintains on-site personnel 24 hours a day, seven days a week. If on-site personnel are not present on-site 24 hours a day, seven days a week, a chain-link fence with solid vinyl slats, and a secured entrance gate, shall enclose the drill site during any and all drilling, completion or reworking operations. All gates are to be kept locked when the operator or its employees are not within the enclosure.

Upon completion.

A slatted permanent cedar fence (#2 grade or better) set on metal poles installed in concrete and at least eight feet (8') but not to exceed ten feet (10') in height, with a secured entrance gate, shall enclose all completed wells and tanks located within the drill site. At the option of the operator, the metal poles may be set in concrete sleeves for ease of removal to allow reworking or other operations at the drill site.

Maintenance.

No fencing and/or screening required by this article shall be maintained in a manner that constitutes a public hazard to persons or property. All fences shall be maintained reasonably plumb and structurally sound. Any fence or screening wall that is severely deteriorated and constitutes a public hazard to persons or property or is 15 degrees or more out of plumb shall be repaired or replaced.

§ 4.05.074 Drainage and erosion control.

Landscaping.

Landscaping shall be required along all public street frontages of the operation site with suitable screening shrubs that complement the architectural character of the surrounding neighborhood. The vegetation shall be kept in an attractive state and in good condition at all times by the operator.

(Ordinance 06-229, ex. A, sec. 4.407(a)(2), adopted 10/9/06)

A drainage and erosion control plan prepared by a professional engineer licensed to operate in the state [shall be required]. The drainage and erosion control plan must be approved by the town engineer and must conform with the following:

Compost berm required.

Downslope erosion control at pad site to be compost berm (minimum 2 feet wide and 1 foot high) or equivalent. Silt fence and/or hay bales are not equivalent to compost berm.

§ 4.05.075 Road usage and damage remediation agreement.

Compliance with environmental laws.

The drainage and erosion control plan must provide references to all applicable local, state, and federal environmental laws and must indicate how these requirements are to be satisfied.

(Ordinance 06-229, ex. A, sec. 4.407(a)(3), adopted 10/9/06)

Form of agreement.

A road usage and damage remediation agreement shall be required if the use of town streets or right-of-way is necessary for access to any oil or gas well site, whether within the town or its ETJ or not. The road usage and damage remediation agreement shall be on the form attached to Ordinance 06-229 as appendix A, and if the well is being permitted within the town the road usage and damage remediation agreement shall be attached to the application for the oil/gas drilling permit.

Reworking or redrilling abandoned well.

A new road usage and damage remediation agreement shall be required for reworking or redrilling an abandoned well.

Vehicle route map.

Vehicles associated with drilling and/or production in excess of three (3) tons shall be restricted to streets as designated on the vehicle route map incorporated in the road usage and damage remediation agreement.

§ 4.05.076 Noise management plan and noise restrictions.

Violation.

Any person accessing a drill site with a vehicle on a public street of the town for any operation for which a permit is required under this article without having a road usage and damage remediation agreement as required by this section shall be subject to the penalty provided by section 4.05.005 of this article.

(Ordinance 06-229, ex. A, sec. 4.407(a)(4), adopted 10/9/06)

Noise management plan.

A noise management plan shall detail how the equipment used in the drilling, completion, transportation, or production of a well shall comply with the maximum permissible noise levels of this article. The noise management plan must identify anticipated noise impacts, and, if maximum permissible noise levels are anticipated to occur (or subsequently do occur), must detail how the impacts will be mitigated.

Maximum noise levels.

No drilling, producing, or other operations shall produce a sound level greater than:

Seventy-eight (78) dB(A) when measured at a distance of three hundred feet (300') from the drilling, producing, or operating equipment in question during the daylight hours of 7:00 a.m. to 7:00 p.m.

Fifty-six (56) dB(A) when measured at or about the closest exterior facade of the nearest residence to the drilling, producing, or operating equipment in question during the nighttime hours of 7:00 p.m. to 7:00 a.m.

A maximum sound level of eighty-five (85) dB(A) shall apply to formation fracturing when measured at a distance of three hundred feet (300') from the production equipment in question.

