Ordinance No. 12,474ORDINANCE NO. 12,474
AN ORDINANCE OF THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS, AMENDING CHAPTER 62 "NATURAL RESOURCES," ARTICLE II
"OIL AND GAS," DIVISION 1 "GENERALLY," SECTION 62-26
"DEFINITIONS"; DIVISION 2 "DRILLING PERMIT," SECTION 62-56
"REQUIRED"; SECTION 62-57 "WELL WORKOVER'; SECTION 62-58
"SUPPLEMENT PERMIT REQUIRED FOR DEEPER DRILLING"; SECTION
62-59 "APPLICATION"; SECTION 62-60 "FEE"; SECTION 62-61 "NOTICE";
SECTION 62-62 "LOCATION RESTRICTIONS"; SECTION 62-63
"PERMISSION OF SURFACE OWNER REQUIRED"; SECTION 62-64
"INSURANCE REQUIRED," SUBSECTIONS (A) AND (B); SECTION 62-65
"ISSUANCE"; SECTION 62-67 "COPIES; AUTHORITY TO DRILL";
DIVISION 3 "WELL SPACING," SECTION 62-105 "DRILLING BY OTHER
THAN LEASEHOLDER," SUBSECTION (C); SECTION 62-106
"SIMULTANEOUS APPLICATIONS"; SECTION 62-107 "INTERESTS OF
PERSONS OTHER THAN PERMITTEE," SUBSECTION (B)(1); SECTION 62-
108 "MULTIPLE WELLS FROM ONE SURFACE LOCATION"; AND
DIVISION 4 "TECHNICAL PROVISIONS," SECTION 62-137 "TECHNICAL
REQUIREMENTS," SUBSECTIONS (1), (8), (10), (11), (12), (13), (14), (18),
(20), (24), (25), AND (26) OF THE CODE OF ORDINANCES, BAYTOWN,
TEXAS; AMENDING CHAPTER 62 "NATURAL RESOURCES," ARTICLE II
"OIL AND GAS," DIVISION 2 "DRILLING PERMIT," SECTION 62-64
"INSURANCE REQUIRED" OF THE CODE OF ORDINANCES, BAYTOWN,
TEXAS, TO ADD A NEW SUBSECTION NUMBERED SUBSECTION (F); TO
PROVIDE UPDATED STANDARDS FOR DRILLING, OIL OR GAS
OPERATIONS; PROVIDING A REPEALING CLAUSE; CONTAINING A
SAVINGS CLAUSE; PRESCRIBING A MAXIMUM PENALTY OF TWO
THOUSAND AND NO/100 DOLLARS ($2,000.00); AND PROVIDING FOR
THE PUBLICATION AND EFFECTIVE DATE THEREOF.
WHEREAS, the City of Baytown ("City") has a long history of drilling, oil or gas
operations, and has oil and gas reserves located within its city limits, as recognized in the
Baytown 2025 Comprehensive Plan; and
WHEREAS, the City recognizes and respects private property rights, and adopts
regulations that strike a balance between the rights of property owners to make reasonable use of
their property and the rights of other property owners to be protected from the adverse impacts of
nearby uses, including noise, odor, dust, declination in property values; and
WHEREAS, drilling, oil or gas operations are currently being conducted in and around
Baytown; and
WHEREAS, technological advances and energy related issues have led to an increase in
interest of the exploration and production of oil in the City; and
WHEREAS, in November 2012, the City Council directed staff to begin a review of the
oil and gas regulatory process, and bring back recommended changes to the Unified Land
Development Code ("ULDC") and related ordinances of the City; and
WHEREAS, Chapter 62, Article II, Oil and Gas, establishes a permitting process for
drilling of oil and gas, which also required updating to conform to the policy changes drafted for
the ULDC; and
WHEREAS, there is an abundance of reports, studies, information and data about the
effects of drilling, oil or gas operations on the public health, safety and welfare, and these have
been considered and have assisted the City Council in establishing these regulations; and
WHEREAS, the Texas Constitution, the City's Charter, and various state laws, provide
various methods and processes through which land uses, structures, businesses and related
activities may be regulated, which authority is utilized herein; and
WHEREAS, after extensive review, public hearings and public comments, this ordinance
has been considered and adopted in furtherance of the health, safety and welfare of the citizens
of the City of Baytown, with due respect for the property rights accorded to land and mineral
owners in law; NOW THEREFORE,
BE IT ORDAINED BY THE CITY COUNCIL OF THE CITY OF BAYTOWN,
TEXAS:
Section 1: That all matters and facts set forth in the recitals hereinabove are found to
be true and such recitals are hereby approved and made a part of this Ordinance for all purposes
and are adopted as a part of the judgment and findings by the City Council of the City of
Baytown, Texas.
Section 2: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 1
"Generally," Section 62-26 "Definitions" of the Code of Ordinances, Baytown, Texas, is hereby
amended to add definitions of "director," "drilling, oil or gas operations," "drilling unit for oil,"
"drilling unit for gas," "drilling block," "drilling site," and "fire chief," which definitions shall
read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 1. GENERALLY
Sec. 62-26. Definitions.
