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349.040 Prohibited drilling activities -- Filing requirements for permit
application -- Appeal -- Waiver -- Filing of maps and plans -- Denial of
permit.
(1)
(2)
It is unlawful for any person to drill, commence, operate, deepen, convert, or
stimulate any coalbed methane well, to conduct any horizontal drilling of a
coalbed methane well or to convert any existing oil or natural gas well to a
coalbed methane well, without first securing from the department a permit
pursuant to this chapter. Before any well, borehole, or facility initially used for a
coal mining related purpose, such as a vent hole, is converted for the purpose
of recovering coalbed methane for sale or use, the operator shall obtain a
permit and comply with the provisions of this chapter prior to the time that the
well, borehole, or facility is converted or used for the purpose of recovering
coalbed methane for sale or use. It is unlawful for any person to drill, deepen,
convert, or reopen a coalbed methane well for the production of oil or natural
gas or for the injection of water, gas, or other fluids into any oil or natural gas
producing formation until the person has obtained a permit from the
department for a petroleum or natural gas well pursuant to KRS 353.570.
However, no additional permit fee shall be required if the original permit for the
coalbed methane well has not expired.
Every permit application filed under this section shall be verified and shall
contain the following:
(a) A statement that the applicant claims to have a valid real property interest
in, or the current legal right to produce coalbed methane from a person
claiming a valid real property interest in, the coalbed methane. The
statement shall identify with specificity the nature of the real property
interest and the document or instrument evidencing that interest or right,
including recording information of any recorded document or instrument;
(b) The names and addresses of the coalbed methane well operator and
every person or entity whom the applicant must notify under any section
of this chapter;
(c) The name and address of each coal interest holder of any workable
coalbed which is to be penetrated by a proposed coalbed methane well or
within seven hundred fifty (750) horizontal feet or fifty (50) vertical feet of
any portion of the proposed coalbed methane well;
(d) The name and addresses of each record oil and gas lessee of, the record
oil and gas lessor of, and the operator of all oil and gas formations from
the surface to one hundred (100) feet below the deepest penetration of
the coalbed methane well on the tract upon which the coalbed methane
well is proposed to be located;
(e) The coalbed methane well name or such other identification as the
department may require;
(f) The approximate depth to which the coalbed methane well is to be drilled,
deepened, or converted, the coal seams including the depth and
thickness of each seam that will be completed for production, and any
other coal seams which will be penetrated by the coalbed methane well;
(g) A description of any means to be used to stimulate any of the workable
(3)
(4)
coalbeds penetrated by the coalbed methane well;
(h) If the proposed coalbed methane well will require casing or tubing, the
entire casing program for the coalbed methane well, including the size of
each string of pipe, the starting point and depth to which each string is to
be set, and the extent to which each string is to be cemented;
(i) If the proposed operation is to convert an existing petroleum or natural
gas well, as defined in KRS 353.010(19), or to convert a vertical borehole
or facility initially used for a coal mining related purpose, such as a vent
hole, to a coalbed methane well, all information required by this section,
all formations from which production is anticipated, and any plans to plug
any portion of the well;
(j) Except for a vent hole proposed to be converted to a coalbed methane
well, if the proposed coalbed methane well will be completed in some but
not all coal seams for production, a plan and design for the coalbed
methane well which will protect all workable coalbeds which will be
penetrated by the coalbed methane well;
(k) If the proposed operations will include horizontal drilling of a coalbed
methane well, a description of the operations, including both the vertical
and horizontal alignment and extent of the coalbed methane well from the
surface to total depth; and
(l) Other information as the department may require consistent with this
chapter.
