Okla. Admin. Code § 165:10-3-5

Current through Vol. 42, No. 4, November 1, 2024

Section 165:10-3-5 - Underground storage

(a)Scope. This Section shall apply to all operations pertaining to the drilling, completion, recompletion, or remedial operations on wells located within the boundaries of an underground storage facility as defined in (b)(4) of this Section or wells whose completion intervals will, at any point, be located within 600 feet of the underground storage facility.

(b)Definitions.

(1) "Underground storage" shall mean storage of natural gas in a subsurface stratum or formation of the earth.

(2) "Natural gas" shall mean gas either while in its natural state or after the same has been processed by removal therefrom of component parts not essential to its use for lights and fuel.

(3) "Storage operator" shall mean any person, firm, or corporation which operates an underground storage facility.

(4) "Underground storage facility" shall mean any subsurface stratum or formation of the earth used for underground storage. Provided that, in the case of a natural gas bearing subsurface stratum or formation, the commercially producible native gas shall have been substantially depleted and the gas therein shall not be used primarily for the secondary recovery of oil in paying quantities from the subsurface stratum or formation.

(5) "Well" means a vertical, directional or horizontal well drilled or bored or to be drilled or bored within the certified boundary of an underground storage facility, or whose completion interval will, at any point, be located within 600 feet of the underground storage facility.

(6) "Well operator" shall be the person, firm, or corporation that is the operator of a well.

(7) "Major remedial operations" shall mean any workover operations requiring a workover rig, wire line or pump truck services.

(8) "Good quality cement" means cement that would obtain a compressive strength to prevent oil, gas, or water migration within a twenty-four (24) hour period.

(9) "Certified boundary" means the perimeter of the legal description of an underground storage facility established by certificate and order of the Commission.

(10) "Completion interval" means for open hole completion or recompletions, the interval from the point of entry to the terminus and, for cased and cemented completions or recompletions, the interval from the first perforations to the last perforations.

(c)Notice to storage operator. Upon receipt of Form 1000 from a well operator, the Conservation Division shall determine whether the proposed well falls with one (1) mile of the certified boundary of an underground storage facility. Following a positive determination, the Conservation Division shall instruct the well operator to provide notice of the application for a Permit to Drill the well to the storage operator and the Director of the Public Utility Division as part of the application for Permit to Drill process. The well operator is required to supply written confirmation to the Conservation Division that notice of the application for a Permit to Drill the well has been provided to the storage operator and the Director of the Public Utility Division.

(d)Operational procedures.

(1) All storage operators and well operators are required to maintain on file with the Commission's Surety Department current mailing addresses, email addresses, and 24 hour telephone numbers. In addition, storage operators are required to maintain on file with the Commission's Surety Department the Commission order number pertaining to the underground storage facility.

(2) Before spudding a well within the certified boundary of a gas underground storage facility, the well operator shall mail a copy of the Permit to Drill to the storage operator at the address listed at the Commission and also supply a copy of the Permit to Drill to the Director of the Public Utility Division. The storage operator will inform the well operator of the estimated depth, thickness, and pressure of the underground storage facility at that location. Failure of the storage operator to provide the data to the well operator shall not be a cause to delay drilling, but the well operator is required to notify the storage operator, by phone a minimum of 24 hours prior to commencing drilling operations at a 24 hour telephone number furnished to the Commission by the storage operator.

(3) A well operator shall comply with the provisions of 165:10-3-4(d). Alternate casing programs shall not be permitted.

(4) Drilling rigs shall be equipped with a blowout preventer. The preventer shall be installed and tested at least 500 psig above the anticipated underground storage facility pressure before drilling below the base of the surface casing.

(5) The storage operator shall receive drilling reports daily from the well operator and the storage operator shall be provided 48 hours notice by the well operator at a 24 hour telephone number furnished to the Commission by the storage operator to afford the storage operator an opportunity to witness any tests or logging operations from the surface to 600 feet below the base of the underground storage facility. Any abnormal conditions occurring during the drilling operation, such as abnormal pressures and/or lost circulation, shall be reported immediately by the well operator to the storage operator at the 24 hour telephone number supplied by the storage operator to the Commission.

(6) The well operator shall drill the well in such a manner as to prevent invasion of drilling fluids into, or the escape of natural gas from, the underground storage facility. The well operator shall be required to mud up at least 100 feet above the anticipated depth of the top of the underground storage facility.