(a) The following words, terms and phrases, when used in this article, shall have the
meanings ascribed to them in this section, except where the context clearly indicates a
different meaning:
Director means the director of planning and development services.
Drilling, oil or gas operations shall mean the drilling, completion or re -working of any
type of oil, gas, disposal, exploratory or injection well or pipeline and subsequent life of a
well or pipeline or any associated appurtenances or operations, including changes to
existing operations and all related equipment and structures, including associated non-
residential temporary office structures.
Drilling unit for gas means an area within the corporate limits that contains a minimum
of 640 acres and shall be 5,280 feet square.
Drilling unit for oil means an area within the corporate limits that contains a minimum of
40 acres and shall be 1,320 feet square.
Drilling block means an area that contains 16 oil drilling units.
Drilling site means the surface premises used for drilling, oil or gas operations.
Fire chief means the chief of the fire department.
Section 3: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-56 "Required" of the Code of Ordinances, Baytown, Texas, is
hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-56. Required.
It shall be unlawful for any person, acting either for himself or as agent, employee,
independent contractor or servant of any other person, to commence to drill, to drill or to operate
any oil or gas well within the regulated area of the city or to work upon or assist in any way in
the drilling, oil or gas operations without a permit for such activity having first been issued in
accordance with this article and other applicable provisions of the code.
Section 4: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-57 "Well workover" of the Code of Ordinances, Baytown, Texas,
is hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE 11. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-57. Well workover.
Any person desiring to conduct drilling, oil or gas operations within the corporate limits
may perform any well workover operations except drilling deeper, without a prior permit,
provided the operator complies with all rules set forth in this article, and no additional filing fees
will be required for such work. No well workover shall be started or performed without first
informing the fire chief and complying with all provisions of the code and all applicable state
and local laws, rules and regulations, including obtaining a zoning amendment or special use
permit where required. It will not be necessary to inform the fire chief when well servicing or
swabbing operations are to be performed.
Section 5: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-58 "Supplement permit required for deeper drilling" of the Code of
Ordinances, Baytown, Texas, is hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-58. Supplement permit required for deeper drilling.
(a) Once any well has either been completed as an oil or gas producer or abandoned as a dry
hole, it shall be unlawful and an offense for any person to drill such well to a greater
depth than that reached in the prior drilling operations without the permittee complying
with all provisions of the code, including obtaining a zoning amendment or special use
permit where required, and obtaining a supplemental permit after filing a supplemental
application with the director specifying the following:
(1) The condition of the well and the casing therein;
(2) The depth to which it is proposed such well be deepened; and
(3) The proposed casing program to be used in connection with the proposed
deepening operation.
(b) In any deeper drilling, any deeper completion, or any deeper production operations, the
permittee shall comply with all other sections contained in this article and the code and
applicable to the drilling, oil or gas operations of a well, but no additional filing fee shall
be required.
Section 6: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-59 "Application" of the Code of Ordinances, Baytown, Texas, is
hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE 11. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-59. Application.
Any person desiring to drill, complete and operate a well for oil or gas exploration or
production within the regulated area of the city shall present an application in duplicate to the
director, which application shall be in writing on a form provided by the city, shall be signed by
the applicant or some person duly authorized to sign the application for the applicant, and shall
state the following:
(1) The date of the application;
(2) The name and address of the applicant; if the applicant is a corporation, the state
of incorporation; and if the applicant is a partnership, the names and addresses of
the general partners;
(3) Two 24-hour emergency contacts, who:
a. can initiate appropriate actions to respond to any emergency associated
with the drilling, oil or gas operations, including emergencies on the site,
with any associated pipelines, or with transit of materials related to the
development;
b. have access to information on the location of the closest shutoff valve to
any specific point in the city or within its jurisdiction; and
C. can furnish the common name of the material then being carried by the
pipeline, as well as any other materials that may be involved in the
emergency;
(4) A statement confirming the right of the applicant to perform drilling, oil or gas
operations on the property subject to the application;
(5) The number of the drilling unit(s), the property description, the particular lot and
block number or tract in the drilling unit on which the surface location and
proposed bottom -hole location of the proposed well are to be located and the
exact location of the proposed well by Lambert Coordinates;
(6) The type of the proposed well, whether oil or gas, and the proposed depth of the
well;
(7) The proposed complete casing program of the well;
(8) The boundaries of the applicant's leased area relating to the proposed well;
(9) If not otherwise exempt pursuant to section 62-96(b), the exact and correct
number of square feet in the drilling unit of the proposed bottom -hole location
over which the applicant has control of oil rights or gas rights, to the end that the
application will show what proportion and what parts of such drilling unit the
applicant owns in fee or holds under lease or drilling contract from the owners,
