353.500DeclarationofpolicyofKRS353.500to353.720.(1) ItisherebydeclaredtobethepublicpolicyofthisCommonwealthtofosterconservationofallmineralresources,toencourageexplorationforsuchresources,toprotectcorrelativerightsoflandandmineralowners,toprohibitwaste and unnecessarysurfacelossanddamageandtoencouragethemaximumrecoveryofoilandgasfromalldepositsthereofnowknownandwhichmayhereafterbediscovered;andtopromotesafetyintheoperationthereof.Tothatend,KRS353.500to353.720isenactedandshallbeliberallyconstruedtogiveeffecttosuchpublicpolicy.(2)TheGeneralAssemblyfindsthatgovernmentalresponsibilityforregulatingallaspectsofoilandgasexploration,production,development,gathering,andtransmissionrestswithstategovernment.Thedepartmentshallpromulgateregulationsrelatingtheretoandtakeallactionsnecessarytoassureefficientoilandgasoperationsandtoprotecttheproperty,health,andsafetyofthecitizensoftheCommonwealthinamannerconsistentwithKRSChapter353,andtotheexclusionofallothernonstategovernmentalentitiesexceptasprovidedinKRSChapter100.Thedepartmentshallpromulgateregulationsrelatingtogatheringlineswithinsix(6)monthsafterJune24,2003.Nothinginthissectionshallbeconstruedaslimitingtherightsoflocalgovernmentalunitstoregulatetheuseofstreets,highways,andrights-of-way.ThedepartmentshallreportquarterlytotheLegislativeResearchCommissionbeginningJuly1,2003,throughDecember31,2004.Thereportshalldetailprogressmadeincarryingoutthissection,andtheefficacyoftheregulatoryprogramsimplemented.Effective:June24,2003History:Amended2003Ky.Actsch.150,sec.7,effectiveJune24,2003.-Created1960Ky.Actsch.103,sec.1,effectiveJune16,1960.LegislativeResearchCommissionNote.TheInterstatecompacttoconserveoilandgaswasratified,approved,andconfirmedbytheCommonwealthofKentuckyandtheGovernordirectedtosignthecompactbyjointresolutionofthe1942GeneralAssembly(Acts1942,ch.267).Section1ofthecompactwasrepealed,amended,andreenactedbyjointresolutionofthe1948GeneralAssembly,authorizingtheexecutionoftheinterstatecompacttoconserveoilandgasandanyrenewalthereofwithintheGovernor'sdiscretion(Acts1948,ch.288).353.510DefinitionsforKRS353.500to353.720.AsusedinKRS353.500to353.720,unlessthecontextotherwiserequires:(1)"Department"meanstheDepartmentforNaturalResources;(2)"Commissioner''meansthecommissioneroftheDepartmentforNaturalResources;(3)"Director"meansthedirectoroftheDivisionofOilandGasasprovidedInKRS353.530;(4)"Commission"meanstheKentuckyOilandGasConservationCommissionasprovidedinKRS353.565;(5)"Person"meansanynaturalperson,corporation,association,partnership,receiver,governmentalagencysubjecttoKRS353.500to353.720,trustee,so-calledcommon-laworstatutorytrust,guardian,executor,administrator,orfiduciaryofanykind,federalagency.stateagency, city,commission,politicalsubdivisionoftheCommonwealth,oranyinterstatebody;(6)"Correlativerights"meansthereasonableopportunityofeachpersonentitledtheretotorecoverandreceivewithoutwastetheoilandgasinandunderhlstractortracts,ortheequivalentthereof;(7)"Oil"meansnaturalcrudeoilorpetroleumandotherhydrocarbons,regardlessofgravity,whichareproducedatthewellinliquidformbyordinaryproductionmethodsandwhicharenottheresultofcondensationofgasafteritleavestheundergroundreservoir;(8)''Gas"meansallnaturalgas,includingcasingheadgas,andallotherhydrocarbonsnotdefinedinsubsection(7)ofthissectionasoil;(9)"Pool"meansanundergroundreservoircontainingacommonaccumulationofoilorgasorboth.Eachproductivezoneofageneralstructurewhichiscompletelyseparatedfromanyotherzoneinthestructure,orwhichforthepurposeofKRS353.500to353.720maybesodeclaredbythedepartment,iscoveredbytheword"pool"asusedherein;(10)"Field"meansthegeneralareawhichisunderlaidorappearstobeunderlaidbyatleastone(1)pool;and''field"includestheundergroundreservoircontainingoilorgasorboth.Thewords"field"and"pool"meanthesamethingwhenonlyone(1)undergroundreservoirisinvolved;however,•field,"unlike"pool,"mayrelatetotwo(2)ormorepools;(11)"Justandequitableshareofproduction"means,astoeachperson,anamountofoilorgasorbothsubstantiallyequaltotheamountofrecoverableoilandgasinthatpartofapoolunderlyinghistractortracts;(12)"Abandoned,"whenusedinconnectionwithawellorhole,meansawellorholewhichhasneverbeenused,orwhich,intheopinionofthedepartment,willnolongerbeusedfortheproductionofoilorgasorfortheinjectionordisposaloffluidtherein;(13)"Workablebed"means:(a)Acoalbedactuallybeingoperatedcommercially;(b)Acoalbedthatthedepartmentdecidescanbeoperatedcommerciallyandtheoperationofwhichcanreasonablybeexpectedtocommencewithinnotmorethanten(10)years;or(c)Acoalbedwhich,fromoutcropindicationsorotherdefiniteevidence,provestothesatisfactionofthecommissionertobeworkable,andwhich,whenoperated,willrequireprotectionifwellsaredrilledthroughit;(14)"WeW'meansaboreholedrilled,shaftdriven,orholedugorsuchproposedorotherwiseusedforthepurposeofprodu.cingnaturalgasorpetroleum,oronethroughwhichnaturalgasorpetroleumisbeingproduced,orforthepurposeofinjectinganywater,gas,orotherfluidthereinoroneintowhichanywater,gas,orotherfluidisbeinginjected;(15)"Shallowwell"meansanywelldrilledandcompletedatadepthlessthanfourthousand(4,000)feetexcept,inthecaseofanywelldrilledandcompletedeastoflongitudeline84degrees30';shallowwellmeansanywelldrilledandcompletedatadepthlessthanfourthousand(4,000)feetorabovethebaseofthelowestmemberoftheDevonianBrownShale,whicheveristhedeeperindepth;(16)"Deepwell"meansanywelldrilledandcompletedbelowthedepthhereinprovidedforashallowwell;(17)"Operator''meansanyowneroftherighttodevelop,operate,andproduceoilandgasfromapoolandtoappropriatetheoilandgasproducedtherefrom,eitherforhimselforforhimselfandothers;intheeventthatthereisnooilandgasleaseinexistencewithrespecttothetractinquestion,theowneroftheoilandgasrightsthereinshallbeconsideredas"operator"totheextentofseven-eighths(7/8)oftheoilandgasinthatportionofthepoolunderlyingthetractownedbysuchowner,andas"royaltyowner''astoone-eighth(1/8)interestinsuchoilandgas;andintheeventtheoilisownedseparatelyfromthegas,theowneroftherighttodevelop,operate,andproducethesubstancebeingproducedorsoughttobeproducedfromthepoolshallbeconsideredas"operator''astosuchpool;(18)"Royaltyowner''meansanyownerofoilandgasinplace,oroilandgasrights,totheextentthatsuchownerisnotanoperatorasdefinedinsubsection(17)ofthissection;(19)"Drillingunit"generallymeansthemaximumareainapoolwhichmaybedrainedefficientlybyone(1)wellsoastoproducethereasonablemaximumrecoverableoilorgasinsucharea.Wheretheregulatoryauthorityhasprovidedrulesfortheestablishmentofadrillingunitandanoperator,proceedingwithintheframeworkoftherulessoprescribed,hastakentheactionnecessarytohaveaspecifiedareaestablishedforproductionfromawell,suchareashallbeadrillingunit;(20)"Undergroundsourceofdrinkingwater"meansthosesubsurfacewatersidentifiedassuchinregulationspromulgatedbythedepartmentwhichshallbeconsistentwiththedefinitionofundergroundsourceofdrinkingwaterinregulationspromulgatedbytheEnvironmentalProtectionAgencypursuanttotheSafeDrinkingWaterAct,42U.S.C.sees.300(f)etseq.;(21)"Undergroundinjection"meansthesubsurfaceemplacementoffluidsbywellinjectionbutdoesnotincludetheundergroundinjectionofnaturalgasforpurposesofstorage;(22)"Endangermentofu'ndergroundsourcesofdrinkingwater''meansundergroundinjectionwhichmayresultinthepresenceinundergroundwater,whichsuppliesorcanreasonablybeexpectedtosupplyanypublicwatersystem,ofanycontaminantandifthepresenceofsuchcontaminantmayresultinsuchsystem'snotcomplyingwithanynationalprimarydrinkingwaterregulationormayotheJWiseadverselyaffectthehealthofpersons;(23)"ClassIIwell"meanswellswhichinjectfluids:(a)Whicharebroughttothesurfaceinconnectionwithconventionaloilornaturalgasproductionandmaybecommingledwithwastewatersfromgasplantswhichareanintegralpartofproductionoperations,unlessthosewatersareclassifiedasahazardouswasteatthetimeofinjection;(b)Forenhancedrecoveryofoilornaturalgas;and(c)Forstorageofhydrocarbonswhichareliquidatstandardtemperatureandpressure;(24)"Fluid"meansanymaterialorsubstancewhichflowsormoveswhetherinasemisolid,liquid,sludge,gas,oranyotherformorstate.Effectlve:July15,2010History:Amended2010Ky.Actsch.24,sec.1903,effectiveJuly15,2010.-Amended2005Ky.Actsch.123,sec.64,effectiveJune20,2005.-Amended2000Ky.Actsch.139,sec.1,effectiveJuly14,2000.-Amended1986Ky.Actsch.277,sec.1,effectiveJuly15,1986.-Amended1974Ky.Actsch.45,sec.1.-Amended1966Ky.Actsch.255,sec.259.-Created1960Ky.Actsch.103,sec.2.353.520TerritorialapplicationofKRS353.500to353.720-Wasteofoilandgasprohibited.(1)KRS353.500to353.720shallapplytoalllandslocatedintheCommonwealth,howeverowned,includinganylandsownedoradministeredbyanygovernmentoranyagencyorpoliticalsubdivisionthereof,overwhichtheCommonwealthhasjurisdictionunderitspolicepower.(2)Thewasteofoilandgasisherebyprohibited.Thewasteprohibitedincludesphysicalwasteasthattermisgenerallyunderstoodintheoilandgasindustryandincludes:(a)Thelocating,drilling,equipping,operatingorproducingofanyoilorgaswell,orwellsdrilled,deepened,orreopenedinamannerthatcauses,ortendstocause,areductioninthequantityofoilorgasultimatelyrecoverablefromapoolunderprudentandproperoperations,orcontrarytoanyprovisionof,oranyorder,ruleorregulationpromulgatedorissuedunderKRS353.500to353.720;(b)Permittingthemigrationofoil,gasorwaterfromthestratuminwhichitisfoundintootherstrata,therebyultimatelyresultinginthelossofrecoverableoilorgas,orboth;(c)Thedrowningwithwaterofanystratumorpartthereofcapableofproducingoilorgasinpayingquantities,exceptforsecondaryrecoverypurposes,orinhydraulicfracturingorothercompletionpractices;(d)Theunreasonabledamagetounderground,freshormineralwatersupply,workablecoalseams,orothermineraldepositsintheoperationsforthediscovery,development,productionorhandlingofoilandgas;(e)Theunnecessaryorexcessivelossofoilandgasbyspillageorventingordestructionofoilorgasortheirconstituents;and(f)Thedrillingofmorewellsthanarereasonablyrequiredtorecoverefficientlythemaximumamountofoilandgasfromapool.(3)TheproductionofoilorgasfromanywellinanypoolunlessapermithasbeenissuedasrequiredbyKRS353.500to353.720,orinviolationofthespacingprovisionsofKRS353.500to353.720,isprohibited;exceptthatthissubsectionshallnotprohibitthecontinuationofproductionofoilorgasfromawellproducingoilorgasonJune16,1960.Effective:June24,2003History:Amended2003Ky.Actsch.150,sec.8,effectiveJune24,2003.-Amended1974Ky.Actsch.45,sec.2.-Created1960Ky.Actsch.103,sec.3,effectiveJune16,1960.353.530DirectorofDivisionofOilandGas-Qualifications-Duties-Oath.(1)ThesecretaryoftheEnergyandEnvironmentCabinetshallappoint,asdirectoroftheDivisionofOilandGasintheDepartmentforNaturalResources,apersonwhohas,atthetimeofhisappointment,atleastfive(5)years'experienceintheexplorationforortheproductionofoilorgas.(2)ItshallbehisdutytoadministertheprovisionsofKRS353.500to353.720subjecttothedirectionandsupervisionofthecommissioner.(3)Beforetakingoffice.thedirectorshalltakeoath,whichshallbecertifiedbytheofficeradministeringit.Theoath,inwriting,andthecertificateshallbefiledintheofficeoftheSecretaryofState.(4)Nodirectorshall,whileholdingoffice,acquireanyfinancialinterest,directlyorindirectly,inanyventureoractivityfortheexplorationfororproductionofoilorgasinthisCommonwealth.Effectlve:July15,2010Hfstory:Amended2010Ky.Actsch.24,sec.1904,effectiveJuly15,2010.-Amended2005Ky.Actsch.123.sec.65,effectiveJune20,2005.-Created1960Ky.Actsch.103,sec.4,effectiveJune16,1960.353.540Authorityofdepartment-Jurisdiction.(1)ThedepartmentisauthorizedanditshallbeitsdutytoadministerandenforceKRS353.500to353.720,allrulesandregulationspromulgatedandordersissuedhereunder,andtoconductsuchinvestigationsasitdeemsnecessary.