The city council finds that there is a likelihood of drilling and production operations for oil and gas within the city in the very near future. The city council further finds that the present and prospective density of population and improvements in the city requires that operations for the drilling and production of oil and gas be regulated because of the fire hazards created by such operations, as well as the menace of falling derricks, exploding boilers, unsanitary conditions, contaminated water supply and all similar like threats to the lives, property, health, safety and convenience of the public in general, for which the police power of the state, delegated to this city, is to be and is hereby invoked in aid of the enforcement of the provisions of this article.
(Ordinance adopted 1/6/14, sec. 11-75)
(a) 
For the purposes of this article, and for all purposes under this article, the following words and terms, wherever and whenever used or appearing in this article, shall have the scope and meaning defined and set out in this section in connection with each:
Permittee.
The person to whom is issued a permit for the drilling and operation of a well under this article, and his, her, or its administrators, executors, heirs, successors and assigns.
Well.
Any hole or bore to any sand, formation, strata or depth, which is drilled, bored, sunk, dug or put down for the purpose of either exploring for or ascertaining the existence of any oil, gas, liquid hydrocarbon or any of them, or for the purpose of producing and recovering any oil, gas, liquid hydrocarbon or any of them.
(b) 
All technical or oil and gas industry words or phrases used in this article and not specifically defined in this article shall have that meaning customarily attributable by prudent operators in the oil and gas industry.
(Ordinance adopted 1/6/14, sec. 11-76)
(a) 
No oil or gas drill site may be located or oil and gas operation shall occur:
(1) 
Within four hundred feet (400') of any street, right-of-way, alley, or utility easement;
(2) 
Within four hundred feet (400') of a cemetery, park, or residential unit, unless waived by the residential unit property owner and the party entitled to occupy the premises;
(3) 
Within one thousand feet (1,000') of any school or hospital;
(4) 
In any public park unless authorized by state law;
(5) 
In any city streets or alleys; and
(6) 
Within one-quarter (1/4) mile of any city water well, active or inactive.
(b) 
No drilling or reworking shall occur within one hundred feet (100') of any oil storage tank, ignition source, or building.
(c) 
The distances set out in subsections (a) and (b) of this section may be reduced at the discretion of the city council. For protection of the public health, safety and welfare, the city council may impose additional requirements for a reduction of such distances.
(Ordinance adopted 1/6/14, sec. 11-77)
No well shall be drilled and no permit shall be issued for any well to be drilled in any location within a drilling unit, which location is nearer than four hundred (400) feet to any residence, building or structure, without the applicant first securing the written permission of the owner thereof.
(Ordinance adopted 1/6/14, sec. 11-78)
Neither this article, nor any permit issued under this article, shall be interpreted to grant any right or license to the permittee to enter upon, use or occupy, in any respect, for the drilling or operation of any well, any surface land except by the written contract of the surface owner, nor shall it limit or prevent the free right of any owner to contract for the amount of damages, rights or privileges with respect to his or her own land and property.
(Ordinance adopted 1/6/14, sec. 11-79)
It shall be unlawful for any person to permit to escape any mud, water, oil, slush or other waste matter from any slush pit used in the drilling or operating of any oil and/or gas well into any adjoining lots or leases or into the alleys, streets, gutters or sewers of the city.
(Ordinance adopted 1/6/14, sec. 11-80)
(a) 
Once any well has either been completed as a producer or abandoned as a dry hole, it shall be unlawful and an offense for any person to drill such well to a greater depth than that reached in the prior drilling operations without the permittee as to such well obtaining a supplemental permit after filing a supplemental application with the city secretary specifying:
(1) 
The then condition of the well and the casing therein;
(2) 
The depth to which it is proposed such well is to be deepened;
(3) 
The proposed casing program to be used in connection with proposed deepening operations;
(4) 
Evidence of adequate current tests showing that the casing strings in the well currently pass the same tests as are provided for in this article in case of the drilling of the original well.