and the applicant shall be required to own in fee or hold under lease or drilling
contract from the owners more than 20 acres of the acreage within a drilling unit
before a permit may be issued; provided, however, for a gas well, at least this
required acreage shall be located within whichever 40 -acre oil drilling unit, out of
the gas drilling unit, on which the well is to be drilled;
(10) A notarized copy of a signed waiver of the setback requirements contained in
section 62-62 evidencing that the surface owner agrees to a lesser setback if
applicable; and
(11) The following shall be attached to the application for the permit:
a. A plat prepared by a state licensed registered professional land surveyor
showing the exact surface location and proposed bottom -hole location of
the proposed well with respect to the drilling unit boundaries, drilling site,
and the boundaries of the lot or block on which the applicant has secured
the rights from the owner to drill; the designation of lots, blocks or tracts
owned or controlled by the applicant within the drilling unit; the distance
from the well location to all residence, place of public assembly, hospital
building, school, public park, public recreational space, or public or
private water well situated within 750 feet of the well's surface location;
and the distance from the well location to a private recreational space
situated within 50 feet of the well's surface location;
b. A copy of all documents submitted to and issued by state regulatory
agencies;
C. Hazardous materials management plan and emergency response plan,
approved by the city's emergency management coordinator and fire chief,
containing the following information:
a plan prepared by an emergency management professional
practicing in Texas, detailing how hazardous materials will be
handled to prevent reasonably anticipated spills or other
emergency situations, and
2. an emergency response plan detailing how each type of emergency
situation would be handled. This plan shall include a signed
contract from an approved hazardous materials cleanup service
company, affirming operator has contracted them to perform
cleanup services in the event of a hazardous materials spill, leak,
seepage or accident. A copy of the signed contract specifying
specific actions shall be attached. The contract shall remain in full
force and effect during all drilling operations, through capping of
wells and for 30 days following termination of operations;
d. Risk management plan approved by the city's emergency management
coordinator and the fire marshal, containing, at a minimum, the following:
1. A table of contents;
2. A roster of emergency and non -emergency contacts, including 24-
hour available management and facility maintenance personnel;
3. A hazard threat analysis to address possible hazards including
hurricanes, coastal storm issues, and other natural or man-made
hazards;
4. A security plan including materials and operations;
5. A plan detailing construction, installation, anchorage and
secondary containment with 110% of the capacity for each liquids
storage tank using approved, impervious materials;
6. A description of risk management operations applicable to a well,
tank or pipeline emergency, including, but not limited to:
a. Direction and control;
b. Notification procedures;
C. Evacuation procedures;
d. Evacuation sheltering locations and procedures;
e. Re-entry/return procedures; and
f. Shelter -in-place procedures;
7. Training schedule as applicable to well or pipeline operations ;
8. Contracts for emergency response;
9. List of approved emergency equipment on site, including fire
suppression and spill containment, absorption and cleanup supplies
and provide licenses of persons, who will operate such equipment;
10. Proof of current required federal, state, and local licenses and
permits; and
11. Other specific information related to the life -safety of the facility,
staff, and nearby residents as required by the fire chief.
e. Infrastructure maintenance agreement, which will be executed by the city
only if a permit is granted pursuant to this section. Such agreement will
be on a form provided by the city and shall require the person to whom the
permit is issued to repair, at its own expense, any damage to roads, streets
or highways, which the city is required to maintain, caused by the use of
commercial motor vehicles, as that term is defined in section 94-1 of the
code, for any construction activity associated with drilling, oil or gas
operations. The agreement shall include the type of security enumerated in
section 126-189 of the code and be in an amount of 110% of the estimated
cost of the repairs to the roads, streets or highways as determined by the
city engineer, based on the current condition and age of the roads to be
used, and the proportional damage likely to occur from applicant's
vehicular impact, which shall be estimated based upon a signed and sealed
statement by the permittee's engineer of the potential damage. The
agreement will require the permittee to provide video documentation of
the current state of all roads, streets or highways, which the city is
required to maintain, and proposed for travel by equipment or commercial
motor vehicles associated with the drilling, oil or gas operations. The
security will be returned to applicant after completion of operations, less
any amount determined by the city engineer that is required for repairs the
applicant has failed to perform; and
f. A copy of the ordinance permitting drilling, oil or gas operations at the site
of the proposed well, if required by the Unified Land Development Code.
Section 7: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-60 "Fee" of the Code of Ordinances, Baytown, Texas, is hereby
amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-60. Fee.
Each application for the permit required under this division shall be accompanied by a
cashier's check in the amount of $250.00, made payable to the city, which shall be the filing fee.
Each supplemental application shall furnish the information and conform with the requirements
set forth in section 62-59, insofar as the requirements are relevant to the authority requested
therein, but need not be accompanied by any additional filing fee.
Section 8: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-61 "Notice" of the Code of Ordinances, Baytown, Texas, is hereby
amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-61. Notice.
