HB401 Manypenny HFA #1 12-14

    Delegate Manypenny moves to amend the amendment on page one, following the enacting section, by striking out the remainder of the bill in its entirety and inserting in lieu thereof, the following:

CHAPTER 22. ENVIRONMENTAL RESOURCES.

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

§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 for 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) “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) "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) "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) "Gas" means all natural gas and all other fluid hydrocarbons not defined as oil in this section;

    (k) "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) "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) "Owner" when used with reference to any coal seam, shall include any person or persons who own, lease or operate such coal seam;

    (n) "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) "Plat" means a map, drawing or print showing the location of a well or wells as herein defined;

    (p) "Pollutant" shall have the same meaning as provided in subsection (17), section three, article eleven of this chapter, chapter twenty-two of this code;

    (q) "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;

    (r) "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;

    (s) “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 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;

    (t) "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;

    (u) "Waste" means (i) physical 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;

    (v) "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.;

    (w) "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;

    (x) "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; and

    (y) "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.

§22-6-2. Secretary -- Powers and duties generally; department records open to public; inspectors.

    (a) The Secretary shall have as his or her duty the supervision of the execution and enforcement of matters related to oil and gas set out in this article and in articles eight and nine of this chapter.

    (b) The Secretary is authorized to propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code necessary to effectuate the above stated purposes.

    (c) The Secretary shall have full charge of the oil and gas matters set out in this article and in articles eight and nine of this chapter. In addition to all other powers and duties conferred upon him or her, the Secretary shall have the power and duty to:

    (1) Supervise and direct the activities of the office of oil and gas and see that the purposes set forth in subsections (a) and (b) of this section are carried out;

    (2) Employ a supervising oil and gas inspector and oil and gas inspectors Determine the number of supervising oil and gas inspectors and oil and gas inspectors needed to carry out the purposes of this article and articles six-a, eight, nine, ten, and twenty-one of this chapter and appoint them as such. All appointees shall be qualified civil service employees, but no person is eligible for appointment until he or she has served in a probationary status for a period of six months to the satisfaction of the Secretary;

    (3) Supervise and direct such oil and gas inspectors and supervising inspector in the performance of their duties;

    (4) Suspend for good cause any oil and gas inspector or supervising inspector without compensation for a period not exceeding thirty days in any calendar year Make investigations or inspections necessary to ensure complete compliance with the provisions of this code and enforce the provisions of this article and articles six-a, eight, nine, ten, and twenty-one of this chapter;

    (5) Prepare report forms to be used by oil and gas inspectors or the supervising inspector in making their findings, orders and notices, upon inspections made in accordance with this article and articles seven, six-a, eight, nine, and ten, and eleven of this chapter;

    (6) Employ a hearing officer and such clerks, stenographers and other employees, as may be necessary to carry out his or her duties and the purposes of the office of oil and gas and fix their compensation;

    (7) Hear and determine applications made by owners, well operators and coal operators for the annulment or revision of orders made by oil and gas inspectors or the supervising inspector, and to make inspections, in accordance with the provisions of this article and articles eight and nine of this chapter;

    (8) Cause a properly indexed permanent and public record to be kept of all inspections made by the Secretary or by oil and gas inspectors or the supervising inspector;

    (9) Conduct such research and studies as the Secretary shall deem necessary to aid in protecting the health and safety of persons employed within or at potential or existing oil or gas production fields within this state, to improve drilling and production methods and to provide for the more efficient protection and preservation of oil and gas-bearing rock strata and property used in connection therewith;

    (10) Collect a permit fee of $400 for each permit application filed other than an application for a deep well, horizontal well, or a coalbed methane well; and collect a permit fee of $650 for each permit application filed for a deep well: Provided, That no permit application fee shall be required when an application is submitted solely for the plugging or replugging of a well, or to modify an existing application for which the operator previously has submitted a permit fee under this section. All application fees required hereunder shall be in lieu of and not in addition to any fees imposed under article eleven of this chapter relating to discharges of stormwater but shall be in addition to any other fees required by the provisions of this article: Provided, however, That upon a final determination by the United States Environmental Protection Agency regarding the scope of the exemption under section 402(l)(2) of the federal Clean Water Act (33 U.S.C. 1342(l)(2)), which determination requires a “national pollutant discharge elimination system” permit for stormwater discharges from the oil and gas operations described therein, any permit fees for stormwater permits required under article eleven of this chapter for such operations shall not exceed $100.

    (11) Perform all other duties which are expressly imposed upon the Secretary by the provisions of this chapter;

    (12) Perform all duties as the permit issuing authority for the state in all matters pertaining to the exploration, development, production, storage and recovery of this state's oil and gas;

    (13) Adopt rules with respect to the issuance, denial, retention, suspension or revocation of permits, authorizations and requirements of this chapter, which rules shall assure that the rules, permits and authorizations issued by the Secretary are adequate to satisfy the purposes of this article and articles six-a, seven, eight, nine, and ten and twenty-one of this chapter particularly with respect to the consolidation of the various state and federal programs which place permitting requirements on the exploration, development, production, storage and recovery of this state's oil and gas: Provided, That notwithstanding any provisions of this article and articles seven, eight, nine and ten of this chapter to the contrary, the environmental quality board shall have the sole authority pursuant to section three, article three, chapter twenty-two-b to promulgate rules setting standards of water quality applicable to waters of the state; and

    (14) Perform such acts as may be necessary or appropriate to secure to this state the benefits of federal legislation establishing programs relating to the exploration, development, production, storage and recovery of this state's oil and gas, which programs are assumable by the state.

    (d) The Secretary shall have authority to visit and inspect any well or well site and any other oil or gas facility in this state and may call for the assistance of any oil and gas inspector or inspectors or supervising inspector whenever such assistance is necessary in the inspection of any such well or well site or any other oil or gas facility. Similarly, all oil and gas inspectors and the supervising inspector shall have authority to visit and inspect any well or well site and any other oil or gas facility in this state. They shall make all necessary surveys and inspections of oil and gas operations required by this article and articles six-a, eight, nine, ten and twenty-one of this chapter; administer and enforce all oil and gas laws and rules; and perform other duties and services as may be prescribed by the secretary. Inspectors shall give particular attention to all conditions of each permit to ensure complete compliance therewith. They shall note and describe all violations of this article and articles six-a, eight, nine, ten or twenty-one of this chapter and immediately report those violations to the secretary in writing, furnishing at the same time a copy of the report to the operator concerned. Any well operator, coal operator operating coal seams beneath the tract of land, or the coal seam owner or lessee, if any, if said owner or lessee is not yet operating said coal seams beneath said tract of land may request the Secretary to have an immediate inspection made. The operator or owner of every well or well site or any other oil or gas facility shall cooperate with the Secretary, all oil and gas inspectors and the supervising inspector in making inspections or obtaining information.

    (e) Oil and gas inspectors shall devote their full time and undivided attention to the performance of their duties, and they shall be responsible for the inspection of all wells or well sites or other oil or gas facilities in their respective districts as often as may be required in the performance of their duties.

    (f) (e) All records of the office shall be open to the public.

§22-6-2a. Oil and gas inspectors qualifications and salary.

    (a) No person is eligible for appointment as an oil and gas inspector or supervising inspector unless, at the time of probationary appointment, the person: (1) Is a citizen of West Virginia, in good health and of good character, reputation and temperate habits; (2) has had at least two years actual relevant experience in the oil and gas industry: Provided, That no more than one year of the experience may be satisfied by any of following: (i) A bachelor of science degree in science or engineering; (ii) an associate degree in petroleum technology; or (iii) actual relevant environmental experience including, without limitation, experience in wastewater, solid waste or reclamation each full year of which shall be considered as a year of actual relevant experience in the oil and gas industry; and (3) has good theoretical and practical knowledge of oil and gas drilling and production methods, practices and techniques, sound safety practices and applicable water and mining laws.

    (b) In order to qualify for appointment as an oil and gas inspector or supervising inspector, an eligible applicant shall submit to a written and oral examination by the Division of Personnel and shall furnish any evidence of good health, character and other facts establishing eligibility required by the Division. If the Division finds after investigation and examination that an applicant: (1) Is eligible for appointment; and (2) has passed all written and oral examinations, the Division shall add the applicant's name and grade to the register of qualified eligible candidates and certify its action to the Secretary of the Department of Environmental Protection. No candidate's name may remain on the register for more than three years without re-qualifying.

    (c) Every supervising oil and gas inspector shall be paid not less than $40,000 per year. Every oil and gas inspector shall be paid not less than $35,000 per year;

§22-6-12. Plats prerequisite to drilling or fracturing wells; preparation and contents; notice and information furnished to coal operators, owners or lessees; issuance of permits; performance bonds or securities in lieu thereof; bond forfeiture.

    (a) Before drilling for oil or gas, or before fracturing or stimulating a well on any tract of land, the well operator shall have a plat prepared by a licensed land professional surveyor or registered engineer showing the district and county in which the tract of land is located, the name and acreage of the same, the names of the owners of adjacent tracts, the proposed or actual location of the well determined by survey, the courses and distances of such location from two permanent points or landmarks on said tract and the number to be given the well. In the event the tract of land on which the said well proposed to be drilled or fractured is located is known to be underlain by one or more coal seams, copies of the plat shall be forwarded by registered or certified mail to each and every coal operator operating said coal seams beneath said tract of land, who has mapped the same and filed such maps with the Office of Miners' Health, Safety and Training in accordance with chapter twenty-two-a of this code and the coal seam owner of record and lessee of record, if any, if said owner or lessee has recorded the declaration provided in section thirty-six of this article, and if said owner or lessee is not yet operating said coal seams beneath said tract of land. With each of such the plats there shall be enclosed a notice (form for which shall be furnished on request by the secretary) addressed to the secretary and to each such coal operator, owner and lessee, if any, at their respective addresses, informing them that such the plat and notice are being mailed to them respectively by registered or certified mail, pursuant to the requirements of this article: Provided, That the Department of Environmental Protection, with advice from the West Virginia Board of Professional Surveyors, may promulgate rules to govern methods of survey and information to be present on the plats and reports related to oil and gas permit maps including but not limited to requiring a north arrow, tax map and parcel numbers for surface tracts, mineral boundary lines, mineral owner name and title reference, surface owner name and title reference, named waterways, state highway and county numbered route numbers, and the plat shall be drawn to a scale large enough for the information to be legible.

    (b) If no objections are made, or are found by the secretary, to such the proposed location or proposed fracturing within fifteen days from receipt of such plat and notice by the secretary, the same shall be filed and become a permanent record of such the location or fracturing subject to inspection at any time by any interested person, and the secretary may forthwith immediately issue to the well operator a permit reciting the filing of such the plat, that no objections have been made by the coal operators, owners and lessees, if any, or found thereto by the secretary, and authorizing the well operator to drill at such the location, or to fracture the well. Unless the secretary has objections to such the proposed location or proposed fracturing or stimulating, such the permit may be issued prior to before the expiration of such the fifteen-day period upon the obtaining by the well operator of the consent in writing of the coal operator or operators, owners and lessees, if any, to whom copies of the plat and notice shall have been mailed as herein required, and upon presentation of such the written consent to the secretary. The notice above provided for may be given to the coal operator by delivering or mailing it by registered or certified mail as above to any agent or superintendent in actual charge of mines.

    (c) A permit to drill, or to fracture or stimulate an oil or gas well, shall may not be issued unless the application therefor is accompanied by a bond as provided in section twenty-six of this article.

§22-6-14. Plats prerequisite to introducing liquids or waste into wells; preparation and contents; notice and information furnished to coal operators, owners or lessees and director; issuance of permits; performance bonds or security in lieu thereof.

    (a) Before drilling a well for the introduction of liquids for the purposes provided for in section twenty-five of this article or for the introduction of liquids for the disposal of pollutants or the effluent therefrom on any tract of land, or before converting an existing well for such purposes, the well operator shall have a plat prepared by a registered engineer or licensed land professional surveyor showing the district and county in which the tract of land is located, the name and acreage of the same, the names of the owners of all adjacent tracts, the proposed or actual location of the well or wells determined by a survey, the courses and distances of such the location from two permanent points of land marked on said tract and the number to be given to the well, and shall forward by registered or certified mail the original and one copy of the plat to the director. In addition, the well operator shall provide the following information on the plat or by way of attachment thereto to the director in the manner and form prescribed by the director's rules: (1) The location of all wells, abandoned or otherwise located within the area to be affected; (2) where available, the casing records of all such those wells; (3) where available, the drilling log of all such those wells; (4) the maximum pressure to be introduced; (5) the geological formation into which such that liquid or pressure is to be introduced; (6) a general description of the liquids to be introduced; and (7) the location of all water-bearing horizons above and below the geological formation into which such that pressure, liquid or waste is to be introduced; (8) such other information as the director requires by rule: may require Provided, That the Department of Environmental Protection, with advice from the West Virginia Board of Professional Surveyors may promulgate rules to govern methods of survey and information to be present on the plats and reports related to oil and gas permit maps including but not limited to requiring a north arrow, tax map and parcel numbers for surface tracts, mineral boundary lines, mineral owner name and title reference, surface owner name and title reference, named waterways, state highway and county numbered route numbers, and the plat shall be drawn to a scale large enough for the information to be legible.

