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Introduced Version Senate Bill 369 History

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SB369 intr
Senate Bill No. 369

(By Senators Minard, Green and Helmick)

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[Introduced January 28, 2010; referred to the Committee on Energy, Industry and Mining; and then to the Committee on Finance.]

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A BILL to amend and reenact §22-6-1 of the Code of West Virginia, 1931, as amended; to amend and reenact §22C-8-2 of said code; and to amended and reenact §22C-9-2 of said code, all relating to modifying the definitions of "shallow well" and "deep well" to allow a shallow well to be drilled deeper; and correcting antiquated language throughout.

Be it enacted by the Legislature of West Virginia:
That §22-6-1 of the Code of West Virginia, 1931, as amended, be amended and reenacted; that §22C-8-2 of said code be amended and reenacted; and that §22C-9-2 of said code be amended and reenacted, all to read as follows:
CHAPTER 22. ENVIRONMENTAL RESOURCES.

ARTICLE 6. OFFICE OF OIL AND GAS; OIL AND GAS WELLS; ADMINISTRATION; ENFORCEMENT.

§22-6-1. Definitions.

Unless the context in which used clearly requires a different meaning, as used in this article:
(a) "Casing" means a string or strings of pipe commonly placed in wells drilled for natural gas or petroleum or both;
(b) "Cement" means hydraulic cement properly mixed with water;
(c) "Chair" means the chair of the West Virginia Shallow Gas Well Review Board as provided in section four, article eight, chapter twenty-two-c of this code;
(d) "Coal operator" means any person or persons, firm, partnership, partnership association or corporation that proposes to or does operate a coal mine;
(e) "Coal seam" and "workable coal bed" are interchangeable terms and mean any seam of coal twenty inches or more in thickness, unless a seam of less thickness is being commercially worked, or can in the judgment of the department foreseeably be commercially worked and will require protection if wells are drilled through it;
(f) "Director" means the director of the Division of Environmental Protection as established in article one of this chapter or such other person to whom the director has delegated authority or duties pursuant to sections six or eight, article one of this chapter.
(g) (f) "Deep well" means any well other than a shallow well or coalbed methane well, drilled and completed in to a formation at or below the top of the uppermost member of the "Onondaga Group";
(h) (g) "Expanding cement" means any cement approved by the office of oil and gas which expands during the hardening process, including, but not limited to, regular oil field cements with the proper additives;
(i) (h) "Facility" means any facility utilized in the oil and gas industry in this state and specifically named or referred to in this article or in article eight or nine of this chapter, other than a well or well site;
(j) (i) "Gas" means all natural gas and all other fluid hydrocarbons not defined as oil in this section;
(k) (j) "Oil" means natural crude oil or petroleum and other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods and which are not the result of condensation of gas after it leaves the underground reservoirs;
(l) (k) "Owner" when used with reference to any well, shall include any person or persons, firm, partnership, partnership association or corporation that owns, manages, operates, controls or possesses such well as principal, or as lessee or contractor, employee or agent of such principal;
(m) (l) "Owner" when used with reference to any coal seam, shall include any person or persons who own, lease or operate such coal seam;
(n) (m) "Person" means any natural person, corporation, firm, partnership, partnership association, venture, receiver, trustee, executor, administrator, guardian, fiduciary or other representative of any kind, and includes any government or any political subdivision or any agency thereof;
(o) (n) "Plat" means a map, drawing or print showing the location of a well or wells as herein defined;
(p) (o) "Review board" means the West Virginia shallow gas well review board as provided for in section four, article eight, chapter twenty-two-c of this code;
