Alhambra Municipal Code Ch. 21.08 Permit Requirements

Except as provided in this title with respect to temporary geological exploratory core holes, no person shall erect any derrick or conduct any drilling operations for a well hole, or drill and produce any oil or gas well or well hole from any controlled drilling site or real property in the city, or from any controlled drilling site outside the city into the subsurface of the city, without first having applied for and obtained from the City Council a permit so to do.

('86 Code, § 21.08.010) (Ord. 3115, passed - - ) Penalty, see § 1.12.010

Each application for a permit shall be made in writing and shall contain the legal description of the proposed surface controlled drilling site, the legal description of the proposed exploratory area and such other information as may be required by the City Council. There shall also be attached to each such application a map clearly showing and outlining both the proposed controlled drilling site and the proposed exploratory area. The application shall be in such form as the City Council may prescribe. It shall be signed by the applicant or by his or its duly authorized representative and shall be filed in the office of the secretary of the Planning Commission and shall be accompanied by the permit fee required under the provisions of Title 23 of this code.

('86 Code, § 21.08.020) (Ord. 3115, passed - - )

After filing of any such application, the Planning Commission shall submit to the City Council its recommendation as to the granting or denial of permit, as to location of any proposed controlled drilling site and as to boundaries of the proposed exploratory area. For this purpose the Planning Commission shall follow the procedure specified in Title 23 of code for a change of zone. The Planning Commission may recommend approval of the pro-posed controlled drilling site and of the proposed exploratory area boundaries specified in the applica-tion, or that the site be modified, or that an entirely different location be selected for the proposed controlled drilling site, or that entirely different boundaries selected for the proposed exploratory area.

('86 Code, § 21.08.030) (Ord. 3115, passed - - )

Following the receipt by the City Council of the recommendation and the records of the case from the Planning Commission, the City Council shall set a date for public hearing. The City Clerk shall give notice in the manner and form provided Title 23 of this code, and, in addition thereto, he shall at least five days before the hearing, give notice to the applicant, in writing, at the address set forth in the application. At such hearing the applicant and any other interested party may be heard in support of or in opposition to the granting of such permit. The City Council may fix and determine all rules and regula-tions for such hearing and the time to be allotted to any such persons. The City Council may continue such hearing from time to time as it deems necessary.

('86 Code, § 21.08.040) (Ord. 3115, passed - - )

After the conclusion of the public hearing, the City Council may take such action as it deems proper. If the City Council grants the permit, it may do so upon such terms and conditions as it deems proper, but no permit shall be granted without the following standard conditions being required and made a part or condition of such permit:

(A) Drilling operations for any well shall commence within 180 days from the effective date of the permit, unless such time is extended by the City Council.

(B) All drilling shall be done by means of a steel derrick enclosed with fireproofed and sound-proofed material, and operations shall be carried on diligently from the commencement of the drilling until the completion of the well, or until such well is abandoned.

(C) Within 90 days after the completion of drilling operations or abandonment of further drilling, the derrick and all drilling equipment, including temporary tanks, shall be removed from the drill site. No permanent derrick shall be installed or maintained on any controlled drilling site or used for the drilling or production of any oil or gas well.

(D) During the temporary testing period following the completion of any well, which period shall not exceed 60 days, internal combustion engines may be used to power pumping units. All internal combustion engines shall be equipped with such types of mufflers as may be satisfactory to the City Council. Thereafter, all pumping equipment shall be operated by electric motors.

(E) No person shall use any open sump or reservoir within the city for the purpose of storing, holding or handling oil or liquid hydrocarbons, rotary mud, drill cuttings and oilfield wastes, derived or resulting from or connected with the drilling, produc-tion, use, operation or maintenance of any oil and gas well. All of the substances and similar products shall be collected, and stored in steel tanks or other closed receptors as may be required in any permit and which shall not extend more than five feet above ground level. Tanks for waste materials, drill cutting, rotary mud and waste materials shall be removed from the controlled drilling site upon completion of drilling operations. Mud and cuttings, while being circulated, shaken or recirculated, in connection with the drilling temporary geological exploratory core holes, need not be kept in closed receptors.

(F) Applicants shall comply with all the provisions of this code, ordinances, rules and regulations of the city and all laws of the state with respect to disposal of waste materials and air pollution.

(G) All drilling and production equipment installed or operated upon any controlled drilling site shall be so constructed, operated, and maintained that no noise, vibration, odor or other harmful or annoying substances or effect therefrom which can be eliminated or diminished by the use of modern and approved types of equipment and silencers shall ever be permitted to result from operations on any controlled drilling site to the injury or annoyance of persons in the vicinity of such controlled drilling site. Proven technological and mechanical improvements in methods of drilling and production, and in the type of equipment used therefor shall be adopted from time to time as the same become available, if the use of such equipment, improvements, and methods will reduce noise, vibration, odors, or the harmful effects of annoying substances. The use of equipment in any controlled drilling site which causes noise or vibra-tion, shall at all times be subject to the approval of the City Council, and the City Council may amend any permit and require the permittee to abate any noise or vibration which constitutes a nuisance and is detrimental to the citizens in the vicinity where such equipment is being operated.