    (b) In the event If the tract of land on which said the well proposed to be drilled or converted for the purposes provided for in this section is located is known to be underlaid with coal seams, copies of the plat and all information required by this section shall be forwarded by the operator by registered or certified mail to each and every coal operator operating coal seams beneath said the tract of land, who has mapped the same and filed such maps with the Office of Miners' Health, Safety and Training in accordance with chapter twenty-two-a of this code, and the coal seam owner of record and lessee of record, if any, if said the owner or lessee has recorded the declaration provided in section thirty-six of this article, and if said the owner or lessee is not yet operating said those seams beneath said the tract of land. With each of such the plats, there shall be enclosed a notice (form for which shall be furnished on request by the director) addressed to the director and to each such coal operator, owner or lessee, if any, at their respective addresses, informing them that such the plat and notice are being mailed to them, respectively, by registered or certified mail, pursuant to the requirements of this section.

    (c) If no objections are made by any such coal operator, owner or lessee, or the director, such the proposed drilling or converting of the well or wells for the purposes provided for in this section within thirty days from the receipt of such the plat and notice by the director, the same shall be filed and become a permanent record of such the location or well, subject to inspection at any time by any interested person, and the director may after public notice and opportunity to comment, issue such a permit authorizing the well operator to drill at such the location or convert such the existing well or wells for the purposes provided for in this section. The notice above provided for may be given to the coal operator by delivering or mailing it by registered or certified mail as above to any agent or superintendent in actual charge of the mines.

    (d) A permit to drill a well or wells or convert an existing well or wells for the purposes provided for in this section shall may not be issued until all of the bonding provisions required by the provisions of section twelve of this article have been fully complied with and all such those bonding provisions shall apply to all wells drilled or converted for the purposes provided for in this section as if such those wells had been drilled for the purposes provided for in section twelve of this article, except that such the bonds shall be conditioned upon full compliance with all laws and rules relating to the drilling of a well or the converting of an existing well for the purposes provided for in said section twenty-five of this article, or introducing of liquids for the disposal of pollutants including the redrilling, deepening, casing, plugging or abandonment of all such wells.

§22-6-36. Declaration of oil and gas notice by owners and lessees of coal seams.

    (a) For purposes of notification under this article, any owner or lessee of coal seams shall may file a declaration of the owner's or lessee's interest in such the coal seams with the clerk of the county commission in the county where such the coal seams are located. Said The clerk shall file and index such the declaration in accordance with section two, article one, chapter thirty-nine of this code, and shall index the name of the owner or lessee of such the coal seams in the grantor index of the record maintained for the indexing of leases. If the declaration of owner’s or lessee’s interest is not filed, then notification pursuant to this article shall be made to the owners or lessees of coal seams of record.

    (b) The declaration, if filed, shall entitles such the owner or lessee to the notices provided in sections twelve, thirteen, fourteen, and twenty-three of this article: Provided, That the declaring owner shall be the record owner of the coal seam, and the declaring lessee shall be the record lessee with the owner's or lessee's source or sources of title recorded prior to recording such the lessee's declaration.

    (c) The declaration, if filed, shall be acknowledged by such the owner or lessee and, in the case of a lessee, may be a part of the coal lease under which the lessee claims. Such The declaration may be in the following language:

"DECLARATION OF OIL AND GAS NOTICE"

"The undersigned hereby declares:

    (1) The undersigned is the ('owner' or 'lessee') of one or more coal seams or workable coal beds as those terms are defined in section one of this article.

    (2) The coal seam(s) or workable coal bed(s) owned or leased partly or wholly by the undersigned lie(s) under the surface of lands described as follows:

    (Here insert a description legally adequate for a deed, whether by metes and bounds or other locational description, or by title references such as a book and page legally sufficient to stand in lieu of a locational description.)

    (3) The undersigned desires to be given all notices of oil and gas operations provided by sections twelve, thirteen, fourteen, and twenty-three of this article, addressed as follows:

    (Here insert the name and mailing address of the undersigned owner or lessee.)

                        _______________________________

                                          (Signature)

    (Here insert an acknowledgment legally adequate for a deed)."

    The benefits of the foregoing declaration shall be personal to the declaring owner or lessee, and not transferable or assignable in any way.

ARTICLE 6A. NATURAL GAS HORIZONTAL WELL CONTROL ACT.

§22-6A-1. Short title.

    This article shall be known and cited as the “Horizontal Well Act”.

§22-6A-2. Legislative findings; declaration of public policy.

    (a) The Legislature finds that:

    (1) The advent and advancement of new and existing technologies and drilling practices have created the opportunity for the efficient development of natural gas contained in underground shales and other geologic formations;

    (2) These practices have resulted in a new type and scale of natural gas development that utilizes horizontal drilling techniques, allows the development of multiple wells from a single surface location, and may involve fracturing processes that use and produce large amounts of water;

    (3) In some instances these practices may require the construction of large impoundments for the storage of water or wastewater;

    (4) Existing laws and regulations developed for conventional oil and gas operations are inadequate to address the potential environmental impacts from these new technologies and practices; and

    (5) Allowing the responsible development of our state’s natural gas resources will enhance the economy of our state and the quality of life for our citizens while assuring the long term protection of the environment.

    (b) The Legislature declares that the establishment of a new regulatory scheme to address new and advanced natural gas development technologies and drilling practices is in the public interest and should be done in a manner that protects the environment and our economy for current and future generations.

    (c) The Legislature declares that in view of the urgent need for prompt decision of matters submitted to the secretary under this article, all actions which the secretary, or oil and gas inspectors are required to take under this article, shall be taken as rapidly as practicable, consistent with adequate consideration of the issues involved.

§22-6A-3. Applicability; exceptions; karst formations.

    (a) Notwithstanding any other provision of this code to the contrary, the provisions of this article shall apply to any natural gas well that is a horizontal well as defined in section four of this article: Provided, That this article shall not apply to or affect any well work permitted for a horizontal well or orders issued regarding horizontal wells prior to the effective date of this article.

    (b) The secretary shall propose legislative rules and promulgate emergency legislative rules establishing designated geographical regions of the state where the provisions of this section are applicable, and establish the following standards for drilling through Karst formations and for having surface operations and uses on or above Karst formations in these regions. The rules at a minimum shall:

    (1) Require pre-drilling geophysical testing, visual inspection of the immediate area, and research of governmental local existing resources and studies in order to identify the location of caves and other voids, faults and relevant features in strata;

     (2) Require pre-drilling visual inspection of the immediate area, and research of governmental and local existing resources and studies in order to identify the location of surface features such as sink holes, and establishing baseline water flow and quality testing requirements for Karst rock formations which serve as a recharge area for a spring that is located within one thousand feet of a drilling site; and

    (3) Provide any other requirements as necessary for protections as a result of features unique to Karst geology. The rules may require additional water source baseline testing than otherwise required. The rules also may require additional materials or techniques on the surface in response to any surface or subsurface Karst features with a substantial likelihood of affecting or being affected by surface operations. The rules shall allow drilling using only air or water without additives until the surface casing is set and cemented, require during drilling record keeping of “bit drops,” loss of air or water pressure and other indications of voids, faults and other relevant features through Karst. The rules shall require testing, such as circulation of water before circulation of cement, to search for or evaluate voids, faults and relevant features before the initial cementing. Where indications of voids, faults and other relevant features in the strata exist, the rules shall also provide for the use of techniques and materials, such as liners, scale of cement additives which clogs up voids, or other special cement additives or techniques sufficient to mitigate the possible effects of those features on the integrity of the well. Where the initial cementing of the surface casing does not result in a return of the cement to the surface, the rules shall also require mitigating measures to further isolate groundwater strata from other strata and from materials used in further drilling and from gas from the target or other formations. The rules shall require a cement bond log run twenty-four hours after the completion of the cement job or its equivalent before additional drilling may continue. Where cement did not return to surface or where the post cementing tests indicate possible problems, the rules may require additional testing and any other mitigation that testing or experience may require to insure the integrity of the well.

    (c) Because karst geology may require precautions not commonly needed in other parts of the state when exploring for or producing oil and natural gas, the secretary shall review the department’s regulatory program to determine whether the rules applicable to oil and gas wells need to be further revised to address drilling in areas of karst geology. If so, the secretary may propose additional legislative rules, including emergency rules if it is deemed necessary, in accordance with the provisions of the administrative procedures act in chapter twenty-nine-a of this code.

    (d) The secretary may require such additional safeguards as may be necessary to protect this geological formation. Special safeguards may include changing proposed well locations to avoid damage to water resources, special casing programs and additional or special review of drilling procedures.

    (e) Nothing in this section shall be construed to allow the department to prevent drilling in karst geology.

22-6A-4. Definitions.

    (a) All definitions set forth in article six of this chapter apply when those defined terms are used in this article, unless the context in which the term is used clearly requires a different meaning.

    (b) Unless the context in which used clearly requires a different meaning, as used in this article:

    (1) “Best management practices” means schedules of activities, prohibitions of practices, maintenance procedures, and other management practices to prevent or reduce pollution of waters of this State. For purposes of this article, best management practices also includes those practices and procedures set out in the Erosion and Sediment Control Manual of the Office of Oil and Gas;

    (2) “Department” means the department of environmental protection;

    (3) ”Horizontal drilling” means a method of drilling a well for the production of natural gas that is intended to maximize the length of wellbore that is exposed to the formation and in which the wellbore is initially vertical but eventually is curved to become horizontal, or nearly horizontal, to parallel a particular geologic formation;

    (4) “Horizontal well” means any well site, other than a coalbed methane well, drilled using a horizontal drilling method, and which disturbs 3 acres or more of surface or utilizes more than 210,000 gallons of water in any month;

    (5) “Flowback Recycle Impoundment” means an impoundment used for the retention of flowback and freshwater and into which no other wastes of any kind are placed;

    (6) “Freshwater Impoundment” means an impoundment used for the retention of fresh water and into which no wastes of any kind are placed;

    (7) “Impoundment” means a man-made excavation or diked area for the retention of fluids;

    (8) “Pit” means a man-made excavation or diked area that contains or is intended to contain an accumulation of process waste fluids, drill cuttings or any other liquid substance generated in the development of a horizontal well and which could impact surface or groundwater; and

    (9) “Secretary” means the Cabinet 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.

§22-6A-5. Application of article six of this chapter to horizontal wells subject to this article.

    To the extent that horizontal wells governed by this article are similar to conventional oil and gas wells regulated under article six of this chapter. Any conflict between the provisions of article six and the provisions of this article shall be resolved in favor of this article. The following sections of article six of this chapter are hereby incorporated by reference in this article:

    (a) The provisions of section three, article six of this chapter relating to the findings and orders of inspectors concerning violations, the determination of reasonable time for abatement, extensions of time for abatement, special inspections, notice of findings and orders.

    (b) The provisions of section four, article six of this chapter providing for the review of findings and orders by the secretary, special inspections, and applications for annulment or revision of orders by the secretary.

    (c) The provisions of section five, article six of this chapter relating to the requirements for findings, orders and notices, notice to the operator of findings and orders, and judicial review of final orders of the secretary.

    (d) The provisions of section seven, article six of this chapter relating to the issuance of water pollution control permits, the powers and duties of the secretary related thereto, and penalties for violations of the same.

    (e) The provisions of section eight, article six of this chapter relating to the prohibition of permits for wells on flat well royalty leases and requirements for permits.

    (f) The provisions of section twelve, article six of this chapter pertaining to plats prerequisite to drilling or fracturing wells, the preparation and contents thereof, notice furnished to coal operators, owners or lessees, the issuance of permits, and required performance bonds, with the following exceptions:

    (1) Under subsection (a), section twelve, article six of this chapter the plat also shall identify all surface tract boundaries within the scope of the plat.

    (2) Under subsection (b), section twelve, article six of this chapter any reference to a time period shall be thirty days in lieu of fifteen days.

    (g) The provisions of section thirteen, article six of this chapter providing for notice of the operator’s intention to fracture wells, with the exception that under subsection (c) of section thirteen, article six of this chapter the applicable time periods shall be thirty days in lieu of fifteen days.

    (h) The provisions of section fifteen, article six of this chapter pertaining to objections to proposed deep well drilling sites above seam or seams of coal, with the exception that the applicable time for filing objections shall be within thirty days of receipt by the secretary of the required plat and/or notice in lieu of fifteen days.

    (i) The provisions of section seventeen, article six of this chapter pertaining to drilling of shallow gas wells, notice to be provided to the chair of the review board, orders issued by the review board, and permits issued for such drilling, with the exception that the applicable time for filing objections shall be thirty days from the date of receipt by the secretary of the required plat and notice in lieu of fifteen days.

    (j) The provisions of section eighteen, article six of this chapter providing for protective devices for when a well penetrates one or more workable coal beds and when gas is found beneath or between workable coal beds.

    (k) The provisions of section nineteen, article six of this chapter providing for protective devices during the life of the well and for dry or abandoned wells.

    (l) The provisions of section twenty, article six of this chapter providing for protective devices when a well is drilled through the horizon of a coalbed from which the coal has been removed.

