American Oil and Gas Reporter - August 2017 - 104

out through a deliberative rule-making
process that truly strives to clarify with
specificity the responsible party for plugging
abandoned orphan wells. Whether individual operators or the abandoned well
plugging fund bears the ultimate responsibility for plugging, in either event, the
industry pays the entire tab for plugging."
Accordingly, Bleakley contends the industry must play a major role in determining
the responsible party for well plugging
under the law and the KCC rules.

for abandoned orphan wells.
Settling the issue is especially important
for eastern Kansas, Cornish opines, because
that is where many of the state's longforgotten abandoned orphan wells are located. "For leases with abandoned orphan
wells, the KCC no longer will follow the
Quest Order. As a result, eastern Kansas
landowners, operators, counties and the
state will lose substantial revenue from
those leases, since no potential operating
companies will want to touch properties
having substantial abandoned orphan well
liability and bear the costs of that plugging
liability," he suggests. "It is a terrific hindrance to any type of investment and economic growth in the area."
EKOGA President-elect Rob Eberhart
emphasizes certainty and eliminating protracted liability. "In any other business,
if you sell a building or a piece of real
estate, the person you sell it to is responsible for everything that happens to that
property from then on," he observes.
Under the draft regulation proposed by
the Conservation Division staff in response
to Denman, he complains, "You potentially
could be responsible for leases you operated
30-40 years ago that may have been sold
four or five times since then."
Bleakley points to the KCC's transfer
of ownership Form T-1 as a critical KCC
document that engages the seller's due
diligence and motivation to identify all
wells being transferred on the lease for
which the seller no longer will be responsible. The buyer's due diligence is motivated
by the need to know the totality of all
wells for which it is assuming responsibility.
In addition, he postulates, the state-as the
primary regulatory body and record keeper-wants to make sure that all wells are
identified on the lease and that the responsibility is transferred to the new operator,
who has provided financial assurance.
Beyond that point, Bleakley suggests
responsibility for an old wellbore that no
one knew existed "needs to be hammered

Disposal Well Protest
The record 5.8 magnitude earthquake
that hit northern Oklahoma on Sept. 3,
2016, was followed four months later by
a notice in a local newspaper that Quail
Oil and Gas wanted to drill a saltwater
disposal well near Burdick, Ks., in southwest Morris County. This notice sparked
a protest that EKOGA leaders worry
could cause all Kansas operators unnecessary problems.
According to local press accounts, a
handful of area residents, loosely organized
as the "Flint Hills Stewards," wrote the
KCC to protest the Quail Oil and Gas
application. A hearing on the application
is scheduled for Aug. 16 in Topeka.
The Morris County protest is not a
lone outlier, observes Bleakley. "We had
a group in Crawford County do the same
thing, except in that instance, the operator
only wanted to add an injection well to
an existing enhanced oil recovery permit,"
he recalls.
That protest appeared to fall apart
when the main critic moved to another
state, but Bleakley says he has heard of a
similar protest in the Eureka, Ks., area.
"If someone starts protesting every injection and disposal well across the state,
it's going to cost everyone a lot of unnecessary time and money," he reflects.
Unfortunately, Cornish offers, "The
people objecting don't have any understanding of how strict the standards are

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for disposal and injection wells, and how
they are monitored constantly."
Bleakley agrees the protests are driven
by misunderstandings and conjured, nonfactual fears that induced seismicity or
industry operations will pollute groundwater, despite numerous studies-including
the U.S. EPA's 2015 landmark report-to
the contrary. Furthermore, he notes that
the KCC's seismic response program has
been effective.
And therein may lie the answer, he
suggests. "The best we can do-maybe
working with the KCC-is to educate people about how the industry and the commission are working to prevent earthquakes," Bleakley says.
For its part, Cornish says, EKOGA is
attempting to be a source for factual information. "We have people with various
backgrounds," he allows. "EKOGA is
broad enough that we can find somebody
who can answer almost any question, or
get the information people need."

Wind Energy
Education-this time of its members
and their lessors-also is EKOGA's response to growing interest in developing
wind energy in eastern Kansas.
About a year ago, Bleakley recalls, a
company that had developed a wind farm
in Coffey County, Ks., was attempting
to lease ground in Anderson County also.
Whereas the Coffey County wind farm
was in an area not considered especially
prospective for oil and gas, he says the
Anderson County project "was heading
more toward oil and gas country."
EKOGA Director Chris McGown,
vice president of McGown Drilling Inc.
in Mound City, Ks., says he became
alarmed when a landowner asked him to
review the proposed wind lease. Not only
did it limit traditional farming and ranching
activities, and such things as hunting and
wildlife management, but the lease went
"to great lengths to attempt to subordinate
a property's mineral estate to the wind
lease," McGown described in a report
prepared for EKOGA last summer.
He says the lease attempted to limit
where and to what depth wells could be
drilled-forbidding development shallower
than 500 feet. He says the lease prohibited
horizontal drilling to access portions of a
property considered "off limits," required
an operator to coordinate siting of wells
and flowlines with the wind lessee, and
prohibited storing "hazardous materials"
in the lease, including crude oil.
Given the realities of oil development
in eastern Kansas, McGown says it would
be very difficult for oil to coexist with
wind under such a lease.



Table of Contents for the Digital Edition of American Oil and Gas Reporter - August 2017

Contents
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