CHAPTER 27

 

OIL WELL DRILLING CODE

ARTICLE I – GENERALLY

 

 

          27‑1‑1           DRILLING PERMIT REQUIRED.  It shall be unlawful for any person, firm or corporation to drill or to commence to drill or to operate a well for oil, gas or salt water disposal within the corporate limits of the Village, or to work upon or assist in any way in the drilling or operating, or the prosecution of work upon any such well, without a permit for such well and for the development and operation thereof having first been secured in accordance with the terms of this Code.

 

 

27‑1‑2           LIMITATION OF PERMITS.  Within the corporate limits of the Village, there shall be issued only one (1) permit for one (1) well in each platted block, or one (1) well in any parcel or combination of parcels of land equal in area to no less than the entire area of the block in which such parcel, or parcels, of land are situated; provided, however, that in any platted block containing more than four (4) acres a permit may be granted for an additional well in such block for any additional area containing no less than two (2) acres; provided also that in those portions of the corporate area which are not subdivided into platted blocks a permit may be granted for each tract or combination of tracts containing not less than four (4) acres.

 

 

27‑1‑3         REJECTION OF PERMIT.  The Mayor and Board of Trustees shall have the right, power and authority to refuse any application for a permit where, by reason of the location of the proposed well and the character and value of the permanent improvements already erected on the block or area of land in question, or adjacent thereto, and the use to which the land and surroundings are adapted, for sanitary reasons, the drilling of an oil, gas or sale water disposal well would, in the judgment of the Mayor and Board of Trustees, be a serious detriment to the Village and the welfare of its inhabitants.

 

 

27‑1‑4           MULTIPLE APPLICANTS.  In case there be applications by more than one applicant filed with the Village Clerk and pending at the same time for permits to drill in any one block, or area of land equal thereto, as defined in Section 27-1-2 above, that application shall be granted, if otherwise sufficient, which shall be made by the person, firm or corporation holding the greater area of the land in the one block or area, by lease or other contract with the owner, or owners, permitting the drilling thereon for oil, gas or sale water disposal.

 

 

          27‑1‑5         PRO RATA SHARE IN THE ROYALTY.  In case a permit for the drilling of a well be issued to a person, firm or corporation not holding oil and gas leases or drilling contracts with the owners of all lots within a one block or area of land, equal thereto, as defined in Section 27-1-2 of this Code, then it shall be a condition of the permit that the permittee, his, or its, assigns and successors, shall deliver to the credit of each of such owners
whose land shall not be under lease to such permittee, free of cost in the pipeline to which the well may be connected, a pro rata share in the royalty of all oil produced and saved from such well, equal to no less than a one-eighth (1/8) royalty, in the proportion that the area of land so owned bears to the entire area of such one block or area of land, exclusive of the streets and alleys, and a like proportion of the proceeds of gas and casinghead gas produced from the well and used off the premises, if such owner, or owners, desire to have and take the same.

 

 

27‑1‑6         PERMISSION REQUIRED FROM THE OWNERS.  In case a permit be issued to a person, firm or corporation which does not hold a lease or other valid drilling contract in writing from the owners of all the land within the one block, or area of land equal thereto, then any owner of the unleased land in the block or area equal thereto and person, firm or corporation other than the permittee holding oil and gas leases on land in the one block, or area equal thereto, shall have the right to share in the ownership and benefits of such oil, gas or salt water disposal wells in the proportion that the area of his, or its, land or lease bears to the area of the one block, or area equal thereto, exclusive of streets and alleys; provided, that within ten (10) days from the date of the issuance of such permit, he, or it, shall file with the Village Clerk his, or its, election, in writing, to pay to the holder of the permit, or his or its assigns, a like proportion of the total cost and expense of drilling, completing and operating a well and shall within that time make and file with the Village Clerk a bond with an authorized surety company as surety, and in an amount representing that portion of the estimated maximum cost of the well that the area of ground held or owned under lease by the principal bears to the whole area of the one block, or area equal thereto, conditioned that the principal in the bond pay to the permittee and his assigns such proportion of the cost of the drilling and operating of the well, from time to time, as required in the operations, such bond to be approved by the Mayor and held by the Village Clerk for the benefit of all persons interested.

          Any person, firm or corporation who shares in the production of any well under the provisions of this Section shall be deemed to have waived any rights to share in the production under Section 27-1-5 of this Code and the rights under this Section are granted and given in lieu of the rights granted under Section 27-1-5 of this Code.