(q) (p) "Safe mining through of a well" means the mining of coal in a workable coal bed up to a well which penetrates such workable coal bed and through such well so that the casing or plug in the well bore where the well penetrates the workable coal bed is severed;
(q) "Secretary" means the Secretary of the Department of Environmental Protection as established in article one of this chapter or such other person to whom the secretary has delegated authority or duties pursuant to sections six or eight, article one of this chapter;
(r) "Shallow well" means any gas well, other than a coalbed methane well, drilled no deeper than one hundred fifty feet below the top of the "Onodaga Group": and completed in a formation above the top of the uppermost member of the "Onondaga Group"
Provided, That in drilling a shallow well the operator may penetrate into the "Onondaga Group" to a reasonable depth, not in excess of twenty feet, in order to allow for logging and completion operations, but in no event may the "Onondaga Group" formation or any formation below the "Onondaga Group" be otherwise produced, perforated or stimulated in any manner;
(s) "Stimulate" means any action taken by a well operator to increase the inherent productivity of an oil or gas well, including, but not limited to, fracturing, shooting or acidizing, but excluding cleaning out, bailing or workover operations;
(t) "Waste" means
: (i) P hysical waste, as the term is generally understood in the oil and gas industry; (ii) the locating, drilling, equipping, operating or producing of any oil or gas well in a manner that causes, or tends to cause a substantial reduction in the quantity of oil or gas ultimately recoverable from a pool under prudent and proper operations, or that causes or tends to cause a substantial or unnecessary or excessive surface loss of oil or gas; or (iii) the drilling of more deep wells than are reasonably required to recover efficiently and economically the maximum amount of oil and gas from a pool; (iv) substantially inefficient, excessive or improper use, or the substantially unnecessary dissipation of, reservoir energy, it being understood that nothing in this chapter shall be construed to authorize any agency of the state to impose mandatory spacing of shallow wells except for the provisions of section eight, article nine, chapter twenty-two-c of this code and the provisions of article eight, chapter twenty-two-c of this code; (v) inefficient storing of oil or gas: Provided, That storage in accordance with a certificate of public convenience issued by the Federal Energy Regulatory Commission shall be conclusively presumed to be efficient and; (vi) other underground or surface waste in the production or storage of oil, gas or condensate, however caused. Waste does not include gas vented or released from any mine areas as defined in section two, article one, chapter twenty-two-a of this code or from adjacent coal seams which are the subject of a current permit issued under article two of chapter twenty-two-a of this code: Provided, however, That nothing in this exclusion is intended to address ownership of the gas;
(u) "Well" means any shaft or hole sunk, drilled, bored or dug into the earth or into underground strata for the extraction or injection or placement of any liquid or gas, or any shaft or hole sunk or used in conjunction with such extraction or injection or placement. The term "well" does not include any shaft or hole sunk, drilled, bored or dug into the earth for the sole purpose of core drilling or pumping or extracting therefrom potable, fresh or usable water for household, domestic, industrial, agricultural or public use;
(v) "Well work" means the drilling, redrilling, deepening, stimulating, pressuring by injection of any fluid, converting from one type of well to another, combining or physically changing to allow the migration of fluid from one formation to another or plugging or replugging of any well;
(w) "Well operator" or "operator" means any person or persons, firm, partnership, partnership association or corporation that proposes to or does locate, drill, operate or abandon any well as herein defined;
(x) "Pollutant" shall have the same meaning as provided in subsection (17), section three, article eleven, chapter twenty-two of this code; and
(y) "Waters of this state" shall have the same meaning as the term "waters" as provided in subsection (23), section three, article eleven, chapter twenty-two of this code.
CHAPTER 22C. ENVIRONMENTAL RESOURCES; BOARDS,