(a) Notice of the filing of each application for the permit required under this division shall be
given by the applicant to each owner of land within 750 feet of the property or lease lines
of the land that is subject to the application, whichever shall give greater notice, and to
each owner and mineral lessee of lots, blocks and tracts within the drilling unit of the
proposed bottom -hole location described in the application, as such ownership is
disclosed by the deed records of the county or other official records as needed to
determine ownership. Such notice shall be in words and figures, substantially as follows:
NOTICE IS HEREBY GIVEN THAT , ACTING UNDER
AND PURSUANT TO THE TERMS AND PROVISIONS OF CHAPTER
62 OF THE CODE OF ORDINANCES OF THE CITY OF BAYTOWN,
TEXAS, REGULATING THE DRILLING, COMPLETION AND
OPERATION OF OIL WELLS AND OF GAS WELLS WITHIN THE
CORPORATE LIMITS OF THE CITY OF BAYTOWN, TEXAS, AND
ESTABLISHING RESTRICTIONS THEREON, did on the day of
file with the Director of Planning and Development Services or
his/her designee, of the City of Baytown, an application to drill, complete
and operate a well for oil (or gas) upon Lot No. , Block No.
(or other appropriate description), [within or outside, as applicable] the
City of Baytown, Texas, as per map of record in Volume , Page
[if applicable, otherwise insert legal description of surface
location], Plat Records of [Harris or Chambers] County, Texas,
in Drilling Unit No. , and located by Lambert Coordinates for the
South Central Zone of Texas at the intersection of Coordinates
East and
hole location in Drilling
Coordinates for the South
Coordinates
North, and the proposed bottom -
Unit No. , and located by Lambert
Central Zone of Texas at the intersection of
East and North.
(b) Within ten days after the filing of an application, a copy of such notice shall be mailed by
registered mail at the expense of the applicant, addressed to the last known address of
each owner of land within 750 feet of the property lines of the land that is subject to the
application as shown in the records of the county appraisal district, and each owner and
lessee of lots, blocks and tracts in the drilling unit not owned by or under lease to the
applicant. A copy of such notice shall be published, at the expense of the applicant, in
every issue of a local newspaper of the city within ten days after the filing of such
application. Proof of such publication shall be made by the printer or publisher of the
newspaper by affidavit filed with the director and shall be prima facie evidence of such
publication. The applicant shall file with the director an affidavit showing the following:
(1) The name and last known address of each owner and lessee of a lot, block and
tract to whom notice is required to be given as provided in this section; and
(2) The name of each owner and lessee of a lot, block and tract to whom such notice
is required to be given and whose address is unknown to the applicant.
Section 9: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-62 "Location restrictions" of the Code of Ordinances, Baytown,
Texas, is hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-62. Location restrictions.
Unless otherwise provided pursuant to the ULDC, no drilling, oil or gas operations shall
be permitted and no permit shall be issued for any well, including its associated appurtenances,
to be drilled in any surface location, which is nearer than:
1. 750 feet from the following:
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a. any structure designed or used for human occupancy associated with any
dwelling unit, multifamily dwelling, place of public assembly, hospital
building, school;
b. the property line of a public park or public recreational space;
C. public or private water well, unless a private water well is associated with
drilling, oil or gas operations; or
2. 50 feet from the property line of a private recreational space;
without the applicant having first securing a notarized setback waiver from the affected surface
owner, which is not in conflict with an approved special use permit.
Drilling, oil or gas operations are not permitted on a surface location within any of the rights-of-
way or alleys, parks or other public property unless authorized by an ordinance duly passed by
the city council. Nothing in this section shall prohibit directional drilling beneath any of the
streets or alleys, parks or other public property of the city, if the depth of the well path under any
such property is at least 750 feet.
Section 10: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-63 "Permission of surface owner required; waivers" of the Code of
Ordinances, Baytown, Texas, is hereby amended to rename such section to Section 62-63
"Permission of surface owner required," which renamed section shall read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-63. Permission of surface owner required.
Neither this article nor any permit issued under this division shall be interpreted to grant
any right or license to the permittee to enter upon, use or occupy in any respect for the drilling or
operation of any well on any surface land except by the written contract of the surface owner
unless the permittee obtained such right in an oil and gas lease or other contract, nor shall it limit
or prevent the free right of the owner to contract for the amount of damages, rights or privileges
with respect to his own land and property.
Section 11: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-64 "Insurance required," Subsection (a) and (b) of the Code of
Ordinances, Baytown, Texas, is hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-64. Insurance required.
(a) General requirements applicable to all policies.
(1) General Liability and Automobile Liability insurance shall be written by a carrier
with an A:VIII or better rating in accordance with the current Best Key Rating
Guide.
(2) Only insurance carriers licensed and admitted to do business in the State of Texas
will be accepted.
(3) Deductibles shall be listed on the certificate of insurance and are acceptable only
on a per occurrence basis.
(4) Claims made policies will not be accepted, except for the environmental pollution
liability and excess or umbrella liability, which may be on a claims -made basis.
(5) The City of Baytown, its officials, employees and volunteers, are to be added as
"additional insured" to the general liability policy. The coverage shall contain no
special limitations on the scope of protection afforded to the owner, its officials,
employees or volunteers.
(6) A waiver of subrogation in favor of the owner with respect to Workers'
Compensation insurance must be included.