(2)Thedepartmentisherebygrantedauthorityandjurisdictionoverallpersonsandpropertynecessaryforsuchpurposes.Effectlve:June16,1960History:Created1960Ky.Actsch.103,sec.6,effectiveJune16,1960.353.550Specificauthorityoveroilandgasoperators.Withoutlimitingitsgeneralauthority,thedepartmentshallhavethespecificauthoritytorequireofandfromalloperatorsofanyoilorgaspropertyinthisCommonwealth:(1)Identificationofproducingleases,submittedontheformonwhichproductionisrequiredbythedepartmenttobereported;(2)Themakingofdriller'slogs,andfilingofalllogsanddownholesurveysmade;(3)Thedrilling,casing,operation,andpluggingofwellsinsuchmannerastoprevent:(a)Theescapeofoilorgasfromonepoolintoanother,orintomineralbearingstratum;(b)Thedetrimentalintrusionofwaterintoanoilorgaspoolorintomineral-bearingstratumthatisavoidablebyefficientoperations;and(c)Blowouts,cavings,seepages,andfires;(4)ThefilingofthereportsandplatswiththedepartmentfortransmittaltotheKentuckyGeologicalSurveyasmaybeprescribedbyrulesandregulationspromulgatedhereunder.AllsuchreportsandplatsshallbetransmittedbythedepartmenttotheKentuckyGeologicalSurveywithinthirty(30)daysafterreceiptthereofbythedepartment.Effectlve:July15,1996History:Amended1996Ky.Actsch.276,sec.1,effectiveJuly15,1996.-Created1960Ky.Actsch.103,sec.7,effectiveJune16,1960.353.560Furtherauthority.(1)Withoutlimitingitsgeneralauthority,thedepartmentshallregulate:(a)Thedrillingandpluggingofallwells;(b)Thespacingorlocatingofwells;and(c)Theuseofvacuum.(2)ThedepartmentshallmakerecommendationstotheU.S.EnvironmentalProtectionAgencyandtheEnergyandEnvironmentCabinetastodisposalofsaltwaterandoilfieldwastes.Effectlve:July15,2010History:Amended2010Ky.Actsch.24,sec.1905,effectiveJuly15,2010.-Amended2003Ky.Actsch.150,sec.9,effectiveJune24,2003.-Created1960Ky.Actsch.103,sec.8,effectiveJune16,1960.353.565KentuckyOilandGasConservationCommission.(1)ThereisherebycreatedintheDepartmentforNaturalResources,the"KentuckyOilandGasConservationCommission"whichshallbecomposedoffive(5)members.Four(4)ofthemembersshallbeappointedbytheGovernorandthefifthmember,whoshallserveaschairmanofthecommission,shallbethedirectoroftheDivisionofOilandGasandwhoshallserveinanexofficiocapacityasanonvotingmember exceptinthecaseofatie.Thefour(4)membersappointedbytheGovernorshallberesidentsofthisstateandnotmorethanone(1)ofthemmaybedirectlyemployedintheexplorationforortheproductionofoilorgas,orderivingmorethanfiftypercent(50%)ofthatperson'sincomefromtheexplorationfororproductionofoilorgas,orengagedinabusinessdirectlyservicingorsupplyingtheseactivities.Nomemberofthecommissionshallparticipateinthedeliberationsofthecommissionorvoteonanymatterbeforethecommissioninwhichhe,hisemployer,oranybusinessunitinwhichhehasafinancialinterestIsaninterestedparty,butamemberofthecommissionisnotprohibitedfromdeliberatingorvotingonmattersofgeneralinterest,suchasthefixingofstatewidespacingpatterns,affectinghim,hisemployer,orabusinessunitinwhichhehasfinancialinterestasamemberofaclassofpersonstobeaffectedbyanadministrativeregulationororderofthecommission.Thecommissionshallnotcontainmorethanone(1)representativefromanyone(1)operator,includingsubsidiariesoraffiliates.Ofthefour(4)membersappointedbytheGovernor,two(2)shallberesidentsofeasternKentuckyandtwo(2)shallberesidentsofwesternKentucky.Longitude84deg.30min.shallbedeemedasthedivisionlinebetweeneasternKentuckyandwesternKentucky.(2)Themembersofthecommission,exceptthechairman,shallbeappointedfortermsoffour(4)yearseach,exceptthat:(a)Theoriginalappointmentsshallbefortermsofone(1),two(2),three(3),andfour(4)yearsrespectively;and(b)OfthemembersappointedafterJuly15,1998,one(1)memberappointedtofillthetermexpiringJune21,1999,shallserveuntilJanuary21,2000;one(1)memberappointedtofillthetermexpiringJune21,2000,shallserveuntilJanuary21,2001;one(1)memberappointedtofillone(1)ofthetwo(2)termsexpiringJune21,2001,shallserveuntilJanuary21,2002;andone(1)memberappointedtofillthesecondofthetwo(2)termsexpiringJune21,2001,shallserveuntilJanuary21,2003;andsubsequentappointmentsshallbeforfour(4)yeartermsendingonJanuary21.EachmemberappointedbytheGovernorshallserveuntilhissuccessorhasbeenappointedandqualified.MembersmaybereappointedbytheGovernortoservesuccessiveterms.Themembersofthecommission,beforeperforminganydutyhereunder,shalltakeanoathwhichshallbecertifiedbytheofficeradministeringit.TheoathinwritingandthecertificateshallbefiledintheofficeoftheSecretaryofState.VacanciesinthemembershipappointedbytheGovernorshallbefilledbyappointmentbyhimandfortheunexpiredtermofthememberwhoseofficeshallbevacant,andtheappointmentshallbemadebytheGovernorwithinsixty(60)daysoftheoccurrenceofavacancy.AnymemberappointedbytheGovernormayberemovedbytheGovernorincaseofincompetency,neglectofduty,grossimmorality,ormalfeasanceofoffice.(3)Thecommissionshallmeetattimesandplacesasshallbedesignatedbythechairman.Thechairmanmaycallameetingofthecommissionatanytime,andheshallcallameetingofthecommissionuponthewrittenrequestoftwo(2)members.Notificationofeachmeetingshallbegiveninwritingtoeachmemberbythechairmanatleastfive(5)daysinadvanceofthemeeting.Anythree(3)members,one(1)ofwhichmaybethechairman,shallconstituteaquorumforthetransactionofanybusiness,includingtheholdingofhearings.Amajorityofthecommissionpresentshallberequiredtodetermineanyissuebroughtbeforeitfordecision.(4)Eachmemberofthecommission,exceptthechairman,shallreceiveonehundredfiftydollars($150)perdiemnottoexceedonehundred(100)dayspercalendaryearwhileactuallyengagedintheperformanceofhisdutiesasamemberofthecommission.Eachmemberofthecommission,includingthechairman,shallalsobereimbursedforallreasonableandnecessaryexpensesactuallyincurredintheperformanceofhisdutiesasamemberofthecommission.(5)Thecommissionshallexecuteandcarryout,administer,andenforcetheprovisionsofKRS353.651and353.652.Thecommissionmaymakeanyinvestigationofrecordsandfacilitiesasitdeemsproper.(6)Ifanemergencyisfoundtoexistbythecommissionwhich,initsjudgment,requiresthemaking,changing,renewal,orextensionofanadministrativeregulationororderwithoutfirsthavingahearing,anemergencyregulationmaybepromulgatedinaccordancewithKRSChapter13AandanemergencyordermaybeissuedinaccordancewithKRS138.125.(7)Thecommissionshallhavespecificauthorityto:(a)Promulgateandenforcereasonableadministrativeregulationsandissueordersreasonablynecessarytopreventwaste,protectcorrelativerights,governthepracticeandprocedurebeforethecommission,andotherwiseadministertheprovisionsofKRS353.651and353.652;and(b)Issuesubpoenasfortheattendanceofwitnessesandsubpoenasducestecumfortheproductionofanybooks,records,maps,charts,diagrams,andotherpertinentdocuments,andadministeroathsandaffirmationstowitnesses,whenever,inthejudgmentofthecommission,itisnecessarytodosofortheeffectivedischargeofitsdutiesundertheprovisionsofKRS353.651and353.652.(8)Anyinterestedpersonmayhavethecommissioncallahearingforthepurposeoftakingactioninrespecttoanymatterwithinthejurisdictionofthecommissionbymakingarequestthereforinwriting.Uponthereceiptofanyrequest,thecommissionpromptlyshallcallahearingthereon,and,afterthehearingandwithallconvenientspeed,andinanyeventwithinthirty(30)daysaftertheconclusionofthehearing,shalltakeappropriateactionwithregardtothesubject matterthereofasitmaydeemappropriate.Ifthehearingisadjudicatoryinnature,itshallbeconductedinaccordancewithKRSChapter138.(9)Agreementsmadeintheinterestofconservationofoilorgas,orboth,orforthepreventionofwaste,betweenandamongownersoroperators,orboth,owningseparateholdingsinthesamefieldorpool,orinanyareathatappearsfromgeologicorotherdatatobeunderlaidbyacommonaccumulationofoilorgas,orboth,andagreementsbetweenandamongtheseownersoroperators,orboth,androyaltyownerstherein,forthepurposeofbringingaboutthedevelopmentandoperationofthefield,pool,orarea,oranypartthereof,asaunit,andforestablishingandcarryingoutaplanforthecooperativedevelopmentandoperationthereof,whentheagreementsareapprovedbythecommission,areherebyauthorizedandshallnotbeheldorconstruedtoviolateanyofthelawsofthisstaterelatingtotrusts,monopolies,orcontractsandcombinationsinrestraintoftrade.(10)NothinginthissectionshallbeconstruedasgivingtothecommissiontherightorauthoritytosupersedetheauthorityofthedepartmentintheadministrationofKRS353.060.Effectlve:July15,2010History:Amended2010Ky.Actsch.24,sec.1906,effectiveJuly15,2010.-Amended2000Ky.Actsch.139,sec.2,effectiveJuly14,2000.-Amended1998Ky.Actsch.194,sec.11,effectiveJuly15,1998.-Amended1996Ky.Actsch.318.sec.340,effectiveJuly15,1996.-Amended1984Ky.Actsch.111,sec.145,effectiveJuly13,1984.-Amended1978Ky.Actsch.154,sec.39,effectiveJune17,1978.-Created1974Ky.Actsch.45,sec.3.353.570Permitrequired••Mayauthorizeoperationpriortoissuanceofpermit.(1)Nopersonshalldrillordeepenawell,orreopenapluggedwellfortheproductionofoilorgasorfortheinjectionofwater,gasorotherfluidintoanyoilorgasproducingformation(exceptseismographtestholes)afterJune16,1960,ordrillordeepenawatersupplywell,andgeologicalorstructuretestholesafterJune16,1966,untilsuchpersonshallobtainapermitfromthedepartment,exceptasprovidedinKRS353.730.(2)Whenanyapplicantforapermitasrequiredbythissectionhascompliedwiththeprovisionsofthischapterandallrulesandregulationspromulgatedhereunder,thedepartmentshallissuethepermit.(3)Thedepartmentmayauthorizethecommencementofthedrilling,deepeningorreopeningofanywellpriortotheissuanceofapermittherefor;exceptifthelocationofthewellisknowntobeunderlaidbyacoal-bearingstratumandconsentoftheowner,operator,andlesseeofthecoal-bearingstratumhasnotbeengranted.Consentshallbeimplied,whenthecoal-bearingstratumisownedbytheoilandgaslessororlessee,andthecoalisnotunderleasetoanythirdparty.Effectlve:July15,1998History:Amended1998Ky.Actsch.359,sec.4,effectiveJuly15,1998.-Amended1966Ky.Actsch.147,sec.1.-Created1960Ky.Actsch.103,sec.9.353.575Dutyofapplicanttomeetandconferwithpermitteeifdrillingwilldisturbpermittedarea.PriortotheissuanceofapermittodrillanoilorgaswellonlandwhichispermittedorbondedundertheprovisionsofKRSChapter350,theapplicantshallcertifythathehasmetandconferredwith,orofferedtomeetandconferwith,thepermitteeastoanyactivitythatwilldisturbthepermittedarea.Effective:July14,1992History:Created1992Ky.Actsch.348,sec.2,effectiveJuly14,1992.353.580Expirationofpermit--Extensions.(1)EachpermitissuedunderKRS353.500to353.720shallexpireone(1)yearafterthedateissued,unlessthedrilling,deepening,orreopeningofawelliscommencedpursuanttheretopriortotheexpirationoftheone(1)yearperiod.However,thepermittermshallbeextendedbyone(1)yearif,priortotheexpirationdate,thepermit applicantnotifiesthedepartmentinwritingoftheapplicant'srequestforanextension,notifiestheowner,recordcoallessee,orminelicenseeoriginallyentitledtoreceiveacopyoftheplatunderKRS353.050,submitsanaffidavitstatingthattheinformationintheoriginalpermitapplicationisstillcorrect,andsubmitsafeefortheextensioninanamountequaltothepermitfeerequiredbyKRS353.590.WithrespecttopermitsissuedpriortoJuly15,2002,noextensionshallbegrantedforanypermitincaseswheretherehasbeenacompleteseveranceoftheownershipoftheoilandgasfromtheownershipofthesurfacetobedisturbed,unlesstherequestedextensionisagreedtoinwritingbythesurfaceowner.(2)The extensionofthepermittermpursuanttosubsection(1)ofthissectionshallnotcreatearighttoobjecttothewelllocationunderKRS353.060nortomediationunderKRS353.5901.(3)Allpermitsissuedbythedepartmentunderanypreviousstatuteshallcontinueinforceaswritten,onlyifthedrillingofthewellhasbeencommencedpursuanttheretoonorbeforesixty(60)daysafterJune16,1960.Effective:June24,2003History:Amended2003Ky.Actsch.150,sec.10,effectiveJune24,2003.-Amended2002Ky.Actsch.325,sec.1,effectiveJuly15,2002.-Created1960Ky.Actsch.103,sec.10,effectiveJune16,1960.353.590Applicationforpermit-Fees--Plat--Bondtoinsureplugging--Schedule-Blanketbonds-Corporateguarantee••Useofforfeitedfunds-Oilandgaswellpluggingfund••Wellsnotincludedin..watersupplywell...(1)AnypersonseekingapermitrequiredbyKRS353.570shallsubmittothedepartmentawrittenapplicationinaformprescribedbythedepartment.(2)Eachapplicationshallbeaccompaniedbyaspecifiedfeeasfollows:(a)Thefeeshallbethreehundreddollars($300)foreachwelltobedrilled;deepened,orreopenedforanypurposerelatingtotheproduction,repressuring,orstorageofoilorgas,andforeachwatersupplywell,observationwell,andgeologicalorstructuretesthole.