 

 

          27‑1‑7           APPLICATION FOR SALT WATER DISPOSAL.

          (A)               Any persons, firm or corporation desiring to obtain a permit for the drilling or operating of any oil, gas or salt water disposal well within the Village shall make written application therefor to the Mayor and Board of Trustees and file the same with the Village Clerk, which application shall be accompanied with a deposit of cash or a certified check as an inspection fee in case the permit is granted in the sum of One Thousand Dollars ($1,000.00) for each permit to drill a well whether it be in a subdivided or unsubdivided area.  All such applications shall be made upon forms prescribed and provided for such purpose by the Village and each such application shall be duly signed and executed by the applicant and shall be verified under oath by the applicant or by some person duly authorized on behalf of the applicant.

          (B)               A separate application shall be made and filed as to each well proposed to be drilled and every such application shall, among other things, show the lot and particular point where the proposed well is to be located and in addition, shall have attached to it or be accompanied by copies of all oil and gas leases or other drilling contacts which the applicant may have with the owners of land within the block and also a map or plat covering the platted
area, block or the tract of land where the proposed well is to be located, indicating thereon the lots or land covered by such leases or contracts and the particular point where such well is to be drilled.

          (C)               The application shall also be accompanied by:

(1)      An executed bond given by the applicant as principal and made without surety running to the Village, for the benefit of the Village and all persons, first or corporations concerned, duly conditioned that if the permit be granted the applicant and his or its assigns will comply with the terms and conditions of this Code in the drilling of the well, as herein provided; that the applicant will restore the streets and sidewalks and other public places of the Village which may be disturbed in the operations, to their former condition; will clear the block and lots of all litter, machinery, derricks, buildings, oil and other substance erected, used or allowed in the drilling or producing operations, whenever the well shall be abandoned or the operations thereof shall be discontinued; and will pay the Village for any and all damages done to trees, sidewalks, paving or other public property, and will pay to the Village any increase in costs of insurance on any buildings, improvements, goods or chattels owned by the Village and so located that the insurance rates or premium will be increased by reason of the drilling, maintaining or operating of such well or wells; and will hold the Village harmless from any and all liability growing out of the granting of such permit.  Such bond shall be made in the sum of Five Thousand Dollars ($5,000.00) if the application is for a permit to drill a well in a platted block or subdivided area; and in the amount of Two Thousand Five Hundred Dollars ($2,500.00) if the application is for a permit to drill a well in an unsubdivided area containing not less than the land required by spacing rules and regulations of the State of Illinois, Department of Mines and Minerals.  Such bond shall be approved by the Mayor and filed with the Village Clerk, and shall be kept in force and effect as long as such well or wells are continued in operation.

(2)      A certificate of insurance from an insurance company authorized to do business in the State of Illinois evidencing the applicant has a policy of insurance in effect providing liability insurance coverage for the applicant’s proposed activities in the drilling of any well or the subsequent production, storage or transportation of oil, gas, brine or other substances therefrom in the minimum amounts as follows:

(a)      One Hundred Thousand Dollars ($100,000.00) per occurrence for property damage;

(b)     One Hundred Thousand Dollars ($100,000.00) per person, Three Hundred Thousand Dollars ($300,000.00) per occurrence for personal injury or damage.

          (D)               If an application be found by the Mayor and Board of Trustees to comply in all respects with the terms of this Code, the Mayor and Board of Trustees shall be authorized
to issue a permit for the drilling of the well applied for.  The permit shall specify the particular location of the well to be drilled.  Any permit issued under this Code shall be conditioned upon the permit holder maintaining in full force and effect the personal bond and insurance policy and coverage required under Section 27-1-7(C)(1)
and (2) of this Code.

          (E)               In case such permit is not granted, the inspection fee filed with the application shall be returned to refunded to the applicant.  (Ord. No. 89-500; 01-09-89)

 

 

27‑1‑8         PERMIT FOR DRILLING.  No permit shall be granted or issued for the drilling of a well except upon the ground held by the applicant under an oil and gas lease or drilling contract from the owner of the surface rights, giving said owners permission to drill a well thereon; and when a permit shall have been issued, the same shall terminate and become inoperative, without any action on the part of the Mayor and the Board of Trustees, unless within thirty (30) days from the date of issue, actual drilling of the well shall have commenced, and the cessation for a like period of the drilling operations, or the cessation of production of oil or gas from the well after production shall have commenced shall operate or terminate and cancel the permit, and the well shall be considered as abandoned for all purposes of this Code, and it shall be unlawful thereafter to continue the operation or drilling of such well without the issuance of another permit.

