As used in KRS § 353.500 to KRS § 353.720, unless the context otherwise requires: (1) “Department” means the Department for Natural Resources;
(2) “Commissioner” means the commissioner of the Department for Natural
Resources;
(3) “Director” means the director of the Division of Oil and Gas as provided in KRS
353.530;
(4) “Commission” means the Kentucky Oil and Gas Conservation Commission as provided in KRS § 353.565;
(5) “Person” means any natural person, corporation, association, partnership, receiver, governmental agency subject to KRS § 353.500 to KRS § 353.720, trustee, so-called common-law or statutory trust, guardian, executor, administrator, or fiduciary of any kind, federal agency, state agency, city, commission, political subdivision of the Commonwealth, or any interstate body;
(6) “Correlative rights” means the reasonable opportunity of each person entitled thereto to recover and receive or receive, without waste, the oil and gas in and under or produced from a tract or tracts in which the person owns or controls an interest, or proceeds thereof;
(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, including casinghead gas, and all other hydrocarbons not defined in subsection (7) of this section as oil;
(9) “Pool” means:
(a) An underground reservoir containing a common accumulation of oil or gas or both; or
(b) An area established by the department or the commission as a pool.
Each productive zone of a general structure which is completely separated from any other zone in the structure, or which for the purpose of KRS § 353.500 to KRS § 353.720 may be so declared by the department, is covered by the word “pool”;
(10) “Field” means the general area which is underlaid or appears to be underlaid by at least one (1) pool; and “field” includes the underground reservoir containing oil or gas or both. The words “field” and “pool” mean the same thing when only one (1) underground reservoir is involved; however, “field,” unlike “pool,” may relate to two (2) or more pools;
(11) “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 his tract or tracts;
(12) “Abandoned,” when used in connection with a well or hole, means a well or hole which has never been used, or which, in the opinion of the department, will no longer be used for the production of oil or gas or for the injection or disposal of fluid therein;
(13) “Workable bed” means:
(a) A coal bed actually being operated commercially;
(b) A coal bed that the department decides can be operated commercially and the operation of which can reasonably be expected to commence within not more than ten (10) years; or
(c) A coal bed which, from outcrop indications or other definite evidence, proves to the satisfaction of the commissioner to be workable, and which, when operated, will require protection if wells are drilled through it;
(14) “Well” means a borehole:
(a) Drilled or proposed to be drilled for the purpose of producing gas or oil; (b) Through which gas or oil is being produced; or
(c) Drilled or proposed to be drilled for the purpose of injecting any water, gas, or other fluid therein or into which any water, gas, or other fluid is being injected;
(15) “Shallow well” means any well drilled and completed at a depth of six thousand (6,000) feet or less except, in the case of any well drilled and completed east of longitude line 84 degrees 30′, shallow well means any well drilled and completed at a depth of six thousand (6,000) feet or above the base of the lowest member of the Devonian Brown Shale, whichever is the deeper in depth;
(16) “Deep well” means any well drilled and completed below the depth of six thousand (6,000) feet or, in case of a well located east of longitude line 84 degree 30′, a well drilled and completed at a depth below six thousand (6,000) feet or below the base of the lowest member of the Devonian Brown Shale, whichever is deeper;
(17) “Operator” means:
(a) For a deep well, 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 himself or for himself 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 the royalty owner to the extent of the prevailing royalty in the oil and gas in that portion of the pool underlying the tract owned by the owner, and as operator as to the remaining interest in such oil and gas. In the event the oil is owned separately from the gas, the owner of the right to develop, operate, and produce the substance being produced or sought to be produced from the pool shall be considered as “operator” as to such pool; and
(b) For a shallow well, any owner of the right to develop, operate, and produce oil and gas from a pool and to appropriate the oil and gas therefrom, either for himself or herself, or for himself or herself and others. If 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 (7/8) of the oil and gas in that portion of the pool underlying the tract owned by the owner, and as a royalty owner as to the one-eighth (1/8) interest in the oil and gas. If the
oil is owned separately from the gas, the owner of the right to develop, operate, and produce the substance being produced or sought to be produced from the pool shall be considered as operator as to the pool;
(18) “Royalty owner” means any owner of oil and gas in place, or oil and gas rights, to the extent that the owner is not an operator as defined in subsection (17) of this section;
