Section 9-17-152

Section 9-17-152Board approval; recordation of order; certificate of effectiveness; dissolution of fields and units; determination of commercial reserves; creation of cavities.

(a) The use of an underground reservoir as a storage facility for gas is hereby authorized, provided that the board shall first enter an order, after notice and hearing pursuant to the provisions of Sections 9-17-3 to 9-17-8, inclusive, approving such proposed underground storage of gas and designating the horizontal and vertical boundaries of the storage facility, such boundaries to include within them any necessary or reasonable buffer zone for the purpose of insuring the safe operation of the storage facility and to protect the storage facility against pollution, invasion, and escape or migration of gas therefrom, upon finding as follows:



(1) That the storage facility is suitable and feasible for the injection, storage and withdrawal of gas and has a greater value or utility for the storage of gas than for the production of any remaining volumes of presently commercially recoverable hydrocarbons and its use for such purpose is in the public interest;



(2) That the underground reservoir to be used for underground storage of gas does not contain proven commercially producible accumulations of oil or gas or both; or, in the alternative, if the underground reservoir to be used for underground storage of gas includes any pool (or portion thereof) that contains proven commercially producible accumulations of oil or gas or both, that a majority in interest, as calculated on a surface acre basis, of all owners (as owner is defined in Section 9-17-1(7), to be "The person who has the right to drill into and to produce from any pool and to appropriate the production either for himself or for himself and another or others.") in the pool has or have consented to such use in writing;



(3) That the use of the storage facility for the underground storage of gas will not contaminate other formations containing fresh water or containing oil, gas or other commercial mineral deposits; and



(4) That the proposed storage will not unduly endanger lives or property.



(b) Upon the board's issuing an order of approval as set forth above, said order, or a certified copy thereof, shall be filed for record in the probate court of the county or counties in which the storage facility is to be located.



(c) Prior to commencing injection of gas, the storage operator shall file for record in the probate court of the county or counties in which the storage facility is located, and with the board, a certificate, entitled a certificate of effectiveness, which shall contain a statement that the storage operator has acquired by eminent domain or otherwise all necessary ownership rights with respect to the storage facility, and the date upon which the storage facility shall be effective.



(d) If any pool (or portion thereof) for any previously established field(s) or producing unit(s) is contained within the boundaries of the storage facility, the board's order of approval for such storage facility shall provide that such field(s) or unit(s) shall be dissolved as to such pool(s) as of the effective date of the storage facility (as set forth in the certificate of effectiveness).



(e) If an underground reservoir that contains commercially recoverable oil and/or gas has been approved, as hereinabove provided, for use as a storage facility, the board shall, after notice and hearing pursuant to the provisions of Sections 9-17-3 through 9-17-8, inclusive, determine the amount of remaining commercially recoverable oil and/or gas in said reservoir and shall set forth its determination in an order supplemental to its order of approval. As a part of the board's determination contained in such supplemental order, the board shall determine a period of time which encompasses the remaining natural production capability of the underground reservoir to produce such commercially recoverable gas and then determine an apportionment of the total volume of such gas withdrawn from the storage facility between (i) injected gas withdrawn from storage and (ii) production of said remaining commercially recoverable gas in said reservoir. All volumes of such gas deemed production under clause (ii) herein shall be subject to the levy of applicable severance taxes under Article I, Chapter 20 of Title 40.



(f) Nothing herein shall be construed to limit or restrict the right of anyone to create, for the purpose of later use as an underground reservoir for underground storage of gas, a cavity in a salt dome even though the board has not issued an order of approval under subsection (a) above for the storage of gas in said cavity, provided that actual injection of gas in said cavity shall not be commenced until such an order of approval shall have been issued by the board and provided further that such cavity and the operations for the creation thereof do not violate the provisions of any rule, regulation, or order issued by the board under Section 9-17-153(a) for the protection of any previously approved storage facility.

(Acts 1992, No. 92-564, p. 1172, §3.)