 

 

          27‑1‑9         INSURANCE PREMIUM INCREASE PAID BY PERMIT HOLDER.  Every person, firm or corporation securing a permit under the provisions of this Code for the drilling and operating of any well, or wells, shall pay to the owner or owners of any building, improvements, goods or chattels so located that the insurance rates or premium have been increased, by reason of maintaining or operating of such well, or wells, any extra cost of fire insurance on such property caused by the operations carried on under and by virtue of any such permit, and shall pay also any and all damages suffered by any person as to property within the Village from fire, over and above insurance collected thereon, or damages from oil, gas or water caused by or originating from the operations connected with such well or wells.

 

 

          27‑1‑10       DRILLING IN STREET PROHIBITED.  It shall be unlawful to drill any oil, gas or sale water disposal well within any of the streets or alleys of the Village or to block or encumber or close up any street or alley in any drilling or production operation, except through a special permit by order of the Mayor and Board of Trustees, and then only temporarily, under the direction and supervision of the Street and Alley Committee and then without obstruction of the streets and alleys or without cost or expense to the Village.

 

 

27‑1‑11       CASING REQUIREMENTS.  In all wells drilled under the terms of this Code, surface casing shall be set to a depth of at least three hundred (300) feet so that drilling operations will not interfere with existing water wells in the Village and such surface casing shall be firmly cemented from ground level to a depth of not less than three hundred (300) feet so as to prevent the pollution of underground water veins by drilling operations.

 

 


27‑1‑12       CRUDE OIL TANKS.  It shall be unlawful and an offense for any person to use, construct or operate in connection with any producing well within the Village limits any crude oil storage tanks exceeding two hundred ten (210) barrel capacity each and not so constructed and maintained as to be vapor-tight.  No wooden or bolted tanks may be transported outside of the Village limits by underground pipelines.

          A suitable fire wall shall be constructed around and enclosing all crude oil storage tanks and said wall shall be capable of containing oil in a capacity greater than the capacity of the storage tanks enclosed thereby.  Said fire wall shall be enclosed with a fence, not less than six (6) feet in height and properly built so as to keep persons and animals out of the enclosure with all gates thereto to be kept locked when the permittee or his employees are not within said enclosure.  It is provided, however, that in unsubdivided areas the Mayor and Board of Trustees, in their discretion, may waive the requirements for any fence or may designate another type of fence to be erected.

          At the time of commencing to drill an oil, gas or sale water disposal well under a permit from said Mayor and Board of Trustees a fire extinguisher of the foam type must be placed upon the lot by the permittee wherein oil, gas and salt water disposal well is to be drilled; that said extinguisher shall be of not less than forty (40) gallon capacity and shall be capable of ejecting at least three hundred (300) gallons of foam; that said fire extinguisher shall be kept on said premises in good working order from the time an oil, gas or salt water disposal well is commenced until it is abandoned.

 

 

27‑1‑13       SLUSH PIT REGULATIONS.  Within thirty (30) days after any oil, gas or salt water disposal well within the limits of the Village shall have been completed for production of oil, gas or salt water disposal, or within thirty (30) days after the same shall have been completed in cases where the same is abandoned for the reason that a dry hole is found, the slush pit shall be filled with dirt and leveled off.  Within thirty (30) days after completion or abandonment of a well the drilling rig or derrick shall be removed from the premises.

 

 

27‑1‑14       ELECTRICITY SOURCE OF POWER.  Motive power for all operations after completion of drilling operations within a platted block or subdivision area shall be electricity.  Motive power for all operations after completion of drilling operations in an unsubdivided area shall be electricity or properly muffled gas, gasoline, or diesel engine; which mufflers shall be approved by the Mayor and Board of Trustees prior to their use.  Motive power for all drilling operations under a permit granted by this Code may be electricity or properly muffled gas, gasoline or diesel engines; which mufflers shall be approved by the Mayor and Board of Trustees prior to their use.