(b) 
If the city council and its assisting geologists, geophysicists or petroleum engineers are satisfied that the well may be deepened with the same degree of safety as existed in the original well, a supplemental permit may be issued without an additional filing fee to the permittee authorizing the deepening and operation of the well of such specified depth as applied for. In any deeper drilling or any deeper completion, or any deeper production operations, the permittee shall comply with all other provisions contained in this article and applicable to the drilling, completion and operation of a well or wells.
(Ordinance adopted 1/6/14, sec. 11-82)
All persons engaged in the drilling and operation of oil and/or gas wells within the regulated area of the city shall comply with the following rules and regulations:
(1) 
No person shall make any excavations or construct any lines for the conveyance of fuel, water or minerals, on, under and through the streets of the city, without the express permission of the city, in writing, and then only in strict compliance with this code, and all such lines must be constructed out of new pipe and buried to a minimum depth as specified in each case by the city, and in no case less than thirty (30) inches below the surface at each and every point. All such lines shall be subject to being moved, lowered or otherwise changed at any time such change would be deemed necessary by the city in carrying out city improvements or other projects, and such change would be at the expense of the person owning such line.
(2) 
No person engaged in drilling or operating any well shall permit gas to escape or be vented into the air unless such gas be flared and burned. All gas flared or burned from a torch, pipe or any other burning device within the city must be done in such manner so as not to constitute a fire hazard to any property. The location, construction, maintenance and operation of the torch, pipe or other burning device shall at all times be in full compliance with such regulations as may from time to time be issued by the fire marshal.
(3) 
It shall be unlawful for any person to use or operate, in connection with the drilling or reworking of any well, any wooden derrick or any steam-powered rig, or to permit any drilling rig or derrick to remain on the premises or drilling site for a period longer than sixty (60) days after completion or abandonment of the well.
(4) 
Whenever any well is abandoned it shall be the obligation of the permittee and the operator of the well to set a cast-iron bridge plug in the top of all the remaining completion and protection casing sections and a one-hundred-foot cement plug pumped below and above each such bridge plug, and to set a cast-iron bridge plug as low as possible in the surface casing and a one-hundred-foot cement plug below and above such bridge plug. No surface string or conductor string of casing may be pulled and removed from a well. The production string of casing may be removed from a point one hundred (100) feet or more above the shoe of the protection string. The protection string of casing may be removed from a point one hundred (100) feet or more above the shoe of the surface string of casing. Whenever any such well is abandoned and plugged, it shall be the further obligation of the permittee and the operator of the well to cut the surface casing off at least six (6) feet below the surface of the ground, to place at least a twenty-five-foot cement plug in the top of the casing, and to weld the top of the casing completely shut, with the resulting hole being completely filled to the surface of the ground and duly tamped. Any additional provisions or precautionary measure prescribed by the state or the railroad commission of the state in connection with the abandonment and plugging of a well shall be complied with by the permittee.
(5) 
The premises shall be kept in a clean and sanitary condition, free from rubbish of every character, to the satisfaction of the health officer, at all times during the drilling operations and as long thereafter as oil and/or gas are being produced therefrom.
(6) 
The person so drilling or operating an oil and/or gas well shall make adequate provision for the disposal of salt water or other impurities which he or she may bring to the surface of the earth in such a manner as not to contaminate the water supply or to destroy vegetation.
(7) 
Open earthen storage for oil is prohibited. All mud tanks and their contents shall be promptly removed from the premises and drilling site as soon as the well is either completed for production or abandoned as a dry hole.
(8) 
All permanent oil tanks or batteries of tanks shall be vapor-tight and must be surrounded by a dike or ditch.
(9) 
Printed signs reading “DANGEROUS, NO SMOKING ALLOWED,” or similar words, shall be posted in conspicuous places on each producing or drilling unit.
(10) 
All of the permittee’s premises shall be kept clear of high grass, weeds and combustible trash, or any other rubbish or debris that might constitute a fire hazard, within a radius of two hundred (200) feet around an oil tank, tanks or producing wells, or to the limits of the premises, whichever is the lesser.
