(a) It shall be unlawful for any person to drill, explore or commence to drill any well for oil, gas, petroleum or other hydrocarbons in any area within the corporate limits of the city or for its secondary recovery, or to extend, or to deepen one already drilled, without first having applied for and receiving a permit by the authority of the city council in accordance with the terms of this division and the applicant's having complied with the terms of this article and having complied with the requirements of this section.
(b) The producer or owner of any proposed well shall fill out, sign and file an application in writing for a permit on forms provided by the city clerk, accompanied with a nonrefundable filing fee in the amount established by resolution. The application shall contain the information as to the location where the proposed well is to be drilled, and attached to the application shall be a map, plat or survey of the area to be drilled and the location of the well on the spacing and the exact location of tanks, flowlines, fences, and details incident to the proposed location. The location of the well shall be stated in relation to established street or plat lines or, in lieu thereof, quarter section lines. The application shall show the names of the owners of the oil and gas in all of the area to be drilled and the lease on the area. The application shall also be accompanied by the consent in writing of the owner of the drill site to be drilled consenting to the drilling of the well on his property. Attached to the application shall be duly certified, sworn or photostatic copies of all leases for the discovery and removal of oil and gas, and ratifications of oil and gas, executed by the owners of the oil or gas in such area, owned or controlled by the applicant, setting forth the names of the lessors and lessees of each such respective lease.
(c) The application shall be forwarded to the city council for consideration if it shall appear that all persons having an interest in the drilling unit or area to be drilled have consented to such drilling, or a pooling order or permit to drill an exploratory well has been issued by the supervisor of wells of the state department of natural resources.
(d) (1) Upon receipt of a completed application, the city council may elect to schedule a public hearing before acting on the application. If a public hearing is required, the applicant shall cause notice of such hearing on forms to be furnished by the city clerk to be given by certified mail to all known owners of the lands containing oil and gas within the area to be drilled and the lessees under valid oil and gas leases of record addressed to their last known place of residence, not less than seven days prior to the date of the hearing. In addition, the applicant shall publish a notice in a public newspaper published and printed in the city at least five days prior to the hearing and shall post notices of the hearing in not less than five public places in the city at least five days prior to the hearing. The applicant shall file proof of compliance with the publication requirements of this division with the city clerk at or prior to the time set for the hearing.
(2) No final action on the application shall be taken and no drilling permit shall be issued until the applicant has filed with the city clerk a permit to drill which has been granted by the supervisor of wells of the state department of natural resources, together with a statement of all special permit conditions or requirements imposed by the supervisor of wells.
(3) The city council shall have the power and reserves the authority to refuse any application for a permit where, by reason of the location of the proposed well, the character and value of the permanent improvements already erected in or adjacent to the area in question, the use to which the land and surroundings are adapted, or for health or sanitary reasons, the drilling of any oil or gas well will cause a serious disadvantage or hazard to the city and its inhabitants as a whole. It shall be discretionary with the city council to grant or deny a permit in any industrial area or in any area in which residences or other buildings may have been erected when the granting of the permit shall create fire hazards; endanger the health, safety or welfare of residents; or otherwise be destructive of property interests. The city council may make and impose any and all reasonable requirements necessary to protect and safeguard the property of all parties affected by such drilling or production activities.