    (m) The provisions of section twenty-one, article six of this chapter requiring the installation of fresh water casings.

    (n) The provisions of section twenty-two, article six of this chapter relating to the filing of a well completion report and the contents thereof, confidentiality and permitted use, and the secretary’s authority to promulgate rules.

    (o) The provisions of section twenty-seven, article six of this chapter regarding a cause of action for damages caused by an explosion.

    (p) The provisions of section twenty-eight, article six of this chapter relating to supervision by the secretary over drilling and reclamation operations, the filing of complaints, hearings on the same, and appeals.

    (q) The provisions of section twenty-nine, article six of this chapter providing for the Operating Permit and Processing Fund, the oil and gas reclamation fund, and associated fees, with the exception that in the first paragraph of subsection (a), section twenty-nine, article six of this chapter the fees to be credited to the Oil and Gas Operating Permit and Processing Fund shall be the permit fees collected pursuant to section seven of this article.

    (r) The provisions of section thirty-one, article six of this chapter providing for preventing waste of gas, plans of operation for wasting gas in the process of producing oil and the secretary’s rejection thereof.

    (s) The provisions of section thirty-two, article six of this chapter pertaining to the right of an adjacent owner or operator to prevent waste of gas and the recovery of costs.

    (t) The provisions of section thirty-three, article six of this chapter relating to circuit court actions to restrain waste.

    (u) The provisions of section thirty-six, article six of this chapter providing for the declaration of oil and gas notice by owners and lessees of coal seams and setting out the form of such notice, with the exception that the owner or lessee of coal seams shall be entitled only to the notices provided in sections twelve and thirteen, of article six of this chapter.

    (v) The provisions of section thirty-nine, article six of this chapter relating to petitions for injunctive relief.

    (w) The provisions of section forty, article six of this chapter relating to appeals from orders issuing or refusing to issue a permit to drill or fracture, and the procedure therefore.

    Notwithstanding any other provision of this code to the contrary, no provision of article six of this chapter shall apply to horizontal wells subject to this article except as expressly incorporated by reference in this article.

§22-6A-6. Secretary of Department of Environmental Protection; powers and duties.

    The secretary is vested with jurisdiction over all aspects of this article, including, but not limited to, the following powers and duties:

    (1) To control and exercise regulatory authority over all gas operations regulated by this article;

    (2) To utilize any oil and gas inspectors or other employees of the Office of Oil and Gas in the enforcement of the provisions of this article;

    (3) To propose any necessary legislative rules, in accordance with the provisions of chapter twenty-nine-a of this code to implement the provisions of this article; and

    (4) To make investigations and inspections necessary to ensure compliance with the provisions of this article.

    (5) Except for the duties and obligations conferred by statute upon the shallow gas well review board pursuant to article eight, chapter twenty-two-c of this code, the coalbed methane review board pursuant to article twenty-one of this chapter, and the oil and gas conservation commission pursuant to article nine, chapter twenty-two-c of this code, the secretary has sole and exclusive authority to regulate the permitting, location, spacing drilling, operation and plugging of oil and gas wells and production operations within the state.

§22-6A-7. Horizontal well permit required; permit fee; application; soil erosion control plan; well site safety plan; site construction plan; water management plan; permit fee; installation of permit number; suspension of a permit.

    (a) It is unlawful for any person to commence any well work, including site preparation work which involves any disturbance of land, for a horizontal well without first securing from the secretary a well work permit pursuant to this article.

    (b) Every permit application filed under this section shall be on such form as may be prescribed by the secretary, shall be verified, and shall contain the following information:

    (1) The names and addresses of (i) the well operator, (ii) the agent required to be designated under subsection (h) of this section, and (iii) every person whom the applicant must notify under any section of this article, together with a certification and evidence that a copy of the application and all other required documentation has been delivered to all such persons;

    (2) The name and address of every coal operator operating coal seams under the tract of land on which the well is or may be located, and the coal seam owner of record and lessee of record required to be given notice by subsection (f), section five of this article, if any, if said owner or lessee is not yet operating said coal seams;

    (3) The number of the well or such other identification as the secretary may require;

    (4) The well work for which a permit is requested;

    (5) The approximate total depth to which the well is to be drilled or deepened, or the actual depth if the well has been drilled; the proposed angle and direction of the well; the actual depth or the approximate depth at which the well to be drilled deviates from vertical, the angle and direction of the non-vertical well bore until the well reaches its total target depth or its actual final depth, and the length and direction of any actual or proposed horizontal lateral or well bore;

    (6) Each formation in which the well will be completed if applicable;

    (7) A description of any means used to stimulate the well;

    (8) If the proposed well work will require casing or tubing to be set, the entire casing program for the well, including the size of each string of pipe, the starting point and depth to which each string is to be set, and the extent to which each such string is to be cemented;

    (9) If the proposed well work is to convert an existing well, all information required by this section, all formations from which production is anticipated and any plans to plug any portion of the well;

    (10) If the proposed well work is to plug or replug the well, all information necessary to demonstrate compliance with the legislative rules promulgated by the secretary in accordance with section thirteen of this article;

    (11) If the proposed well work is to stimulate a horizontal well, all information necessary to demonstrate compliance with the requirements of subsection (g), section five of this article;

    (12) The erosion and sediment control plan required under subsection (c) of this section for applications for permits to drill;

    (13) A well site safety plan to address proper safety measures to be employed for the protection of persons on the site as well as the general public. The plan shall encompass all aspects of the operation, including the actual well work for which the permit was obtained, completion activities, and production activities and shall provide an emergency point of contact for the well operator. The well operator shall provide a copy of the well site safety to the local emergency planning committee established pursuant to section seven, article five-a, chapter fifteen of this code, for the emergency planning district in which the well work will occur at least seven days before commencement of well work or site preparation work that involves any disturbance of land; and

    (14) Any other relevant information which the secretary may reasonably require.

    (c)(1) An erosion and sediment control plan shall accompany each application for a well work permit under this article. The plan shall contain methods of stabilization and drainage, including a map of the project area indicating the amount of acreage disturbed. The erosion and sediment control plan shall meet the minimum requirements of the West Virginia Erosion and Sediment Control Manual as adopted and from time to time amended by the department. The erosion and sediment control plan shall become part of the terms and conditions of any well work permit that is issued pursuant to this article and the provisions of the plan shall be carried out where applicable in the operation. The erosion and sediment control plan shall set out the proposed method of reclamation which shall comply with the requirements of section fourteen of this article.

    (2) For horizontal well sites that disturb 3 acres or more of surface, excluding pipelines, gathering lines, and roads, the erosion and sediment control plan submitted in accordance with this section shall be certified by a registered professional engineer.

    (d) For well sites that disturb 3 acres or more of surface, excluding pipelines, gathering lines, and roads, the operator shall submit a site construction plan that shall be certified by a registered professional engineer and contains information that the secretary may require by rule.

    (e) In addition to the other requirements of this section, if the drilling, fracturing or stimulating of the horizontal well requires the use of water obtained by withdrawals from waters of this state in amounts that exceed 210,000 gallons during any month, the application for a well work permit shall include a water management plan, which shall include the following information:

    (1) The type of water source, such as surface or groundwater, the county of each source to be used by the operation for water withdrawals, and the latitude and longitude of each anticipated withdrawal location;

    (2) The anticipated volume of each water withdrawal;

    (3) The anticipated months when water withdrawals will be made;

    (4) The planned management and disposition of wastewater after completion from fracturing, refracturing, stimulation, and production activities;

    (5) A listing of the anticipated additives that may be used in water used for fracturing or stimulating the well. Upon well completion, a listing of the additives that were actually used in the fracturing or stimulating of the well shall be submitted as part of the completion report required by subsection (n), section five of this article;

    (6) For all surface water withdrawals, a water resources protection plan that includes the information requested in subdivisions (1) through (5) of this subsection and includes documentation of measures that will be taken to allow the State to manage the quantity of its waters for present and future use and enjoyment and for the protection of the environment. The plan shall include the following:

    (A) Identification of the current designated and existing water uses, including any public water intakes within one mile downstream of the withdrawal location;

    (B) For surface waters, a demonstration, using methods acceptable to the secretary, that sufficient in-stream flow will be available immediately downstream of the point of withdrawal. A sufficient in-stream flow is maintained when a pass-by flow that is protective of the identified use of the stream is preserved immediately downstream of the point of withdrawal; and

    (C) Methods to be used for surface water withdrawal to minimize adverse impact to aquatic life.

    (7) This subsection is intended to be consistent with and does not supersede, revise, repeal or otherwise modify articles eleven, twelve or twenty-six of this chapter and does not revise, repeal or otherwise modify the common law doctrine of riparian rights in West Virginia law.

    (f) An application may propose and a permit may approve two or more activities defined as well work, however a separate permit must be obtained for each well drilled.

    (g) The application for a permit under this section shall be accompanied by the applicable bond as required by section fifteen of this article, the applicable plat required by subsection (f), section five of this article, and a permit fee of $10,000 for the initial horizontal well drilled at a location and a permit fee of $5,000 for each additional well drilled on a single well pad at the same location. However, the secretary may propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code to increase the permit fees authorized by this subsection.

    (h) The well operator named in the application shall designate the name and address of an agent for the operator who shall be the attorney-in-fact for the operator and who shall be a resident of the state of West Virginia upon whom notices, orders or other communications issued pursuant to this article or article eleven of chapter twenty-two may be served, and upon whom process may be served. Every well operator required to designate an agent under this section shall, within 5 days after the termination of such designation, notify the secretary of such termination and designate a new agent.

    (i) The well owner or operator shall install the permit number as issued by the secretary and a contact telephone number for the operator in a legible and permanent manner to the well upon completion of any permitted work. The dimensions, specifications, and manner of installation shall be in accordance with the rules of the secretary.

    (j) The secretary may waive the requirements of this section and sections eight, ten and eleven of in any emergency situation, if the secretary deems such action necessary. In such case the secretary may issue an emergency permit which shall be effective for not more than 30 days, unless reissued by the secretary.

    (k) The secretary shall deny the issuance of a permit if the secretary determines that the applicant has committed a substantial violation of a previously issued permit for a horizontal well, including the applicable erosion and sediment control plan associated with the previously issued permit, or a substantial violation of one or more of the rules promulgated under this article, and has failed to abate or seek review of the violation within the time prescribed by the secretary pursuant to the provisions of subsections (a) and (b), section five of this article and the rules promulgated hereunder, which time may not be unreasonable.

    (l) In the event the secretary finds that a substantial violation has occurred and that the operator has failed to abate or seek review of the violation in the time prescribed, the secretary may suspend the permit on which said violation exists, after which suspension the operator shall forthwith cease all well work being conducted under the permit. However, the secretary may reinstate the permit without further notice, at which time the well work may be continued. The secretary shall make written findings of any such suspension and may enforce the same in the circuit courts of this state. The operator may appeal a suspension pursuant to the provisions of subsection (w), section five of this article. The secretary shall make a written finding of any such determination.

    (m) Upon receipt of notice from the Division of Highways that the operator has been found in violation of the operator’s letter of certification as required in section twenty-one of this article, the Secretary shall suspend the operator’s permit, prohibit initiation or further production of gas or oil from the well subject to the letter of certification, and deny all other pending permits of the operator until the operator provides proof that the violation of the letter of certification has been discharged by the Division of Highways.

§22-6A-8. Review of application; issuance of permit in the absence of objections; performance standards; copy of permits to county assessor.

    (a) The secretary shall review each application for a well work permit and shall determine whether or not a permit shall be issued.

    (b) No permit shall be issued less than 30 days after the filing date of the application for any well work except plugging or replugging; and no permit for plugging or replugging shall be issued less than 5 days after the filing date of the application except a permit for plugging or replugging a dry hole: Provided, That if the applicant certifies that all persons entitled to notice of the application under the provisions of this article have been served in person or by certified mail, return receipt requested, with a copy of the well work application, including the erosion and sediment control plan, if required, and the plat required by section seven of this article, and further files written statements of no objection by all such persons, the secretary may issue the well work permit at any time.

    (c) Prior to the issuance of any permit the director shall ascertain from the Executive Director of Workforce West Virginia and the Insurance Commissioner whether the applicant is in not in default pursuant to the provisions of section six-c, article two, chapter twenty-one-a of this code, and in compliance with section five, article two, chapter twenty-three of this code, with regard to any required subscription to the Unemployment Compensation Fund or to the Workers' Compensation Fund, the payment of premiums and other charges to the fund, the timely filing of payroll reports and the maintenance of adequate deposits. If the applicant is delinquent or defaulted, or has been terminated by the executive director or the Insurance Commissioner, the permit may not be issued until the applicant returns to compliance or is restored by the executive director or the Insurance Commissioner under a reinstatement agreement: Provided, That in all inquiries the Executive Director of Workforce West Virginia and the Insurance Commissioner shall make response to the Department of Environmental Protection within fifteen calendar days; otherwise, failure to respond timely is considered to indicate the applicant is in compliance and the failure will not be used to preclude issuance of the permit.