(7) If run, a copy of either an open hole porosity or resistivity well log run from the base of surface casing to total depth shall be promptly forwarded to the storage operator. The logs submitted to the storage operator may be terminated 600 feet below the base of the underground storage facility. At least 48 hours prior to commencing logging operations the well operator shall notify the storage operator at the 24 hour telephone number furnished by the storage operator to the Commission, and the storage operator shall have the option of witnessing the open hole logging operation.

(8) In the event that the well is noncommercial and is to be plugged and abandoned, the well operator shall place a cement plug using a good quality cement, covering from not less than 300 feet below the base to not less than 300 feet above the top of the underground storage facility. At least 48 hours prior to commencing the plugging operation, the well operator shall notify the storage operator at the 24 hour telephone number furnished by the storage operator to the Commission, and the storage operator shall have the option of witnessing the plugging operation. The field inspector may invoke the provisions of 165:10-11-6(m), (n) and (o).

(9) In the event that casing is run, the well operator will cause the underground storage facility interval to be covered with steel casing and be cemented from not less than 100 feet below the base to not less than 100 feet above the top of the underground storage facility using a good quality cement. At least 48 hours prior to commencing the casing operation, the well operator shall notify the appropriate Conservation Division District Office and the storage operator at the 24 hour telephone number furnished by the storage operator to the Commission. The Commission field inspector for the area and storage operator shall have the option of witnessing the operation.

(10) For the purpose of ensuring the integrity of the underground storage facility, the well operator shall be required to run a cement bond log through the underground storage facility formation before any completion attempts are made. At least 48 hours prior to commencing the logging operation, the well operator shall notify the storage operator at the 24 hour telephone number furnished by the storage operator to the Commission, and the storage operator shall have the option of witnessing the logging operation and be furnished with a copy of the bond log from the top of cement to total depth or, at the option of the well operator, to 600 feet below the base of the underground storage facility. If the integrity of either the bond log or cement across the underground storage facility interval is questioned by the storage operator, the storage operator may, at its sole risk and expense, run additional logs. No completion, recompletion or major remedial operations shall be permitted until the fact has been established by the well operator, storage operator and the Managers of the Technical Services and Field Operations Departments, that the integrity of the cement is sound and that the underground storage facility is isolated from the remainder of the bore hole. The remedial work, if needed to protect the storage reservoir, shall be at the risk and expense of the well operator.

(11) The storage operator, the Managers of the Technical Services and Field Operations Departments and the Director of the Public Utility Division shall be notified at least 48 hours prior to commencement of completion, recompletion, or major remedial operations so as to afford opportunities to witness such operations. The well site shall be made accessible at all times to the storage operator and all information pertaining to the completion shall be forwarded daily to the storage operator. If the completion, recompletion, or major remedial operations attempt is to be made in any formation within 600 feet of the underground storage facility, the proposed plan of completion shall be forwarded to the storage operator ten business days prior to commencement of operations. The storage operator shall have five business days after receipt of the proposed plan to forward any objection to the well operator. Completion operations, recompletion, or major remedial operations shall not be permitted until the matter is resolved.

(12) At any time that the storage operator shall reasonably believe that damage may be occurring to the underground storage facility or that natural gas may be escaping into any other formations or otherwise believe that a well may compromise the integrity of the underground storage facility, the storage operator may then request that the operator of the well conduct specific tests solely at the storage operator's risk and expense. If an agreement cannot be obtained between the parties concerned, the storage operator or well operator may bring the matter before the Corporation Commission for determination by application, notice, and hearing following the procedure set out in OAC 165:5-7.

(13) If tests establish that damage is occurring and/or that natural gas is escaping by the continued operation of the well, the well shall be shut down immediately and the remedial operation to rectify the condition shall be commenced within ten days, at the sole risk and expense of the well operator.

(14) All information furnished to the storage operator shall be kept confidential until released in writing by the well operator.

Okla. Admin. Code § 165:10-3-5

Amended by Oklahoma Register, Volume 32, Issue 23, August 17, 2015, eff. 8/27/2015.

Amended by Oklahoma Register, Volume 36, Issue 21, July 15, 2019, eff. 8/1/2019

Amended by Oklahoma Register, Volume 39, Issue 24, September 1, 2022, eff. 10/1/2022