Each application for a coalbed methane well permit shall be accompanied by
the following:
(a) A permit application fee of three hundred dollars ($300);
(b) A bond in an amount prescribed in KRS 349.120;
(c) A certificate that the applicant's notice requirements of KRS 349.015 have
been satisfied. Certification may be by affidavit of personal service, or the
return receipt card, or other postal receipt, for certified mailing;
(d) If the proposed coalbed methane well will be located within one-half (1/2)
of a mile, measuring horizontally, of a water supply well being used for
residential or domestic purposes, the applicant will submit the
groundwater protection plan required under KRS 224.70-110 and
applicable administrative regulations promulgated pursuant thereto for
review by the department, or demonstrate to the department that a plan is
not required; and
(e) Proof that the applicant has public liability insurance coverage in an
amount not less than five hundred thousand dollars ($500,000) in
aggregate and three hundred thousand dollars ($300,000) per occurrence
for damages to persons and property caused by the applicant's
operations or proof that the applicant has satisfied self-insurance
requirements as provided by administrative regulations which shall be
promulgated by the department.
Prior to the department's issuance of a permit to drill a coalbed methane well, a
copy of the written authorization from the mine licensee shall be filed with the
application under the following circumstances:
(a)
(5)
(6)
If the proposed coalbed methane well is to penetrate a workable coalbed
that is within the permitted area of an existing permit or the proposed
permitted area of a permit pending before the division and if the applicant
plans to stimulate, complete, or horizontally drill the coalbed methane well
in a workable coalbed that is within the permitted area of an existing
permit or the proposed permitted area of a permit pending before the
division;
(b) If the proposed coalbed methane well is to be located within a surface
area permitted under an existing permit, or the proposed permitted area
of a permit pending before the division for which no bond release has
been obtained; or
(c) If the proposed coalbed methane well is to be located within a surface
area permitted under an existing permit by the division for which a partial
bond release has been obtained.
If a coalbed methane well permit is issued for a well site located within the
boundaries of any coal mine for which a permit has been issued or is pending
pursuant to KRS Chapter 350, the permit shall include a provision specifically
stating that the permitted coalbed methane well location is in an area for which
a coal mine permit has been issued or is pending pursuant to KRS Chapter
350 and is subject to the mine-through rights set forth in KRS 349.030(1).
If a partial bond release for the surface area on which the proposed coalbed
methane well is located has been obtained from the division and the applicant
is denied written authorization from the mine licensee, the applicant may file an
appeal with the review board requesting approval to drill the proposed coalbed
methane well. When requesting an appeal, the applicant shall submit a verified
statement including the following:
(a) The applicant has met and conferred with or offered to meet and confer
with the mine licensee concerning the authorization;
(b) The mine licensee has refused to provide written authorization to disturb
the permitted area;
(c) The physical area to be disturbed by the proposed well location and the
use of area, including ingress and egress thereto, qualifies as a
commercial or industrial postmining land use entitling the mine licensee to
a complete bond release for the area to be disturbed by the coalbed
methane well operator in accordance with KRS Chapter 350; and
(d) The applicant has agreed to pay the reasonable and actual costs of the
permit revision required by the division to affect the incremental bond
release for the proposed area to be disturbed by the coalbed methane
well operator, not to exceed five thousand dollars ($5,000).
Prior to the issuance of a permit to drill a coalbed methane well, the applicant
shall grant assignable subsidence waivers to any mine licensee if requested in
an objection filed pursuant to KRS 349.060 and, if required, to allow present or
future mining with planned subsidence under KRS Chapter 350. However, this
subsection and any subsidence waivers shall in no way waive, affect, or impair
the ability of the applicant or the applicant's successors or assigns to pursue
any remedies for damages to persons, or to improved or tangible property,
suffered or incurred as a result of any subsidence caused by the mine licensee
(7)
or the mine licensee's successors or assigns. The mine licensee, its
successors or assigns, shall be liable for any and all damages to persons or to
improved or tangible property proximately caused by the mine licensee.