    (d) The secretary may cause such inspections to be made of the proposed well work location as necessary to assure adequate review of the application. The permit shall not be issued, or shall be conditioned including conditions with respect to the location of the well and access roads prior to issuance if the director determines that:

    (1) The proposed well work will constitute a hazard to the safety of persons;

    (2) The plan for soil erosion and sediment control is not adequate or effective;

    (3) Damage would occur to publicly owned lands or resources; or

    (4) The proposed well work fails to protect fresh water sources or supplies.

    (e) In addition to the considerations set forth in subsection (d) of this section, in determining whether a permit should be issued, issued with conditions, or denied, the Secretary shall also consider:

    (A) The proximity of the drilling location to any existing public or private water supply source, and the extent to which the well’s location and proposed drilling activities potentially threaten public and private water sources;

    (B) The adequacy of the proposed well protections, including emergency response measures which are proposed in the event of a spill or impoundment overflow or pit failure, to reasonably protect the integrity of such public and private water supplies when the proposed drilling activities are to be conducted within 2500 feet of such wells and springs, or within one mile upstream of any public water intake on a water course.

    (C) The proposed well location’s proximity to municipalities or densely populated or urban areas, and the proposed well location’s impact on those areas.

    (D) Any unresolved objections raised by the surface owner on which the drilling activities or land disturbances, or the surface owner of any immediately adjacent properties or any water purveyor.

    (E) In cases where the well location restrictions set forth in section twelve of this article have not been complied with, and the affected surface owner or water purveyor does not consent to a waiver of those location restrictions, the Secretary shall consider the impact of enforcing the distance restriction on the mineral rights owner’s right to produce or share in the oil or gas underlying the surface tract. The Secretary shall also consider whether additional measures, facilities or practices should be employed during well site construction, drilling and operations to insure the safety and protection of affected persons and property if a variance to the well location restrictions were granted by the Secretary.

    (F) The permit’s proposed water use plan, and its potential impact on the water table and water supply sources.

    (G)The permit’s proposed plans for collection, storage, recycling, reuse and or disposal of returns, discharges or waste from the well during the drilling or stimulation activities.

    (H) The impact of the proposed well on public resources, including, but not limited to, the following:

    (i) Publicly owned parks, forests, gamelands and wildlife areas.

    (ii) National or State scenic rivers.

    (iii) National natural landmarks.

    (iv) Habitats of rare and endangered flora and fauna and other critical communities.

    (v) Historical or archaeological sites listed on the Federal or State list of historic places.

    (I) The Applicant’s safety record and record of compliance with well reporting requirements, well site restoration and reclamation requirements, bonding requirements and highway maintenance agreements for other well permits that have been issued in this state.

    (J) Whether the well site for which a permit is requested is in violation of the provisions of this act, or any other applicable environmental statute, rule or regulation.

    (f) The director shall promptly review all comments filed. If after review of the application and all comments received, the application for a well work permit is approved, and no timely objection or comment has been filed with the director or made by the director under the provisions of section ten and eleven of this article, the permit shall be issued, with conditions, if any. Nothing in this section shall be construed to supersede the provisions of section seven or subsections (f) through (i), section five of this article.

    (g) Each permit issued by the secretary pursuant to this article shall require the operator at a minimum to:

    (1) Adopt measures consistent with best management practices in order to control fugitive particulate matter;

    (2) Plug all wells in accordance with the requirements of this article and the rules promulgated pursuant thereto when such wells become abandoned;

    (3) With respect to disposal of cuttings at the well site, stabilize all waste pits, including the use of impervious materials, if necessary, to assure that any leachate therefrom will not degrade surface or groundwaters below water quality standards established pursuant to applicable federal and State law and that the site is stabilized and revegetated according to the provisions of this article and the rules promulgated thereunder;

    (4) Grade, terrace and plant, seed or sod the area disturbed that is not required in production of the horizontal well where necessary to bind the soil and prevent substantial erosion and sedimentation;

    (5) Protect off-site areas from damages that may result from horizontal drilling operations;

    (6) Take action in accordance with industry standards to minimize fire hazards and other conditions which constitute a hazard to health and safety of the public;

    (7) Protect the quantity and the quality of water in surface and groundwater systems both during and after drilling operations and during reclamation by: (A) Withdrawing water from surface waters of the State by methods deemed appropriate by the secretary, so as to maintain sufficient in-steam flow immediately downstream of the withdrawal location. In no case shall an operator withdraw water from ground or surface waters at volumes beyond which the waters can sustain; (B) Casing, sealing or otherwise managing wells to keep returned fluids from entering ground and surface waters; (C) Conducting oil and gas operations so as to prevent, to the extent possible using the best management practices, additional contributions of suspended or dissolved solids to streamflow or runoff outside the permit area, but in no event shall the contributions be in excess of requirements set by applicable State or federal law; and (D) Identify all water supply wells to the Office of Oil and Gas that are required to be permitted by the Bureau for Public Health under 64 CSR 19. All drinking water wells within 2,500 feet of the water supply well shall be flow and quality tested by the operator upon request of the drinking well owner prior to operating the water supply well. The secretary shall propose legislative rules to identify appropriate methods for testing and water flow and quality.

    (8) The construction of new roads or the improvement or use of existing roads shall be conducted in accordance with the standards established pursuant to this article or the rules promulgated thereunder for such effects which result from oil and gas operations; and

    (9) In addition to the other requirements of this subsection, an operator proposing to drill any horizontal well requiring the withdrawal of more than 210,000 gallons in a month shall have the following requirements added to its permit:

    (A) Identification of water withdrawal locations. Within 48 hours prior to the withdrawal of water, the operator shall identify to the Secretary the location of withdrawal by latitude and longitude and verify that sufficient flow exists to protect designated uses of the stream. The operator shall use methods deemed appropriate by the secretary to determine if sufficient flow is available and must check flows on a daily basis for the duration of the withdrawal. Any variation from the methods previously approved by the secretary for determining if sufficient flow is available must be requested in writing by the operator.

    (B) Signage for water withdrawal locations. All water withdrawal locations and facilities identified in the water management plan shall be identified with a sign that identifies that the location is a water withdrawal point, the name and telephone number of the operator, and the permit numbers(s) for which the water withdrawn will be utilized.

    (C) Recordkeeping and reporting. For all water used for hydraulic fracturing of horizontal wells and for flowback water from hydraulic fracturing activities and produced water from production activities from horizontal wells, an operator shall comply with the following record keeping and reporting requirements:

    (i) For production activities, the following information shall be recorded and retained by the well operator:

    (I) The quantity of flowback water from hydraulic fracturing the well;

    (II) The quantity of produced water from the well; and

    (III) The method of management or disposal of the flowback and produced water.

    (ii) For transportation activities, the following information shall be recorded and maintained by the operator:

    (I) The quantity of water transported;

    (II) The collection and delivery or disposal locations of water; and

    (III) The name of the water hauler.

    (iii) The information maintained pursuant to this subdivision shall be available for inspection by the department along with other required permits and records and maintained for three years after the water withdrawal activity.

    (iv) This subdivision is intended to be consistent with and does not supersede, revise, repeal or otherwise modify articles eleven, twelve or twenty-six of this chapter and does not revise, repeal or otherwise modify the common law doctrine of riparian rights in West Virginia law.

    (h) The secretary shall mail a copy of the permit as issued or a copy of the order denying a permit to any person who submitted comments to the director concerning the permit and requested a copy.

    (i) Upon the issuance of any permit pursuant to the provisions of this article, the secretary shall transmit a copy of such permit to the office of the assessor for the county in which the well is located.

§22-6A-9. Certificate of approval required for large impoundment construction; certificate of approval and annual registration fees; application required to obtain certificate; term of certificate; revocation or suspension of certificates; appeals; farm ponds.

    (a) It is unlawful for any person to place, construct, enlarge, alter, repair, remove or abandon any freshwater impoundment or flowback recycle impoundment with capacity of greater than 210,000 gallons used in association with any horizontal well operation until he or she has first secured from the secretary a certificate of approval for the same: Provided, That routine repairs that do not affect the safety of the impoundment are not subject to the application and approval requirements. A separate application for a certificate of approval must be submitted by a person for each impoundment he or she desires to place, construct, enlarge, alter, repair, remove or abandon, but one application may be valid for more than one impoundment involved in a single project, which involves two or more well pads.

    (b) The application fee for placement, construction, enlargement, alteration, repair or removal of an impoundment pursuant to this section is $300, and such fee shall accompany the application for certificate of approval. Operators holding certificates of approval shall be assessed an annual registration fee of $100, which shall be valid for more than one impoundment involved in a single project, which involves two or more well pads.

    (c) Any certificate of approval required by this section shall be issued or denied no later than sixty days from the submission of an application containing the information required by this section. However, if the application for a certificate of approval is submitted with the application for a horizontal well permit, the certificate shall be issued or denied no later than thirty days from the submission of the permit application.

    (d) The initial term of a certificate of approval issued pursuant to this section shall be one year. Existing certificates of approval shall be extended for one year upon receipt of the annual registration fee, an inspection report, a monitoring and emergency action plan, and a maintenance plan: Provided, That where an approved, up-to-date inspection report, monitoring and emergency action plan, and maintenance plan are on file with the department, and where no outstanding violation(s) of the requirements of the certificate of approval or any plan submitted pursuant to this article related to the impoundment exist, then the certificate of approval shall be extended without resubmission of the foregoing documents upon receipt of the annual registration fee.

    (e) Every application for a certificate of approval shall be made in writing on a form prescribed by the secretary and shall be signed and verified by the applicant. The application shall include a monitoring and emergency action plan and a maintenance plan, the required contents of which shall be established by the secretary by legislative rule. The application shall contain and provide information that may reasonably be required by the secretary to administer the provisions of this article.

    (f) Plans and specifications for the placement, construction, erosion and sediment control, enlargement, alteration, repair or removal and reclamation of impoundments shall be the charge of a registered professional engineer licensed to practice in West Virginia. Any plans or specifications submitted to the department shall bear the seal of a registered professional engineer. Provided, That when a flowback recycle impoundment will be used to store flowback water, the impoundment shall be designed and constructed using a single liner system.

    (g) Each certificate of approval issued by the secretary pursuant to the provisions of this article may contain other terms and conditions as the secretary may prescribe.

    (h) The secretary may revoke or suspend any certificate of approval whenever the secretary determines that the impoundment for which the certificate was issued constitutes an imminent danger to human life or property. If necessary to safeguard human life or property, the secretary may also amend the terms and conditions of any certificate by issuing a new certificate containing the revised terms and conditions.

    (1) Before any certificate of approval is amended, suspended, or revoked by the secretary without the consent of the operator holding the certificate, the secretary shall hold a hearing in accordance with the provisions of article five, chapter twenty-nine-a of this code.

    (2) Any person adversely affected by an order entered following this hearing has the right to appeal to the Environmental Quality Board pursuant to the provisions of article one, chapter twenty-two-b of this code.

    (i) Upon expiration of the certificate of approval, or upon its revocation by the secretary, the operator shall, within 60 days, fill all impoundments that are not required or allowed by state or federal law or rule or agreement between the operator and the surface owner that allows the impoundment to remain open for the use and benefit of the surface owner and reclaim the site with the approved erosion and sediment control plan.

    (j) This section shall not apply to:

    (A) Farm ponds constructed by the operator with the written consent of the surface owner, which will be used after completion of the drilling activity primarily for agricultural purposes, including without limitation livestock watering, irrigation, retention of animal wastes and fish culture. Any impoundment that is intended to be left permanent as a farm pond under this subdivision shall meet the requirements set forth by the United States Department of Agriculture’s Natural Resources Conservation Service “Conservation Practice Standard - Ponds” (Code 378).

    (B) Farm ponds subject to certificates of approval under article fourteen of this chapter.

    (k) The secretary is authorized to propose rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code, necessary to effectuate the provisions of this section.

§22-6A-10. Notice to property owners.

    (a) Prior to filing a permit application, the operator shall provide notice to the surface owner of at least seventy-two hours but no more than forty-five days prior to entering the surface tract to conduct any plat surveys required pursuant to this article.

    (b) No later than the filing date of the application, the applicant for a permit for any well work or for a certificate of approval for the construction of an impoundment as required by this article shall deliver, by personal service or by registered mail or by any method of delivery that requires a receipt or signature confirmation, copies of the application, well plat, and erosion and sediment control plan required by section seven of this article to each of the following persons:

    (1) The owners of record of the surface of the tract on which the well is or is proposed to be located;

    (2) The owners of record of the surface tract or tracts overlying the oil and gas leasehold being developed by the proposed well work, if such surface tract is to be utilized for roads or other land disturbance as described in the erosion and sediment control plan submitted pursuant to subsection (c), section seven of this article;

    (3) The coal owner, operator or lessee, in the event the tract of land on which the well proposed to be drilled is located is known to be underlain by one or more coal seams;

    (4) The owners of record of the surface tract or tracts overlying the oil and gas leasehold being developed by the proposed well work, if such surface tract is to be utilized for the placement, construction, enlargement, alteration, repair, removal or abandonment of any impoundment as described in section nine of this article;

    (5) The owners of record of the surface of any tract immediately adjacent to any tract where the well work is to be conducted or other land disturbance is to occur; and

    (6) Any surface owner or water purveyor who is known to the applicant to have a water well, spring or water supply source located within 2,500 feet of the center of the well pad which is used to provide water for consumption by humans or domestic animals.