(7) If the operator receives notice that any insurance policy required herein is
suspended, voided, cancelled, reduced in coverage or in limits, the permittee shall
provide the city prompt written notice by certified mail, return receipt requested.
(8) Upon request, certified copies of all insurance policies shall be furnished to the
City of Baytown.
(9) Certificates of insurance must be delivered to the director, evidencing all the
required coverages, including endorsements, prior to the issuance of an oil and
gas well permit, and thereafter annually, prior to the policy termination or
cancellation date.
(10) Any failure on part of the city to request required insurance documentation will
not constitute a waiver of the insurance requirement specified herein.
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(11) During the term of the oil or gas well permit, the operator will report, in a timely
manner, to the fire chief any known loss occurrence which could give rise to a
liability claim or lawsuit or which could result in a property loss.
(b) No permit required under this division shall be issued until the applicant shall also file
with the director a certificate of insurance evidencing the following:
Commercial general liability insurance with an aggregate of $2,000,000 and a per
occurrence limit of $1,000,000. There shall be no modification limiting the scope
of coverage for liability arising from drilling, oil or gas operations. No coverage
shall be deleted from the standard policy without notification of individual
exclusions being attached for review and acceptance by the city.
Excess or Umbrella Liability with minimum limits of $10,000,000.
Coverage must include an endorsement for, sudden or accidental
pollution. If seepage and pollution coverage is written on a "claims made"
basis, permittee must maintain continuous coverage and purchase.
Extended Coverage Period Insurance when necessary.
Environmental Pollution Liability Coverage with minimum limits of
$5,000,000 per loss with an annual aggregate of at least $10,000,000.
Insurance for environmental pollution liability applicable to bodily injury,
property damage, including loss of use of damaged property or of property
that has not been physically injured or destroyed; clean-up costs; and
defense, including costs and expenses incurred in the investigation,
defense or settlement of claims; all in connection with any loss arising
from the insured site. Coverage shall apply to sudden and accidental
pollution conditions resulting from the escape or release of smoke, vapors,
fumes, acids, alkalis, toxic chemicals, liquids or gases, waste material or
other irritants, contaminants or pollutants, or other causes as applicable.
Permittee shall maintain continuous coverage and shall purchase Extended
Coverage Period insurance when necessary. The ECP insurance must
provide that any retroactive date applicable to coverage under the policy
precedes the date of the permit.
Control of Well Coverage with minimum limits of $3,000,000 per
occurrence/no aggregate, if available, otherwise an aggregate of
$10,000,000. $500,000 sublimit endorsement may be added for damage
to property for which permittee has care, custody and control. This is a
policy that covers the cost of controlling a well that is out of control, re -
drilling or restoration expenses, seepage and pollution damage as first
party recovered for permittee and related expenses, including, but not
limited to, loss of equipment, experts and evacuation of residents.
Workers' compensation liability limits of $500,000 for each
accident/disease is required by the employer. Texas Waiver of Our Right
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to Recover From Others Endorsement, WC 42 03 04 shall be included in
this policy. Texas must appear in Item 3A of the Workers' Compensation
coverage or Item 3C must contain the following: All States except those
listed in Item 3A and the States of NV, ND, OH, WA, WV, and WY.
Automobile liability minimum combined single limit of five hundred
thousand dollars ($500,000.00) per occurrence for bodily injury and
property damage. The business auto policy must show Symbol 1 in the
covered autos portion of the liability section in Item 2 of the declarations
page. Coverage must include all owned, hired and not -owned automobiles.
Section 12: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-64 "Insurance required" of the Code of Ordinances, Baytown,
Texas, is hereby amended to add a new subsection numbered subsection (f), which subsection
shall read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE 11. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-64. Insurance required.
(f) Any bond, insurance or other financial security requirement as stated in the Unified Land
Development Code or other Article herein shall not apply to the aggregate for the
purposes of this section.
Section 13: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-65 "Issuance" of the Code of Ordinances, Baytown, Texas, is
hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-65. Issuance.
(a) If, after such application or supplemental application is filed pursuant to this division, it is
found by the fire chief to comply in all respects with terms of this article and the drilling
and operation or deepening and operation of a well is not prohibited by the terms of this
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article, the fire chief shall issue a permit for the drilling and operation or deepening and
operation of the well applied for.
(b) Except for areas exempted under section 62-96(b), the granting and issuance of a permit
for a well with a proposed bottom -hole location on a drilling unit, as provided in this
article, shall automatically operate as a rejection and denial of all other pending
applications for a well to be completed upon the drilling unit involved or any portion
thereof.
(c) If the fire chief denies the applicant a permit to drill or deepen a well, an appeal to the
city council may be made by such applicant by filing written notice of appeal with the
city council. Such appeal shall be heard by the city council within 30 days after the filing
date.
Section 14: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 2
"Drilling Permit," Section 62-67 "Copies; Authority to drill" of the Code of Ordinances,
Baytown, Texas, is hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 2. DRILLING PERMIT
Sec. 62-67. Copies; authority to drill.