 

 

27‑1‑15       WATCHMAN AT DRILLING SITES.  At all times from the start of erection of a derrick until the well is abandoned and plugged or completed as a producer and enclosed with a fence as herein provided, the permittee shall keep a watchman on duty on the premises at all times; provided, however, it shall not be necessary to keep an extra watchman on duty on the premises when other workmen of the permittee are on said premises.  If said well is completed as a producer, the pumping unit thereof shall be enclosed with a fence not
less than six (6) feet in height and properly built so as to keep persons and animals out of the enclosure with all gates thereto to be kept locked when the permittee or his employees are not within said enclosure.

 

 

27‑1‑16       CONTROL VALVE REQUIRED.  All persons, firms or corporations drilling oil or gas wells under a permit issued by virtue of this Code, prior to beginning completion of said well, shall install a control valve at the well head of sufficient size and strength to control any gas pressure encountered and in any event capable of withstanding and controlling not less than one thousand (1,000) pounds of pressure; and shall take such other and further safety precautions as are necessary to protect persons and property within the Village.  (Ord. No. 376; 09-20-66)

 

 

27‑1‑17         ESCAPING GAS TORCHES.  No permittee engaged in the drilling or operation of an oil, gas or salt water disposal well within the corporate limits of the Village, shall permit gas to escape into the air and the same shall be burned from a torch or other similar means at a distance of not less than ten (10) feet above the ground and then only so long as the same does not, within the discretion of the Mayor and Board of Trustees, constitute a fire hazard to property of those within the vicinity of such well.

 

 

27‑1‑18       CLEAN CONSTRUCTION SITE.  The premises shall be kept in a clean and sanitary condition, free from rubbish of every character, to the satisfaction of the Mayor and Board of Trustees, at all times drilling operations or reworking operations are being conducted, and as long thereafter as oil, gas or salt water disposal is being produced therefrom.  It shall be unlawful for any permittee, their agent or employee, to permit within the corporate limits of the Village, any mud, water, waste oil, slush or other waste matter from any slush pit, storage tank or oil, gas or sale water disposal well located within the corporate limits of the Village, or from any premises within the Village, developed or being developed for oil, gas or salt water disposal purposes, into the alleys, streets, sanitary sewer system, lots, land or leases within the corporate limits of the Village.

 

 

27‑1‑19         DISPOSAL OF SALT WATER.  Permittee shall make adequate provisions for the disposal of all salt water or other impurities which he may ring to the surface, such disposal to be made in such manner as to not contaminate the water supply, present or prospective, the Village sanitary sewer system, or to injure surface vegetation.

 

 

27‑1‑20         WRITTEN PERMISSION OF OWNER.  Neither this Code, nor any permit issued hereunder, shall be interpreted to grant any right or license to the permittee to enter upon or occupy in any respect, in drilling or production operations, any land, except upon the written consent of the owners; nor shall it limit or prevent the free right of any property owner to contract for the amount of royalty to be paid with respect to his own land, or for damages, rights or privileges with respect thereto.


27‑1‑21       PENALTY.  It shall be unlawful and an offense for any person to violate or neglect to comply with any provision hereof irrespective of whether or not the verbage of each section hereof contains the specific language that such violation or neglect is unlawful and is an offense.  Any person who shall violate any of the provisions of this Code, or any of the provisions of a drilling and operating permit issued pursuant hereto, or any condition of the bond filed by the permittee pursuant to this Code, or who shall neglect to comply with the terms hereof, shall be deemed guilty of a misdemeanor and shall, on conviction thereof, be fined in any sum not less than One Hundred Twenty Dollars ($120.00) nor more than Seven Hundred Fifty Dollars ($750.00); and the violation of each separate provision of this Code and of said permit, and of said bond, shall be considered a separate offense, and each day’s violation of each separate provision thereof shall be considered a separate offense.  In addition to the foregoing penalties, it is further provided that the Mayor and Board of Trustees at any regular or special session or meeting thereof, may, provided ten (10) days notice has been given to the permittee that revocation is to be considered at such meeting, revoke or suspend any permit issued under this Code and under which drilling or producing operations are being conducted in the event the permittee thereof has violated any provision of said permit, said bond, or this Code.  In the event the permit be revoked, the permittee may make application to the Village Clerk for a reissuance of such permit, and the action of the Mayor and Board of Trustees thereon shall be final.  (See Section 1-1-20)  (Ord. No. 2011-655; 01-24-11)

 

(Ord. No. 373; 04‑19‑66)