    (7) The operator of any storage field within which the proposed well work activity is to take place.

    (c) If more than three tenants in common or other co-owners of interests described in subsection (b) of this section hold interests in such lands, the applicant may serve the documents required upon the person described in the records of the sheriff required to be maintained pursuant to section eight, article one, chapter eleven-a of this code.

    (d) With respect to immediately adjacent surface landowners, surface landowners or water purveyors with water supplies within 2,500 feet of the center of the proposed well pad location, notification shall be made on forms and in a manner prescribed by the Secretary sufficient to identify, for such persons, the rights afforded them under sections eleven and twelve of this article, and the advisability of taking their own prealteration survey.

    (e) Prior to filing an application for a permit for a horizontal well under this article, the applicant shall cause to publish in the county in which the well is located or is proposed to be located a Class II legal advertisement as described in section two, article three, chapter fifty-nine of this code, containing such notice and information as the secretary shall prescribe by rule, with the first publication date being at least ten days prior to the filing of the permit application: Provided, That all owners occupying the tracts where the well work is or is proposed to be located on the filing date of the permit application shall receive actual service of the documents required by subsection (b) of this section.

    (f) Materials served upon persons described in subsections (b) and (c) of this section shall contain a statement of the methods and time limits for filing comments, who may file comments, the name and address of the secretary for the purpose of filing comments and obtaining additional information, and a statement that such persons may request, at the time of submitting comments, notice of the permit decision and a list of persons qualified to test water as provided by the Office of Oil and Gas.

    (g) Any person entitled to submit comments shall also be entitled to receive from the secretary a copy of the permit as issued or a copy of the order modifying or denying the permit if such person requests receipt of them as a part of the comments concerning the permit application.

    (h) The surface owners described in subdivisions (1), (2) and (4), subsection (b) of this section, and the coal owner, operator or lessee described in subdivision (3) of said subsection shall also be entitled to receive notice within seven days but no less than two days before commencement that well work or site preparation work that involves any disturbance of land is expected to commence.

    (i) Persons entitled to notice may contact the department to ascertain the names and locations of water testing laboratories in the subject area capable and qualified to test water supplies in accordance with standard accepted methods. In compiling that list of names the department shall consult with the state Bureau of Public Health and local health departments.

    (j)(1) Prior to conducting any seismic activity for seismic exploration for natural gas to be extracted using horizontal drilling methods, the company or person performing the activity must provide notice to Miss Utility of West Virginia Inc. and to all surface owners, mineral owners, and storage field operators on whose property blasting, percussion or other seismic-related activities will occur or whose property interests are within the geographic area encompassed by the seismic study.

    (2) The notice shall be provided at least three days prior to commencement of the seismic activity.

    (3) The notice shall also include a reclamation plan in accordance with the erosion and sediment control manual that provides for the reclamation of any areas disturbed as a result of the seismic activity, including filling of shotholes utilized for blasting.

    (4) Nothing in this subdivision shall be construed to decide questions as to whether seismic activity may be secured by mineral owners, surface owners or other ownership interests.

§22-6A-11. Procedure for filing comments; certification of notice; procedures for considering objections and protests; public hearing option; issues to be considered; public notice and hearing procedures.

    (a) All persons described in subsections (b) and (c), section ten of this article may file comments with the Secretary as to the location or construction of the applicant's proposed well work within thirty days after the application is filed with the Secretary. The pubic comment period shall end no earlier than 30 days after the date of the second publication required under subsection (e), section ten of this article.

    (b) The applicant shall tender proof of publication and certify to the Secretary that the individual and public notice requirements of section ten of this article have been completed by the applicant. Such certification of individual notice to the person may be made by affidavit of personal service, the return receipt card, or other postal receipt for certified mailing.

    (c)(1) The Secretary shall review and consider the comments filed to the permit application. The Secretary shall notify the applicant of the character of the objections made by the public commentators, no later than fifteen days after the close of the public comment period or forty-five days after the date of the permit application, whichever is later.

    (2) The objections of the affected coal operators and coal seam owners and lessees shall be addressed through the processes and procedures that exist under sections fifteen, sixteen and seventeen of article six of this chapter, as applicable.

    (3) The applicant and the objecting surface property owners and the water purveyors may agree on the location of the drilling activities and associated land disturbances to be made, agree upon an alternate location, or agree upon the conditions under which the drilling activity is to take place. Any modified drilling site location or additional drilling conditions agreed to by the applicant which would constitute an amendment of the proposed permit application shall be submitted for the Secretary’s review and approval, with the proposed modifications reflected on a revised plat which shall become a part of the permit application, and submitted for the Secretary’s review and approval.

    (d)(1) The Secretary shall have the discretion to hold a public hearing on the permit application prior to issuing a decision on the permit, based upon the comments received or to receive testimony and documentation on any of the factors the Secretary is required to consider in the issuance of a permit under section seven of this article. Any such public hearing scheduled by the director shall be conducted no later than 30 days after the conclusion of the comment period.

    (2) If a public hearing is scheduled by the Secretary to review the permit application, the time and place of the scheduled public hearing shall be provided as a Class I legal advertisement no later than seven days prior to the scheduled hearing. Additional written notice of the hearing shall be provided to each individual submitting written comments within the comment period. Persons previously provided with individual notice of the application notice pursuant to subsection (b), section ten of this article shall be given at least ten days written notice of the scheduled hearing. Notice of the scheduled hearing shall also be published on the Secretary’s public website. Persons registered to receive electronic notices from the Secretary pertaining to permit applications filed in the affected county shall also be provided with electronic notice of the scheduled public hearing.

    (3) At any such public hearing, the proposed well operator, the objecting property owner or adjacent property owners on which the proposed drilling activity is to be conducted, water purveyors, coal seam operators, owners or lessors, municipalities and county commissions located in the county where the permitted activity is to be conducted, if any are present and represented, and any other parties granted intervenor status by the Secretary shall be provided the opportunity to present documents and testimony for the Secretary’s consideration. The Secretary will have the discretion to limit and identify the scope of the issues on which testimony and documents will be presented at any public hearing. Any persons or entities not granted intervenor status and other members of the general public appearing at such hearing shall be provided the opportunity to tender a written or oral statement for the Secretary’s consideration.

    (4) In reviewing the permit, after any public hearing is conducted pursuant to this section, the Secretary shall consider and receive documents and testimony filed at the hearing, as a part of the record on the permit application, along with the previously filed protests and comments.

    (5) The Secretary shall prepare a record of the proceedings, which record shall include all applications, plats and other documents filed with the Secretary, any proposed revisions thereto, all notices given and proof of service thereof, all orders issued, all permits issued and a transcript of the hearing. The record prepared by the Secretary shall be open to inspection by the public.

§22-6A-12. Well location restrictions.

    (a) Wells may not be drilled within 250 feet measured horizontally from any existing water well or developed spring used for human or domestic animal consumption. The center of well pads may not be located within 625 feet of an occupied dwelling structure, or a building 2,500 square feet or larger used to house or shelter dairy cattle or poultry husbandry: Provided, That the secretary may increase the distance by proposing rules for legislative approval in accordance with the provisions of article three, chapter twenty-nine-a of this code. This limitation is applicable to those wells, developed springs, dwellings or agricultural buildings that existed at the date a notice to the surface owner of planned entry for surveying or staking as provided in section ten of this article was provided, and to any dwelling under construction or for which the surface owner had entered into a contract for construction at that date. This limitation may be waived by written consent of the surface owner. When the distance restriction would deprive the owner of the oil and gas the right to produce or share in the oil or gas underlying said surface tract, the well operator may be granted a variance from said distance restriction upon submission of a plan which shall identify the additional measures, facilities or practices to be employed during well site construction, drilling and operations. The variance, if granted, shall include such additional terms and conditions as the department may require to insure the safety and protection of affected persons and property. The provisions may include insurance, bonding and indemnification, as well as technical requirements.

    (b) No well pad may be prepared or well drilled within 100 feet measured horizontally from any watercourse, natural or artificial lake, pond or reservoir, within 200 feet of the boundary of a wetland or the boundary that affects the functions and values of a wetland, or within 300 feet of a naturally reproducing trout streams. No wellpad may be located within 1,000 feet of a surface water or groundwater intake of a public water supply. The distance from the public water supply as identified by the department, shall be measured as follows:

    (1) For a surface water intake on a lake or reservoir, the distance shall be measured from the boundary of the lake or reservoir.

    (2) For a surface water intake on a flowing stream, the distance shall be measured from a semicircular radius extending upstream of the surface water intake.

    (3) For a groundwater source, the distance shall be measured from the wellhead or spring.

    The department may waive such distance restrictions upon submission of a plan which shall identify the additional measures, facilities or practices to be employed during well site construction, drilling and operations. Such waiver, if granted, shall impose such permit conditions as are necessary to protect the waters of the State.

§22-6A-13. Plugging and abandonment of horizontal wells.

    The secretary shall promulgate legislative rules governing the procedures for plugging horizontal wells, including rules relating to the methods of plugging such wells and the notices required to be provided in connection therewith.

§22-6A-14. Reclamation requirements.

    The operator of a horizontal well shall reclaim the land surface within the area disturbed in siting, drilling, completing or producing the well in accordance with the following requirements:

    (a) Except as provided elsewhere in this section, within six months after the completion of the drilling process the operator shall fill all the pits and impoundments that are not required or allowed by state or federal law or rule or agreement between the operator and the surface owner that allows the impoundment to remain open for the use and benefit of the surface owner (i.e. a farm pond as described in section nine of this article) and remove all concrete bases, drilling supplies, and drilling equipment. Within that period, the operator shall grade or terrace and plant, seed or sod the area disturbed that is not required in production of the horizontal well where necessary to bind the soil and prevent substantial erosion and sedimentation. No pit may be used for the ultimate disposal of salt water. Salt water and oil shall be periodically drained or removed and properly disposed of from any pit that is retained so the pit is kept reasonably free of salt water and oil. No pits may be left permanent. The operator shall remove and dispose of any waste pit liner and liner wastes at a landfill that is approved by the Secretary to receive liner and liner wastes.

    (b) For well pads containing multiple horizontal wells, reclamation shall be completed within six months after the completion of the drilling process for a well, unless the operator commences drilling on a subsequent well at that location within that six-month period.

    (c) Within six months after a horizontal well that has produced oil or gas is plugged or after the plugging of a dry hole, the operator shall remove all production and storage structures, supplies and equipment and any oil, salt water and debris and fill any remaining excavations. Within that period, the operator shall grade or terrace and plant, seed or sod the area disturbed where necessary to bind the soil and prevent substantial erosion and sedimentation.

    (d)(1) It shall be the duty of the operator to commence the reclamation of the area of land disturbed in siting, drilling, completing or producing the horizontal well in accordance with soil erosion and sediment control plans approved by the secretary or the secretary’s designee pursuant to this article.

    (2) The secretary, upon written application by an operator showing reasonable cause, may extend the period within which reclamation shall be completed, but not to exceed a further six-month period.

    (3) If the secretary refuses to approve a request for extension, the refusal shall be by order, which may be appealed pursuant to the provisions of subsection (v), section five of this article.

§22-6A-15. Performance bonds; corporate surety or other security.

    (a) No permit shall be issued pursuant to this article unless a bond as described in subsection (d) of this section which is required for a particular activity by this article is or has been furnished as provided in this section.

    (b) A separate bond as described in subsection (d) of this section may be furnished for each horizontal well drilled. Each of these bonds shall be in the sum of $50,000 payable to the State of West Virginia, conditioned on full compliance with all laws, rules relating to the drilling, redrilling, deepening, casing, and stimulating of horizontal wells and to the plugging, abandonment, and reclamation of horizontal wells and for furnishing such reports and information as may be required by the secretary.

    (c) When an operator makes or has made application for permits to drill or stimulate a number of horizontal wells, the operator may, in lieu of furnishing a separate bond, furnish a blanket bond in the sum of $250,000 payable to the State of West Virginia, and conditioned as aforesaid in subsection (b) of this section.

    (d) The form of the bond required by this article shall be approved by the secretary and may include, at the option of the operator, surety bonding, collateral bonding (including cash and securities) letters of credit, establishment of an escrow account, self-bonding or a combination of these methods. If collateral bonding is used, the operator may elect to deposit cash, or collateral securities or certificates as follows: Bonds of the United States or its possessions, of the federal land bank, or of the homeowners' loan corporation; full faith and credit general obligation bonds of the State of West Virginia or other states or of any county, district or municipality of the State of West Virginia or other states; or certificates of deposit in a bank in this state, which certificates shall be in favor of the department. The cash deposit or market value of the securities or certificates shall be equal to or greater than the amount of the bond. The secretary shall, upon receipt of any deposit of cash, securities or certificates, promptly place the same with the Treasurer of the State of West Virginia whose duty it shall be to receive and hold the same in the name of the state in trust for the purpose of which the deposit is made when the permit is issued. The operator shall be entitled to all interest and income earned on the collateral securities filed by such operator. The operator making the deposit shall be entitled from time to time to receive from the State Treasurer, upon the written approval of the secretary, the whole or any portion of any cash, securities or certificates so deposited, upon depositing with the State Treasurer in lieu thereof, cash or other securities or certificates of the classes herein specified having value equal to or greater than the amount of the bond.