(b)IfthedepartmentreceivesdelegationofauthorityforadministrationoftheundergroundinjectioncontrolprogramunderSection1425oftheSafeDrinkingWaterAct(Pub.L.93-523asamended),thedepartmentmay,byadministrativeregulation,establishafeeorscheduleoffeesinanamountnottoexceedfiftydollars($50)perwell,inadditiontothefeesimposedbyparagraph(a)ofthissubsection,uponeachapplicationtodrill,deepen,orreopenawellforanypurposerelatingtotheproduction,repressuring,orstorageofoilorgas,andforeachwatersupplywell,observationwell,andgeologicalorstructuretesthole.ThefeesorscheduleoffeestobeestablishedbyadministrativeregulationshallnotexceedanamountsufficienttorecoverthecostsincurredbythedepartmentinadministeringtheUndergroundInjectionControlProgramlessanyotherstateorfederalfundswhicharemadeavailableforthispurpose.(c)AllmoneypaidtotheStateTreasurerforfeesrequiredbyparagraph(b)ofthissubsectionshallbeforthesoleuseofthedepartmentintheadministrationoftheUndergroundInjectionControlProgramunderSection1425oftheSafeDrinkingWaterAct(Pub.L.93-523asamended).(3)AllmoneypaidtotheStateTreasurerforlicensesandfeesrequiredbyKRS353.500to353.720shallbeforthesoleuseofthedepartmentandshallbeinadditiontoanymoneysappropriatedbytheGeneralAssemblyfortheuseofthedepartment.(4)Eachapplicationshallbeaccompaniedbyaplat,whichshowsthelocationandelevationofeachwell,preparedaccordingtotheadministrativeregulationspromulgatedunderKRS353.500to353.720.TheplatshallbecertifiedasaccurateandcorrectbyaprofessionallandsurveyorlicensedinaccordancewiththeprovisionsofKRSChapter322.(5)WhenanypersonsubmitstotheDepartmentforNaturalResourcesanapplicationforapermittodrillawell,ortoreopen,deepen,ortemporarilyabandonanywellwhichisnotcoveredbysuretybond,thedepartmentshall,exceptasprovidedinthissection,requirefromthewelloperatorthepostingofabond.Exceptforbondsforwelldepthsgreaterthanfourthousand(4,000)feet,thebondshallbepostedinaccordancewiththefollowingschedule:WellDepthandAmount0to500feet500.00501feetto1,000feet1,000.001,001feetto1,500feet1,500.001,501feetto2,000feet2,000.002,001feetto2,500feet2,500.002,501feetto3,000feet3,000.003,001feetto3,500feet3,500.003,501feetto4,000feet4,000.004,001feetanddeeper5,000.00(6)Thecommissionmayestablishabondinasumgreaterthanfivethousanddollars($5,000)foranywelltobedrilledtoadepthofmorethanfourthousand(4,000)feetifthemembersofthecommissiondeterminethatthe particularcircumstancesofthedrillingofthewellwarrantanincreaseinthebondamountestablishedinsubsection(5)ofthissection.(7)Allbondsrequiredtobepostedunderthissectionshall:(a)BemadeinfavoroftheDepartmentforNaturalResources;(b)Beconditionedthatthewells,uponabandonment,shallbepluggedinaccordancewiththeadministrativeregulationsofthedepartmentandthatallrecordsrequiredbythedepartmentbefiledasspecified;and(c)Remainineffectuntilthepluggingofthe wellisapprovedbythedepartment,orthebondisreleasedbythedepartment.(8)Anoperatormaypetitionthedepartmenttoamendthedrillingdepthandbondamountapplicabletoaparticularwellandshallnotproceedtodrilltoadepthgreaterthanthatauthorizedbythedepartmentuntiltheoperatorissoauthorized,exceptpursuanttoadministrativeregulationspromulgatedbythedepartment.(9) (a)Anyqualifiedwelloperator,inlieuoftheindividualbond,mayfilewiththedepartmentablanketbondaccordingtothefollowingtieredstructure:1.One(1)totwenty-five(25)wellsrequireatenthousanddollar($10,000)bond;2.Twenty-six(26)toonehundred(100)wellsrequireatwenty-fivethousanddollar($25,000)bond;3.Onehundredone(101)tofivehundred(500)wellsrequireafiftythousanddollar($50,000)bond;and4.Fivehundredone(501)ormorewellsrequireaonehundredthousanddollar($100,000)bond.(b)Anynonqualifiedwelloperator,inlieuofanindividualbond.mayfilewiththedepartmentablanketbondaccordingtothefollowingtieredstructure:1.One(1)toonehundred(100)wellsrequireafiftythousanddollar($50,000)bond;and2.Onehundredone(101)ormorewellsrequireaonehundredthousanddollar($100,000)bond.(10)Toqualifyforablanketbondunderthetieredstructuresetforthinsubsection(9)(a)ofthissection,anoperatorshall:(a)HaveablanketbondinplacefiledwiththedepartmentpriortoJuly15,2006,andhavenooutstanding,unabatedviolationsofKRSChapter353orregulationsadoptedpursuanttheretowhichhavenotbeenappealed;(b)Demonstrateforaperiodofthirty-six(36)monthspriortotherequestforblanketbondingarecordofcompliancewiththestatutesandadministrativeregulationsofthedivision;or(c)Provideproofoffinancialabilitytoplugandabandonwellscoveredbytheblanketbond.(11)Inadditiontotherequirementssetforthinsubsection(12)ofthissection,proofoffinancialabilitysetforthinsubsection(1O)(c)ofthissectionshallbeestablishedbyanauditedfinancialstatementthatsatisfiesatleasttwo(2)ofthefollowingratios:(a)Aratiooftotalliabilitiestonetworthlessthantwo(2);or(b)Aratioofthesumofnetincomeplusdepreciation,depletion,andamortizationtototalliabilitygreaterthanone-tenth(0.1);or(c)Aratioofcurrentassetstocurrentliabilitiesgreaterthanoneandfive-tenths(1.5).(12)Iftheoperatorisacorporatesubsidiary,theoperatorfurthershallprovideacorporateguaranteeinwhichtheguarantorshallbetheparentcorporationoftheoperatorofthewellscoveredunderthebond.Thecorporateguaranteeshallprovide:(a)Thatiftheoperatorfailstoperformwiththeproperpluggingandabandonmentofanywellcoveredbytheblanketbond,theguarantorshalldosoorprovideforalternatefinancialassurance;and(b)Thecorporateguaranteeshallremaininforceunlesstheguarantorsendsnoticeofthecancellationbycertifiedmailtotheoperatorandtothedepartment.Cancellationshallnotoccur,however,duringtheonehundredtwenty(120)dayperiodbeginningonthefirstdaythatboththeoperatorandthedepartmenthavereceivednoticeofcancellation,asevidencedbythecertifiedmailreturnreceipts.(13)Anoperatorshallnotbeeligibleforblanketbondingif:(a)Ithasmorethanten(10)violationsofKRSChapter353ortheregulationsadoptedpursuanttheretowithinthethirty-six(36)monthperiod;(b)Ithasanyoutstanding,unabatedviolationsofKRSChapter353ortheregulationsadoptedpursuanttheretowhichhavenotbeenappealed;(c)Ithasaforfeitureofabond,whetheranindividualbondorportionofablanketbond,onanypermitwheretheoperatorhasnotenteredintoanagreedorderwiththedepartmentforthepluggingandproperabandonmentofthewellorwellsontheforfeitedpermitorpermits;or(d)Ithasapermitorpermits,uponwhichabondorportionofabondhasbeenforfeitedandtheproceedsfromtheforfeiturehavebeenspentbythedepartmenttoplugorreclaimthepermittedwellorwells,unlesstheoperatorhasmaderestitutiontothedepartmentforallcostsassociatedwiththeforfeiture,plugging,andproperabandonment.(14)Adepositincashorabank-issuedirrevocableletterofcreditmayserveinlieuofeitheroftheindividualwellorblanketbonds.(15)Individualsacquiringasinglewellfordomesticusemaypostacombinationbondwhichshallconsistofacashbondintheamountofonethousanddollars($1,000)plusalienonthepropertytocoverfuturepluggingcosts.Onlyone(1)combinationbondmaybepostedbyeachindividual.(16)Acertificateofdeposit,theprincipalofwhichispledgedinlieuofabondandwhoseinterestispayabletothepartymakingthepledge,mayserveforanindividualwellbond.Acertificateofdeposit,theprincipalofwhichispledgedinlieuofabondandwhoseinterestispayabletothepartymakingthepledge,mayserveforablanketbond,providedthatthefirstfivethousanddollars($5,000)oftheblanketbondispostedwiththedepartmentincash.(17)Thebondorbondsreferredtointhissectionshallbeexecutedbythewelloperatorasprincipaland,ifasuretybond,byacorporatesuretyauthorizedtodobusinessintheCommonwealth.(18)Adepositincashshallserveinlieuofeitheroftheabovebonds;allcashbondsacceptedbythedepartmentshallbedepositedintoaninterest-bearingaccount,withtheinterestthereonpayabletothespecialagencyaccountknownastheoilandgaswellpluggingfund,createdinsubsection(24)ofthissection,tobeusedinaccordancewiththepurposesdescribedtherein.AllcashbondsbeingheldbythedepartmentonJuly13,1990,shalllikewisebedepositedintheinterest-bearingaccount,withtheproceedstobeusedforthepurposesestablishedfortheoilandgaswellpluggingfund.(19)Thebondamountsprescribedbysubsection(5)ofthissectionshallbeapplicableonlytopermitsissueduponandafterJuly15,2006.AllbondspostedforpermitsissuedpriortoJuly15,2006,shallremaininfullforceandeffectforthedurationofthepermits.{20)Theblanketbondamountsprescribedbysubsection(9)ofthissectionshallbeeffectiveuponandafterJuly15,2006.AnyoperatorhavingfiledablanketbondwiththedepartmentpriortoJuly15,2006,mayatitsdiscretionincreasetheleveloftheblanketbondincrementallybyincreasingtheblanketbondbytheamountoftheindividualbondprescribedbysubsection(9)ofthissectiononanywellsdrilledsubsequenttoJuly15,2006,untiltheblanketbondhasreachedthelevelprescribedbysubsection(9)ofthissection.(21)Asuccessortothewelloperatorshallpostbond,payatwenty-fivedollar($25)feeperwelltothedepartment,andnotifythedepartmentinwritinginadvanceofcommencinguseoroperationofawellorwells.Thesuccessorshallassumetheobligationsofthischapterastoaparticularwellorwellsandrelievetheoriginalpermitteeofresponsibilityunderthischapterwithrespecttothewellorwells.Itshallbetheresponsibilityofthesellingoperatortorequirethesuccessoroperatortopostbondbeforeuseoroperationiscommencedbythesuccessorandreliefofresponsibilityunderthischapterisgrantedtotheoriginalpermittee.(22)Iftherequirementsofthissectionwithrespecttoproperplugginguponabandonmentandsubmissionofallrequiredrecordsonallwellorwellshavenotbeencompliedwithwithinthetimelimitssetbythedepartment,byadministrativeregulation,orbythischapter,thedepartmentshallcauseanoticeofnoncompliancetobeservedupontheoperatorbycertifiedmail,addressedtothepermanentaddressshownontheapplicationforapermit.(a)Thenoticeshallspecifyinwhatrespectstheoperatorhasfailedtocomplywiththischapterortheadministrativeregulationsofthedepartment.(b)Iftheoperatorhasnotreachedanagreementwiththedepartmentorhasnotcompliedwiththerequirementssetforthbyitwithinforty-five(45)daysaftermailingofthenotice,thebondshallbeforfeitedtothedepartment.(23)AbondforfeitedpursuanttotheprovisionsofthischaptermaybecollectedbyanattorneyforthedepartmentorbytheAttorneyGeneral,afternoticefromthedirectoroftheDivisionofOilandGas.(24)AllsumsreceivedunderthissectionorthroughtheforfeitureofbondsshallbeplacedintheStateTreasuryandcreditedtoaspecialagencyaccounttobedesignatedastheoilandgaswellpluggingfund,whichshallbeaninterest-bearingaccountwiththeinterestthereonpayabletothefund.Thisfundshallbeavailabletothedepartmentandshallbeexpendedforthepluggingofanyabandonedwellscomingwithintheauthorityofthedepartmentpursuanttothischapter.Thepluggingofanypursuanttothissubsectionshallnotbeconstruedtorelievetheoperatororanyotherpersonfromcivilorcriminalliabilitywhichwouldexistexceptfortheplugging.Anyunencumberedandanyunexpendedbalanceofthisfundremainingattheendofanyfiscalyearshallnotlapsebutshallbecarriedforwardforthepurposeofthefunduntilexpendedoruntilappropriatedbysubsequentlegislativeaction.(25)Uponrequestbyanypersonapplyingrorapermitforageologicalorstructuretesthole,thedepartmentshallkeepthelocationandelevationoftheholeconfidentialuntiltheinformationisallowedtobereleasedbythepersonobtainingthepermit.(26)Forthepurposeofthischapter,"watersupplywell"shallnotinclude:(a)Anywellforapotablewatersupplyfordomesticuseorforlivestock;or(b)Anywaterwellusedprimarilyforcoolingpurposesinanindustrialprocess.(27)NotwithstandingtheprovisionsofKRSChapter353orthissection,nooperatorshallbeeligibletoreceiveadditionalpermitsifthatoperatororanyentityinwhichithasanownershipinteresthas:(a)Anyoutstanding,unabatedviolationsofKRSChapter353ortheregulationsadoptedpursuantthereto,whichhavenotbeenappealed;(b)Aforfeitureofabond,whetheranindividualbondorportionofablanketbond,onanypermitwheretheoperatorhasnotenteredintoanagreedorderwiththedepartmentforthepluggingandproperabandonmentofthewellorwellsontheforfeitedpermitorpermits;or(c)Apermitorpermitsuponwhichabondorportionofabondhasbeenforfeited,andtheproceedstherefromhavingbeenspentbythedepartmenttoplugorreclaimthepermittedwell,orwells,unlesstheoperatorhasmaderestitutiontothedepartmentforallcostsassociatedwiththeforfeiture,plugging,andproperabandonment.Effectlve:July15,2010History:Amended2010Ky.Actsch.24,sec.1907,effectiveJuly15,2010.