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)
Permittee.
Well.
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:
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.
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.
(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)
Within thirty (30) days after the completion or abandonment
of any oil or gas well, the mud and other similar matter and materials
used in connection with the drilling and operations thereon shall
be removed from the premises.
(Ordinance adopted 1/6/14, sec.
11-81)
(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:
(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:
(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 holder of a permit as provided for in this article shall be
bound by all regulations set forth in this article.
(Ordinance adopted 1/6/14, sec.
11-97)
(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)