(H) During all drilling or production operations, except in the case of emergency, all equipment or supplies to be delivered to the drill site shall be transported, trucked or conveyed to the drilling site and unloaded only between the hours of 8 a.m. and 6 p.m. During the testing of any well, which shall not exceed a period of 60 days after the completion thereof, oil may be trucked from the drilling site, provided such trucking is done between the hours of 8 a.m. and 6 p.m. As soon as commercial production has been established in any new well, acquisition of a right-of-way or the construction of a pipeline shall be started within 60 days and work thereon diligently prosecuted until such pipeline is completed in order to eliminate the trucking of oil. All oil and gas shall be shipped and transported through pipelines when completed. All pipelines outside of the drill site shall be laid to a depth of at least three feet below the surface of the ground where existing structures permit.

(I) Private roads for ingress and egress to and from the drill site shall be surfaced with gravel, oiled and maintained in good condition at all times during drilling and production operations. No signs shall be erected on the drill site except those required by law or permitted by this code, or any ordinances or regulations of this city.

(J) Well abandonment shall be in accordance with requirements of the state division of oil and gas. Upon such abandonment applicant shall restore the property as nearly as possible to its original condition, and shall remove all concrete foundations, oil soaked soil and debris, all holes or depressions shall be filled to the natural surface.

(K) When required by the City Council, the applicant or permittee shall designate a competent representative who shall be responsible for the supervision of drilling operations and the carrying out of the conditions of any permit. Such representative shall be available at all times during drilling operations and shall be the responsible contact agent of applicant or the permittee whom the City Council may require to carry out the provisions of the permit.

(L) After any oil or gas well has been placed on production, the site thereof shall be adequately landscaped and screened, either with shrubbery, masonry or concrete wall, or their equal, so that the same shall not be unsightly nor hazardous. After any oil and gas well is placed on production, all equip-ment with moving parts in use at such well shall be securely enclosed by an adequate type of fence or approved wire screen or housing, sufficient to prevent the entry of persons thereto. Such protections shall be subject to the approval of the Superintendent of Building of this city. Any gates thereto shall be securely fastened at all times, except when authorized personnel are in attendance at such well. All tanks and other equipment shall be depressed so that the top of any tank or other equipment or appurtenances shall not extend more than five feet above the surface of the site, unless otherwise permitted by the City Council. Any wall around storage tanks shall be painted a neutral color to blend with the surroundings. Tanks holding liquid hydrocarbons shall have an enclosing dike to confine contents in the event of an accidentally ruptured tank. Such dikes shall be constructed of earth or concrete.

(M) Oil produced from the wells may be stored in steel tanks on the site. Unless otherwise permitted by the City Council, the total amount of storage for production, recycling and all storage and operational purposes shall not exceed two tanks each of 1,000 barrels capacity.

(N) All of the operations at the drill site shall be conducted in a careful and orderly manner, and the premises shall at all times be maintained in a neat, clean and orderly condition.

(O) Within 60 days after any oil and gas well is placed on production, the applicant or permittee shall file with the City Clerk a copy of the complete record of any oil and gas well, which record shall be the same as that filed with the division of oil and gas of the state. The City Council may require a map or plat showing the location of the producing interval and the route of the well hole between the production interval and the controlled drilling site shall be furnished to the city. All records submitted pursuant to this division shall be confidential and privileged.

(P) All fire fighting equipment as required and approved by the Chief of the Fire Department shall be installed and maintained on the controlled drilling site at all times during the drilling and production operations.

(Q) All well holes and oil and gas wells passing through, or bottomed in or under residential real property in the city, which wells are drilled from controlled drilling sites outside the city shall be below a depth of 500 feet upon entering real property within the city. All oil and gas wells or well holes drilled from a controlled drilling site within the city shall be at least 500 feet below the surface of the controlled drilling site when such well hole or well leaves or goes outside the boundaries of the controlled drilling site.

(R) The Superintendent of Building shall have the primary responsibility of enforcement of the provisions of this title. When appropriate, he shall consult with other city departments. Any and all interested city officials shall be permitted at all reasonable times to review and inspect the controlled drilling site and any operations or methods used in the drilling for and producing of oil and gas.