-Amended2006Ky.Actsch.160,sec.2,effectiveJuly12,2006.-Amended2003Ky.Actsch.150,sec.11,effectiveJune24,2003.-Amended2000Ky.Actsch.139,sec.3,effectiveJuly14,2000.-Amended1998Ky.Actsch.214,sec.43,effectiveJanuary1,1999.-Amended1994Ky.Actsch.127,sec.1,effectiveJuly15,1994.-Amended1990Ky.Actsch.12,sec.1,effectiveJuly13,1990.-Amended1982Ky.Actsch.232,sec.1,effectiveJuly15,1982.-Amended1966Ky.Actsch.147,sec.2.-Created1960Ky.Actsch.103,sec.11.353.5901Operationsandreclamationproposalforlandwithcompleteseverance--Contents,distribution,andagreementormediation••Mediationreport.(1)Inallcaseswheretherehasbeenacompleteseveranceoftheownershipoftheoilandgasfromtheownershipofthesurfacetobedisturbed,awelloperatorshallsubmittothedepartmentanoperationsandreclamationproposalatthetimeoffilinganapplicationforpermittodrill,deepen,orreopenawell.Theproposalshallbefiledonformsprovidedbythedepartmentandshallinclude:(a)Aproposaltopreventerosionofandsedimentationfromthewellsiteandalldisturbedareas,includingroads;(b)Anarrativedescriptionofthelocationofallareastobedisturbed,includingthelocationofroads.gatheringlines.thewellsite,tanksandotherstoragefacilities,andanyotherinformationthatmayberequiredbythedepartment.Accompanyingthisnarrativedescriptionshallbeaplatdepictingthelocationonthelandofallofthesedisturbancesorfacilities;(c)Asignedagreementbythesurfaceownersofalldisturbedareastotheoperationsandreclamationproposal;and(d)Anyadditionalinformationthatthedepartmentmayrequire.(2)Inallcaseswheretherehasbeenacompleteseveranceoftheownershipoftheoilandgasfromtheownershipofthesurfaceandthesurfaceownersofalldisturbedareashavenotsignedagreementswiththewelloperatoragreeingtotheoperationsandreclamationproposal,atthetimeoffilingtheapplicationthewelloperatorshallcausetobedeliveredtothesurfaceownersofalldisturbedareaswhohavenotagreedtotheoperationsandreclamationproposal,bycertifiedmail,returnreceiptrequested:(a)Acopyoftheoperationsandreclamationproposalrequiredbyparagraph(a)ofsubsection(1)ofthissection,andthenarrativedescriptionoflanddisturbancesandplatrequiredbyparagraph(b)ofsubsection(1)ofthissection;and(b)Anoticetoreadasfollows:"Ifyoudonotagreewiththeproposeduseofyourlandbythewelloperator,thewelloperatormayrequestmediationofyourdisputebytheGeneralCounsel'sOfficeoftheDepartmentforNaturalResources.Ifmediationisrequested,andyoudecidetoparticipate,eachpartytothemediationwi11bechargedonehundreddollars($100)tohelpcoverthecostofmediation.Youwillbenotifiedofthetimeandplaceformediation,ifthewelloperatorchoosesmediation,andofyourrighttoparticipate."'Thecertifiedmailreceipt,whenreturned,shallbefiledbythewelloperatorwiththedepartmentandmadepartofthepermitapplication.(3)Ifthewelloperatorhasbeenunabletoreachagreementwiththesurfaceownersofallareastobedisturbedinallcaseswheretherehasbeenacompleteseveranceoftheownershipoftheoilandgasfromtheownershipofthesurfacetobedisturbed,thepermitrequiredbythischaptershallnotbeissueduntilthedisputehasbeenreferredtomediationbytheGeneralCounsel'sOfficeoftheDepartmentforNaturalResources,andmediationhasbeenconcludedeitherbyagreementbetweenthepartiesorbyareportofthemediator,inaccordancewithsubsection(4)ofthissection.(4)Thewelloperatormayrequestmediationanytimeafterfilingthepermitapplication,andallpartiesparticipatinginthemediationshallpayanonrefundablefeeofonehundreddollars($100)totheKentuckyStateTreasurer,whichshallbeforthesoleuseofthedepartmentandshallbeinadditiontoanymoneyappropriatedbytheGeneralAssemblyfortheuseofthedepartment.Thedepartmentshallnotifythewelloperatorandallsurfaceownersofareastobedisturbedbydrillingwhohavenotagreedtotheoperationandreclamationplanofthedateandtimemediationshallbeconductedbycertifiedmail,returnreceiptrequested.Thedepartmentshallconductmediationatthesiteproposedtobedisturbedwithinfifteen(15)daysfromthedaterequested,ifpracticable.Atthemediation,themediatorwillattempttofacilitateanagreementbetweenthewelloperatorandthesurfaceowner.Ifanagreementisnotforthcomingaftermediation,themediatorshall,withinfive(5)daysaftermediation,issueareporttothedirectoroftheDivisionofOilandGasrecommendingthatthedirector:(a)Accepttheproposalassubmittedbythewelloperator;or(b)Accepttheproposalwithmodificationssetforthbythemediator.(5)Ifanagreementbetweenthewelloperatorandthesurfaceownersofalldisturbedareasisnotforthcomingaftermediation,themediatorshallconsiderthefollowingfactorsastothereasonableuseofthesurfacebythewelloperatorinissuingareporttothedirector,whichrecommendationsshallbecomepermitconditions:(a)Thelocationofroads,gatheringlines,andtankbatteries;(b)Thetimingoftheoperation,consideringseasonalusesofthelandbythesurfaceownerandtheneedofthewelloperatortodrillexpeditiously;(c)Theimpactontheotherusesofthelandbythesurfaceowner,includingthelocationoftimber,houses,barns,ponds,crops,andotherimprovements;(d)Whethertheproposalincludesaplanfortimely,effectivereclamationofalldisturbedareas;and(e)Anyotherinformationdeemedappropriatebythemediator.(6)Thedirectorshallactupontherecommendationofthemediatorwithinfive(5)daysofthereceiptofthemediationreport.Effectlve:July15,2010History:Amended2010Ky.Actsch.24,sec.1908,effectiveJuly15,2010.-Created1994Ky.Actsch.127,sec.2,effectiveJuly15, 1994.353.591PurposeandapplicationofKRS353.592and353.593.ThepurposeofKRS353.592and353.593shallbe,upondelegationofauthorityforadministrationoftheUndergroundInjectionControlProgramunderSection1425oftheSafeDrinkingWaterAct(PublicLaw93-523asamended),toprotectundergroundsourcesofdrinkingwaterandtopreventtheirendangermentfromclassIIwells.KRS353.592and353.593shallapplytoallpersonsasdefinedinKRS353.510;toalllandsincludingfederally-ownedlands;andtoallclassIIwellswithoutregardtothetimethewellwasdrilled;providedthatthedepartmentmaymakereasonabledistinctionsbetweenexistingandnewclassIIwellsintheimplementationofKRS353.592and353.593.NoprovisionofKRS353.592or353.593shallapplytocrudeoilornaturalgasproductionwellsthatarenotclassIIwells.Effectlve:July15,1986History:Created1986Ky.Actsch.277,sec.2,effectiveJuly15,1986.353.592Powersofthedepartment.InadditiontothepowersconferreduponthedepartmentbyKRS353.500to353.720andnotwithstandinganyprovisionofKRS353.500to353.720,thedepartmentisauthorizedbutnotobligatedtodevelopandpromulgatearegulatoryprogramforthepurposeofacceptingprimaryresponsibilityforadministrationoftheUndergroundInjectionControlProgramunderSection1425oftheSafeDrinkingWaterAct(PublicLaw93-523asamended).Tothatend,thedepartmentshallincludeinanyregulatoryprogramdevelopedandpromulgatedunderthisprovision:(1)Regulationsregardingthedrilling,casing,operation,plugging,construction,conversion,maintenance,andabandonmentofclassIIwellstoprotectundergroundsourcesofdrinkingwaterandtopreventtheirendangerment;(2)RegulationsprohibitingundergroundinjectionthroughclassIIwellsexceptasauthorizedbysuchregulationsorbyapermitissuedpursuantthereto;(3)RegulationsrequiringownersoroperatorsofclassIIwellstodemonstratefinancialresponsibilityforthecostsofclosureofallclassIIwells.SuchdemonstrationoffinancialresponsibilitymayincludebutneednotbelimitedtothewellpluggingbondrequiredbyKRS353.590(5)and(9);(4)RegulationsprovidingforreasonablepublicnoticeofapplicationsforpermitsforclassIIwellsandprovidingforpublicparticipationintheissuanceofsuchpermits;(5)RegulationsestablishingascheduleoffeesforthemechanicalintegritytestingandperiodicregistrationofclassIIwellstobepaidbytheownersoroperatorsthereof.Thescheduleoffeesshallbebaseduponthereasonablecosttothedepartmentofadministeringtheundergroundinjectioncontrolprogram.TheregulationsmayprovideforthecollectionofafeepriortodelegationofauthoritybytheFederalEnvironmentalProtectionAgencywhichshallberefundedbythedepartmentifthedepartmentdoesnotreceivesaiddelegation.NoregulationpromulgatedpursuanttothissectionshallauthorizetheendangermentofanundergroundsourceofdrinkingwaterorbemorestringentthanregulationspromulgatedbytheEnvironmentalProtectionAgencypursuanttotheUndergroundInjectionControlProgramoftheSafeDrinkingWaterAct,42U.S.C.sec.300fetseq.Effectlve:July12,2006History:Amended2006Ky.Actsch.160,sec.3,effectiveJuly12,2006.-Created1986Ky.Actsch.277,sec.3,effectiveJuly1,1986.353.593Appeals.Appealsmaybetakenfromallfinalordersofthedepartmenttoissue,deny,modify,orrevokeanypermitundertheUndergroundInjectionControlProgram.AppealsshallbetakentotheCircuitCourtofthecountyinwhichthewellislocatedorproposedtobelocatedinaccordancewithKRSChapter139.Effective:July15,1996History:Amended1996Ky.Actsch.318,sec.341,effectiveJuly15,1996.-Created1986Ky.Actsch.277,sec.5,effectiveJuly15,1986.353.595Noticetosurfaceownerofintenttodrilloilorgaswell--Compensationfordamagetosurface--Restorationofsurface.{1)Asusedinthissection:{a)"Person"meansanynaturalperson,corporation,firm,partnership,venture,receiver,trustee,executor,administrator,guardian,fiduciary,orotherrepresentativeofanykind,andincludesanygovernmentoranypoliticalsubdivisionoragencythereof.(b)"Drillingoperations"meansthedrilling,deepening,orconversionofawellforoilorgasproduction,coreholeforoilorgaspurposes,ordrillholeforastratigraphictestforoilorgaspurposes.(c)"Entry"meansthemovinguponthesurfaceoflandwithequipmenttocommencedrillingoperations,butshallnotincludeentryforthesurveyfororascertainingoridentificationofawelllocation.(d)"Operator''meanstheperson,whethertheownerornot,whoappliesfororholdsapermitfordrillingoperationsorwhoisnamedastheprincipalonabondforapermitforawellthatwasissuedbythedepartment.{e)"Surfaceowner"meansthepersoninwhosenamethesurfaceofthelandonwhichdrillingoperationsarecontemplated,andwhoisassessedforpurposesoftaxesimposedaccordingtotherecordsofthepropertyvaluationadministratorofthecountywherethelandislocatedascertifiedbythepropertyvaluationadministrator.(f)"Productionoperation"meanstheoperationofawellfortheproductionofoilorgas,includingallacts,structures,equipment,androadwaysnecessaryfortheoperation.(g)"Newwell"meansawellthatisspuddedafterJuly13,1990,anddoesnotutilizeanypartofawellboreordrillinglocationthatexistedpriortoJuly13,1990.(h)"Completionofthewell"meanscompletionofthoseprocessesnecessarybeforeproductionoccurs,includingthelayingofflowlinesandtheconstructionofthetankbattery.Ifthewellisnotproductive,thedateofcompletionofthewellshallbethedayitispluggedandabandoned.{2)Thissectionshallbeapplicableonlyforthedrillingoperationsofnewwellsexceptasprovidedinsubsection(7)ofthissection.Thissectionshallnotapplyforreworkingoperationsonawell.Thissectionshallbeapplicableonlywhenthesurfaceownerhasnotconsentedinwritingtothedrillingoperationsand:(a)Therehasbeenacompleteseveranceoftheownershipoftheoilandgasfromtheownershipofthesurface;or(b)Thesurfaceownerownsaninterestintheoilandgas.(3) (a)Priortocommencementofthedrillingofawell,theoperatorshallgivewrittennoticetothesurfaceowneroftheoperator'sintenttocommencedrillingoperations.(b)Theoperatorshall,forthepurposeofgivingnotice,securefromthepropertyvaluationadministrator'soffice,withinninety(90)dayspriortothegivingofthenotice,acertificationwhichshallidentifythepersoninwhosenamethelandsonwhichdrillingoperationsaretobecommencedandwhoisassessedatthetimethecertificationismade.Thewrittencertificationmadebythepropertyvaluationadministratorofthesurfaceownershallbeconclusiveevidenceofthesurfaceownership.(c)Thenoticerequiredtobegivenbytheoperatortothesurfaceownershallidentifythefollowing:1.Thelocationoftheproposedentryonthesurfacefordrillingoperationsandthedateonorafterwhichdrillingoperationsshallcommence.2.Aphotocopyofthedrillingapplicationtothedepartmentforthewelltobedrilled.3.Thename,address,andtelephonenumberoftheoperator.4.Anoffertodiscusswiththesurfaceownerthosematterssetforthinsubsection(4)ofthissectionpriortocommencementofdrillingoperations.