The permit issued pursuant to this division, in duplicate originals, shall be signed by the
permittee. One original of the permit duly executed shall be delivered to the permittee, and one
original of the permit duly executed shall be retained and filed by the fire chief. When so filed,
the permit shall constitute the permittee's drilling and operating license and the contractual
obligations of the permittee to comply with the terms of such permit, of the bond and of this
article.
Section 15: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 3
"Well Spacing," Section 62-105 "Drilling by other than leaseholder," subsection (c) of the Code
of Ordinances, Baytown, Texas, is hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE 11. OIL AND GAS
DIVISION 3. WELL SPACING
15
Sec. 62-105. Drilling by other than leaseholder.
(c) If any owner does not exercise the right and option provided in subsection (b) of this
section, the obligation shall then be upon the permittee, his heirs, successors and assigns
to make settlement with such owner on the terms provided in the option in subsection
(b)(2) of this section, providing for the payment of a one-eighth royalty. If the owner of a
lot, block or tract shall exercise his option under subsection (b)(1) of this section and treat
his interest as a working interest, as therein provided, the permittee shall be entitled to
reimburse himself for such owner's proportionate part of the cost out of such owner's
proportionate part of the oil, gas and casinghead gas or the value thereof before making
deliveries of products or settlement for the value thereof. If the option in subsection
(b)(1) of this section is exercised by the owner of any lot, block or tract, such owner shall,
within the time provided for notice of his election set forth in this section, file with the
director a bond or other obligation executed by such owner as principal and by an
authorized surety company as surety, in which such principal and surety agree, bind and
obligate themselves to pay to the permittee, his heirs, successors and assigns, currently
each month, that proportion of the actual and necessary cost and expenses involved in the
drilling, completion and operation of such well that the number of square feet embraced
within the lot, block or tract of such owner bears to the total number of square feet in
such drilling unit, such bond to be approved by the city attorney and held by the director
for the benefit of the beneficiaries therein. The failure of any such owner to timely file
and obtain approval of such bond or other obligation shall be deemed to be an election
under subsection (b)(2) of this section. Permits shall be issued in all cases and shall be
subject to this article and upon the condition that the permittee, his heirs, successors and
assigns shall make settlement in accordance with the provisions thereof.
Section 16: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 3
"Well Spacing," Section 62-106 "Simultaneous applications" of the Code of Ordinances,
Baytown, Texas, is hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 3. WELL SPACING
Sec. 62-106. Simultaneous applications.
If there are applications filed with the director and pending at the same time for permits
to drill a well in any one drilling unit by more than one applicant, that application shall be
granted, if otherwise sufficient, which shall be made by the person holding the greater area of the
land within the drilling unit by ownership in fee or by lease or other contract with the owner
permitting the drilling thereon for oil or gas.
16
Section 17: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 3
"Well Spacing," Section 62-107 "Interests of persons other than permittee," Subsection (b)(1) of
the Code of Ordinances, Baytown, Texas, is hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 3. WELL SPACING
Sec. 62-107. Interests of persons other than permittee.
(b) The election as provided in subsection (a) of this section is that such other persons shall
either:
(1) Agree in writing with the permittee to contribute their share of all costs and
expenses, properly allocated to the well and drilling unit by the permittee in
accordance with accepted accounting practice, currently each month in the
proportion that the number of square feet in the area held by them or each of them
in the drilling unit bears to the total number of square feet embraced in the unit
and, within such 30 -day period, execute and file with the director a bond issued
by a surety company licensed to do business in the state in an amount representing
that portion of the estimated maximum cost of the well that the area of land held
in fee simple under lease or other contract by the principal bears to the whole area
of the drilling unit, conditioned that the principal in the bond will pay to the
permittee and his assigns such proration of the cost of drilling and operating the
well, from time to time, as required in the drilling and operation thereof, such
bond to be approved by the city attorney and held by the director for the benefit of
all persons interested; and thereupon such persons so acting shall be entitled to
participate in the total working interest under such unit; and the persons so acting
shall have the right upon reasonable notice given to the permittee, upon furnishing
of storage tanks or facilities for handling the same and upon the payment of or
securing the payment of their share of the royalty interests and any overriding
royalty or oil payment interest thereon, to receive in kind their proportionate share
of oil and gas produced and saved from the well in the drilling unit and allocated
to the working interest of the well; or
Section 18: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 3
"Well Spacing," Section 62-108 "Multiple wells from one surface location" of the Code of
Ordinances, Baytown, Texas, is hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 3. WELL SPACING
17
Sec. 62-108. Multiple wells from one surface location.
Notwithstanding any other provision of this chapter or other city regulations, multiple
wells for oil or gas or both, may be drilled from a drilling site under the following circumstances:
(1) The surface location is located outside of the regulated area;
(2) The surface location is properly zoned in accordance with the ULDC;
(3) The nearest place of residence, public assembly, hospital building, public park,
school, private recreational space, or public or private water well, unless a private
water well is associated with drilling, oil or gas operations, to any wellhead, tanks
or production equipment associated with any well meets the distance requirements
in section 62-62.