AUTHORITIES, COMMISSIONS AND COMPACTS.

ARTICLE 8. SHALLOW GAS WELL REVIEW BOARD.

§22C-8-2. Definitions.

Unless the context in which used clearly requires a different meaning, as used in this article:
(1) "Board" means the Shallow Gas Well Review Board provided for in section four of this article;
(2) "Chair" means the chair of the Shallow Gas Well Review Board provided for in section four of this article;
(3) "Coal operator" means any person who proposes to or does operate a coal mine;
(4) "Coal seam" and "workable coal bed" are interchangeable terms and mean any seam of coal twenty inches or more in thickness, unless a seam of less thickness is being commercially worked, or can in the judgment of the division department foreseeably be commercially worked and will require protection if wells are drilled through it;
(5) "Commission" means the oil and gas conservation commission provided for in section four, article nine of this chapter;
(6) "Commissioner" means the oil and gas conservation commissioner provided for in section four, article nine of this chapter;
(7) "Correlative rights" means the reasonable opportunity of each person entitled thereto to recover and receive without waste the gas in and under a tract or tracts, or the equivalent thereof;
(8) "Deep well" means any well other than a shallow well or coalbed methane well, drilled and completed in to a formation at or below the top of the uppermost member of the "Onondaga Group";
(9) "Division" Department means the state
Division Department of Environmental Protection provided for in chapter twenty-two of this code;
(10) "Director" means the director of the Division of Environmental Protection as established in article one, chapter twenty-two of this code or such other person to whom the director delegates authority or duties pursuant to sections six or eight, article one, chapter twenty-two of this code;
(11) (10) "Drilling unit" means the acreage on which the board decides one well may be drilled under section ten of this article;
(12) (11) "Gas" means all natural gas and all other fluid hydrocarbons not defined as oil in subdivision (15) of this section;
(13) (12) "Gas operator" means any person who owns or has the right to develop, operate and produce gas from a pool and to appropriate the gas produced therefrom either for such person or for such person and others. In the event that there is no gas lease in existence with respect to the tract in question, the person who owns or has the gas rights therein shall be considered a "gas operator" to the extent of seven eighths of the gas in that portion of the pool underlying the tract owned by such person, and a "royalty owner" to the extent of one eighth of such gas;
(14) (13) "Just and equitable share of production" means, as to each person, an amount of gas in the same proportion to the total gas production from a well as that person's acreage bears to the total acreage in the drilling unit;
(15) (14) "Oil" means natural crude oil or petroleum and other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods and which are not the result of condensation of gas after it leaves the underground reservoir;
(16) (15) "Owner" when used with reference to any coal seam, shall include any person or persons who own, lease or operate such coal seam;
(17) (16) "Person" means any natural person, corporation, firm, partnership, partnership association, venture, receiver, trustee, executor, administrator, guardian, fiduciary or other representative of any kind, and includes any government or any political subdivision or any agency thereof;
(18) (17) "Plat" means a map, drawing or print showing the location of one or more wells or a drilling unit;
(19) (18) "Pool" means an underground accumulation of gas in a single and separate natural reservoir (ordinarily a porous sandstone or limestone). It is characterized by a single natural- pressure system so that production of gas from one part of the pool tends to or does affect the reservoir pressure throughout its extent. A pool is bounded by geologic barriers in all directions, such as geologic structural conditions, impermeable strata, and water in the formation, so that it is effectively separated from any other pools which may be present in the same district or in the same geologic structure;
(20) (19) "Royalty owner" means any owner of gas in place, or gas rights, to the extent that such owner is not a gas operator as defined in subdivision (13) of this section;
(20) "Secretary" means the Secretary of the Department of Environmental Protection as established in article one, chapter twenty-two of this code or such other person to whom the secretary delegates authority or duties pursuant to section six or eight, article one, chapter twenty-two of this code;
(21) "Shallow well" means any gas well other than a coalbed methane well, drilled no deeper than one hundred feet below the top of the "Onondaga Group": and completed in a formation above the top of the uppermost member of the "Onondaga Group"
Provided, That in drilling a shallow well the well operator may penetrate into the "Onondaga Group" to a reasonable depth, not in excess of twenty feet, in order to allow for logging and completion operations, but in no event may the "Onondaga Group" formation or formation below the Onondaga Group" be otherwise produced, perforated or stimulated in any manner;
(22) "Tracts comprising a drilling unit" means that all separately owned tracts or portions thereof which are included within the boundary of a drilling unit;
(23) "Well" means any shaft or hole sunk, drilled, bored or dug into the earth or into underground strata for the extraction, injection or placement of any liquid or gas, or any shaft or hole sunk or used in conjunction with such extraction, injection or placement. The term "well" does not include any shaft or hole sunk, drilled, bored or dug into the earth for the sole purpose of core drilling or pumping or extracting therefrom potable, fresh or usable water for household, domestic, industrial, agricultural or public use; and
(24) "Well operator" means any person who proposes to or does locate, drill, operate or abandon any well.
ARTICLE 9. OIL AND GAS CONSERVATION.