(d)Ifthesurfaceownerelectstomeettheoperator,thesurfaceownershallrequesttheoperatortoscheduleameetingatamutuallyagreedtimeandplacewithinthelimitationssetforthherein.Failureofthesurfaceownertocontacttheoperatoratleastfive(5)dayspriortotheproposedcommencementofdrillingoperationsshallbeconclusivelydeemedawaiveroftherighttomeetbythesurfaceowner.Themeetingshallbescheduledbetweenthehoursofnineo'clockinthemorningandthesettingofthesunofthesamedayandshallbeatleastthree(3)dayspriortocommencementofdrillingoperations.Unlessagreedtootherwise,theplaceshallbelocatedwithinthecountyinwhichdrillingoperationsaretobecommencedwheretheoperatororhisagentshallbeavailabletodiscusswiththesurfaceownerorhisagentthosematterssetforthinsubsection(4)ofthissection.(e)Thenoticeshallbegiventothesurfaceownerbyeither:1.Certifiedmailaddressedtothesurfaceownerattheaddressshowninthecertificationobtainedfromthepropertyvaluationadministrator,whichshallbepostmarkedatleastten(10)dayspriortothecommencementofdrillingoperations;or2.Personaldeliverytothesurfaceowneratleasteight(8)dayspriortothecommencementofdrillingoperations.(f)Noticetothesurfaceownerasdefinedinthissectionshallbedeemedconclusivenoticetotherecordownersofallinterestinthesurface.(4)Theoperator,orhisagentshall,ifthesurfaceowneracceptstheoffertodiscusstbeavailableatthetimeagreed,date,andplacetodiscusswiththesurfaceownerthefollowing:(a)Placementofroadstobeconstructedbytheoperator;(b)Pointsofentryuponthesurfacefordrillingoperations;(c)Constructionandplacementofpitsusedfordrillingoperations;(d)Restorationoffencestobecutinordertomakeentryuponthesurfacefordrillingoperations;(e)Useofwateronthesurfaceofthelands;(f)Removaloftrees;and(g)Surfacewaterdrainagechangescausedbydrillingoperations.(5)Thesurfaceownershallbeentitledtoreasonablecompensationfromtheoperatorfordamagestogrowingcrops,trees,shrubs,fences,roads,structures,improvements,andlivestockthereoncausedbythedrillingofanewwell.Thesurfaceownershallbeentitledtoreasonablecompensationfromtheoperatorforsubsequentdamagestogrowingcrops,trees,shrubs,fences,roads,structures,improvements,andlivestockcausedbysubsequentproductionoperationsoftheoperatorthereon.Thesurfaceownershallbeentitledtoreasonablecompensationforallnegligentactsoftheoperatorthatcausemeasurabledamagetotheproductivecapacityofthesoil.Inaddition,theoperatorshallnotutilizeanymoreofthesurfaceestatethanisreasonablynecessaryfortheexploration,productionanddevelopmentofthemineralestate.(6)Thecompensationrequiredpursuanttosubsection(5)ofthissectionshallbepaidinanymannermutuallyagreeduponbytheoperatorandthesurfaceowner,butthefailuretoagreeupon,ormakethecompensationrequired,shallnotpreventtheoperatorfromcommencementofdrillingoperations.Theoperatorshalltendertothesurfaceownerpaymentbycheckordraftinaccordancewiththeprovisionsofthissectionnolaterthanninety(90)daysaftercompletionofthewell.Thesurfaceowner'sremedyshallbeanactionforcompensationintheCircuitCourtinwhichthelands,orthegreaterpartthereof,arelocatedonwhichdrillingoperationswereconducted.Iftheoperatorfailstotenderpaymentwithintheninety(90)dayperiodorifthetenderisnotreasonable,thesurfaceownershallbeentitledtoreasonablecompensationasprovidedinthissection,aswellasattorney'sfees.Iftheoperatorreliesonathird-partyappraiser'sassessmentofdamagesthereshallbenoawardofattorney'sfees.(7)Inconjunctionwiththepluggingandabandonmentofanywellorthereworkingofanywell,theoperatorshallrestorethesurfaceandanyimprovementsthereontoaconditionasnearaspracticabletotheirconditionpriortocommencementofthework.Thesurfaceownerandoperatormaywaivethisrequirementinwriting,subjecttotheapprovalofthedepartmentthatthewaiverisinaccordancewithitsadministrativeregulations.(8)Nothinginthissectionshallbeconstruedtodiminishtherightsoftheoperatororsurfaceownerastheyexistbyestablishedcommonlaw.Anycompensationpaidandacceptedpursuanttotheprovisionsofsubsections(5)and(6)ofthissectionshallbeacompletebartotheassertionofanyotherremedyforsuchdamages.Effectlve:July13,1990History:Created1990Ky.Actsch.128,sec.1,effectiveJuly13,1990.353.597Replacementofdisruptedwatersupplybywelloperator.Awelloperatorshallreplacethewatersupplyofanyownerofinterestinrealpropertywhoobtainsallorpartofhissupplyofwaterfordomestic,agriculture,industrial,orotherlegitimateusefromanundergroundorsurfacesourcewherethesupplyhasbeensubstantiallydisruptedbycontamination,diminution,orinterruptionproximatelyresultingfromtheoperator'soilorgasoperation.Effectlve:July15,1994History:Created1994Ky.Actsch.127,sec.3,effectiveJuly15,1994.353.600Repealed,1992.Catchllneatrepeal:Copyofplattobesenttoowneroroperatorofcoal-bearingstratumunderlyingwell.History:Repealed1992Ky.Actsch.348,sec.9,effectiveJuly14,1992.-Created1960Ky.Actsch.103,sec.12,effectiveJune16,1960.353.610Conditionsunderwhichpermitsmaybeissued··Exceptions.(1)ExceptasprovidedinKRS353.500to353.720,nopermitsshallbeissuedforthedrUiingtdeepening,orreopeningofanyshallowwellfortheproductionofoil,unlesstheproposedlocationofthewellshallbeatleastthreehundredthirty(330)feetfromthenearestmineralboundaryofthepremisesuponwhichthewellistobedrilled,deepenedorreopened;and,theproposedlocationmustbeatleastsixhundredsixty(660)feetfromthenearestoilproducingwell.Thissubsectionshallnotbeconstruedtoregulatethedistancebetweenwellswhichdonotproduceoilfromthesamepool.(2)ExceptasprovidedinKRS353.500to353.720,nopermitshallbeissuedforthedrilling,deepeningorreopeningofanyshallowwellfortheproductionofgasunlesstheproposedlocationofthewellshallbeatleastfivehundred(500)feetfromthenearestmineralboundaryofthepremisesuponwhichsuchwellistobedrilled,deepenedorreopened;and,theproposedlocationmustbeatleastonethousand(1,000)feetfromthenearestgasproducingwelLThissubsectionshallnotbeconstruedtoregulatethedistancebetweenwellswhichdonotproducegasfromthesamepool.(3)Thissectionshallnotapply:(a)Towellsdrilled,deepened,orreopenedfortheinjectionofwater,gasorotherfluidsintoanoilorgasproducingformation.(b)Toanywelldrilled,deepenedorreopenedinapoolorportionthereof,whichisincludedinasecondaryrecoveryprogramcommencedorproposed,ifthelocationorproposedlocationofthewellconformstoageometricpatternalreadyestablishedonallpremiseswhichwillbeoffsetandaffectedbythewell.(c)Towellsdrilledordeepenedaswatersupplywellsandgeologicalorstructuretestholes;or(d)Topremiseswithinthelimitsofanyincorporatedcity,townorvillagewhichhasenactedorenactshereafteranordinanceregulatingthelocationorspacingofwellsfortheproductionofoilandgasatdistancesofnotlessthantheprescribedinthissection.(e)Towellsfortheproductionofoiltobedrilled,deepened,orreopenedandcompletedatadepthoflessthantwothousand(2,000)feetwheretherearenoworkablebedsofcoalatlesserdepthsandtheformationfromwhichtheoilisexpectedtobeextractedisnotappreciablyaffectedbyfactors,asdeterminedbythecommissioner,otherthannaturaldrainage.Thelocationofwellsfortheproductionofoilcomingwithinthisexceptionshallbeatleasttwohundred(200)feetfromthenearestboundaryofthepremisesuponwhichthewellistobedrilled,deepenedorreopened;andtheproposedlocationmustbeatleastfourhundred(400)feetfromthenearestoilproducingwell.Thissubsectionshallnotbeconstruedtoregulatethedistancebetweenweltswhichdonotproducefromthesamepool.Effective:June24,2003History:Amended2003Ky.Actsch.150,sec.12,effectiveJune24,2003.-Amended1976Ky.Actsch.134,sec.1.-Amended1974Ky.Aclsch.45,sec.4.-Amended1966Ky.Actsch.147,sec.3.-Created1960Ky.Actsch.103,sec.13.353.620VariancefromrequirementsofKRS353.610.(1)NotwithstandingKRS353.610,ifanapplicationissubmittedforapermittodrill,deepen,orreopenawellclosertoaboundaryortoanotherwellthanprescribedinKRS353.610andtheapplicationisaccompaniedbythewrittenconsentofallownersofoilandgasinterestsintheadjacentpremisesdirectlyaffectedbytheprescribedboundarydistancesinKRS353.610,whichwillbeoffsetbytheproposedwell,thedepartmentshallissueapermitforthewell.(2)NotwithstandingKRS353.610,thedepartmentmayissueapermitforawelltobedrilled,.deepened,orreopenedclosertoaboundaryoranotherwellthanprescribedinKRS353.610,ifthedirector,afternoticeandhearing,findsthattopographicalorotherconditionsaresuchastomakecompliancewiththerequirementsofKRS353.610undulyburdensomeorinconflictwithreasonablyprudentmethodsandpracticesfortheproductionofoilorgas.(3)NotwithstandingKRS353.610,thedepartmentshallissueapermitforawelltobedrilled,deepened,orreopenedclosertoaboundarythanprescribedinKRS353.610ifapoolingorderhasbeenissuedpursuanttoKRS353.630.(4)Ifapermitisissuedtodrill,deepen,orreopenawellundersubsection(1)or(2)ofthissectionatalocationclosertoawellorboundarythanprescribedinKRS353.610,thedepartmentshallpermitalikevariancefromtherequirementsofKRS353.610onallpremisesoffsetandadverselyaffectedbythewell.Effective:June24,2003History:Amended2003Ky.Actsch.150,sec.13,effectiveJune24,2003.-Amended2000Ky.Actsch.268,sec.1,effectiveJuly14,2000.-Created1960Ky.Actsch.103.sec.14,effectiveJune16,1960.353.630Poolingofoilandgasinterests-Conditions.(1)Wheneveranyseparatetractoflandissosituatedbecauseofsizeorotherconditionthatitdoesnotcontainalocationatwhichawellforoilorgasmaybedrilled,deepened,orreopenedbyreasonofthespacingprovisionsofKRS353.610,thedepartmentshallorder,afternoticeandahearing,thepoolingofalloilandgasinterestsintheseparatetractorinaportionthereofwithalllikeinterestsinacontiguoustractortracts,orportionsthereof,asarenecessarytoaffordthepooledtractsone(1)locationforthedrilling,deepening,orreopeningofawellfortheproductionofoilorgasincompliancewiththespacingrequirementsofKRS353.500to353.720.ThedepartmentshallrequirethedevelopmentandoperationofallpooledacreageasasingleleaseholdestateinaccordancewithregulationsandrulespromulgatedunderKRS353.500to353.720.(2)Wheneveranoperatorproposestodrill,deepen,orreopenawellatalocationthatwouldrequirethepoolingofseparatetractsorinterestsinordertocomplywiththespacingrequirementsofKRS353.610,andtheoperatorhassecuredthewrittenconsentoragreementfromtheownersofatleastfifty-onepercent(51%)oftheinterestsineachtract,orportionsthereof,includedintheproposedpooledacreage,thedepartmentshall,whereitfindsthattherequirementsofthissubsection havebeenmet,order,afternoticeandahearing,thepoolingofalloilandgasinterestsinalltracts,orportionsthereof,thatareincludedwithintheproposedpooledacreageasestablishedbythespacingrequirementsofKRS353.610.Forpurposesofthissection,anyunknownornonlocatableownersshallbedeemedtohaveconsentedoragreedtothepooling,providedthattheoperatorhascompliedwiththepublicationrequirementsofKRS353.640(1)withrespecttotheunknownornonlocatableowners.Thedepartmentshallissueapermittodrill,deepen,orreopenthewellandrequirethedevelopmentandoperationofthepooledacreageasasingleleaseholdestateinaccordancewithadministrativeregulationspromulgatedunderKRS353.500to353.720.(3)Wheneveranoperatorproposestodrill,deepen,orreopenawellatalocationthatwouldrequirethepoolingofinterestsortractsinordertocomplywiththespacingrequirementsofKRS353.610,andtheoperatorownsorcontrolstherighttodeveloptheoilandgasunderlyingonehundredpercent(100%)oftheinterestsineachtract,orportionsthereof,includedintheproposedpooledacreage,thedepartmentshall,whereitfindsthattherequirementsofthissubsectionhavebeenmet,order,afternoticeandahearing,thepoolingofalloilandgasinterestsinalltracts,orportionsthereof,thatareincludedwithintheproposedpooledacreageestablishedbythespacingrequirementsofKRS353.610.Thedepartmentshallissueapermittodrill,deepen,orreopenthewellandrequirethedevelopmentandoperationofallpooledtractsasasingleleaseholdestateinaccordancewithadministrativeregulationspromulgatedunderKRS353.500to353.720.(4)Nopoolingaspermittedbythissectionshallbeorderedexcept:(a)Whenanapplicationhasbeenfiledtodrill,deepen,orreopenawellwithinthedistancelimitationsprescribedinKRS353.610;and(b)Whenalesseeorownerofanoilorgasinterestinthetractshallrequestthepooling.