No person shall operate or permit to operate in connection with the operation of a producing well any engine, small compressor or motor-driven machinery of any type which creates a sound level greater than fifty-two (52) dB(A) when measured at the nearest property line of an existing residence. In addition, if a residence existed on property adjacent to a producing well or if an application for a building permit was on file for a residence on the date the original application for a drilling permit was filed with the town, the permitted sound level shall be no greater than 52 dB(A) when measured at the nearest property line of the existing or proposed residence.

Sound level measurement guidelines.

Sound level meters shall conform, as a minimum, to the requirements of the American National Standards Institute.

Sound level measurements shall be taken at a point four feet (4') above ground level.

Sound levels shall be determined by averaging minute-by-minute measurements made over minimum fifteen-minute sample duration if practicable. The sample shall be taken under conditions that are representative of the noise experienced by the complainant (e.g., at night, morning, evening, or during special weather conditions).

In all sound level measurements, the existing ambient noise level from all other sources in the encompassing environment at the time and place of such sound level measurement shall be considered to determine the contribution to the sound level by the oil and gas operation(s).

Sound reduction mitigation measures.

If sound levels exceed the dB(A) levels, the oil/gas inspector may require the operator to implement sound-reducing mitigation measures, and/or require the implementation of best management practices by limiting or eliminating noisier operations to ensure compliance with the sound levels referenced in the subsection above. In determining noise mitigation, specific site characteristics shall be considered, including but not limited to the following:

Nature and proximity of adjacent development, location, and type;

Seasonal and prevailing weather patterns, including wind directions;

Vegetative cover on or adjacent to the site; and

Topography.

(Ordinance 06-229, ex. A, sec. 4.407(a)(5), adopted 10/9/06; Ordinance 22-010 adopted 8/22/2022)

§ 4.05.077 Lights.

No person shall permit any lights located on any drill or operation site to be directed in such a manner so that they shine directly on public roads, adjacent property or property in the general vicinity of a drill or operation site. In addition, no person shall permit any lights located on any drill or operation site to exceed four-tenths (0.4) footcandles at the closest public road, property line, or residence. To the extent practicable, and taking into account safety considerations, site lighting shall be shielded and directed downward and internally onto the drill or operation site so as to avoid glare on public roads and adjacent properties.

(Ordinance 06-229, ex. A, sec. 4.407(a)(6), adopted 10/9/06)

§ 4.05.078 Pipelines.

Pipelines transporting hydrocarbons produced subject to an oil/gas drilling permit issued pursuant to the terms of this article, which have applied for and received required permits pursuant to the town’s ordinance on oil and gas pipelines, are additionally subject to the following requirements:

Compliance with right-of-way ordinance.

In addition to other federal, state or local requirements, any easements affecting the town rights-of-way shall be subject to the town’s right-of-way ordinance, as amended from time to time.

Identifying signs required.

The location of all pipelines must be marked with warning signs in accordance with federal and state requirements. Subject to having secured a permit from the town pursuant to the right-of-way ordinance or other applicable ordinances allowing a pipeline to cross a public street or road, each permitted operator shall place an identifying sign at each point where a pipeline crosses the public street or road.

Maximum allowable pressure.

All pipelines within the corporate limits of the town (excluding utility lines and franchise distribution systems) that are used to transport oil, gas, and/or water shall be limited to the maximum allowable operating pressure applicable to the pipes installed.

Construction of new structures.

Structures shall not be built within twenty feet (20') of any pipeline.

Easements; easement map and as-built plans required.

Easements must be acquired for all pipelines outside the oil/gas well development site. The location of easements shall be shown in a pipeline easement map approved by the town prior to the installation of any pipelines. In addition, once construction has been completed, as-built plans shall be provided to the town of all pipelines, including those inside the oil/gas well development site.

§ 4.05.079 Safety and environmental requirements.

Cover or backfill requirements.

Pipelines shall be installed with at least the minimum cover or backfill specified by the American National Safety Institute Code, as amended, provided all pipelines shall be buried to a minimum of 36" below the ground surface. During backfill of any pipeline excavations, whether such pipelines are located inside or outside the oil/gas well development site, “buried pipeline” warning tape shall be buried one foot (1') above any such pipeline to warn future excavators of the presence of a buried pipeline.

(Ordinance 06-229, ex. A, sec. 4.407(a)(7), adopted 10/9/06)

Perforation of hydrogen sulfide field.

If a gas well in the town is identified as having perforated an H2S (hydrogen sulfide) gas field, the operator shall be required to cease operations and take all action to close in the well immediately and to plug and abandon the well in accordance with railroad commission requirements.