(11) 
No person engaged in the drilling or operation of any oil or gas well within the city shall use, set or place in any well any used or reconditioned casing, pipe or tubing, unless it has been tested and found to conform to API specifications. All casing, other than conductors, including surface, protection and production strings, shall be either seamless steel or equivalent quality oil well casing and of sufficient internal pressure rating to withstand and confine any pressures that may be encountered therein.
(12) 
No well shall be drilled within the city without properly setting the surface casing to a minimum depth of two thousand (2,000) feet. No well shall be drilled within the city without cementing the conductor casing and the surface casing by the pump and plug method with sufficient cement to completely fill all of the annular space behind such casing to the surface of the ground and without cementing the production string by the pump and plug method with sufficient cement to completely fill all of the annular space behind the production string to at least six hundred (600) feet above the highest oil and/or gas bearing horizon. If a protection string or casing be required under the terms of this article, no well shall be drilled without cementing the protection string by the pump and plug method with sufficient cement to completely fill all of the annular space behind the protection string to at least six hundred (600) feet above the highest oil and/or gas bearing horizon.
(13) 
All wells shall be equipped with a bradenhead and a master valve with working pressure of not less than three thousand (3,000) pounds per square inch. The bradenhead shall be equipped with the proper pipe connection and valve accessible at the surface. No well shall be drilled within the city without properly equipping the surface casing when set with at least one (1) master valve and at least two (2) blowout preventers. On each well drilled, a valve cock or kelly cock shall be installed on the kelly used. Each blowout preventer shall be tested at least once every period of twenty-four (24) hours and all control equipment shall be in good working condition and order at all times.
(14) 
No boiler or electric generating equipment shall be allowed in the drilling or operation of any oil and/or gas well except by special permission by the city council.
(15) 
All well heads, pits, tank batteries and pumping units and equipment appurtenant thereto shall be adequately protected with man-proof steel mesh fencing.
(16) 
No oil storage tank used in connection with the production or operation of a well, other than flow tanks, shall be permitted within the regulated area of the city, and no flow tank shall exceed five hundred (500) barrels’ capacity, and a battery of flow tanks shall not exceed three (3) in number, except by special permission from the city council. Each flow tank as permitted in this article shall be permanently connected to a Foamite, or similar system, generator for fighting fires in a manner to be approved by the fire marshal.
(17) 
No well shall be drilled or reworked in the city without the bore hole at all times being filled with drilling fluid of such weight and viscosity as will keep the well under control at all times.
(18) 
It shall be unlawful for any person, in connection with the drilling or reworking operations of any well within the city, to take and to complete any drill stem test except during daylight hours.
(19) 
All drilling actions, operations and other acts performed in drilling wells must be done in such manner as to fully protect the city water supply, and the city shall be furnished, if so requested by the city, a copy of the electric log along with casing installations, including cementing of casing, for study in determining that the sources of the city water supply are being fully protected. Cementing of surface casing shall be to a depth greater than two thousand (2,000) feet if such is required to fully protect the city water supply.
(20) 
A sign shall be prominently displayed and maintained in good condition near or on the pumping unit or fence of each well, whether producing or not. Such sign shall be of durable material and, unless otherwise required by the commission, shall have a surface area not less than two (2) square feet nor more than four (4) square feet and shall be lettered with the following:
(A) 
Well name and number;
(B) 
Name of operator;
(C) 
Telephone numbers of two (2) persons responsible for the well who may be contacted in case of emergency.
(Ordinance adopted 1/6/14, sec. 11-83)
It shall be unlawful for any person to violate any of the laws of the state or regulations of the railroad commission of the state, or of this article or future ordinances of the city, pertaining to the drilling of oil, gas or other mineral wells within the regulated area of the city.
(Ordinance adopted 1/6/14, sec. 11-84)
Whenever necessary to enforce any of the provisions of this article, or whenever the city council has reasonable cause to believe that there exists in any building or upon any premises any condition contrary to the provisions of this article, the city council, or their authorized representative, may enter such building or premises at all reasonable times to inspect the same or to perform any duty imposed upon their representative by this article. If such entry is refused, the city shall have recourse to every remedy provided by law and equity to secure entry.