(5)Nopoolingaspermittedbythissectionshallbeorderedwithrespecttoanytractorportionthereofuponwhichawellisdrilled,deepened,orreopened:(a)Unlessthepoolingwasrequestedpriortothecommencementofthedrilling,deepening,orreopeningofthewellbyalesseeorownerofanoilandgasinterestinacontiguoustractpursuanttosubsection(1),(2),or(3)ofthissection;and(b)Unlesstherequest,ifmadebytheownerofanoperatinginterestwhoelectstoparticipateintheriskandcostofthedrilling,deepening,orreopeningofthewell,isaccompaniedbyabondorothersecuritysatisfactorytoandinanamountsetbythedirectorforthepaymentofsuchowner'sshareofthecostofdrilling,deepening,orreopeningthewell.(6)ProductionfromanywellwhichisorderedpooledpursuanttoKRS353.500to353.720shallbedeemedforallpurposestohavebeensoproducedfromeachtractorportionthereofincludedinthepoolinproportiontotheamountsestablishedinthepoolingorder.Effectlve:June24,2003History:Amended2003Ky.Actsch.150,sec.14,effec:tiveJune24,2003.-Amended2000Ky.Actsch.268,sec.2,effectiveJuly14,2000.-Amended1986Ky.Actsch.233,sec.1,effectiveJuly15,1986.-Created1960Ky.Actsch.103,sec.15,effectiveJune16.1960.353.640Poolingorder••Notice••Provisions-Surrenderorsharingofinterest··Limitedparticipation.(1)Theoperatorshallprovidealisttothedepartmentofallpersonsreasonablyknowntoownanoilorgasinterestinanytract,orportionthereof,proposedtobepooledinanapplicationtothedepartmentforapoolingorder.Apoolingordershallbemadeonlyafterthedepartmentprovidesnoticetoallpersonsreasonablyknowntoownanoilorgasinterestinanytract,oraportionthereof.proposedtobepooledafterahearinghasbeenheld.IntheeventofthefilingofanapplicationforapoolingorderunderKRS353.630(2)whereunknownownersornonlocatableownersexist,theoperatorshallcausetobepublished,atleasttwenty(20)dayspriortothe'hearingontheapplicationforthepoolingorder,one(1)noticeinthenewspaperofthelargestcirculationineachcountyinwhichanytract,orportionthereof,proposedtobepooledislocated.Thenoticeshall:(a)StatethatanapplicationforapoolingorderisbeingfiledwiththeDivisionofOilandGasintheDepartmentforNaturalResources;(b)Describeanytract,orportionthereof,proposedtobepooled;(c)Inthecaseofanunknownowner,identifythenameofthelastknownowner;(d)Inthecaseofanonlocatableowner,identifytheownerandtheowner'slastknownaddress;and(e)Statethatanypartyclaiminganinterestinanytract,orportionthereof,proposedtobepooledshouldcontacttheoperatoratthepublishedaddressandprovideacopyofthenotificationtothedirectoroftheDivisionofOilandGasintheDepartmentforNaturalResourceswithintwenty(20)daysofthedateofpublication.(2)Apoolingordershallauthorizethedrilling,deepening,orreopening,andtheoperationofawellfortheproductionofoilorgasonthetractsorportionsthereofpooled;shalldesignatetheoperatortodrillandoperatethewell;shallprescribethetimeandmannerinwhichallownersofoperatinginterestsinthepooledtractsorportionsthereofmayelecttoparticipatetherein;shallprovidethatallreasonablecostsandexpensesofdrilling,deepening,orreopening,andthecompleting,operating,plugging,andabandoningthewellshallbeborne,andallproductionfromthewellshallbesharedbyallownersofoperatinginterestsinproportiontothenetmineralacresinthepooledtractsownedorunderleasetoeachowner;andshallmakeprovisionforthepaymentofthereasonableactualcostthereof,includingareasonablechargeforsupervision,byallthosewhoelecttoparticipatetherein.(3)Apoolingordershallestablishaprocedurefortheownerofanoperatinginterestwhodoesnotdecidetobecomeaparticipatingoperatortoelecttoeither:(a)Surrender,bymeansofsaleorlease,theinteresttoaparticipatingoperatoronareasonablebasisandforareasonableconsideration,whichifnotagreeduponshallbedeterminedbythedirectoroftheDivisionofOilandGas;or(b)Shareintheoperationofthewellasanonparticipatingoperatoronacarriedbasisaftertheproceedsallocabletohisorhershareequaltwohundredpercent(200%)oftheshareofthecostsallocabletohisorherinterest.(4)AnoilorgasownerwhoseidentityandlocationremainunknownattheconclusionofahearingconcerningtheentryofapoolingorderforwhichpublicnoticewasgivenandwhoseinterestispooledpursuanttoKRS353.630(3)shallbedeemedtohaveelectedtoleasetheinteresttotheoilorgasoperator,exclusiveofone-eighth(1/8)oftheproductionattributabletotheunleasedinterest,andshallnotbeentitledtomaketheelectionestablishedinsubsection(3)ofthissection.(5)Exceptasprovidedinthissubsection,anoilorgasownerwhodoesnotmakeanelectionunderthepoolingorderwithinthirty(30)daysoftheentryoftheordershallbedeemedtohaveleasedtheoilorgasinteresttotheoilorgaswelloperatorinthemannerestablishedinsubsection(4)ofthissection.Iftheholderofanoperatinginteresthasobtainedtheinterestbyleaseorotheragreementgrantingtherighttoconductoperationstoanyoneotherthantheholderoftheoilandgasestate,andiftheowneroftheoperatinginterestdoesnotmakeanelectionunderthepoolingorder,theholderoftheoperatinginterestshallbedeemedtohaveelectedtoshareintheoperationofthewellasanonparticipatingoperatoronacarriedbasisaftertheproceedsallocabletohisorhershareequaltwohundredpercent(200%)oftheshareofthecostsallocabletohisorherinterest.(6)Apersonwhoseinterestis subjecttoanoilorgasleaseorotheragreementwhichgrantstoanothertherighttooperateorconductoperationsshallnotownanoperatinginterestforthepurposesofsubsection(3)ofthissection.(7)AcertifiedcopyofanypoolingorderenteredunderKRS353.500to353.720shallbeentitledtoberecordedintheofficeofthecountyclerkofthecountyorcountiesinwhichalloranyportionofthepooledtractislocated,andtherecordoftheorder,fromthetimeoflodgingtheorderforrecord,shallbenoticeoftheordertoallpersons.Effectlve:July15,2010History:Ameflded2010Ky.Actsch.24,sec.1909.effectiveJuly15,2010.-Amended2002Ky.Actsch.217,sec.1,effectiveJuly15.2002.-Amended2000Ky.Actsch.268,sec.3,effectiveJuly14,2000.-Amended1978Ky.Actsch.384,sec.487,effectiveJune17, 1978.-Created1960Ky.Actsch.103,sec.16,effecti,veJune16,1960.353.645OperationanddevelopmentasaunitofoilandgasinterestsinapoolorApplicationforHearing--Unitizationorder.Thissectionappliestoanylesseeorownerofanoilandgasinterestinaproposedunit.(1)Thedepartment,uponitsownmotionorupontheapplicationofanylesseeorownerofanoilandgasinterestinapoolorpoolsofaproposedunitmay,afternoticetoallinterestedpersons,conductahearingtoconsidertheneedfortheoperationanddevelopmentasaunitofanypoolorpools,oranyportionthereof,fortheproductionofoilandassociatedgasinordertoincreasetheirultimaterecoverybyunitizedoperationanddevelopmentsothateachownerinthepoolorpoolsshallhavetheopportunitytorecoverhisfairandequitableshareoftherecoverableoilandgasintheunit.(a)ThehearingshallbeconductedinaccordancewithKRSChapter138.Noticeofthehearingsprescribedinthissubsectionshallbegiventoallpersonsreasonablyknowntothedepartmenttobealesseeorownerofanoilandgasinterestinapoolorpoolswithinaproposedunit.(b)Thedepartmentmayrequireareasonableapplicationfeefromalesseeorownerofanoilandgasinterestapplyingforaproposedunit.(2)Theapplicationforaunitshallincludethefollowing:(a)Adescriptionoftheareatobeincludedintheunit,withamapattached,andadescriptionofthepoolorpools,orportionsthereof,tobeincludedwithintheunit;(b)Astatementofthenatureoftheunitoperationscontemplated;(c)Aproposedallocationofproductionandreservesamongtheseparately-ownedtractsandinterestscontributedtotheunit.Reservesshallbecalculatedbyindustrystandardmethodssupportedbygeologicalandengineeringdata,asdeterminedtobeappropriatebythedepartment.Thedepartmentmayrequireanindependentthirdpartytoverifythecalculationsastoproposedallocationofproductionorreserves;(d)Theprocedureuponwhichwellsandequipmentoftheseparately-ownedtractsandinterestsaretobeusedandcompensatedforinunitoperations;and(e)Documentationthattheapplicationisapprovedbyatleastfifty-onepercent(51%)ownershipintheinterestsproposedforinclusionintheunit.(3)Afternoticeandhearinginthemannerestablishedinthissection,thedepartmentshallissueafinalorderestablishingaunitandrequiringunitoperationanddevelopmentifitfindsthat:(a)1.Theunitizedoperationanddevelopmentofapoolorpools,oranyportionthereof,fortheproductionofoilandassociatedgasisreasonablynecessaryinordertoeffectivelycarryonoperationsforenhancedrecovery,includingbutnotlimitedto,increaseddensitydrilling,orsecondaryrecoveryoperationsbypressure-maintenance,repressuring,cycling,waterflooding,tertiaryrecoveryoperations,oranycombinationofthese,inordertosubstantiallyincreasetheultimaterecoveryofoilandassociatedgasfromthepoolorpoolswithintheunit,ortoprotectthecorrelativerightsofaffectedmineralowners;and2.Thevalueoftheadditionalrecoveryofoilandassociatedgasexceedstheestimatedadditionalcostincidenttoconductingtheoperation;or(b)Theunitizedoperationofthepoolorpoolswithintheunitwillpreventwasteandprotectthecorrelativerightsoftheownersinthepoolorpoolswithintheunit.(4)Eachwellpermittedtobedrilled,deepened,reopened,orconvertedtoaninjectionwellandoperatedinaunitshallconformtoeitherthespacingstandardsestablishedinKRS353.610,ortootherunitspacingthatshallbeestablishedbythedepartmentasapartofthehearingprovidedforinthissection.(5)Allunitoperationsandproductionshallbedeemed,forallpurposes,astheconductofoperationsandproductionuponeachoftheseparately-ownedtractsandinterestsintheunit.(6)Aunitizationorderissuedinaccordancewiththissectionshall:(a)Authorizetheunitoperationofapoolorpools,includingdrilling,deepening,reopening,conversiontoinjectionwells,andoperationofallwellswithintheunitfortheproductionofoilandgasfromtheunit:(b)Designatetheunitoperatoroftheoperation;(c)Approveaunitoperatingagreement;(d)Providefortheallocationofproductionandreservesamongallseparately-ownedtractsandinterestsintheunit;(e)Providefortheproportionateallocationofallreasonablecostsandexpensesofunitoperationsasthesecostsandexpensesaresetoutintheapprovedoperatingagreement.Costsandexpensesshallbeallocatedamongallparticipatingownersofoperatinginterestswhoelecttoparticipateintheproportionthattheseparately-ownedtractsandinterestsshareintheproductionoftheunit;and(f)Establishthespacingapprovedfortheunit.(7)Anyunitizationordershallprovidejustandequitablealternativeswherebyanownerofanoperatinginterestwhodoesnotelecttoparticipateintheriskandcostofdevelopingtheunitmayelecttosurrenderhisinterest,oraportionofit,totheparticipatingownersonareasonablebasisandforareasonableconsideration,whichifnotagreedupon,shallbedeterminedbythedepartment;orelecttoparticipateinthedevelopmentoftheunitonacarriedbasisontermsandconditionswhich,ifnotagreedupon,shallbedeterminedbythedepartmenttobejustandreasonable.Ifadisputearisesastothecostsofoperatinganddevelopingaunit,thenthedepartmentshalldetermineandapportionthecostswithinninety(90)daysafterthedateofwrittennotificationtothedepartmentoftheexistenceofthedispute;however,anypersondisputinganactualorproposedexpenditureshallfilenoticeofthedisputedcostswithinone(1)yearafternoticeoftheactualorproposedexpenditurewasreceivedbythepersonfilingthedispute.(8)Anorderestablishingaunitmaybemodified,altered,extended,vacated,orotherwiseamendedbythedepartmentafternoticeandhearingasprescribedinthissectionandademonstrationbyaffectedpersonsofasignificantchangeofcircumstancessupportingtheamendment.(a)Anamendmenttoextendorenlargetheunitareashallbeagreeduponinwritingbydocumentedownersofatleastafifty-onepercent(51%)ownershipintheinterestsinthepoolorpoolsintheunit;(b)Anamendmentofaunitizationorderenlargingaunitshallallocatetoeachtractorinterestintheunit,asamended,aportionofthetotalproductionofoilorgas,orboth,fromtheunitsoenlarged,inproportiontothecontributionofthetractorinteresttotheunitduringtheremainingcourseofunitoperations,andshallsupersedeandbeinlieuoftheallocationofproductionprovidedforinanypreviously-establishedunitandshallhaveaneffectivedateprovidedforintheorder.(9)Wellsdrilled,deepened,orreopenedfortheinjectionofwater,gas,orotherfluidsintoanysubsurfaceformationshallbegovernedbyapplicablestateandfederalstatutesandregulations.Effectlve:July15,1996History:Amended1996Ky.Actsch.318,sec.342,effectiveJuly15,1996.-Created1994Ky.Actsch.431,sec.2,effectiveJuly15,1994.353.650Exclusionofroyaltyinterestincomputingshareofproduction••Limitation.