If the mine licensee is mining in a coal seam that is not being produced by the
coalbed methane well operator and has not exercised his or her mine-through
rights, as set forth in KRS 349.030(1) or (2), in any coal mine before removing
any coal or other material or driving any entry or passageway within five
hundred (500) horizontal feet of the vertical segment of a coalbed methane well
or within fifty (50) vertical feet of the horizontal segment of a coalbed methane
well, the mine licensee shall forward simultaneously to the well operator and to
the department, by certified mail, return receipt requested, or by registered
mail, a copy of the maps and plans required by law to be filed and kept up to
date. Maps or plans shall show the mine workings and projected mine workings
within five hundred (500) horizontal feet of the coalbed methane well. However,
the issuance of any coalbed methane well permit shall not preclude or prevent
coal mining outside two hundred (200) feet, but not closer than fifty (50) feet, of
the vertical segment of a coalbed methane well or outside of the workable
coalbed in which the horizontal segment of a coalbed methane well is located,
unless specified by the department for reasons of mine or well safety. The
mine licensee shall not mine within fifty (50) feet of the vertical segment of a
coalbed methane well without the written authorization of the coalbed methane
well operator. A mine licensee may file a request with the department to mine
closer than two hundred (200) feet of the vertical segment of the coalbed
methane well. The mine licensee shall forward simultaneously to the well
operator and the department, by certified mail, return receipt requested, or by
registered mail, a request to mine closer than two hundred (200) feet, but not
closer than fifty (50) feet, of the vertical segment of the coalbed methane well,
which shall be accompanied by the following:
(a) A copy of the maps and plans required by law to be filed and kept up to
date, showing on the copy of the map or plan its mine plan workings and
projected mine workings beneath the tract of land and within two hundred
(200) feet, but not closer than fifty (50) feet, of the vertical segment of the
coalbed methane well; and
(b) A statement that the applicant has met and conferred with, or offered to
meet and confer with, the well operator concerning the mine licensee's
plan to mine closer than two hundred (200) feet, but not closer than fifty
(50) feet, of the vertical segment of the coalbed methane well.
The well operator may, within twenty (20) days of receipt of the documents
listed in paragraphs (a) and (b) of this subsection, file specific objections in
writing with the department. When objections are filed, the department shall
provide a copy of the objections to the mine licensee and fix a time and place
for an informal hearing. The hearing shall be held not more than ten (10) days
from the end of the twenty (20) day period. At the hearing, the mine licensee
and the well operator, in person or by representative, shall consider the
objections and seek agreement on the character and the extent of operations
to be conducted within less than two hundred (200) feet, but not closer than
fifty (50) feet, of the vertical segment of the coalbed methane well. If no
agreement can be reached, the department, after administrative hearing
(8)
conducted in accordance with KRS Chapter 13B, shall make a decision
defining what coal, if any, is necessary to be left for the safe protection, use,
and operation of the well. The department's decision shall be subject to appeal
by either party as provided in this chapter. The department shall keep a
complete record of all hearings. The mine licensee shall, every six (6) months,
while mining within two hundred (200) feet, but not closer than fifty (50) feet, of
the vertical segment of the coalbed methane well, file up-to-date maps and
plans required by this section, or file new maps and plans complete to date.
The department may deny the issuance of a permit if it determines that the
applicant has a documented pattern or practice of substantial violations of the
provisions of this chapter and has failed to abate or seek review of the
violations. If the department finds that a substantial violation has occurred with
respect to existing operations and that the operator has failed to abate or seek
review of the violation in the time prescribed, the department may suspend the
permit. After a suspension, the operator shall forthwith cease all work being
conducted under the permit until the department reinstates the permit. The
department shall make a written finding of its determination and may enforce
the determination in Circuit Court pursuant to KRS 349.145.
Effective:June 25, 2009
History: Amended 2009 Ky. Acts ch. 79, sec. 9, effective June 25, 2009. -Amended 2005 Ky. Acts ch. 123, sec. 47, effective June 20, 2005. -- Created
2004 Ky. Acts ch. 65, sec. 8, effective July 13, 2004.
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