The bottom -hole locations of such wells may be located in one or more drilling units,
provided that the depth thereof shall not be less than 750 feet subsurface when a well penetrates
the vertical extension of the boundary of the drill -site tract. Notwithstanding any other provisions
of this article, multiple completions may be made in any given drilling block if a well otherwise
meets the requirements of this section. Notwithstanding the foregoing, except as provided in
section 62-96(b), (a) no more than one contiguous surface tract, not to exceed 40 acres in area,
shall be utilized within a given gas drilling unit as a surface drillsite location; and (b) no more
than one contiguous surface tract, not to exceed ten acres in area, shall be utilized within a given
oil drilling unit as a surface drillsite location.
Section 19: That Chapter 62 "Natural Resources," Article II "Oil and Gas," Division 4
"Technical Provisions," Section 62-137 "Technical requirements," Subsections (1), (8), (10),
(11), (12), (13), (14), (18), (20), (24), (25), and (26) of the Code of Ordinances, Baytown, Texas,
are hereby amended to read as follows:
CHAPTER 62. NATURAL RESOURCES
ARTICLE II. OIL AND GAS
DIVISION 4. TECHNICAL PROVISIONS
Sec. 62-137. Technical requirements.
All persons engaged in the drilling, oil or gas operations within the regulated area shall
comply with the following:
(1) In order to enable the holder of each permit to move oil, gas, water or other
products to or from each drilling unit within the city limits, the holder of each
permit issued under this article for the drilling, oil or gas operations shall apply to
the city council for an easement on, over, under, along or across the city's streets,
18
sidewalks, alleys and other city property for the purpose of constructing, laying,
maintaining, operating, repairing, replacing and removing pipelines, so long as
production or operations may be continued under any permit issued pursuant to
this article. However, such permittee shall:
a. Not interfere with or damage existing water, sewer or gas lines or the
facilities of public utilities located on, under or across the course of such
rights-of-way;
b. Furnish the director with a plat showing the location of such pipelines;
C. Construct such lines or cause such to be constructed out of new or
reconditioned pipe in accordance with directions of the fire chief and
properly cased and vented if under a street; and
d. Grade, level and restore the property to the same surface condition, as
nearly practicable, as existed when operations for the drilling of the well
were first commenced.
(8) Any person drilling or operating a well for oil or gas shall make adequate
provisions for the disposal of saltwater or other materials that may be produced
along with the oil or gas in such a manner as not to contaminate the city water
supply or watersheds or damage vegetation or fauna.
No saltwater or other type of disposal well shall be permitted unless issued a
permit in accordance with this section. No saltwater or other type of disposal well
shall be located within a subdivision that was platted on or after January 1, 2003,
and that is used for residential use. No saltwater or other type of disposal well
shall be operated as a commercial disposal well, and all disposal wells shall be
limited to private use. Disposal wells shall only be used for the disposal of
saltwater or other materials that may be produced from the associated drilling, oil
or gas operations.
(10) It shall be unlawful for any person in connection with the drilling or working over
operations of any well within the city to conduct any swabbing operations or to
take and to complete any drill stem test except during daylight hours. Drill stem
tests may be conducted only if the well effluent during the test is produced
through an adequate oil and gas separator to storage tanks, and the effluent
remaining in the drill pipe at the time the tool is closed is flushed to the surface by
circulating drilling fluid down the annulus and up the drill pipe. The fire chief
shall be informed before drill stem testing or swabbing is performed so that a city
representative may be present during such operations.
(11) The operator of any well in any field or area within the city shall be required to
set and cement a sufficient amount of surface casing to properly protect all
19
freshwater sands as specified by the state regulatory authorities and the fire chief.
A minimum of 1,200 feet of surface casing shall be set. The surface casing shall
be of new or reconditioned casing and shall be set and cemented in accordance
with the rules, regulations and orders of the state railroad commission for the field
or area in which the well is to be drilled. Cementing shall be by the pump and
plug method, and sufficient cement shall be used to fill the calculated annular
space back of the casing to the surface of the ground. If returns to the surface of
the ground are not realized, a temperature survey must be conducted to find the
location of the cement and necessary work performed to provide cementing from
the shoe of the casing to the surface of the ground. The cement shall be allowed to
stand for a period of 24 hours before drilling plug.
If more than 1,200 feet of surface casing is required, in lieu of setting the full
amount of surface casing required to protect freshwater sands, the applicant may
use the multistage cementing process on the next casing string. In using the
multistage cementing process, sufficient cement shall be used in the stage cement
job that is equivalent to the volume of the annulus from the cementing tool to the
surface of the ground. If the cement does not reach the surface of the ground, a
temperature survey must be conducted. If the survey shows that the top of the
cement is less than one-third of the distance from the shoe of the surface casing to
the surface, corrective measures must be taken. Any applicant using the
multistage process must file with the director a copy of the state railroad
commission letter granting such permit and an affidavit from the company
performing the cementing. Failure to file either of these shall be unlawful and
shall be punishable in accordance with this article.