(1)Ifone(1)ormoreoftheownersofanyoperatinginterestinanyportionofthepooledtractshalldrill,deepenorreopenandoperate,orpaythecostsofdrilling,deepeningorreopeningandoperatingawellforthebenefitofanotherownerofanopeninginterest,asprovidedinthepoolingorder,thensuchownerorownersshallbeentitledtotheproceedsfromtheshareofproductionfromthetractsorportionsthereofpooledaccruingtotheinterestofsuchotherowner,exclusiveofanyroyaltyreservedinanyleaseorleasesofsuch tractsorportionsthereoforexclusiveofone-eighth(1/8)ofproductionattributabletoallunleasedtractsorportionsthereof,untilsuchproceedsequalthesumspayablebyorchargedtotheinterestoftheotherownerplusareasonablechargeforinterestonsuchsums.(2)Ifadisputeshallariseastothecostsofdrilling,deepeningorreopening,andoperatingawell,thedirectoroftheDivisionofOilandGasshalldetermineandapportionthecosts.Effective:July15,2010History:Amended2010Ky.Actsch.24,sec.1910,effectiveJuly15,2010.-Created1960Ky.Actsch.103,sec.17,effectiveJune16,1960.353.651Deepwells··Establishmentandregulationofdrillingunits-Poolingofinterests••Exceptions.Thefollowingprovisionsofthissectionshallapplytoanydeepwell:(1)Drillingunits:(a)Thecommissionshall,afternoticeandahearing,tobeconductedinaccordancewithKRSChapter138,regulatethedrillingandlocationofwellsinanypoolandtheproductiontherefromsoastopreventreasonablyavoidablenetdrainagefromeachdevelopedunit(thatis,drainagewhichisnotequalizedbycounterdrainage)sothateachownerinapoolshallhavetherightandopportunitytorecoverhisfairandequitableshareoftherecoverableoilandgasinsuchpool.(b)Forthepreventionofwaste,toprotectandenforcethecorrelativerightsoftheownersinapool,andtoavoidtheaugmentingandaccumulationofrisksarisingfromthedrillingofanexcessivenumberofwells,thecommissionshall,afternoticeandahearing,tobeconductedinaccordancewithKRSChapter138,establishdrillingunitsforeachpool.Thespacingofwellsinprovedoilandgasfieldsshallbegovernedbyadministrativeregulationspromulgatedforthatparticularfield.Wellsdrilledinareasnotcoveredbyspecialfieldadministrativeregulationsshallbegovernedbystatewideadministrativeregulationspromulgatedbythecommission.(c)Eachwellpermittedtobedrilleduponanydrillingunitshallbedrilledinaccordancewiththeadministrativeregulationspromulgatedbythecommissionandinaccordancewithaspacingpatternfixedbythecommissionforthepoolinwhichthewellislocated,withanyexceptionsthatmaybereasonablynecessarywhereitisshown,inaccordancewithadministrativeregulationspromulgatedbythecommission,thattheunitispartlyoutsidethepoolorforsomeotherreasonawellotherwiselocatedontheunitwouldnotbelikelytoproduceinpayingquantities,ortopographicalconditionsaresuchastomakethedrillingatthelocationundulyburdensome.Wheneveranexceptionisgranted,thecommissionshalltakeactionaswilloffsetanyadvantagewhichthepersonsecuringtheexceptionmayhaveoverotherownersbyreasonofthedrillingofthewellasanexception.(d)Nodrillingunitestablishedbythecommissionshallbesmallerthanthemaximumareawhichcanbedrainedefficientlybyone(1)deepwellsoastoproducethereasonablemaximumrecoverableoilorgasinsucharea,unlessanexceptionisgrantedinaccordancewithadministrativeregulationspromulgatedbythecommission.(e)Anorderestablishingdrillingunitsmaybemodified,altered,extended,amended,orvacatedbythecommissionafternoticeandhearingasprescribedabove.(2)Poolingofinterestsindrillingunits:(a)Whentwo{2)ormoreseparatelyownedtractsareembracedwithinadrillingunit,orwhenthereareseparatelyownedinterestsinallorapartofadrillingunit,theinterestedpersonsmaypooltheirtractsorinterestsforthedevelopmentandoperationofthedrillingunit.Intheabsenceofvoluntarypoolinganduponapplicationofanyoperatorhavinganinterestinthedrillingunit,andafterthecommissionhasgivennoticetoallpersonsreasonablyknowntoownaninterestintheoilorgasinthedrillingunit,andafterahearingconductedinaccordancewithKRSChapter138,thecommissionshallenteranorderpoolingalltractsorinterestsinthedrillingunitforthedevelopmentandoperationthereofandforthesharingproductiontherefrom.Eachpoolingordershallbeupontermsandconditionswhicharejustandreasonable.(b)Alloperations,'including,butnotlimitedto,thecommencement,drilling,oroperationofadeepwell,uponanyportionofadrillingunitforwhichapoolingorderhasbeenentered,shallbedeemedforallpurposestheconductofthoseoperationsuponeachseparatelyownedtractinthedrillingunitbytheseveralownersthereof.Thatportionoftheproductionallocatedtoaseparatelyownedtractincludedinadrillingunitshall,whenproduced,bedeemedforallpurposestohavebeenactuallyproducedfromthetractbyadeepwelldrilledthereon.(c)Anypoolingorderundertheprovisionsofsubsection(2)ofthissectionshallauthorizethedrillingandoperationofadeepwellfortheproductionofoilorgasfromthepooledacreage;shalldesignatetheoperatortodrillandoperatesuchdeepwell;shallprescribethetimeandmannerinwhichallownersofoperatinginterestsinthepooledtractsorportionsoftractsmayelecttoparticipatetherein;shallprovidethatallreasonablecostsandexpensesofdrilling.completing,equipping,operating,plugging,andabandoningthedeepwellshallbeborne,andallproductiontherefromshared,byallownersofoperatinginterestsinproportiontotheacreageinthepooledtractsownedorunderleasetoeachowner;andshallmakeprovisionforpaymentofallreasonablecoststhereof,includingreasonablechargeforsupervisionandforinterestonpastdueaccounts,byallthosewhoerecttoparticipatetherein.Upontheapplicationofanyoperatorhavinganinterestinthedrillingunit,thepersonorpersonsselectedtodrillandoperatethedeepwellshallbedeterminedbycompetitivebids.{d)Uponrequest,anypoolingordershallprovidejustandequitablealternativeswherebyanownerofanoperatinginterestwhodoesnotelecttoparticipateintheriskandcostofthedrillingofadeepwellmayelecttosurrenderhisinterestoraportionthereoftotheparticipatingownersonareasonablebasisandforareasonableconsideration,which,ifnotagreedupon,shallbedeterminedbythecommission;ortoparticipateinthedrillingofthedeepwellonalimitedorcarriedbasisontermsandconditionswhich,ifnotagreedupon,shallbedeterminedbythecommissiontobejustandreasonable.(e)Ifanoperatorowninganinterestinapooleddrillingunitelectsnottoparticipateintheriskandcostofdrillingofadeepwellthereon,andanotheroperatorowninganinteresttherein,shalldrillandoperate,orpaythecostsofdrillingandoperatingadeepwellasprovidedinthecommission'sorder,thentheoperatingownershallbeentitledtotheshareofproductionfromthetractsorportionsthereofaccruingtotheinterestofthenonparticipatingowner,exclusiveofanyroyaltyoroverridingroyaltyreservedinanyleases,assignmentsthereoforagreementsrelatingthereto,ofthetractsorportionsthereof,orexclusiveofone-eighth(1/8)oftheproductionattributabletoallunleasedtractsorportionsthereof,untilthemarketvalueofthenonparticipatingowner'sshareoftheproduction,exclusiveofanyroyalty,overridingroyaltyorone-eighth(1/8)ofproduction,equalstwo(2)timestheshareofthecostspayablebyorchargedtotheinterestofthenonparticipatingowner.(f)Ifadisputeshallariseastothecostsofdrillingandoperatingadeepwell,thecommissionshalldetermineandapportionthecosts,withinninety(90)daysfromthedateofwrittennotificationtothecommissionoftheexistenceofsuchdispute.(3)Thissectionshallnotapplytowellsdrilled,deepened,orreopenedfortheinjectionofwater,gas,orotherfluidsintoanysubsurfaceformation.Effectlve:July12,2006History:Amended2006Ky.Actsch.158,sec.1,effectiveJuly12,2006.-Amended2000Ky.Actsch.139,sec.4,effectiveJuly14,2000.-Amended1996Ky.Actsch.318,sec.343,effectiveJuly15,1996.-Created1974Ky.Actsch.45,sec.5.353.652UnitoperationofpoolProcedure.(1)Upontheapplicationofanyoperatorinadeepwellpoolproductiveofoilorgas,orboth,andothermineralswhichmaybeassociatedandproducedtherewithandafternoticegivenbythecommissiontoallpersonsreasonablyknowntoownaninterestintheoilorgasinthepool,andafterahearingconductedinaccordancewithKRSChapter13B,thecommissionmayenterafinalorderrequiringtheunitoperationofapoolorofanyportionorcombinationsthereofwithinafield.Theunitoperationshallbeinconnectionwithaprogramdesignedtoavoidthedrillingofunnecessarywells,orotherwisetopreventwaste,ortoincreasetheultimaterecoveryoftheunitizedmineralsbyadditionalrecoverymethods.Thefinalordershallprovidefortheunitizationofseparately-ownedtractsandinterestswithinthepoolorpools,butonlyafterfindingthat:(a)Theorderisreasonablynecessaryforthepreventionofwaste;(b)Theproposedplanofunitizedoperationwillincreasetheultimaterecoveryofoilorgas,orboth,fromthepoolandwillbeeconomicallyfeasible;(c)Theproductionofoilorgas,orboth,fromtheunitizedpoolcanbeallocatedinamannertoinsuretherecoverybyallownersoftheirjustandequitableshareoftheproduction;and(d)Acontractincorporatingtheunitizationagreementhasbeensignedorinwritingratifiedorapprovedbytheownersofatleastseventy-fivepercent(75%)ininterestascostsaresharedunderthetermsoftheorderandbyseventy-fivepercent(75%)ininterestasproductionistobeallocatedoftheroyaltyintheunitarea,andacontractincorporatingtherequiredarrangementsforoperationshasbeensignedorinwritingratifiedorapprovedbytheownersofatleastseventy-fivepercent(75%)ininterestascostsareshared,andthecommissionhasmadeafindingtothateffecteitherinthefinalorderorasupplementalorder.(2)Thefinalorderrequiringtheunitoperationshalldesignateone(1)operatorasunitoperatorandshallalsomakeprovisionfortheproportionateallocationtoalloperatorsofthecostsandexpensesoftheunitoperation,includingareasonablechargeforsupervision,whichallocationshallbeintheproportionthattheseparately-ownedtractsshareintheproductionfromtheunit.Intheabsenceofanagreemententeredintobytheoperatorsandfiledwiththecommissionprovidingforsharingthecostsofcapitalinvestmentsinwellsandphysicalequipment,andintangibledrillingcosts,thecommissionshallprovidebyorderforthesharingofthecostsinthesameproportionasthecostsandexpensesoftheunitoperation,butanyoperatorwhohasnotconsentedtotheunitizationshallnotberequiredtocontributetothecostsorexpensesoftheunitoperation,ortothecostofcapitalinvestmentinwellsandphysicalequipment,andintangibledrillingcosts,exceptoutoftheproceedsfromthesaleoftheproductionaccruingtotheinterestoftheoperatorexclusiveofanyroyaltyoroverridingroyaltyinterest.(3)Thecommission,afternoticeandhearingasprovidedabovemayfromtimetotimebyentryofaneworamendingfinalorderenlargetheunitareabyapprovingagreementsaddingtotheareaapooloranyportionorcombinationsthereofnotpreviouslyincluded.Anyneworamendedfinalordershallnotbecomeeffectiveunlessanduntil:(a)Allofthetermsandprovisionsoftheunitizationagreementrelatingtotheextensionorenlargementoftheunitareaortotheadditionofpoolsorportionsorcombinationsthereoftounitoperationshavebeenfulfilledandsatisfiedandevidencethereofhasbeensubmittedtothecommission;and(b)Theextensionoradditioneffectedbytheorderhasbeenagreedtoinwritingbytheownersofatleastseventy-fivepercent(75%)ininterestascostsaresharedinthepoolorpoolsorportionsorcombinationsthereoftobeaddedtounitoperationsbytheorderandbyseventy-fivepercent(75%)ininterestasproductionistobeallocatedoftheroyaltyownersinthepool,pools,portions,orcombinationsandevidencethereofhasbeensubmittedtothecommission.(4)Anyagreement,inprovidingforallocationofproductionfromtheunitarea,shallfirstallocatetoeachpooloraddedportionaportionofthetotalproductionofoilandgas,orboth,fromallpoolsaffectedwithinthearea,asenlarged,theallocationtobeinproportiontothecontributionwhichaddedpoolorportionsorextensionsthereofareexpectedtomake,duringtheremainingcourseofunitoperations,tothetotalproductionofoilorgas,orboth,oftheunitasenlarged.Theremainingportionofunitproductionshallbeallocatedamongtheseparately-ownedtractswithinthepreviouslyestablishedunitareainthesameproportionsasthosespecifiedpriortotheenlargement.Effectlve:July15,1996History:Amended1996Ky.Actsch.318,sec.344,effectiveJuly15,1996.-Amended1990Ky.Actsch.11,sec.1,effectiveJuly13,1990.-Created1974Ky.Actsch.45,sec.6.353.653Shareofproductionfromdrillingunitorunitizedpool.EachoperatorshallhavetherighttotakeinkinditsshareofanyoilorgasproducedfromanydrillingunitorpoolunitizedunderKRS353.510,353.520,353.565,353.610,353.651to353.654,353.700,or353.991.Theoperatorshallpaytheexpensesoccasionedtherebyandpayoraccounttotheunitoperatorfortheoilorgasorthevaluethereofifhehasnotpaidhisshareofdrilling,completingandoperatingcosts.Thissectionappliestodeepwelldrillingunitsonly.Effectlve:July13,1990History:Amended1990Ky.Actsch.11,sec. 2,effectiveJuly13,1990.