    (e) When an operator has furnished a separate bond from a corporate bonding or surety company to drill, fracture or stimulate a horizontal well and the well produces oil or gas or both, its operator may deposit with the secretary cash from the sale of the oil or gas or both until the total deposited is $5,000. When the sum of the cash deposited is $5,000, the separate bond for the well shall be released by the secretary. Upon receipt of that cash, the secretary shall immediately deliver that amount to the Treasurer of the State of West Virginia. The State Treasurer shall hold the cash in the name of the state in trust for the purpose for which the bond was furnished and the deposit was made. The operator shall be entitled to all interest and income which may be earned on the cash deposited so long as the operator is in full compliance with all laws and rules relating to the drilling, redrilling, deepening, casing, plugging, abandonment, and reclamation of the well for which the cash was deposited and so long as the operator has furnished all reports and information as may be required by the secretary. If the cash realized from the sale of oil or gas or both from the well is not sufficient for the operator to deposit with the secretary the sum of $10,000 within one year of the day the well started producing, the corporate or surety company which issued the bond on the well may notify the operator and the secretary of its intent to terminate its liability under its bond. The operator then shall have thirty days to furnish a new bond from a corporate bonding or surety company or collateral securities or other forms of security, as provided in this section with the secretary. If a new bond or collateral securities or other forms of security are furnished by the operator, the liability of the corporate bonding or surety company under the original bond shall terminate as to any acts and operations of the operator occurring after the effective date of the new bond or the date the collateral securities or other forms of security are accepted by the Treasurer of the State of West Virginia. If the operator does not furnish a new bond or collateral securities or other forms of security with the secretary, as provided in this section, the operator shall immediately plug, fill and reclaim the well in accordance with all of the provisions of law and rules applicable thereto. In such case, the corporate or surety company which issued the original bond shall be liable for any plugging, filling or reclamation not performed in accordance with such laws and rules.

    (f) Any separate bond furnished for a particular well prior to the effective date of this article shall continue to be valid for all work on the well permitted prior to the effective date of this article; but no permit shall hereafter be issued on such a particular well without a bond complying with the provisions of this section. Any blanket bond furnished prior to the effective date of this article shall be replaced with a new blanket bond conforming to the requirements of this section, at which time the prior bond shall be discharged by operation of law; and if the secretary determines that any operator has not furnished a new blanket bond, the secretary shall notify the operator by registered mail or by any method of delivery that requires a receipt or signature confirmation of the requirement for a new blanket bond, and failure to submit a new blanket bond within sixty days after receipt of the notice from the secretary shall work a forfeiture under subsection (i) of this section of the blanket bond furnished prior to the effective date of this article.

    (g) Any such bond shall remain in force until released by the secretary, and the secretary shall release the same upon satisfaction that the conditions thereof have been fully performed. Upon the release of any such bond, any cash or collateral securities deposited shall be returned by the secretary to the operator who deposited it.

    (h) Whenever the right to operate a well is assigned or otherwise transferred, the assignor or transferor shall notify the department of the name and address of the assignee or transferee by registered mail or by any method of delivery that requires a receipt or signature confirmation not later than thirty days after the date of the assignment or transfer. No assignment or transfer by the owner shall relieve the assignor or transferor of the obligations and liabilities unless and until the assignee or transferee files with the department the well name and the permit number of the subject well, the county and district in which the subject well is located, the names and addresses of the assignor or transferor, and assignee or transferee, a copy of the instrument of assignment or transfer accompanied by the applicable bond, cash, collateral security or other forms of security, described in this section, and the name and address of the assignee's or transferee's designated agent if assignee or transferee would be required to designate such an agent under this article, if assignee or transferee were an applicant for a permit under this article. Every well operator required to designate an agent under this section shall, within five days after the termination of such designation, notify the department of such termination and designate a new agent.

    Upon compliance with the requirements of this section by assignor or transferor and assignee or transferee, the secretary shall release assignor or transferor from all duties and requirements of this article and shall give written notice of release to assignor or transferor of any bond and return to assignor or transferor any cash or collateral securities deposited pursuant to this section.

    (i) If any of the requirements of this article or rules promulgated pursuant thereto or the orders of the secretary has not been complied with within the time limit set by any notice of violation issued pursuant to this article, the performance bond shall then be forfeited.

    (j) When any bond is forfeited pursuant to the provisions of this article or rules promulgated pursuant thereto, the secretary shall collect the forfeiture without delay.

    (k) All forfeitures shall be deposited in the Treasury of the State of West Virginia in the Oil and Gas Reclamation Fund as defined in section twenty-nine, article six of this chapter.

§22-6A-16. Surface owners agreements.

    (a) Notwithstanding the provisions of article seven of this chapter, the provisions of this section are applicable to horizontal wells for the purpose of compensation for surface owners and to mitigate impacts and loss of use of the surface where a horizontal well is located.

    (b) The operator shall compensate the surface owner for damages sustained by the surface owner, for loss of agricultural production and income, lost land value, lost value of timber crops, for lost use and enjoyment of the surface, lost access to the surface’s owners land, and lost value of improvements caused by the well construction and operation.

    (c) No later than the date for filing the permit application, an operator may, by certified mail return receipt requested or hand delivery, give the surface owner notice of the planned operation: Provided, That a surface owner may give permission to an operator to enter the land for the purpose of preparing a surface owner’s agreement: Provided, further that after an inspection, a surface owner and an operator may agree to an extension of time to allow for revision of any proposed agreement to increase the likelihood of an amicable agreement. The notices permitted by this section shall be given to the surface owner at the address of the records shown by the county clerk at the time of notice. The notice shall include:

    (1) A copy of this code section;

    (2) the name, address, telephone number, and if available, facsimile number and electronic mail address of the operator and the operator’s authorized representative; and

    (d) A proposed surface use and compensation agreement addressing, at a minimum and to the extent known the following issues:

    (1) Placement and dimensions of well pads, gathering pipelines, roads and pits to be constructed for drilling and production operations;

    (2) Use and impoundment of water on the surface of the land;

    and

    (3) An offer of compensation for damages to the surface affected by oil and gas operations.

    (e) Upon receipt of the surface owners compensation agreement, the surface owner may:

    (1) Accept the proposed surface owners agreement within twenty days; or

    (2) Reject the proposed surface use and compensation agreement and enter into negotiations with the operator, including, if the parties agree, mediation.

    (f) If a civil action is brought, the surface owner must give the operator thirty days notice of its intent to file suit. If a court finds that compensation is owed under this section, the court shall also award attorney fees as follows:

    (1) If the operator provided notice pursuant to subsection (c) and made an offer of compensation, then attorney fees shall be awarded to the surface owner if the court awards damages that exceed by twenty percent the last offer made by the operator, prior to institution of suit; or

    (2) If the operator did not provide notice pursuant to subsection (c) then attorney fees shall be awarded to the surface owner if the court awards damages greater than the last offer made by the operator prior to institution of suit: Provided, That the surface owner gave to the operator 30 days notice of his or her intent to file suit; or 

    (g) In any action for breach of surface owners compensation agreement, the court shall award attorney fees to the prevailing party if either the surface owner or the operator willfully and knowingly violated the surface owners compensation agreement.

    (h) The remedies provided by this section are not exclusive and do not preclude a person from seeking other remedies allowed by law.

§22-6A-17. Reimbursement of property taxes of encumbered properties.

    In addition to any compensation owed by the operator to the surface owner pursuant to the provisions of article seven of this chapter, the operator shall pay the surface owner $2,500.00 to compensate for payment of real property taxes for the surface lands that are encumbered or disturbed by construction or operation of the horizontal well pad.

§22-6A-18. Civil action for contamination or deprivation of fresh water source or supply; presumption; water rights and replacement; waiver of replacement.

    (a) Nothing in this article affects in any way the rights of any person to enforce or protect, under applicable law, the person's interest in water resources affected by an oil or gas operation.

    (b) Unless rebutted by one of the defenses established in subsection (c) below, in any action for contamination or deprivation of a fresh water source or supply within 2,500 feet of the center of the well pad for an oil or gas well, there shall be a rebuttable presumption that the drilling and the oil or gas well or either was the proximate cause of the contamination or deprivation of the fresh water source or supply.

    (c) In order to rebut the presumption of liability established in subsection (b) above, the operator must affirmatively prove one of the following defenses:

    (1) The pollution existed prior to the drilling or alteration activity as determined by a predrilling or prealteration survey.

    (2) The landowner or water purveyor refused to allow the operator access to the property to conduct a predrilling or prealteration survey.

    (3) The water supply is not within two thousand five hundred feet of the well.

    (4) The pollution occurred more than six months after completion of drilling or alteration activities.

    (5) The pollution occurred as the result of some cause other than the drilling or alteration activity.

    (d) Any operator electing to preserve its defenses under subdivision (c)(1) or (c)(2) above shall retain the services of an independent certified laboratory to conduct the predrilling or prealteration survey of water supplies. A copy of the results of the survey shall be submitted to the department and the landowner or water purveyor in a manner prescribed by the secretary.

    (e) Any operator shall replace the water supply of an owner of interest in real property who obtains all or part of that owner's supply of water for domestic, agricultural, industrial or other legitimate use from an underground or surface source where the supply has been affected by contamination, diminution or interruption proximately caused by the oil or gas operation, unless waived by that owner.

    (f) The operator conducting the oil or gas operation shall: (1) Provide an emergency drinking water supply within twenty-four hours; (2) provide temporary water supply within seventy-two hours; (3) within thirty days begin activities to establish a permanent water supply or submit a proposal to the secretary outlining the measures and timetables to be utilized in establishing a permanent supply. The total time for providing a permanent water supply may not exceed two years. If the operator demonstrates that providing a permanent replacement water supply cannot be completed within two years, the secretary may extend the time frame on case-by-case basis; and (4) pay all reasonable costs incurred by the real property owner in securing a water supply.

    (g) A real property owner as described in subsection (b) above aggrieved under the provisions of subsections (b), (c) or (d) of this section may seek relief in court.

    (h) Notwithstanding the denial of the operator of responsibility for the damage to the real property owner’s water supply or the status of any appeal on determination of liability for the damage to the real property owner’s water supply, the operator may not discontinue providing the required water service until authorized to do so by the secretary.

§22-6A-19. Offenses; civil and criminal penalties.

     (a) Any person or persons, firm, partnership, partnership association or corporation who willfully violates any provision of this article or any rule or order promulgated hereunder shall be subject to a civil penalty not exceeding $5,000. Each day a violation continues after notice by the department constitutes a separate offense. The penalty shall be recovered by a civil action brought by the department, in the name of the state, before the circuit court of the county in which the subject well or facility is located. All such civil penalties collected shall be credited to the general fund of the state.

     (b) Notwithstanding the provisions of subsection (a) of this section, any person or persons, firm, partnership, partnership association or corporation who willfully disposes of waste fluids, drill cuttings or any other liquid substance generated in the development of a horizontal well and which could impact surface or groundwater, in violation of this article or any rule or order promulgated hereunder or in violation of any other state or federal statutes, rules or regulations, shall be subject to a civil penalty not exceeding $100,000. The penalty shall be recovered by a civil action brought by the department, in the name of the state, before the circuit court of the county in which the subject well or facility is located. All such civil penalties collected shall be credited to the general fund of the state.

     (c) Any person or persons, firm, partnership, partnership association or corporation willfully violating any of the provisions of this article which prescribe the manner of drilling and casing or plugging and filling any well, or which prescribe the methods of conserving gas from waste, shall be guilty of a misdemeanor, and, upon conviction thereof, shall be punished by a fine not exceeding $5,000, or imprisonment in a regional jail for not more than 12 months, or both, in the discretion of the court, and prosecutions under this section may be brought in the name of the state of West Virginia in the court exercising criminal jurisdiction in the county in which the violation of such provisions of the article or terms of such order was committed.

     (d) Any person who intentionally misrepresents any material fact in an application, record, report plan or other document filed or required to be maintained under the provisions of this article or any rules promulgated by the secretary thereunder is guilty of a misdemeanor and, upon conviction thereof, shall be fined not less than $1,000 nor more than $10,000, or imprisoned in a county or regional jail not more than six months, or both fined and imprisoned.

     (e) Any person who willfully violates any provision of any permit issued under or subject to the provisions of this article or who willfully violates any provision of this article or any rule of the secretary or any order of the secretary or board is guilty of a misdemeanor and, upon conviction thereof, shall be fined not less than $2,500 dollars nor more than $25,000 per day of violation, or imprisoned in a county or regional jail not more than one year, or both fined and imprisoned.

§22-6A-20. Local ordinances.

     All local ordinances and enactments purporting to regulate gas operations regulated by this act are hereby preempted and superseded to the extent the ordinances and enactments regulate the method of gas operations. Nothing in this act shall affect the traditional power of local government to regulate zoning and land development of gas activities as well as other aspects, such as the time and the place of operations to protect the health, safety and welfare of the general public through local ordinances and enactments.