(12) Before drilling and setting casing in any well for oil or gas within the corporate
limits, the permittee must notify the fire chief and obtain letter(s) from the state
regulatory authorities stating where the freshwater sands are to be found in the
area or field in which the well is to be drilled. A copy of the state regulatory
authorities letter(s) must be filed with the director and the fire chief, and the
permittee must set sufficient surface casing as required. Failure to file a copy of
the state water commission's letter shall be unlawful and shall be punishable
under section 1-14.
(13) All completed wells within the city shall be equipped with Christmas tree fittings
and wellhead connections, with a rated working pressure equal to or greater than
the surface shut-in pressure of the well. All wellhead connections shall be
assembled and tested prior to installation by a fluid pressure, which shall be equal
to the test pressure of the fitting employed.
(14) Whenever any well is abandoned within the city limits, it shall be the obligation
of the permittee to plug such well in accordance with the rules and regulations of
the state railroad commission and to make any and all additional provisions or
take precautionary measures prescribed by the state or the state railroad
commission in connection with abandonment and plugging of the well. It shall be
20
the further obligation of the permittee or the operator of the well to cut the surface
casing off at least six feet below the surface of the ground and to place at least a
25 -foot cement plug in the top of the casing and to weld the top of the casing
completely shut. The resulting hole in the ground must be completely filled to the
surface of the ground and duly tamped.
Abandonment shall be approved by the city engineer after restoration of the drill
site and the subsurface thereof has been accomplished in conformity with state
regulations and the following requirements:
1. The derrick and all appurtenant equipment thereto is removed from the drill
site;
2. All tanks, towers, and other surface installations are removed from the drill
site;
3. All concrete, piping, wood, and other foreign materials regardless of depth,
except surface casing, are removed from the drill site, unless otherwise
directed by the state railroad commission;
4. All holes and depressions are filled with clean compatible soil;
5. All oil, waste oil, refuse, or waste material is removed from the drill site;
6. Operator pays an abandonment fee in an amount set by Council resolution;
and
7. During abandonment operator shall comply with all applicable sections in this
chapter.
(18) Except in a drilling overlay district, any appurtenance that is three feet or more in
height and within 300 feet of a property line or a public right-of-way shall be
adequately protected by an opaque fence so constructed that it will prevent easy
entry, in accordance with the code, including the chapter 18, article XIV of the
code and the ULDC. Fences to prevent easy entry shall be approved by the
director.
(20) No prime movers shall be permitted within the corporate limits for the purpose of
pumping wells, except electric motors. However, nonelectric motors may be used
in an unusual hardship, with approval of the fire chief.
►�I
(24) All new flow lines shall be located underground at least 18 inches under grade
from and after [effective date of ordinance]. Warning signs shall be placed for
lines carrying hydrogen sulfide gas as required by the commission and all other
applicable state or federal regulatory agencies, and an identifying sign at each
point where a flow line or gathering line crosses a public street, road, or fence
line. Identification signs must conform to commission regulations.
(25) All tanks, piping and appurtenances shall comply with the requirements of NFPA
30.
(26) All electrical equipment, lighting, bonding and grounding shall comply with the
requirements of NFPA 70.
The fire chief, upon a determination of change in standards or technology, may permit a
variance from the forgoing provisions of this section, or a functionally equivalent
alternative method to achieve equivalent compliance.
Section 20: Any person who fails to comply with any provision of this ordinance shall
be guilty of a misdemeanor and, upon conviction, shall be punished by a fine not exceeding
TWO THOUSAND AND NO/100 DOLLARS ($2,000.00). Each act of violation and each day
upon which any such violation shall occur shall constitute a separate offense. In addition to the
penalty prescribed above, the city may pursue other remedies such as abatement of nuisances,
injunctive relief, administrative adjudication and revocation of licenses or permits.
Section 21: All ordinances or parts of ordinances inconsistent with the terms of this
ordinance are hereby repealed; provided, however, that such repeal shall be only to the extent of
such inconsistency and in all other respects this ordinance shall be cumulative of other
ordinances regulating and governing the subject matter covered by this ordinance.
Section 22: If any provisions, section, exception, subsection, paragraph, sentence,
clause or phrase of this ordinance or the application of same to any person or set of
circumstances, shall for any reason be held unconstitutional, void or invalid, such invalidity shall
not affect the validity of the remaining provisions of this ordinance or their application to other
persons or sets of circumstances and to this end all provisions of this ordinance are declared to be
severable.
Section 23: This ordinance shall take effect from and after ten (10) days from its
passage by the City Council. The City Clerk is hereby directed to give notice hereof by causing
the caption of this ordinance to be published in the official newspaper of the City of Baytown at
least twice within ten (10) days after passage of this ordinance.
INTRODUCED, READ and PASSED by the affirmativevo'e of the City Council of the
City of Baytown, this the 13`x' day of February, 2014. ,
DONCARLOS, Mayor
22
ATTEST:
T
LETICIA BRYSCH, City �; ? p
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y0 r1J 6*460006.S.tP
APPROVED AS TO FORM:
6,410ACIO RAMIREZ, S ity Attorney
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