Compliance with environmental laws.

The drilling and production of oil/gas and accessing the oil/gas drill site and/or the operation site shall be in compliance with all federal, state and local environmental laws.

Blowout preventer.

Each well shall be equipped with a blowout preventer to close the well in the event of an abnormal change in operating pressure. All wellheads shall contain an emergency shutoff valve to the well distribution line.

Automatic shutoff valves.

Each storage tank shall be equipped with a level control device that will automatically activate a valve to close the well in the event of excess liquid accumulation in the tank.

Secondary containment system.

All storage tanks shall be equipped with a secondary containment system including lining with an impervious material. The secondary containment system shall be of a sufficient height to contain one and one-half (1-1/2) times the contents of the largest tank permitted pursuant to the terms of this article, and shall be buried at least one foot (1') below the surface. Drip pots shall be provided at pump-out connections to contain the liquids from the storage tank. Drip pans and other containment devices shall be placed or installed underneath all tanks, containers, pumps, lubricating oil systems, engines, fuel and chemical storage tanks, system valves, connections, and any other areas or structures that could potentially leak, discharge, or spill hazardous liquids, semi-liquids, or solid waste materials, including hazardous waste inseparable by simple mechanical removal processes. The contents of any pit shall always be maintained at least two (2) feet below the top of the pit.

Allowable drilling muds.

Only freshwater-based drilling fluid systems shall be permitted. Saltwater-based drilling fluid systems and oil-based mud systems are prohibited. No metal additives may be added to any drilling fluids.

Drilling fluid storage pits.

No drilling fluid storage pits shall be located within the town.

Testing hours and restrictions.

All open hole formation or drill stem testing shall be done during daylight hours. Drill stem tests may be conducted only if the well effluent during the test is produced through an adequate oil and/or gas separator to storage tanks and the effluent remaining in the drill pipe at the time the tool is closed is flushed to the surface by circulating drilling fluid down the annulus and up the drill pipe.

Nuisances; best accepted practices required.

All drilling and production operations shall be conducted in such a manner as to minimize, so far as practicable, dust, vibration, or noxious odors, and shall be in accordance with the best accepted practices incident to drilling for the production of oil, gas, and other hydrocarbon substances. All equipment used shall be so constructed and operated so that vibrations, dust, odor, or other harmful or annoying substances or effect will be minimized by the operations carried on at any drilling or production site or from anything incident thereto, to the injury or annoyance of persons living in the vicinity; neither the site nor the structures thereon shall be permitted to become dilapidated, unsightly or unsafe. Proven technological improvements in industry standards of drilling and production in this area shall be adopted as they become available if capable of reducing factors of dust, vibration and odor.

Reserved.

(k)

Hazardous materials management plan.

A hazardous materials management plan must be filed with the application for an oil/gas drilling permit. Any updates or changes to this plan shall be provided to the fire official within three (3) working days of the change. All chemicals and/or hazardous materials shall be stored in such a manner as to prevent, contain, and facilitate rapid remediation and cleanup of any accidental spill, leak, or discharge of a hazardous material. The operator shall have material safety data sheets (MSDS) for all hazardous materials stored on-site. All applicable federal and state regulatory requirements for the proper labeling of containers shall be followed. Appropriate pollution prevention actions shall be required and include, but are not limited to, chemicals and materials raised from the ground (e.g., on wooden pallets), bulk storage, installation and maintenance of secondary containment systems and protection from stormwater and weather elements.

(l)

Emergency response plans and emergency incident reporting requirements.

Emergency response plan.

An emergency response plan must be provided with each oil and gas well drilling permit application. The town secretary shall provide a list of emergency contacts for the town to be incorporated within the emergency response plan. Such plan must be prepared and maintained by each operator and shall set forth procedures to minimize the hazards resulting from an emergency. These procedures shall at a minimum provide for:

Prompt and effective response to emergencies regarding:

Leaks or releases that can impact public health, safety, and welfare;

Fire or explosions at or in the vicinity of an oil or gas well; or

(iii)

Natural disasters;

Effective means to notify and communicate required and pertinent information to local fire, police, and public officials during an emergency;

The availability of personnel, equipment, tools, and materials as necessary at the scene of an emergency;

Measures to be taken to reduce public exposure to injury and probability of accidental death or dismemberment;

Emergency shutdown of an oil or gas well and related site;

(F)

The safe restoration of service and operations following an emergency or incident;

(G)

A follow-up incident investigation to determine the cause of the incident and require the implementation of corrective measures.