§22-6A-21. Division of Highways approval of well road access.

     As part of the permit application, the operator shall provide a letter of certification from the Division of Highways that the operator has entered into a required Division of Highways road maintenance agreement for horizontal drilling operations and is in compliance with all laws, regulations and conditions required by the Division of Highways relating to use, maintenance and repair of all state and county roads to be utilized for access to a well location, including, but not limited to, those roads used for the transportation of water, machinery or any other items or materials related to the construction and operation of the well. The operator shall be responsible and liable for all actions of the operator’s agents, employees, subcontractors and others under the direction of the operator regarding performance under the agreement provided herein above. Upon notice that the operator is failing to comply with the letter of certification as required by this section, the division shall deem such violation as a violation of a permit condition for construction or operation of the well pursuant to this article.

“§22-6A-22. Establishment of public website information and      electronic notification registry regarding horizontal well permit applications.

    (a) No later than ninety days after the effective date of this article, the Secretary shall establish resources on the Department’s public website which will list searchable information related to all horizontal well applications filed in this state, including information sufficient to identify the county and approximate location of each permit application for a horizontal well permit, the referenced well application number, date of application and name of the applicant.

    (b) Notice of any and all public hearings scheduled on any horizontal permit application pending before the Secretary shall be prominently displayed and made readily available to the general public on the Secretary’s public website.

    (c) The Secretary shall also establish a registration and e-notification process by which individuals, corporations and agencies may register to receive electronic notice of horizontal well applications filings and notices, by county of interest. Once established, individuals, agencies and corporations interested who are properly registered to receive e-notices of filings and actions on horizontal well permits shall receive electronic notifications of applications, related notice of any public hearings and notices of permits issued for horizontal drilling, in their designated county or counties of interest.

§22-6A-23. Air quality regulation, study and rulemaking. 

    (a) Notwithstanding any other code provision to the contrary, activities at the well site impacting air quality are to be regulated, and when appropriate, permitted by the Office of Air Quality, pursuant to article five of this chapter. Any permit or other condition established pursuant to article five and rules promulgated thereunder shall be deemed a condition of the drilling permit issued pursuant to this article. The Secretary shall consider as part of any air quality permit condition or other regulation or limitation, the cumulative impacts to air quality of multiple wells in a localized geographic area.

    (b) The secretary shall, by July 1, 2012, report to the Legislature on the need for further regulation of air pollution occurring from well sites, including the possible health impacts, the need for air quality inspections during drilling, the need for inspections of compressors, pits and impoundments, and any other potential air quality impacts that could be generated from this type of drilling activity that could harm human health or the environment. If he or she finds that specialized permit conditions are necessary, the Secretary shall promulgate legislative rules establishing these new requirements.

§22-6A-24. Impoundment and pit safety study.

    The secretary shall, by July 1, 2012, report to the Legislature on the safety of pits and impoundments utilized pursuant to section nine of this article including an evaluation of whether testing and special regulatory provision is needed for radioactivity or other toxins held in the pits and impoundments. Upon a finding that greater monitoring, safety and design requirements or other specialized permit conditions are necessary, the Secretary shall promulgate legislative rules establishing these new requirements.

§22-6A-25. Comprehensive regulatory review of state hydraulic fracturing regulations.

    No later than 60 days of the effective date of this article, the Secretary shall formally request that the State Review of Oil and Natural Gas Environmental Regulations, Inc. (STRONGER), a non-profit, multistate organization, conduct a comprehensive review of the State of West Virginia’s laws and regulations pertaining to the drilling of horizontal wells and hydraulic fracturing in comparison to the 2010 Hydraulic Fracturing Guidelines developed by STRONGER, and present its report and associated findings and recommendations to the Legislature’s Select Committee on Marcellus Shale Drilling and Development, on or before July 1, 2012.

§22-6A-26. Casing and cement standards.

    No later than thirty days after the effective date of this article, the Secretary shall prepare a written guidance document for casing standards which contains at a minimum the following standards:

    (1) General requirements for protective devices, general casing and cementing requirements.

    (A) Any person engaged in drilling any horizontal gas well should equip the well with casings of sufficient strength and with other safety devices as may be necessary and should use every effort and endeavor effectively to prevent blowouts, explosions and fires.

    (B) The operator should conduct casing and cementing activities in accordance with this document and should case and cement the well to accomplish the following:

    (i) Allow effective control of the well at all times;

    (ii) Prevent migration of gas or other fluids into sources of fresh groundwater;

    (iii) Prevent pollution of diminution of fresh groundwater; and

    (iv) Prevent the migration of gas or other fluids into coal seams.

    (C) To aid in the protection of fresh groundwater, the well operator should control and dispose of brines and discharges from the drilling, alteration or operation of an oil and gas in a manner which is consistent with the requirements of article six and six-a of Chapter twenty-two of the West Virginia Code, as amended, and the requirements of the Water Pollution Control Act (article eleven of chapter twenty-two of the West Virginia Code), the Groundwater Protection Act (article twelve of chapter twenty-two of the West Virginia Code), or regulations promulgated thereunder.

    (D) To prevent the migration of gas or fluids into sources of fresh groundwater and to prevent pollution or diminution of fresh groundwaters, there should be run and permanent cemented a string or strings of casing in each well drilled through the fresh water bearing strata to a depth and in a manner as prescribed this article and by regulation of the Secretary.

    (E) When the well is drilled a location where the coal seam has not been removed, the well should be drilled to such a depth and of size as will permit the placing of casing, packers in, and vents on, throughout the borehole at such points and in such manner as prescribed by the Secretary by regulation as will exclude all gas or fluids from the coal seam, except such as may be found naturally in the coal seam itself and will enable the monitoring by the integrity of the production casing.

    (2) Casing and cementing plan; filing requirements, approval and revision.

    (A) The operator should prepare and maintain a casing and cementing plan showing how the well will be drilled and completed. The plan should demonstrate compliance with the requirements of this document, and include the following minimum information:

    (i) The anticipated depth and thickness of any producing formation, expected pressures, anticipated fresh groundwater zones and the method or information by which the depth of the deepest fresh groundwater was determined;

    (ii) The diameter of the borehole;

    (iii) Casing type, whether the casing to be utilized is new or used, and the depth, diameter, wall thickness and burst pressure rating for the casing;

    (iv) Cement type, yield, additives and estimated amount of cement to be used;

    (v) The estimated location of centralizers;

    (vi) The proposed borehole conditioning procedures; and

    (vii) Any alternative methods or materials required by the Secretary as a condition of the well permit.

    (B) The well-specific casing and cementing plan should be submitted to the Secretary for review and approval, and a copy of the plan should be kept at the well site for review by the Secretary.

    (C) Any revisions to the casing and cementing plan made as a result of onsite modification should be documented in the plan and be available for review by the Secretary. The person making any revisions to the plan should initial and date the revisions.

    (3) Conductor pipe.

    If the operator installs conductor pipe in the well, the following provisions apply:

    (A) The operator may not remove the pipe.

    (B) Conductor pipe should be installed in a manner that prevents the subsurface infiltration of surface water or fluids by either driving the pipe into place or cementing the pipe from the seat to the surface.

    (C) Conductor pipe must be made of steel unless a different material is approved for use by the Secretary.

    (4) Surface and coal protective casing and cementing procedures.

    (A) For horizontal wells drilled, altered, reconditioned or recompleted after the effective date of this article, surface casing or any casing functioning as a water protection casing may not be utilized as production casing unless one of the following applies:

    (i) In oil wells where the operator does not produce any gas generated by the well and the annulus between the surface casing and the production pipe is left open.

    (ii) The operator demonstrates that the pressure in the well is no greater than the pressure permitted does not exceed the parameters established by the Secretary for well construction and operation, demonstrates through a pressure test or other method approved by the Secretary that all gas and fluids will be contained within the well, and installs a working pressure gauge that can be inspected by the Secretary.

    (B) If the well is to be equipped with threaded and coupled casing, the operator should drill a hole so that the diameter is at least 1 inch greater than the outside diameter of the casing collar to be installed. If the well is to be equipped with plain-end welded casing, the operator should drill a hole so that the diameter is at least 1 inch greater than the outside diameter of the casing coupling.

    (C) The operator should drill to approximately 50 feet below the deepest known fresh groundwater or at least 50 feet into consolidated rock, whichever is deeper, and immediately set and permanently cement a string of surface casing to that depth. Except as provided in subsection six of this section, the surface casing may not be set more than 200 feet below the deepest fresh groundwater except if necessary to set the casing in consolidated rock. The surface hole should be drilled using air, freshwater, or freshwater-based drilling fluid. Prior to cementing, the wellbore should be conditioned to ensure an adequate cement bond between the casing and the formation. The surface casing seat should be set in consolidated rock. When drilling a new well or redrilling an existing well, the operator should install at least one centralizer within 50 feet of the casing seat and then install a centralizer in intervals no greater than every 150 feet above the first centralizer.

    (D) The operator should permanently cement the surface casing by placing the cement in the casing and displacing it into the annular space between the wall of the hole and the outside of the casing.

    (E) Where potential oil or gas zones are anticipated to be found at depths within 50 feet below the deepest fresh groundwater, the operator should set and permanently cement surface casing prior to drilling into a stratum known to contain, or likely containing, oil or gas.

    (F) If additional fresh groundwater is encountered in drilling below the permanently cemented surface casing, the operator should document the depth of the fresh ground water zone in the well record and protect the additional fresh groundwater by installing and cementing a subsequent string of casing or other procedures approved by the Secretary to completely isolate and protect fresh groundwater. The string of casing may also penetrate zones bearing salty or brackish water with cement in the annular space being used to segregate the various zones. Sufficient cement should be used to cement the casing to the surface. The operator should install at least one centralizer within 50 feet of the casing seat and then install a centralizer in intervals no greater than, if possible, every 150 feet above the first centralizer.

    (H) The operator should set and cement a coal protective string of casing through workable coal seams, in accordance with the provisions of section eighteen, article six of chapter twenty-two of the West Virginia Code. 

    (I) When a well is drilled through a coal seam at a location where the coal has been removed or when a well is drilled through a coal pillar, the operator should install coal protective strings and devices, in accordance with the provisions of section twenty, article six of chapter twenty-two of the West Virginia Code.

    (J) If the operator sets and cements casing pursuant to subsection seven or eight of this section and subsequently encounters additional fresh groundwater zones below the deepest cemented casing string installed, the operator should protect the fresh groundwater by installing and cementing another string of casing or other method approved by the Secretary. Sufficient cement should be used to cement the casing to the surface. The additional casing string may also penetrate zones bearing brackish or salt water, but should be run and cemented prior to penetrating a zone known to or likely to contain oil or gas. The operator should install at least one centralizer within 50 feet of the casing seat and then, if possible, install a centralizer in intervals no greater than every 150 feet above the first centralizer.

    (K) If it is anticipated that cement used to permanently cement the surface casing cannot be circulated to the surface, a cement basket may be installed immediately above the depth of the anticipated lost circulation zone. The casing should be permanently cemented by the displacement method. Additional cement may be added above the cement basket, if necessary, by pumping through a pour string from the surface to fill the annular space. Filling the annular space by this method does not constitute permanently cementing the surface or coal protective casing under section ten of this section (relating to casing and cementing-lost circulation).

    (5) Casing and cementing—lost circulation.

    (A) If cement used to permanently cement the surface or coal protective casing is not circulated to the surface despite pumping a volume of cement equal to or greater than 120% of the calculated annular space, the operator should determine the top of the cement, notify the Secretary, and meet one of the following requirements as approved by the Secretary:

    (i) Run an additional string of casing at least 50 feet deeper than the string where circulation was lost and cement the additional string of casing back to the seat of the string where circulation was lost and vent the annulus of the additional casing string to the atmosphere at all times unless closed for well testing or maintenance. Shut-in pressure on the casing seat of the additional string of casing may not exceed the requirements of subsection 11 of this section. (relating to intermediate and production casing).

    (ii) Run production casing and set the production casing on a packer in a competent formation below the string where circulation was lost and vent the annulus of the production casing to the atmosphere at all times unless closed for well testing or maintenance.

    (iii) Run production casing at least to the top of the formation that is being produced and cement the production casing to the surface.

    (iv) Run intermediate and production casing and cement both strings of casing to the surface.

    (v) Produce oil but not gas and leave the annulus between the surface casing and the production pipe open.

    (vi) In addition to meeting the requirements of subsection one of this section, the operator may also pump additional cement through a pour string from the surface to fill the annular space.

    (6) Intermediate and production casing.

    (A) Prior to cementing the intermediate and production casing, the borehole, mud and cement should be conditioned to ensure an adequate cement bond between the casing and the formation.

    (B) If the well is to be equipped with an intermediate casing, centralizers should be used and the casing should be cemented to the surface by the displacement method. Gas may be produced off the intermediate casing if a shoe test demonstrates that all gas will be contained within the well and a relief valve is installed at the surface that is set less than the shoe test pressure. The shoe test pressure should be recorded in the completion report.