(19) “Drilling unit” generally means the maximum area in a pool which may be drained efficiently by one (1) well so as to produce the reasonable maximum oil or gas reasonably recoverable in the area. Where the regulatory authority has provided rules for the establishment of a drilling unit and an operator, proceeding within the framework of the rules so prescribed, has taken the action necessary to have a specified area established for production from a well, the area shall be a drilling unit;
(20) “Underground source of drinking water” means those subsurface waters identified as in regulations promulgated by the department which shall be consistent with the definition of underground source of drinking water in regulations promulgated by the Environmental Protection Agency pursuant to the Safe Drinking Water Act, 42 U.S.C. secs. 300(f) et seq.;
(21) “Underground injection” means the subsurface emplacement of fluids by well injection but does not include the underground injection of natural gas for purposes of storage;
(22) “Endangerment of underground sources of drinking water” means underground injection which may result in the presence in underground water, which supplies or can reasonably be expected to supply any public water system, of any contaminant and if the presence of the contaminant may result in the system’s not complying with any national primary drinking water regulation or may otherwise adversely affect the health of persons;
(23) “Class II well” means wells which inject fluids:
(a) Which are brought to the surface in connection with conventional oil or natural gas production and may be commingled with waste waters from gas plants which are an integral part of production operations, unless those waters are classified as a hazardous waste at the time of injection;
(b) For enhanced recovery of oil or natural gas; and
(c) For storage of hydrocarbons which are liquid at standard temperature and pressure;
(24) “Fluid” means any material or substance which flows or moves whether in a semisolid, liquid, sludge, gas, or any other form or state;
(25) “Horizontal well” means a well, the wellbore of which is initially drilled on a vertical or directional plane and which is curved to become horizontal or nearly horizontal, in order to parallel a particular geological formation and which may include multiple horizontal or stacked laterals;
(26) “Vertical well” means a well, the wellbore of which is drilled on a vertical or directional plane into a formation and is not turned or curved horizontally to allow the wellbore additional access to the oil and gas reserves in the formation;
(27) “Prevailing royalty” means the royalty rate or percentage that the department
or the commission determines is the royalty most commonly applicable with regard to the tract or unit in the issue. The royalty rate set by the department or the commission shall not be less than one-eighth (1/8) or twelve and one-half percent (12.5);
(28) “Best management practices” means demonstrated practices intended to control site runoff and pollution of surface water and groundwater to prevent or reduce the pollution of waters of the Commonwealth;
(29) “Abandoned storage tank facility” means any aboveground storage tank or interconnected grouping of tanks that is no longer being actively used and maintained in conjunction with the production and storage of crude oil or produced water;
(30) “Spill prevention, control, and countermeasure structures” means containment structures constructed around a storage facility to contain facility discharges;
(31) “Landowner” means any person who owns real property where an abandoned storage tank facility is currently located;
(32) “Chemical Abstracts Service” means the division of the American Chemical Society that is the globally recognized authority for information on chemical substances;
(33) “Chemical abstracts service number” means the unique identification number assigned to a chemical by the Chemical Abstracts Service;
(34) “Chemical” means any element, chemical compound, or mixture of elements or compounds that has its own specific name or identity, such as a chemical abstracts service number;
(35) “Chemical disclosure registry” means the chemical registry known as FracFocus developed by the Groundwater Protection Council and the Interstate Oil and Gas Compact Commission. If that registry becomes permanently inoperable, the chemical disclosure registry shall mean another publicly accessible Web site that is designated by the commissioner;
(36) “Division” means the Kentucky Division of Oil and Gas;
(37) “Emergency spill or discharge” means an uncontrolled release, spill, or discharge associated with an oil or gas well or production facility that has an immediate adverse impact to public health, safety, or the environment as declared by the secretary of the cabinet;
(38) “Health professional” means a physician, physician assistant, nurse practitioner, registered nurse, or emergency medical technician licensed by the Commonwealth of Kentucky;
(39) “High-volume horizontal fracturing treatment” means the stimulated treatment of a horizontal well by the pressurized application of more than eighty thousand (80,000) gallons of water, chemical, and proppant, combined for any stage of the treatment or three hundred twenty thousand (320,000) gallons in the aggregate for the treatment used to initiate or propagate fractures in a geological formation for the purpose of enhancing the extraction or production of oil or natural gas;
(40) “Proppant” means sand or any natural or man-made material that is used in a hydraulic fracturing treatment to prop open the artificially created or enhanced fractures once the treatment is completed;