§22C-9-2. Definitions.
(a) Unless the context in which used clearly requires a different meaning, as used in this article:
(1) "Commission" means the Oil and Gas Conservation Commission and "commissioner" means the Oil and Gas Conservation Commissioner as provided for in section four of this article;
(2) "Director" "Secretary" means the director Secretary of the division Department of Environmental Protection and "chief" means the chief of the office of oil and gas;
(3) "Person" means any natural person, corporation, partnership, receiver, trustee, executor, administrator, guardian, fiduciary or other representative of any kind, and includes any government or any political subdivision or any agency thereof;
(4) "Operator" means any owner of the right to develop, operate and produce oil and gas from a pool and to appropriate the oil and gas produced therefrom, either for such person or for such person and others; in the event that there is no oil and gas lease in existence with respect to the tract in question, the owner of the oil and gas rights therein shall be considered as "operator" to the extent of seven eighths of the oil and gas in that portion of the pool underlying the tract owned by such owner, and as "royalty owner" as to one-eighth interest in such oil and gas; and in the event the oil is owned separately from the gas, the owner of the substance being produced or sought to be produced from the pool shall be considered as "operator" as to such pool;
(5) "Royalty owner" means any owner of oil and gas in place, or oil and gas rights, to the extent that such owner is not an operator as defined in subdivision (4) of this section;
(6) "Independent producer" means a producer of crude oil or natural gas whose allowance for depletion is determined under Section 613A of the federal Internal Revenue Code in effect on July 1, 1997;
(7) "Oil" means natural crude oil or petroleum and other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods and which are not the result of condensation of gas after it leaves the underground reservoir;
(8) "Gas" means all natural gas and all other fluid hydrocarbons not defined as oil in subdivision (7) of this section;
(9) "Pool" means an underground accumulation of petroleum or gas in a single and separate natural reservoir (ordinarily a porous sandstone or limestone). It is characterized by a single natural- pressure system so that production of petroleum or gas from one part of the pool affects the reservoir pressure throughout its extent. A pool is bounded by geologic barriers in all directions, such as geologic structural conditions, impermeable strata, and water in the formations, so that it is effectively separated from any other pools that may be presented in the same district or on the same geologic structure;
(10) "Well" means any shaft or hole sunk, drilled, bored or dug into the earth or underground strata for the extraction of oil or gas;
(11) "Shallow well" means any well other than coalbed methane well, drilled no deeper than one hundred feet below the top of the "Onondaga Group": and completed in a formation above the top of the uppermost member of the "Onondaga Group" Provided, That in drilling a shallow well the operator may penetrate into the "Onondaga Group" to a reasonable depth, not in excess of twenty feet, in order to allow for logging and completion operations, but in no event may the "Onondaga Group" formation or any formation below the "Onondaga Group" be otherwise produced, perforated or stimulated in any manner;
(12) "Deep well" means any well or coalbed methane well, other than a shallow well, drilled and completed to in a formation at or below the top of the uppermost member of the "Onondaga Group";
(13) "Drilling unit" means the acreage on which one well may be drilled;
(14) "Waste" means and includes:
(A) Physical waste, as that term is generally understood in the oil and gas industry;
(B) The locating, drilling, equipping, operating or producing of any oil or gas well in a manner that causes, or tends to cause, a reduction in the quantity of oil or gas ultimately recoverable from a pool under prudent and proper operations, or that causes or tends to cause unnecessary or excessive surface loss of oil or gas; or
(C) The drilling of more deep wells than are reasonably required to recover efficiently and economically the maximum amount of oil and gas from a pool. Waste does not include gas vented or released from any mine areas as defined in section two, article one, chapter twenty-two-a of this code or from adjacent coal seams which are the subject of a current permit issued under article two of chapter twenty-two-a of this code: Provided, That nothing in this exclusion is intended to address ownership of the gas;
(15) "Correlative rights" means the reasonable opportunity of each person entitled thereto to recover and receive without waste the oil and gas in and under his or her tract or tracts, or the equivalent thereof; and
(16) "Just and equitable share of production" means, as to each person, an amount of oil or gas or both substantially equal to the amount of recoverable oil and gas in that part of a pool underlying such person's tract or tracts.
(b) Unless the context clearly indicates otherwise, the use of the word "and" and the word "or" shall be interchangeable, as, for example, "oil and gas" shall mean oil or gas or both.


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(NOTE: The purpose of this bill is to modify the definitions of "shallow" and "deep" wells to allow a shallow well to be drilled deeper and provide clarity to both definitions.

Strike-throughs indicate language that would be stricken from the present law, and underscoring indicates new language that would be added.)
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