Annual meeting with town required.

Each operator shall meet annually with the town administrator, fire official and police chief to review the emergency response plan. These reviews shall be in accord with U.S. Department of Transportation and railroad commission requirements and the operator will:

Furnish or update a copy of the emergency response plan described in the foregoing subsections;

Review the responsibilities of each governmental organization in response to an emergency or incident;

Review the capabilities of the operator to respond to an emergency or incident;

Identify the types of emergencies or incidents that will result in or require contacting the town; and

Plan mutual activities that the town and the operator can engage in to minimize risks associated with oil or gas well operation.

Emergency incident reporting.

Upon discovery of an oil or gas well emergency or incident, the following communications are to be initiated by the operator:

Within the first hour following discovery, the operator shall contact:

County 9-1-1 and any other emergency response groups that are necessary that may not be activated through the county 9-1-1 system.

The county emergency planning committee (DCEPC).

The following information shall be reported to emergency responders:

A general description of the emergency or incident;

The location of the emergency or incident;

(iii)

The name and telephone number of the person reporting the emergency or incident;

(iv)

The name of the operator;

(v)

Whether or not any hazardous material is involved and identification of the hazardous material so involved;

(vi)

Any actions taken by the operator, or the employees or agents thereof, in response to the emergency prior to the arrival of emergency personnel; and

(vii)

Any other information as requested by the emergency dispatcher or other such official at the time of reporting the emergency or incident.

As soon as practicable after notification of emergency responders, but within two (2) hours following discovery, the operator shall notify all persons shown on the emergency evacuation plan (if an evacuation is advisable) and the town.

Biannual drill required.

Within two (2) years of the effective date of the oil/gas drilling permit and every two (2) years thereafter, the operator shall conduct an on-site emergency drill that includes, but shall not be limited to, the personnel operating the oil or gas well, local law enforcement personnel, and the fire official or other designated representative from the fire department.

Letter acknowledging hazardous materials cleanup contract.

The operator shall provide with the application for an oil/gas drilling permit a letter on company letterhead from a company offering hazardous materials cleanup services, acceptable to the fire official, stating that the operator has entered into a valid and binding contract authorizing said company to perform cleanup services, at the cost and expense of the operator, upon request of the fire official. The fire official may issue such request upon finding that a hazardous incident has occurred and that the operator has failed to undertake the necessary steps to contain and clean up any hazardous material released from the drill and/or operation site in a timely manner. Notice of such request shall be provided to the operator.

(m)

Emergency evacuation plan.

An emergency evacuation plan must be provided with each oil and gas well drilling permit application detailing all persons to be notified in the event of an evacuation, including, without limitation, all residents within 1000' of the well bore and any other person whose means of egress lies within that area.

(n)

Well abandonment requirements.

Promptly (but in no event later than six (6) months) after determining that a well is not longer capable of producing hydrocarbons in paying quantities, the operator shall take all necessary steps to abandon the well in accordance with the rules of the railroad commission; however, all well casings shall be cut and removed to a depth of at least ten feet (10') below the surface unless the surface owner submits a written agreement otherwise. Three feet (3') shall be the minimum depth allowable. Notice of abandonment and a copy of the mandatory well casing report required for abandoned wells by the railroad commission shall be submitted to the town and BWSC.

(o)

Restriction on construction near abandoned well.

No permit shall be issued for any activity within 20 feet of an abandoned well or in such cases that may interfere with an abandoned well. No structures or wells shall be built or otherwise established over an abandoned well.

(p)

Saltwater disposal wells.

No saltwater disposal wells shall be located within the town.

(q)

No venting.