(S) The City Council may restrict the use of certain streets, alleys or roadways in connection with the permittee's operations which shall be named in any permit granted. In the event any street, alley or road is damaged by permittee's operations, then such damage shall be paid by the permittee upon demand by the city and the failure to pay such damage, being the reasonable cost of the repair of any such damaged portions, shall be ground for the revocation of the permit or the collection of such damage at law by the city.

(T) The permit shall become null and void unless accepted by the applicant in its entirety in writing, filed with the City Clerk within 30 days from the date of the permit, and no work on the drill site shall be commenced until such permit is accepted.

(U) The operation of any oil and gas well and production therefrom drilled pursuant to a permit shall be in accordance with the rules and regulations of the state division of oil and gas or any successor agent or body thereto.

('86 Code, § 21.08.050) (Ord. 3115, passed - - )

(A) The Planning Commission is authorized to consult with the applicant in determining the boundaries of the proposed exploratory area. Such area shall include an area in the city which can reasonably be expected to produce oil or gas, or in or under which real property there are likely to be deposits of oil and gas which can be produced. The exploratory area shall be delineated and described in any permit issued hereunder.

(B) In order to determine the proper boundaries of any proposed exploratory area, the Planning Commission or the City Council may employ such engineers or consultants as it deems necessary to advise the Planning Commission or the City Council in such matter, and the cost of such services shall be paid by the city.

('86 Code, § 21.08.060) (Ord. 3115, passed - - )

Each applicant requesting a permit must have the contractual or proprietary right and authority to drill for oil and gas under the surface of at least 51% of the area of the real property described and included in any proposed exploratory area. The City Council or the Planning Commission may require the applicant to prove any such authority by submitting a lease agreement or evidence of ownership therefor.

('86 Code, § 21.08.070) (Ord. 3115, passed - - )

It being the intention of the City Council to give the owners of oil and gas rights within the exploratory area the right and privilege to participate in royalties derived from the drilling of wells in the exploratory area, it shall be a condition to the granting of any permit by the City Council that each applicant or permittee or his successor in interest, shall, within one year from the issuance of a permit under the provisions of this title, execute an offer in writing giving to each record owner of property located within the exploratory area who has not joined in the lease, or other authorization to drill, the right to share in the proceeds of production from wells bottomed in the district, upon the same basis as those property owners who have, by lease or other legal consent, agreed to the drilling for and produc-tion of oil, gas or other hydrocarbon substances from the subsurface of 51% of the area. The offer hereby required must remain open for acceptance for a period of five years after the date of issuance of the permit. During the period the offer is in effect, the applicant, or his successor in interest, shall impound all royalties to which the owners or any of them may become entitled in a bank or trust company in the state, with proper provisions for payment to the record owners of property in the exploratory area who had not signed the lease at the time such permit was issued, but who accept such offer in writing within the five year period. Any such royalties remaining in any bank or trust company at the time the offer expires and which are not due or payable as hereinabove provided shall be paid pro rata to those owners who, at the time of such expiration, are otherwise entitled to share in the proceeds of such production.

('86 Code, § 21.08.080) (Ord. 3115, passed - - )

(A) First permit. The first application for a permit to cover drilling operations for a single oil and gas well hole on any controlled drilling site, whether inside or outside the city, and for production operations thereof, shall be accompanied by applicant's certified or cashier's check payable to the city in the sum of $2,500 as an application and permit fee for the drill site and all operations for the first oil and gas well to be drilled on such controlled drilling site inside or outside the city, which fee shall be for the controlled drilling site permit and the first year's operations for the first well under the permit.

(B) Subsequent permits. The application and permit fee for the use of a controlled drilling site and for a permit for any second or subsequent oil and gas well on the same controlled drilling site shall be $500. When application is made for the drilling of any second or subsequent oil and gas well on such site, such application shall be accompanied by applicant's certified or cashier's check for $500, which fee shall be for the current fiscal year's operations under the permit.

(C) Renewal of permits. As a condition of con-tinuing each such permit in force and effect after the first fiscal year expires, the permittee shall pay to the city an annual fee in the sum of $500 for each fiscal year, which the annual fee shall be payable on the first day of any renewal period.

(D) Core hole. The application and permit fee for each temporary geological exploratory core hole shall be $500.

(E) Refunds. No fee provided for herein shall be refundable in the event any such application for permit is denied.

('86 Code, § 21.08.090) (Ord. 3115, passed - - )

If any fee required herein is not paid at the time and in the manner provided, the same shall become delinquent and a penalty in an amount equal to 25% of such fee shall be added thereto for such delinquency, which penalty shall become a part of such fee.

(A) Each person whose duty it is to obtain or cause to be obtained any permit, as provided herein, shall be and is hereby declared to be liable for the payment of the fee required.

(B) All fees required to be paid herein shall constitute a lien upon the derrick, well, well hole and production equipment for which the respective permits are required and upon the production from any such well. Such lien shall attach as of the date the permit is granted and the property on which such lien is attached may be sold in payment thereof.