-Created1974Ky.Actsch.45,sec.9.353.654Drillingwithoutconsentoflandownerprohibited.NothingcontainedinKRS353.510, 353.520, 353.565,353.610,353.651to353.654,353.700,or353.991shallbeconstruedasauthorizinganyoperator,withorwithoutanorderofthecommission,todrillupon,enterupon,oruseinanymannerthesurfaceofanylandwithouttheconsentoftheownerthereofasevidencedbyanoilorgasleaseorotherwise.Thissectionappliestodeepwelldrillingunitsonly.Effectlve:July13,1990History:Amended1990Ky.Actsch.11,sec.3,effectiveJuly13,1990.-Created1974Ky.Actsch.45,sec.10.LegislativeResearchCommissionNote.TheoriginalHouseBill64,section10(Acts1974,ch.45,§10)wasamendedbydeletionofthewords"asevidencedbyanoilorgasleaseorotherwise"fromtheendofthesection;however,IntheengrossedbillassignedbytheGovernor,thewordswerenotstricken.353.655Useofshacklerodsorrelatedcables.(1)Nooperatorshallutilizeshacklerodsorrelatedcablesfortheproductionofoilorgaswithoutthepermissionofthepresentownerofthelanduponwhichthewellsexistoraredrilledunlesssuchrodsorcablesareplacedinconduitandburiedatleasttwenty-four(24)inchesbelowthesurfaceofthelandbetweenallwellheadsandpowerstationsorareattachedtopowerpoleswiththerodsorcablestwenty(20)feetabovethesurfaceofthelandbetweenallwellheadsandpowerstations.(2)NothinginthissectionshallapplytolandsclassifiedbytheUnitedStatesSoilConservationServiceasclass5,6,7,or8.Effectlve:January1.1985History:Created1984Ky.Actsch.244,sec.1.effectiveJanuary11,1985.353.656Displayofdangersignsonoilstoragefacilities.Thewelloperatorshallcausesignsprintedwiththeword"DANGER"andotherinformationwhichmayberequiredbythedepartmenttobeprominentlydisplayednearoronallfacilitiesusedforstorageofoilwhetherthefacilitiesareinactiveproductionorhavebeenabandoned.Effectlve:July15,1994History:Created1994Ky.Actsch.127,sec.4,effectiveJuly15,1994.353.660Reportrequiredafterterminationofoperations--Contents••Confidentialityofinformation-Exceptions.(1)AnypersontowhomapermitisissuedpursuanttoKRS353.500to353.720shallfile,withinninety(90)daysafterterminationofoperationsconductedunderthepermit,withthedepartmentfortransmittaltotheKentuckyGeologicalSurveyonformstobefurnishedbythedepartmentthefollowinginformationrelatingtothewell:(a)Acopyofthedriller'slogcertifiedtobetrueandaccurate;(b)Thedepthandthicknessofallwaterzonesencounteredandlogged;(c)Thedepthofallshowingsofoilorgas;(d)Thedepthandthicknessofallcoalseamsencountered;and(e)Atruecopyofallelectricalsurveysandsimilarlogsandsurveystaken.Ifthepersontowhomthepermitisissuedobtainsacopyoftheelectricalsurveyorsimilarlogorsurveyinelectronicform,theoperatorshallsubmittheelectricalsurveyorsimilarloginelectronicformifrequestedbythedepartment.(2)Uponrequestbythedepartment,anypersontowhomapermitisissuedshallsavefortheKentuckyGeologicalSurveysamplesofallcuttingsfromthewelldrilledordeepenedpursuanttothepermitforaperiodofninety(90)daysaftercompletionthereof.(3)Uponrequestbyanypersonfurnishinginformationunderthissection,theinformationshallbekeptconfidential,foraperiodofone(1)yearaftertheinformationisfurnishedbysuchperson.(4)Thissectionshallnotapplyto wellsdrilledordeepenedasgeologicalorstructuretestholes.Effective:June24.2003History:Amended2003Ky.Actsch.150,sec.15,effectiveJune24,2003.-Amended1966Ky.Actsch.147,sec.4.-Created1960Ky.Actsch.103,sec.18.353.670Promulgationofregulations••Hearing··Writtenrecordofhearing.(1)Allrules,regulationsandamendmentspromulgatedunderKRS353.500to353.720shallbepromulgatedbythedepartmentafternoticeandahearing.Atallhearingsheldtoconsideranyrules,regulationsoramendmentsthereto,anyinterestedpersonshallbeentitledtobeheard.(2)Allhearingsheldunderthissectionshallbeheldatsuchtimeandplaceasisspecifiedbythedepartment,andaccordingtorulesandregulationspromulgatedunderKRS353.500to353.720.Awrittenrecordofeachhearingshallbekept,unlessthekeepingofarecordshallbewaivedbyallpartieswhoparticipatetherein.AllinterestedpersonsshallbeentitledtobeheardatallhearingsconductedunderKRS353.500to353.720.(3)ThedirectoroftheDivisionofOilandGas,orhisrepresentatives,shallattendallhearingsunderthissectionconductedbythedepartment.(4)Allrules,regulationsandorderspromulgatedorissuedunderKRS353.500to353.720shallbeinwriting,shallbeenteredinfullandindexedinbookstobekeptbythedepartmentforthatpurpose,shallbepublicrecordsopenforinspectionatalltimesduringofficehours,andshallbefiledinaccordancewiththeprovisionsofKRSChapter13A.Acopyofanyrule,regulation,ororder,certifiedbythecommissioneroftheDepartmentforNaturalResourcesorthedirectoroftheDivisionofOilandGas,shallbereceivedinevidenceinallcourtsofthisCommonwealthwithoutanyfurtherauthenticationthereof.Effectlve:July15,2010History:Amended2010Ky.Actsch.24,sec.1911,effectiveJuly15,2010.-Amended1986Ky.Actsch.331,sec.48,effectiveJuly15,1986.-Created1960Ky.Actsch.103,sec.19,effectiveJune16,1960.353.680Repealed,1996.Catchllneatrepeal:Notice-Methodofgiving-Proofofservice.History:Repealed1996Ky.Actsch.318,sec.357effectiveJuly15,1996.-Amended1966Ky.Actsch.239,sec.211.-Created1960Ky.Actsch.103,sec.20.353.690Productionofevidence-Failuretocomply.(1)Thedepartmentshallhavethepowertosummonwitnesses,toadministeroaths,andtorequiretheproductionofpertinentrecords,books,anddocumentsforexaminationatanyhearingorinvestigationconductedunderKRS353.500to353.720.(2)Uponfailureorrefusalonthepartofanypersontocomplywithasubpoenaissuedunderthissection,orupontherefusalofawitnesstotestifyastoanymatterregardingwhichhemaybeinterrogatedandwhichispertinenttothehearingorinvestigation,anycourtofrecordintheCommonwealthupontheapplicationofthecommissionershallhavethepowertopunishforcontemptasinthecaseofdisobediencetoalikesubpoenaissuedbythecourt,orforrefusaltotestify.Effective:January2,1978History:Amended1976(1stExtra.Sess.)Ky.Actsch.14,sec.285,effectiveJanuary2,1978.-Created1960Ky.Actsch.103,sec.21,effectiveJune16,1960.353.700Reviewoforderofdepartmentbycivilaction··Appeal.(1)AnypersonaggrievedbyanyorderissuedbythedepartmentorbythecommissionunderKRS353.500to353.720shallhavetherighttobringacivilactionforreviewoftheorderbyfilingacomplaintintheCircuitCourtofthecountyinwhichthepremisesoranyportionthereofaffectedbythe orderislocated,orintheFranklinCircuitCourt.(2)Thesuitshallbebroughtwithinthirty(30)daysaftertheorderisissued,andineventnosuitisfiledwithinthethirty(30)dayperiod,theordershallbefinal.(3)Inthesuittheburdenofproofshallbeuponthepartycomplainingoftheorder,andtheordershallbedeemedprimafacievalid.Anypartytothesuitmayofferinevidencealloranypartoftherecordofthehearingwhichresultedintheorder,andanyotherrelevantevidence.(4)Onappealnonewevidencemaybeintroduced,exceptastofraudormisconductofsomepersonengagedinthehearingbeforethecommission,unlessthecourtuponmotionandforgoodcauseshowndeterminesthattheinterestsofjusticewillbebetterservedbytheintroductionofnewevidence.Thecourtsittingwithoutajuryshallhearthecauseupontherecordbeforeit,anddisposeoftheappealinasummarymanner,beinglimitedtodetermining:whetherornotthecommissionactedwithoutorinexcessofitspowers;theorderwasprocuredbyfraud;theorderisnotinconformitytotheprovisionsofKRSChapter353;theorderisclearlyerroneousonthebasisofreliable,probativeandmaterialevidencecontainedinthewholerecord;ortheorderisarbitrary,orcapriciousorcharacterizedbyabuseofdiscretionorclearlyunwarrantedexerciseofdiscretion.Thecourtshallenteritsfindingsontheorderbookasajudgmentofthecourt,andsuchjudgmentshallhavethesameeffectandbeenforceableasanyotherjudgmentofthecourtincivilcauses.(5)Thepractice,pleadingandproceedingsinthesuitshallbeinaccordancewiththeRulesofCivilProcedure.(6)Inthesuitthecourtmaystaytheorderuntilthecourtshallenteritsdecree.ThecourtshallhavejurisdictiontoenteradecreeaffirmingorsettingasidetheorderorremandingthecausewithdirectionstomodifytheordersothatitshallconformtotheprovisionsofKRS353.500to353.720.Appealsmaybetakenbyanypartytothesuitinthesamemannerandtothesameextentasinothercivilactions.History:Amended1974Ky. Actsch.45,sec.7.-Created1960Ky.Actsch.103,sec.22,effectiveJune16,1960.353.710Suittoenjoinviolation••Bydepartment,personadverselyaffected,AttorneyGeneral.(1)WheneveritappearsthatanypersonisviolatingorthreateningtoviolateanyprovisionofKRS353.500to353.720,oranyrule,regulationororderpromulgatedorissuedunderKRS353.500to353.720,thedepartmentmaybringsuitagainstthepersonintheCircuitCourtofthecountywheretheviolationoccurredoristhreatened,orinthecountyinwhichthedefendantresidesorinwhichanydefendantresidesifthereismorethanone(1)defendant,torestrainthepersonfromcontinuingtheviolationorfromcarryingoutthethreatenedviolation.Insuchasuitthecourtshallhavejurisdictiontograntwithoutbondorotherundertakingtheprohibitoryormandatoryinjunctionasthefactsmaywarrant,includingatemporaryrestrainingorderorinjunction.(2)IfthedepartmentshallfailtobringsuittoenjoinaviolationorthreatenedviolationofanyprovisionsofKRS353.500to353.720,oranyrule,regulation,ororderpromulgatedorissuedunderKRS353.500to353.720withinten(10)daysafterreceiptofawrittenrequesttodosobyanypersonwhoisorwillbeadverselyaffectedbytheviolation,thepersonmakingtherequestmaybringsuitinhisownbehalftorestraintheviolationorthreatenedviolationinanycourtinwhichthedepartmentmighthavebroughtsuit.ThedepartmentshallbemadeapartydefendantinthesuitinadditiontothepersonallegedlyviolatingorthreateningtoviolateaprovisionofKRS353.500to353.720,oranyrule,regulationororderpromulgatedorissuedunderKRS353.500to353.720.(3)WheneveritappearsthatanypersonisviolatinganyprovisionofKRS353.500to353.720,oranyrule,regulationororderpromulgatedorissuedhereunder,theAttorneyGeneraloranypersonwhoisadverselyaffectedbytheviolationmaybringsuittorestraintheviolationinanycourtinwhichthedepartmentmighthavebroughtsuit.Thedepartmentshallbemadeapartydefendantinthesuitinadditiontothepersonallegedlyviolatingaprovisionoforanyrule,regulationororderpromulgatedorissuedunderKRS353.500to353.720.Effective:June16,1960History:Created1960Ky.Actsch.103,sec.23,effectiveJune16,1960.353.720ConstructionofKRS353.500to353.720.(1)KRS353.500to353.720shallnotbeconstruedtoauthorizeanylimitationofproductionofoilorgasfromanywell,lease,pool,fieldorpropertytopreventorcontroleconomicwasteortolimitproductiontomarketdemand.(2)NothinginKRS353.500to353.720isintendedtoorshallbeconstruedassuperseding,impairing,abridgingoraffectinganycontractualrightsorobligationsnoworhereafterexistingbetweentherespectiveownersofoil,gas,coal,orotherminerals,oranyintereststherein.Effectlve:June16,1960History:Created1960Ky.Actsch.103,sees.25and26,effectiveJune16,1960.353.730Investigationofabandonedwells--Application--Report--Bond.(1)Anypersonmayinvestigateanabandonedwelluponreceiptofapprovalfromthedepartment.Thepersonshallsubmittothedepartment:(a)Anapplicationrequestingapprovaltoinvestigateandstatingtheplannedmethodsfortheinvestigation.Inallcaseswheretherehasbeenacompleteseveranceoftheownershipoftheoilandgasfromtheownershipofthesurfacetobedisturbed,theapplicationshallincludeaplantopreventerosionandsedimentation;(b)Atwenty-fivedollar($25)fee;and(c)Acertificationbytheapplicantthathehastheauthoritytoenterthepropertyuponwhichthewellislocatedandtoconducttheinvestigation.(2)Thedepartmentshallreviewallapplicationsforinvestigation.Ifthedepartmentapprovestherequestforinvestigation,theapplicantshallbeallowedtoproducethewellwithoutapermitasrequiredbyKRS353.570,andtheapplicantshallsubmitareportofinvestigationtothedepartmentonformsprovidedbythedepartment.Inordertoproducethewellformorethansixty(60)days,theapplicantmustobtainabondasrequiredbyKRS353.590(5)or(9).NotwithstandingtheprovisionsofKRS353.590(2),nofeeshallberequiredforanysuchwell.Effectlve:July12,2006History:Amended2006Ky.Actsch.160,sec.4,effectiveJuly12,2006.-Created1998Ky.Actsch.359,sec.3,effectiveJuly15,1998.