(41) “Total water volume” means the total quantity of water from all sources used in a high-volume hydraulic fracturing treatment;
(42) “Trade secret” means information concerning the volume of a chemical or relative concentration of chemicals used in a hydraulic fracturing treatment that:
(a) Is known only to the hydraulic fracturing treatment’s owners, employees, former employees, or persons under contractual obligation to hold the information in confidence;
(b) Has been perfected and appropriated by the exercise of individual ingenuity which gives the hydraulic fracturing treatment’s owner an opportunity to retain or obtain an advantage over competitors who do not know the information; and
(c) Is not required to be disclosed or otherwise made available to the public under any federal or state law or administrative regulation;
(43) “Cabinet” means the Energy and Environment Cabinet;
(44) “Stratigraphic test well” means an exploratory borehole drilled for the sole purpose of acquiring subsurface geological and structure test data;
(45) “Notice” means the sending of certified mail to the last known address. The date of delivery shall be the earlier of the date shown on the certified mail return receipt or the date thirty (30) days after the date shown on the postal service proof of mailing. For the purposes of KRS § 353.620, 353.630, 353.640, and 353.700, any unknown or nonlocatable owner shall be deemed to have received notice, provided that the person giving the notice has caused to be published, no more than thirty (30) days prior to the submission of an application or order issued pursuant to an application, one (1) notice in the newspaper of the largest circulation in each county in which any tract, or portion thereof, affected or proposed to be affected, is located. The applicant shall provide a copy of the published notification to the director within twenty (20) days of the date of publication. The notice shall:
(a) State, as applicable, that an application is being filed with the division or that an order has been issued pursuant to an application filed with the division;
(b) Describe any tract, or portion thereof, affected or proposed to be affected; (c) In the case of an unknown owner, identify the name of the last known
owner;
(d) In the case of a nonlocatable owner, identify the owner and the owner’s last known address; and
(e) State that any party claiming an interest in any tract, or portion thereof, affected or proposed to be affected, shall contact the operator at the published address;
(46) (a) “Control person” means a person who:
1. Has the ability to commit the financial or real property assets or working resources of an entity to comply with this chapter and the administrative regulations promulgated hereunder with respect to the operations of a well or the manner in which a well is operated;
2. Has any other relationship that gives that person authority to determine the manner in which a well is operated, plugged, and abandoned. This includes a rebuttable presumption that an ineligible person is directing the actions of his or her spouse or child who files an application;
3. Is an officer, director, or general partner of an entity; or
4. Has an ownership interest in an entity equaling or exceeding fifty percent (50), except that the cabinet may determine that a person has controlling interest in an entity with less than fifty percent (50) ownership.
(b) Unless the person is determined to qualify under paragraph (a) of this subsection, “control person” does not include:
1. An independent third-party service company;
2. A contract operator;
3. A well tender or pumper;
4. The owner of a non-operated undivided working interest;
5. A limited partner;
6. A unitholder in a limited liability company; or
7. Any other person who by virtue of a joint operating agreement, entity governance agreement, or other contractual relationship does not have the right to control the manner in which a well is operated and plugged and abandoned;
(47) “Eligible well” means: (a) An orphan well; or
(b) Any abandoned well that poses an imminent threat to human health, safety, or the environment; and
(48) “Orphan well” means any oil or gas well, as defined in subsection (14) of this section, which has been determined by the cabinet to be improperly abandoned or improperly closed, and that has no known owner or operator with continuing legal responsibility or all owners or operators with continuing legal responsibility for the well are determined to be financially insolvent following a reasonable investigation conducted by the cabinet.
Effective:April 8, 2022
History: Amended 2022 Ky. Acts ch. 118, sec 1, effective April 8, 2022; and ch.
173, sec. 1, effective April 8, 2022. — Amended 2019 Ky. Acts ch. 21, sec. 1, effective June 27, 2019. — Amended 2018 Ky. Acts ch. 94, sec. 4, effective July
14, 2018. — Amended 2016 Ky. Acts ch. 40, sec. 1, effective July 15, 2016. — Amended 2015 Ky. Acts ch. 21, sec. 12, effective June 24, 2015. — Amended
2010 Ky. Acts ch. 24, sec. 1903, effective July 15, 2010. — Amended 2005 Ky. Acts ch. 123, sec. 64, effective June 20, 2005. — Amended 2000 Ky. Acts ch.
139, sec. 1, effective July 14, 2000. — Amended 1986 Ky. Acts ch. 277, sec. 1, effective July 15, 1986. — Amended 1974 Ky. Acts ch. 45, sec. 1. — Amended
1966 Ky. Acts ch. 255, sec. 259. — Created 1960 Ky. Acts ch. 103, sec. 2.
Legislative Research Commission Note (4/8/2022). This statute was amended by
2022 Ky. Acts chs. 118 and 173, which are identical and have been codified together.