(C) In the event any fee is not paid, the City Attorney, at the request of the City Council or the City Treasurer, in addition to other remedies, may file suit in the proper court to collect the same.

('86 Code, § 21.08.100) (Ord. 3115, passed - - )

(A) Insurance required for permit issuances. As a condition to the granting of any permit under this title for the drilling of an oil or gas well, or production of oil or gas, the permittee shall hold the city and its officers and employees harmless from any claims of, or liability to, third parties arising out of or resulting from the permittee's operations.

(B) Amount. The permittee shall carry and keep in force at all times a permit is in force, insurance in an amount to be set by City Council resolution to insure against liability for negligence of permittee or any of its agents or servants or employees, arising from the drilling or production activities or operations incident to the drilling or production of oil or gas wells pursuant to any such permit. Such insurance shall run in favor of the city and also in favor of any third party who may be injured by any such negligence.

(C) Filing policy. Such policy or policies of insurance shall be issued by a good and responsible insurance company and shall be filed in the office of the City Clerk and approved by the City Attorney before any drilling is commenced.

(D) Exception. If the City Council approves the same in advance, the applicant may, in lieu of such insurance, submit to the city evidence and agreements satisfactory to the city of the applicant's financial responsibility to insure itself and to indemnify the city.

('86 Code, § 21.08.110) (Ord. 3115, passed - - )

Before any drilling, including temporary geo-logical exploratory core holes, is commenced, each permittee shall file in the office of the City Clerk a corporate surety bond satisfactory to the City Attorney, executed by the applicant as principal and by a surety company authorized to do business in the state as surety, in favor of the city, in an amount to be set by City Council resolution for each well here-after drilled on a controlled drilling site within the city, and a bond in an amount to be set by City Council resolution for each well located on a drill site outside the city for drilling into the subsurface of the city, provided, however, that the applicant, in lieu of filing individual bonds for each individual well, may file a blanket bond in an amount to be set by City Council resolution covering all of its drill sites, wells, core holes and production. Such individual bonds or blanket bonds shall be conditioned on the principal named therein faithfully complying with all of the provisions of the permit and shall secure the city against all losses, charges and expenses incurred by the city to obtain such compliance by the principal named in the bond.

(A) Each such bond shall be kept and maintained in full force and effect at all times, and the obliga-tions thereof and the liabilities thereunder shall be terminated solely and only at the time or times and in the manner as herein provided.

(B) The applicant as principal, and the surety under any bond filed hereunder may have such bond terminated and cancelled by furnishing a new bond therefor, approved by the City Attorney and the City Council. Any bond shall be terminated and cancelled upon the final and permanent cessation or abandon-ment of all operations in connection with any well or wells for which the bond was given.

('86 Code, § 21.08.120) (Ord. 3115, passed - - )

After a permit has been granted the City Council may alter, amend or add to the conditions of the permit at any time in order to protect the citizens and their property rights within the city.

(A) If oil drilling and production is successful on the subject property and if there is any evidence that the production activities have caused or are causing subsidence in the present elevation of the ground on the subject property, or in the immediate vicinity, the City Council may require corrective action, such as repressurizing the oil producing structure or the cessation of oil drilling and production;

(B) Such new amended or added conditions shall be made only after ten days' notice to the applicant or permittee and after a hearing before the City Council.

('86 Code, § 21.08.130) (Ord. 3115, passed - - )

No permit issued hereunder may be assigned or otherwise transferred without first obtaining the written consent of the City Council. Such application for consent to assignment or transfer shall be filed on such form as the City Council may prescribe, and at the time of filing the applicant shall pay to the city the sum of $500 and shall also file with the City Council a bond in the form and for the amount required for the original permit sought to be trans-ferred.

('86 Code, § 21.08.140) (Ord. 3115, passed - - ) Penalty, see § 1.12.010

Any permit issued by the City Council pursuant to the provisions hereof may be revoked by the City Council after not less than ten days' notice to the permittee and following a hearing and finding of the existence or any one or more of the matters set forth below. Notice of the revocation of the permit shall be mailed to the permittee within five days of its revocation at his or its address set forth in the application for such permit. Revocation of a permit may be made if any of the following exist:

(A) The permittee has failed or refused to comply with and abide by the conditions of the permit;

(B) The permittee has failed and refused to comply with or abide by or has violated any of the provisions of this title or any ordinance of the city, or the charter of the city, or any law, rule or regulation of the state regulating the drilling and production of oil and gas wells by reason of or in connection with his operations under the permit.

(C) The permittee has made any willful mis-representations of fact in his or its application for such permit or any report or record required by this title to be filed or furnished by the permittee.

('86 Code, § 21.08.150) (Ord. 3115, passed - - )