No person shall allow, cause or permit gases to be vented into the atmosphere or to be burned by open flame except as provided by law or as permitted by the Railroad Commission. All gas flared or burned from a torch pipe or any other burning device within the town must be done in a manner so as not to constitute a fire hazard to any property; and the location of the torch, pipe, or other burning device, the construction thereof, the maintenance thereof, and the operation thereof shall at all times be in full compliance with those regulations as may from time to time be issued by the oil and gas inspector and approved by the town council. If the venting of gases into the atmosphere or the burning of gases by open flame is authorized as provided by law or as permitted by the Railroad Commission, then such vent or open flame shall not be located closer than three hundred feet (300') from any dwelling or any other building used, or designed or intended to be used, for human occupancy, as defined herein, and such vent or open flame shall be screened in such a way as to minimize detrimental effects to adjacent surface owners. The town, the Argyle Volunteer Fire District and all residences located within one thousand feet (1,000') of such vent or open flame shall be given 72 hours advance notice of any flaring activities, and such notice shall indicate the exact date and time and anticipated length of the flaring procedure. In the event that emergency conditions exist, flaring may be permitted upon notification to the town and the Argyle Volunteer Fire District. Reasonable efforts should be undertaken for flaring operations to occur during daylight hours, if feasible. For purposes of this subsection, notice to residences shall be written and delivered to each residence via hand delivery or United States mail.

(r)

Automated audible alarm system.

At the request of the town, an automated audible alarm system shall be installed at each drill site and maintained thereafter at each operation site to provide warnings for a substantial drop in pressure, or the release of any gas or oil, or fire. Said audible alarm system must be approved by the fire official prior to any drilling or production operations at the drill site or the operation site.

(s)

Site cleanup and maintenance.

Property to be kept free from debris.

The property on which a drill site or operation site is located shall at all times be kept free of debris, pools of water or other liquids, contaminated soil, weeds, brush, downed trees, trash or other waste material within a radius of one hundred feet (100'). All downed trees and brush must be either chipped and spread on the property subject to the lease or removed from the premises within ten (10) days of clearing activities. No burning of debris is allowed.

Cleanup after well completion or servicing.

Upon completion, servicing or reworking of a well, the operator shall clean the drill site and/or the operation site of all debris and equipment except that necessary for the continued operation of the well. In addition, the drill site, except for so much thereof as is necessary for the periodic servicing or reworking of the well, shall be cleared of gravel and restored to the pre-drilling condition of the site (or other condition approved by the town council).

Cleanup after abandonment.

After the well has been plugged and abandoned, the operator shall clean and restore the drill site and/or the operation site to the site’s pre-drilling condition (or other condition approved by the town council), including, if requested by the surface owner, removal of an access road if one has been constructed to the drill site and/or the operation site by the operator, and repair all damage to public property caused by such operations, within thirty (30) calendar days of the plugging and abandonment of a well; provided, however, that if such damage to public property is deemed by the fire official, the chief of police or the oil/gas inspector to create an unreasonably dangerous condition, the time period within which such damage must be repaired by the operator may be shortened at the discretion of the town.

Cleanup after spills, leaks, and malfunctions.

After any spill, leak or malfunction, the operator shall remove or cause to be removed as required by federal, state and local regulations all waste materials from any public or private property affected by such spill, leak or malfunction. Cleanup operations must begin immediately. The town also reserves the right to contact the railroad commission in order to facilitate the removal of all waste materials from any property affected by such spill, leak or malfunction. The operator is responsible for all costs and expenses associated with the cleanup and removal of all waste materials and the restoration of the site to the condition it was in prior to any leak, spill or malfunction.

Painting and maintenance of equipment.

All production equipment on the site shall be painted and maintained at all times, including pumping units, storage tanks, buildings and structures. Low VOC paints shall be used.

(t)

Handling of blowouts.

In the event of the loss of control of any well, the operator shall immediately take all reasonable steps to regain control regardless of any other provision of this article and shall notify the town as soon as practicable. If the town believes that danger to persons and property exists because of loss of well control and that the operator is not taking or is unable to take all reasonable and necessary steps to regain control of such well, the town may, at the operator’s expense and subject to reimbursement upon demand at the rate specified by the town’s fee ordinance, employ any well control expert or specialist or other contractors or suppliers of special services, or may incur any other expenses for labor and material that the town deems necessary to regain control of such well. In addition to all other remedies provided the town pursuant to the terms of this article, upon the filing of a statement of expenses with the county clerk, the town shall then have a first, prior, and valid lien against the property, the well and its production to secure payment of any expenditure made by the town pursuant to such action of the town in gaining control of said well. Said lien shall accrue interest at the greater of ten percent (10%) per annum, or the prime rate plus five percent (5%) per annum. Said lien shall be superior to all other liens against the property, including purchase-money security interests, regardless of when such other lien(s) may have arisen, except liens for taxes.