(Ordinance adopted 1/6/14, sec. 11-85)
(a) 
Every person who acquires any well, property or site upon which operations which are the subject matter of this article exist, whether by purchase, transfer, assignment, conveyance, exchange or otherwise, shall, within ten (10) days after acquiring such well, property or site, notify the city secretary in writing of his or her acquisition. The notice shall contain the following:
(1) 
The name and address of the person acquiring such well, property or site;
(2) 
The name and location of the well;
(3) 
The date of acquisition;
(4) 
A description of the properties and equipment acquired; and
(5) 
The name and address of any person designated to receive service of notice.
(b) 
The operator of every well shall notify the city secretary in writing of the transfer to another operator of such well for any purpose. Within ten (10) days after such transfer by reason of sale, assignment, transfer, conveyance, or exchange, the notice shall be given and shall contain the following:
(1) 
The name and address of the person to whom such well was sold, assigned, transferred, conveyed or exchanged;
(2) 
The name and location of the well;
(3) 
The date of sale, assignment, transfer, conveyance or exchange;
(4) 
The date when possession was relinquished by the former operator; and
(5) 
A description of the properties and equipment acquired.
(Ordinance adopted 1/6/14, sec. 11-86)
It shall be unlawful and an offense for any person, acting either for himself or herself or as agent, employee, independent contractor, or servant of any other person, to commence to drill, to drill, or to operate any well within the regulated area of the city, or to work upon or assist in any way in the prosecution or operation of any such well, without a permit for the drilling and operation of such well having first been issued by authority of the city council in accordance with the provisions of this article.
(Ordinance adopted 1/6/14, sec. 11-91)
(a) 
Any person desiring to drill a well for oil and/or gas within the corporate limits shall present an application for such purpose in duplicate to the city secretary, which application shall contain or have attached the following:
(1) 
The date and name and address of the applicant, including, without being limited to, the names and addresses of the manager and person or operator in charge of drilling under and by virtue of the lease.
(2) 
Clear identification of the drilling unit, and the exact location thereon of the proposed well location, together with the certified or photostated copies of all requisite permissions, including, if and then in the manner required, permission from the owners of the surface and improvements thereon.
(3) 
Depth of the well, and proposed complete casing program with specifications as to equipment and materials to be utilized in drilling, as well as a description and specifications of the means of storage and disposal of slush, salt water and other wastes arising from drilling operations.
(4) 
The fixed route over city streets to be utilized in servicing of the well.
(5) 
All available seismographic data as will allow a qualified geologist, geophysicist and/or petroleum engineer to evaluate the strata to be drilled and to determine whether the well to be drilled will utilize that technology, equipment end materials that will minimize risks to the inhabitants of the city from explosion, escape of oil or gas or other catastrophic consequence.
(6) 
The application shall be accompanied by a cashier’s check payable to the city in the sum established in the fee schedule in appendix A of this code, plus an amount determined by the city council as is necessary to retain the services of a geologist, geophysicist and/or petroleum engineer to study the application for conformity to the highest safety standards in the drilling thereof and for inspection of the well not only during drilling but upon completion of same and installation of storage facilities.
(7) 
The agreement by the applicant to pay ordinary and necessary inspection fees incurred by the city each year such well is producing oil and gas, which sum shall be payable on the anniversary date of the application and upon receipt by the permittee of an itemized statement for inspection, providing further such sum shall become due and payable only upon expending of the deposit made by the applicant.
(8) 
Signature of the applicant or person duly authorized to sign in his or her behalf under oath with acknowledgment.
(b) 
The applicant shall request that the application be accepted and filed by the city secretary and kept as a part of the public records of the city.
