American Oil and Gas Reporter - August 2017 - 100

mission to increase the rights of surface
owners for "quiet enjoyment" of their
property (AOGR, April 2017, pg. 31).
"It is very upsetting because HB 2189
is based on one lawsuit involving a
landowner and an operator," Powell reports. "The landowner was trying to get
the state to pass a law that essentially
gives him what he wanted in the lawsuit.
That is not what the legislature is for.
KIOGA has gone through this before,
and it should be put to rest. A court
should rule on a contractual agreement
between a landowner and an operator, or
the lessor and the lessee."
Cross notes HB 2189 failed to advance
out of the House Water and Environment
Committee. However, Chairman Tom
Sloan, R-Lawrence, sent a letter to the
KCC, asking it to study surface owners'
rights. In addition, Cross says the KCC
Oil & Gas Advisory Board, which includes
representatives from KIOGA and the Eastern Kansas Oil & Gas Association, also
will be considering state laws on drilling,
completion and production restrictions.
"KIOGA will be on top of this issue,"
he promises. "I don't think there will be
any legislative action in 2018, but I know
the Sierra Club comes up every year with
rules and regulations it would like to see
imposed on the oil and gas industry.
KIOGA has been successful in defeating
those measures in the past, and hopefully
that success will continue."

Abandoned Wells
KIOGA continues to push the KCC
commissioners to reconsider the Oil &
Gas Conservation Division staff recommendation on assigning liability for plugging abandoned orphan wells to whoever
acquires a new oil or gas lease on the
property. Powell points out the proposed
language would make a landman, who
merely acquires a property with the intent
to sell it to a third party, a potentially responsible party.

Summit
Drilling

"I don't think the KCC staff understands
that this rule actually puts a liability on
the landowner. The staff recommendation
requires anyone who leases a property to
plug a well, which means the landowner
in essence also has that burden," he says.
"When someone comes to lease (a landowner's) property, and he knows there is an
abandoned orphan well on that property,
that liability will lower what he is willing
to pay in bonuses and royalties to compensate. In that way, the landowner is
taking on the burden, and everyone involved
is incentivized to not divulge the presence
of abandoned wells to the KCC."
The agency's focus should be on learning
where the state's orphan wells are located
and determining their physical condition,
Powell contends. If any wells represent an
environmental problem, they should be
plugged using the funds Kansas has collected
from the oil and gas industry, he adds.
Powell suggests the KCC instead require it be notified when an abandoned
well is discovered, and if no responsible
party tied to the original lease can be
found, the well should be monitored with
no liability to the current property owner
or potential lessee.
"If the landowner wants to plug the
well, he can, but there is no requirement
unless it is an environmental problem,
Powell says. "The well just goes on the
state's plugging list. The state knows
where the abandoned wells are. It is monitoring those wells and has money to plug
any that become an environmental issue.
Everyone is incentivized to tell the state
about those wells because they are not
taking on the liability, and the landowner
is free to lease his property unburdened."
Powell says future legal actions regarding
abandoned wells in Kansas may have to
consider how an old lease becomes a new
lease. "I don't know whether a court of
law would find that a new lease and old
lease are legally the same thing," he offers.
Cross says KIOGA has joined EKOGA
and the Wichita Association of Professional Landmen in filing joint comments
on the proposed rule.

Serving the
Midcontinent to 4,500'
620-343-3278
P.O. Box 2004
Emporia, KS 66801
100 THE AMERICAN OIL & GAS REPORTER

"That report was written by the KCC
staff, and was not a finding by the commissioners," he points out. "What the
three associations recommend is KCC
empower and direct its staff to work with
the oil and gas industry to draft suitable
revisions to the abandoned well statutes,
and to undertake a traditional rule-making
process. That means any changes have
to go to the Oil & Gas Advisory Committee. If the KCC staff paper moves
forward, the industry may seek statutory
changes in the next legislative session."

Injection Wells
KIOGA also continues to monitor opposition a company faces in its attempt
to permit a wastewater disposal well in
Morris County, Ks., Cross says.
According to media reports, Quail Oil
and Gas filed an application for a 5,000
barrel-a-day wastewater disposal well in
the county, which had 20 operating disposal wells in 2015.
Before the Kansas Legislature's session
ended June 10, Cross says several legislators-mostly Democrats-signed a letter to
the KCC opposing that permit. He adds
that he coordinated a response supporting
the injection well application, which was
signed by 33 lawmakers. "Neither of those
groups would have standing in a hearing on
an injection well application, but I wanted
to make sure the KCC would see a letter
with legislative support to balance the letter
opposing the application," he says.
Most of the public opposition is based
on concerns about induced seismicity,
Cross notes. He points out that Morris
County lies in the eastern portion of the
state, and is not among the counties where
the KCC has limited injection well volumes.
Cross adds the Quail project is a traditional,
low-volume, low-pressure injection well.
"Those opposition groups are looking
for a victory of any kind," Cross says.
"KIOGA was able to persuade legislators
there was no need for informational hearings during the legislative session. Those
groups are just trying to generate media
hype."
r

VAL ENERGY, INC.

Rotary Drilling, Operations and Producers
P:

316-263-6688

F:

K. Todd Allam, President
316-262-2512

E: valenergy1982@yahoo.com



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

Contents
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