    (C) Except as provided in subsection nine of this section (relating to surface and coal protective casing and cementing procedures), each well must be equipped with production casing. The production string may be set on a packer or cemented in place. If the production casing is cemented in place, centralizers should be used and cement should be placed by the displacement method with sufficient cement to fill the annular space to a point at least 500 feet above true vertical depth or at least 200 feet above the uppermost perforations, whichever is greater.

    (7) Minimum casing standards for horizontal wells.

    (A) The operator should install casing that can withstand the effects of tension, and prevent leaks, burst and collapse during its installation, cementing and subsequent drilling and producing operations.

    (B) All casing must be a string of new pipe with an internal pressure rating that is at least 20% greater than the anticipated maximum pressure to which the casing will be exposed. No used casing along any segment of a horizontal well.

    (C) Any plain end casing, except when being used as conductor pipe, which is welded together for use must meet the following requirements:

    (i) The casing must pass a pressure test by holding the anticipated maximum pressure to which the casing will be exposed for 30 minutes with not more than a 10% decrease in pressure. The operator should notify the Secretary at least 24 hours before conducting the test. The test results should be entered on the drilling log.

    (ii) The casing should be welded using at least three passes with the joint cleaned between each pass.

    (iii) The casing should be welded by a person trained and certified in the applicable American Petroleum Institute, American Society of Mechanical Engineers, American Welding Society or equivalent standard for welding casing and pipe or an equivalent training and certification program as approved by the Secretary. The certification requirements of this paragraph should take effect on the effective date of this article. A person with 10 or more years of experience welding casing as of the effective date of this article, who registers with the Secretary by December 1, 2011, is deemed to be certified.

    (iv) When casing through a workable coal seam, the operator should install coal protective casing that has a minimum wall thickness of 0.23 inch.

    (v) Casing which is attached to a blow-out preventer with a pressure rating of greater than 3,000 psi should be pressure tested after cementing. A passing pressure test must be holding the anticipated maximum pressure to which the casing will be exposed for 30 minutes with not more than a 10% decrease. Certification of the pressure test should be confirmed by entry and signature of the person

    (8) Cement standards.

    (A) When cementing surface casing or coal protective casing, the operator should use cement that meets or exceeds the ASTM International C 150, Type I, II or III Standard or API Specification 10. The cement must also:

    (i) Secure the casing in the wellbore.

    (ii) Isolate the wellbore from fresh groundwater.

    (iii) Contain any pressure from drilling, completion and production.

    (iv) Protect the casing from corrosion from, and degradation by, the geochemical, lithologic and physical conditions of the surrounding wellbore. For wells employing coal protective casing, this includes, but is not limited to, formulating cement to withstand elevated sulfate concentrations and other geochemical constituents of coal and associated strata which have the potential to adversely affect the integrity of the cement.

    (v) Prevent gas flow in the annulus. In areas of known shallow gas producing zones, gas block additives and low fluid loss slurries should be used.

    (B) After the casing cement is placed behind surface casing, the operator should permit the cement to set to a minimum designed compressive strength of 500 pounds per square inch (psi) at the casing seat. The cement placed at the bottom 300 feet of the surface casing must constitute a zone of critical cement and achieve a 72-hour compressive strength of 1,200 psi and the free water separation may be no more than 6 milliliters per 250 milliliters of cement. If the surface casing is less than 300 feet, the entire cemented string constitutes a zone of critical cement.

    (C) After any casing cement is placed and cementing operations are complete, the casing may not be disturbed for a minimum of 8 hours by doing any of the following:

    (i) Releasing pressure on the cement head within 4 hours of cementing if casing equipment check valves did not hold or casing equipment was not equipped with check valves. After 4 hours, the pressure may be released at a continuous, gradual rate over the next four hours provided the floats are secure;

    (ii) Nippling up on or in conjunction to the casing;

    (iii) Slacking off by the rig supporting the casing in the cement sheath; or,

    (iv) Running drill pipe or other mechanical devices into or out of the wellbore with the exception of a wireline used to determine the top of cement.

    (D) Where special cement or additives are used, the operator may request approval from the Secretary to reduce the cement setting time specified in this subsection three, above.

    (E) The operator should notify the Secretary a minimum of 1 day before cementing of the surface casing begins, unless the cementing operation begins within 72 hours of commencement of drilling.

    (F) A copy of the cement job log should be available at the well site for inspection by the Secretary during drilling operations. The cement job log must include the mix water temperature and pH, type of cement with listing and quantity of additive types, the volume, yield and density in pounds per gallon of the cement and the amount of cement returned to the surface, if any. Cementing procedural information must include a description of the pumping rates in barrels per minute, pressures in pounds per square inch, time in minutes and sequence of events during the cementing operation.

    (G) The cement job log should be maintained by the operator after drilling operations for at least 5 years, and made available to the Secretary for inspection upon request at any time during and after well drilling and completion. Withing 60 days of well completion, a copy of the full cement log for the well should be filed with the Secretary.

    (9) Defective casing or cementing.

    In a well that has defective, insufficient or improperly cemented casing, the operator should report the defect to the Secretary within 24 hours of discovery by the operator and should correct the defect. The operator should correct the defect or submit a plan to correct the defect for approval by the Secretary within 30 days. If the defect cannot be corrected or an alternate method is not approved by the Secretary, the well should be plugged.

    (10) Gas storage reservoir protective casing and cementing procedures.

    (A) In addition to the other provisions of subsections nine, ten and eleven of this section, a well drilled through a gas storage reservoir or a gas storage reservoir protective area should be drilled, cased and cemented as follows:

    (i) An operator should use drilling procedures capable of controlling anticipated gas flows and pressures when drilling from the surface to 200 feet above a gas storage reservoir or gas storage horizon.

    (ii) An operator should use drilling procedures capable of controlling anticipated gas storage reservoir pressures and flows at all times when drilling from 200 feet above a gas storage reservoir horizon to the depth at which the gas storage protective casing will be installed. Operators should use blow-out prevention equipment with a pressure rating in excess of the allowable maximum storage pressure for the gas storage reservoir.

    (iii) To protect the gas storage reservoir, an operator should run intermediate or production casing from a point located at least 100 feet below the gas storage horizon to the surface. The operator should cement this casing by circulating cement to a point at least 200 feet above the gas storage reservoir or gas storage horizon.

    (iv) When cementing casing in a well drilled through a gas storage reservoir, the operator should insure that no gas is present in the drilling fluids in an amount that could interfere with the integrity of the cement.

    (B) A request by an operator for approval from the Secretary to use an alternative method or material for the casing, plugging or equipping of a well drilled through a gas storage reservoir must satisfy the requirements of subsection six, subsection six of this section.

    (11) Inspection of well and casing integrity.

    (A) After a well has been completed, recompleted, reconditioned or altered, the operator should prevent surface shut-in pressure and surface producing back pressure inside the surface casing or coal protective casing from exceeding the following pressure: 80% multiplied by 0.433 psi per foot multiplied by the casing length (in feet) of the applicable casing.

    (B) The operator should inspect each operating well at least quarterly to ensure it is in compliance with the well construction and operating requirements of this article and associated rules promulgated by the Secretary. The results of the inspections should be recorded and retained by the operator for at least 5 years and be available for review by the Secretary and the coal owner or operator.

    (C) At a minimum, inspections must determine:

    (i) The well-head pressure or water level measurement;

    (ii) The open flow on the annulus of the production casing or the annulus pressure if the annulus is shut in;

    (iii) If there is evidence of gas escaping from the well and the amount escaping, using measurement or best estimate of quantity; and,

    (iv) If there is evidence of progressive corrosion, rusting or other signs of equipment deterioration.

    (D) For structurally sound wells in compliance with subsection nine this section (relating to surface and coal protective casing and cementing procedure), the operator should follow the reporting schedule outlined in subsections five six of this section.

    (E) For wells exhibiting progressive corrosion, rusting or other signs of equipment deterioration that compromise the integrity of the well, or for wells which are not in compliance with the requirements of subsection one of this section:

    (i) The operator should immediately notify the Secretary and take corrective actions to repair or replace defective equipment or casing or mitigate the excess pressure on the surface casing seat or coal protective casing seat. If the remedial or corrective measures requires the installation of replacement production casing or retrofitted production casing, the operator should notify the Secretary at least 7 days prior to initiating the corrective measure.

    (ii) Additional mechanical integrity tests, including, but not limited to, pressure tests, may be required by the Secretary to demonstrate the integrity of the well.

    (F) The operator should submit an annual report to the Secretary identifying the compliance status of each well with the mechanical integrity requirements of this section. The report should be submitted on forms prescribed by, and available from, the Secretary or in a similar manner approved by the Secretary.

    (12) Gas migration response.

    (A) When an operator or owner is notified of or otherwise made aware of a potential natural gas migration incident, the operator should immediately conduct an investigation of the incident. The purpose of the investigation is to determine the nature of the incident, assess the potential for hazards to public health and safety, and mitigate any hazard posed by the concentrations of stray natural gas.

    (B) The investigation undertaken by the operator must include, but not be limited to, the following:

    (i) A site visit and interview with the complainant to obtain information about the complaint and to assess the reported natural gas migration incident;

    (ii) A field survey to assess the presence and concentrations of natural gas and aerial extent of the stray natural gas; and,

    (iii) If necessary, establishment of monitoring locations at potential sources, in potentially impacted structures, and the subsurface.

    (C) If combustible gas is detected inside a building or structure at concentrations equal to or greater than 10% of the Lower Explosive Limit (L.E.L.)the operator should do the following:

    (i) Immediately notify the Secretary, local emergency response agency, gas and electric utility companies, police and fire departments and, in conjunction with the Secretary and local emergency response agencies, take measures necessary to ensure public health and safety;

    (ii) Initiate mitigation measures necessary to control and prevent further migration; and,

    (iii) Implement the additional investigation and mitigation measures as provided in subsection five of this section.

    (D) The operator should notify the Secretary and, in conjunction with the Secretary, take measures necessary to ensure public health and safety, if sustained detectable concentrations of combustible gas satisfy any of the following:

    (i) Greater than 1% and less than 10% of the lower explosive Limit (L.E.L.), in a building or structure;

    (ii) Equal to or greater than 25% of the lower explosive limit (L.E.L.) in a water well head space;

    (iii) Detectable in the soils; or,

    (iv) Equal to or greater than 7 mg/l dissolved methane in water.

    (E) The Secretary may require the operator to take one or more of the following additional actions:

    (i) Conduct a field survey to assess the presence and concentrations of combustible gas and the areal extent of the combustible gas in the soils, surface water bodies, water wells, and other potential migration pathways;

    (ii) Collect gas or water, or both, samples at a minimum for molecular and stable carbon and hydrogen isotope analyses from the impacted locations such as water wells, and from potential sources of the migration such as gas wells;

    (iii) Conduct an immediate evaluation of the operator’s adjacent oil or gas wells to determine well cement and casing integrity and to evaluate the potential mechanism of migration. This evaluation may include assessing pressures for all casing intervals, reviewing records for indications of defective casing or cement, application of cement bond logs, ultrasonic imaging tools, geophysical logs, and other mechanical integrity tests as required. The initial area of assessment must include wells within a radius of 2,500 feet and may be expanded if required by the Secretary;

    (iv) Take action to correct any defect in the oil and gas wells to mitigate the stray gas incident.

    (v) Establish monitoring locations and monitoring frequency in consultation with the Secretary at potential sources, in potentially impacted structures, and the subsurface.

    (F) If concentrations of stray natural gas are detected at less which are less than the levels set forth in subsections three or four of this section, the operator should notify the Secretary, and do the following if requested by the Secretary:

    (i) Conduct additional monitoring;

    (ii) Document findings; and,

    (iii) Submit a closure report.

    (G) If concentrations of stray natural gas are detected inside a building or structure at concentrations equal to or greater than 10% of the lower explosive limit (L.E.L.), the operator and owner should file a report with the Secretary by phone and email within 24 hours after the interview with the complainant and field survey of the extent of stray natural gas. Additional daily or weekly reports should be submitted if requested by the Secretary.

    (H) For all stray natural gas migration incidents, a final written report documenting the results of the investigation should be submitted to the Secretary for approval within 30 days of the close of the incident, or in a time frame otherwise approved by the Secretary. The final report must include the following:

    (i) Documentation of all results of the investigation, including analytical data and monitoring results;

    (ii) Operational changes established at the operator’s oil and gas wells in this State; and,

    (iii) Measures taken by the operator to repair any defects at any of the investigated oil and gas wells;

    (I) Reports submitted in accordance with this section that contain an analysis of geological or engineering data should be prepared and sealed by a geologist or engineer licensed in this State.

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 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” means the state Division 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 division department delegates authority or duties pursuant to sections six or eight, article one, chapter twenty-two of this code;

    (11) “Drilling unit” means the acreage on which the board decides one well may be drilled under section ten of this article;

    (12) “Gas” means all natural gas and all other fluid hydrocarbons not defined as oil in subdivision (15) of this section;

    (13) “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-eights 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) “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) “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) “Owner” when used with reference to any coal seam, shall include any person or persons who own, lease or operate such coal seam;

    (17) “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) “Plat” means a map, drawing or print showing the location of one or more wells or a drilling unit;

    (19) “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) “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;

    (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 any 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 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” means the Director of the Division 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 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 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 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, 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;”

    (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 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.