(e) No permit for the drilling of any well shall be issued without a duly executed bond given by the applicant as principal and executed by some bonding or indemnity company authorized to do business in the state, as surety, running to the city for the benefit of the city, and all persons concerned, conditioned that if the permit is granted, the applicant and his assigns shall comply with the terms and conditions of this article in the drilling and operation of the proposed well; pay and discharge any liability imposed by law for damages on account of injury to property, either public or private, or bodily injury, or death, received or suffered by any person and resulting from the drilling operation or maintenance of any well or any structures, equipment, machinery, lines or appurtenances used or allowed in the drilling or producing operation; and clear from the area to be drilled all litter, machinery, derricks, trenches, pits, debris, oil and other substances used in the drilling or producing operations, whenever the well shall be abandoned or its operation discontinued. The maximum total liability under the bond, for loss or damage, either to person or property shall be in the amount of $1,000,000.00. The bond shall be made for a term of not less than one year, and a new bond shall be furnished at the expiration of any existing one if the operation of such well covered by the bond is continued. If at the time of such renewal all drilling on such well has been completed, the amount of total liability under such bond may be reduced to $500,000.00. If any bond required in this section shall lapse or become void for any reason whatsoever, the permit issued under the terms of this division shall immediately become inoperative and void until a new bond shall have been provided and filed with the city clerk or the existing bond reinstated in full force; and such well and the drilling operations and production under the bond shall be shut down, suspended and discontinued until the filing of such new bond or reinstatement of such existing bond. Each bond, both original and renewal, shall be approved by the city council and shall be filed with the city clerk.
(f) (1) All applicants for a permit to drill a well for oil or gas shall at time of making such applications pay to the city clerk the sum established by resolution as a nonrefundable application fee to apply on the cost and expenses of the administration of this article.
(2) In addition, all applicants shall deliver to the city clerk a cash deposit in the amount established by resolution to be held in escrow pending completion of drilling operations or denial or abandonment of the permit application. An additional permit fee shall thereafter be levied by the city council against this deposit in an amount sufficient to reimburse the city for its actual expenses incurred in investigating and processing the application, planning and providing public safety services, the expenses of inspecting and supervising completion operations, and litigation arising out of the approval of the application. Following completion of drilling or denial or abandonment of the permit application, the city clerk shall prepare and file with the city council and the applicant a written itemization of all such expenses incurred by the city. The city council shall then, by resolution, determine such amounts as shall reasonably compensate the city for such necessary expenses and shall order the city clerk to disburse that portion of applicant's escrow to the city general fund and refund the balance to the applicant. The applicant shall be provided notice of the meeting at which such action is to be taken and shall be provided an opportunity to appear and present arguments and/or evidence in opposition to the charges.
(3) On the January 2 after the completion of any producing well and annually thereafter so long as production of oil or gas continues from such well, the owner of each well shall pay to the city clerk a sum of $250.00 to apply on the cost and expense of the administration of this article.
(g) When a permit shall have been issued, it shall terminate and become inoperative without any action on the part of the city council unless within 60 days from the date of the issue, actual drilling of the well shall have been commenced; and after the drilling of a well shall be commenced, the cessation of drilling for 60 days or the cessation of production of oil or gas from the well after production shall have commenced shall operate to terminate and cancel the permit; and the well shall be considered as abandoned for all purposes of this article; and it shall be unlawful thereafter to continue the operation, reworking or drilling of such well without the issuance of another permit upon new application as provided in this division; however, there may be granted additional periods of 60 days each, but not to exceed three in number, upon application by the permittee to the city council requesting such extension and good and reasonable cause shown.
(h) A copy of the permit so granted shall be forwarded by the city clerk by certified mail to the supervisor of wells of the state and a copy posted in the location of such well.
(i) The director of public works is granted the authority to suspend the permit for the operation of any well where any of the provisions of this article or any permit conditions are violated, which suspension of any such license shall be effective until such time as that person shall comply with the provisions of this article. Before suspending any such license, the city clerk shall cause written notice to be served upon the permittee, advising such permittee that a hearing will be had at a time and place fixed in the notice to determine whether the permit held by such permittee shall be suspended. Five days' notice of the time of the hearing shall be given. It shall be unlawful and an offense for any person to operate any well during any period in which the permit covering the operation of such well is so suspended. The provisions of this section shall in no way limit or interfere with the enforcement of the penalties for the violation or ordinances generally, but shall be cumulative and in addition to such penalties.
(Ord. No. 85, § 2, 4-19-1971; Ord. No. 85-A-82, § 1, 1-18-1982)