(Ordinance 06-229, ex. A, sec. 4.407(a)(8), adopted 10/9/06; Ordinance 08-258, sec. 2, adopted 10/13/08; Ordinance 08-259, sec. 2, adopted 11/10/08; Ordinance 22-010 adopted 8/22/2022)

§ 4.05.080 Miscellaneous requirements.

On-site refining or processing prohibited; removal of drilling rig.

No refinery, processing, treating, dehydrating or absorption plant of any kind shall be constructed, established or maintained on the premises. This shall not be deemed to exclude a conventional gas separator or dehydrator installed on the drill site for a well or wells permitted thereon. The drilling rig and associated drilling equipment shall be removed from the site within thirty (30) days of the completion of the well or drilling activities.

Gathering, cooling and compression stations prohibited.

Gathering stations and transmission pipeline cooling and/or compression stations are prohibited in the town.

Hours of operation.

Site development, other than drilling or reworking a well, shall be conducted only between the hours of 7 a.m. to 7 p.m. on Monday through Friday and 9 a.m. to 5 p.m. on Saturday. Truck deliveries of equipment and materials, including the delivery and/or removal of water for all fracture stimulation operations performed on a well, associated with drilling and/or production, well servicing, site preparation and other related work conducted on the drill site shall be limited to between the hours of 7 a.m. to 7 p.m., Monday through Friday, except in cases of fires, blowouts, explosions and any other emergencies or where the delivery of equipment is necessary to prevent the cessation of drilling or production. All “tripping” operations, formation fracturing operations (fracing) and “flow-back” operations to recover fluids used during fracture stimulation shall be performed between the hours of 7 a.m. to 7 p.m., Monday through Friday, unless prior approval has been secured from the fire marshal due to safety concerns.

Tanks and permanent structures.

All tanks and permanent structures shall conform to the American Petroleum Institute (API) specifications unless other specifications are approved by the fire official. The top of the tanks and all related piping shall be no higher than twelve feet (12') above the terrain surrounding the tanks. All tanks shall be set back pursuant to the standards of the railroad commission and the National Fire Protection Association, but in all cases shall be at least five hundred feet (500') from any public right-of-way.

Air, gas or pneumatic drilling prohibited.

Air, gas or pneumatic drilling is not allowed in the town.

Open fires; smoking.

No open fires (including those contained in containers such as barrels, drums or barbeque pits) shall be permitted on the drill site and/or operation site at any time. No smoking shall be allowed at any time on the drilling rig. The operator may designate an employee smoking area on the drill site away from the drilling rig provided such area poses no danger as a source of ignition, is not prohibited by any federal and state requirement and is approved by the fire marshal.

Private access roads.

Prior to the commencement of any drilling operations, all private roads used for access to the drill site itself shall be at least ten feet (10') wide, shall have an overhead clearance of fourteen feet (14') and shall be paved or surfaced with crushed rock, gravel or ore and shall be maintained to prevent dust and mud. In particular cases these requirements governing surfacing of private roads may be altered with the approval of both the town engineer and fire official after consideration of all circumstances including, but not limited to, the following: distances from public streets and highways; distances from adjoining and nearby surface owners whose surface rights are not leased by the operation but whose ownership rights are likely to be impacted by the activities at the drill site; topographical features; nature of the soil; and exposure to wind.

Discharge of oil, wastewater or other substance.

No person shall place, deposit, or discharge (or cause or permit to be placed, deposited, or discharged) any oil, naphtha, petroleum, asphalt, tar, hydrocarbon substance, or any refuse, including but not limited to wastewater or brine, from any oil or gas operation, or the contents of any container used in connection with any oil or gas operation, in, into, or upon any public right-of-way, storm drain, ditch or sewer, sanitary drain or sewer, any body of water, or any private property within the corporate limits of the town or the town’s ETJ. The town shall have the right to inspect records and/or request the production of evidence, by receipts or other similar documentation, reflecting the appropriate disposal of any such hazardous or contaminated substance by an individual or entity authorized to dispose of such material. Failure to provide said records or evidence of such appropriate disposal shall constitute a violation of this article and such failure may be subject to penalty in accordance with section 4.05.005 hereof.

Underground electric lines required.

All electric lines to production facilities shall be located underground.