(Ordinance adopted 1/6/14, sec. 11-92; Ordinance adopting 2016 Code)
(a) 
When the application provided for in this article is filed with the city secretary, the city secretary shall publish a notice in a newspaper within seven (7) days from the date of such application, addressed to “TO ALL INTERESTED PERSONS,” which notice shall state as follows:
This the ______ day of _______, 20_______, notice is hereby given that _______, acting under and pursuant to the terms and provisions of AN ORDINANCE REGULATING THE DRILLING, COMPLETION AND OPERATION OF OIL AND/OR GAS WELLS WITHIN THE LIMITS OF THE CITY OF SCHULENBURG, TEXAS, dated the _______ day of _________, 20_______, filed with the City Secretary of the City of Schulenburg, Texas, an application for a permit to drill an oil and/or gas well within the city limits of the City of Schulenburg, Texas; a copy of such application is available for public inspection in the office of the City Secretary, 535 N. Main Street, Schulenburg, Texas. A hearing upon such application before the Mayor and the City Council will be held in the Council Chambers of the City of Schulenburg, Texas, on the _______ day of _______, 20_______, at _______ o’clock ___________.M.
(b) 
This notice shall bear the signature of the city secretary and the seal of the city and shall be accompanied by one (1) of the duplicate copies of the application provided for in this article. This notice shall be also served by posting one (1) copy thereof on the public bulletin board at the city hall for not less than ten (10) days before the day of hearing therein set forth.
(Ordinance adopted 1/6/14, sec. 11-93)
(a) 
If, after the hearing provided for in this article, an application filed pursuant to this article is found by the city council to comply in all respects with the terms of this article, and the drilling and operation of a well on such drilling unit is not prohibited by the terms of this article, then the city council shall issue a permit for the drilling and operation of the well applied for. Each permit issued under this article shall:
(1) 
By reference have incorporated therein all provisions of this article with the same force and effect as if this article were copied verbatim in the permit;
(2) 
Specify the well location with particularity as to lot number, block number, name of addition or subdivision, or the available correct legal description;
(3) 
Contain and specify that the term of such permit shall be for a period of ninety (90) days from the date of the permit and as long thereafter as the permittee is engaged in continuous drilling operations or oil or gas is produced in commercial quantities from the well drilled pursuant to such permit; provided that, if at any time after discovery of oil or gas the production thereof in commercial quantities should cease, the term shall not terminate if the permittee commences additional reworking operations within ninety (90) days thereafter, and if they result in the production of oil or gas, so long thereafter as oil or gas is produced in commercial quantities from the well;
(4) 
Contain and specify such conditions as are by this article authorized and as required by the geologist, geophysicist and/or petroleum engineers retained by the city to review the application;
(5) 
Specify the total depth to which the well may be drilled, not exceeding the projected depth;
(6) 
Obligate the permittee, in accordance with the leases and contracts held by him or her and in accordance with this article, to pay to the owners thereof their portion of the royalties and other payments on oil and gas produced from the drilling unit.
(b) 
The permit shall not be issued until the provisions of sections 4.05.048 and 4.05.050 be complied with. The permit, in duplicate originals, shall be signed by the city secretary and prior to delivery to the permittee shall be signed by the permittee, with one (1) original to be retained by the city and one (1) by the permittee, and when so signed shall constitute the permittee’s drilling and operating license and the contractual obligation of the permittee to comply with the terms of such permit, [and] of the bond mentioned in this article.
(Ordinance adopted 1/6/14, sec. 11-94)
At the time fixed in the notice provided for in this article, a hearing on such application for a permit shall be held in accordance with such notice. If a majority of the members of the city council are not present at the hearing, or at the discretion of the members of the city council if a majority of the members thereof are present at the hearing, the hearing may be recessed, continued or postponed from time to time until final disposition of the application. In no event shall final decision on the application be postponed for a longer period than thirty (30) days from the original date of hearing fixed for such application unless a final decision within such time be waived in writing by the applicant.
(Ordinance adopted 1/6/14, sec. 11-95)
In addition to the fines and penalties provided for in this article, the city council will revoke the permit under which a well for oil or gas is being drilled, produced or operated, upon proof and evidence that any provision of this article is being violated after the issuance of the permit by the city secretary. Notice of revocation shall be in writing and shall be mailed by registered mail to the permittee’s address shown in his or her application. Any permittee whose permit or license has been revoked may, within fifteen (15) days from and after the date of the order of revocation, appeal to the city council from such order. Within thirty (30) days from the filing of such application, the city council shall hear the same and shall either sustain or set aside the order.
(Ordinance adopted 1/6/14, sec. 11-96)
(a) 
If the issuance of a permit required by this article is authorized by proper vote of the city council, the permit shall not be issued until the applicant shall file with the city secretary a bond executed by the permittee as principal and by a good and sufficient corporate surety company licensed to do business in the state, conditioned that:
(1) 
The principal obligor will drill and operate the well in strict accordance with the terms of this article;
(2) 
Any and all damages to streets, curbs, gutters, water lines, fire hydrants, sewer lines, manholes, power lines, power poles and appurtenances and any and all other public property, and any and all claims that might arise for damages to any private property, occasioned in any manner by his or her drilling of the well, shall be paid by the permittee;
(3) 
The permittee will hold and protect the city harmless from any and all liability whatsoever growing out of such permit and/or all activities connected with such permit.
(b) 
The bond shall be in a form in accordance with this section and acceptable to the city council and shall be in the amount of one hundred thousand dollars ($100,000.00).
(c) 
It shall be unlawful for the permittee to fail to keep the bond in full force and effect, in accordance with the terms of this section.
(Ordinance adopted 1/6/14, sec. 11-98)
If and when any permit shall terminate and become inoperative as provided in this article, or if and when the permittee shall file with the city secretary written notice of his or her election to surrender his or her permit and abandon the premises covered thereby, then if no claims under the bond shall be pending or have been filed within six (6) months after the permit shall have terminated, become inoperative, or written notice of election to surrender has been filed, the city secretary shall return the bond furnished by the permittee in connection with such permit; and if claims are pending or are filed within such time, upon the satisfaction or defeat of such claims the bond shall thereupon be returned to the permittee.
(Ordinance adopted 1/6/14, sec. 11-99)
(a) 
The permit required by this article shall not be issued until the applicant shall also file with the city secretary a memorandum copy of a policy of public liability and property damage insurance, issued by a solvent insurance company authorized to do business in the state, to be approved by the city secretary. The amount of the policy of insurance for liability for bodily injury or death of one (1) person shall not be less than two hundred thousand dollars ($200,000.00), and for any one (1) accident not less than five hundred thousand dollars ($500,000.00), and the amount of such policy for damage to property of others shall not be less than five hundred thousand dollars ($500,000.00). The applicant shall also file with the city excess or “umbrella” coverage over and above the foregoing basic coverage in the amount of ten million dollars ($10,000,000.00). The terms and conditions of such policy covering such operations are to be such as to assure persons against loss by liability imposed by law by reason of an accidental personal injury or death to any person, other than the assured or his or her employees, or by reason of any such loss or damage to property of any person other than the assured. The applicant shall execute an agreement with the city to hold the city harmless from any and all liability arising out of the granting of or the applicant’s operations pursuant to the drilling permit described in this article. The applicant shall ensure performance of this indemnity agreement by having contractual liability insurance. Each policy of insurance shall contain a provision obligating the insurer to give the city council written notice of cancellation, not less than thirty (30) days prior to the date of cancellation. The applicant shall, upon request of the council, submit the original or a certified copy of any policy for inspection at any time.
(b) 
Irrespective of the requirements as to insurance to be carried, the insolvency, bankruptcy or failure of any insurance company carrying insurance for any applicant or permittee under this article, or the failure of any such company to pay claims accruing, shall not be held to waive any of the provisions of this article. The applicant shall pay promptly all premiums for such insurance in strict accordance with its obligations to its carrier and to maintain the coverage described in subsection (a) of thus section in full effect so long as the permit shall be valid and alive.
(c) 
It shall be unlawful for the applicant to fail to keep such policy in full force and effect, in accordance with the terms of this section.
(Ordinance adopted 1/6/14, sec. 11-100)
The granting of a permit as provided in this article and the acceptance thereof by the permittee obligates the permittee to hold the city harmless from any and all liability of every kind and nature whatsoever which may arise because of any act done or omitted by the permittee or successors thereto.
(Ordinance adopted 1/6/14, sec. 11-101)