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(A) The business and occupation of drilling and exploring for, producing, obtaining, transporting, gathering and storing of oil, gas, petroleum and hydrocarbons within the limits of the City of Memphis is a hazardous and dangerous business and occupation. As such, it is necessary that such business and occupation be regulated, controlled and limited for the purpose of providing protection for the lives, health, welfare and safety of the citizens of the city and of the public generally and for the protection of property from the danger of fire, explosion, gas, leaks, nuisances and other hazards, injurious to the public peace, health, welfare and safety. The provisions of this chapter shall be deemed to be the minimum requirements for the preservation of the public peace, health, safety and welfare, and compliance with all terms thereof shall not be deemed to relieve any person from any duty imposed by law to use all necessary care and take all necessary precautions for the safeguarding of the public peace, health and safety and the rights of any individual or group of individuals, and it shall be the duty of any person drilling, operating or maintaining any well to use all necessary care and take all precautions reasonably necessary under the circumstances to protect the public or the rights of any part thereof.
(B) This chapter applies to the location, installation, drilling and operation of any well for the commercial extraction of oil, gas or other hydrocarbons in the city. No well owner or operator or property owner shall allow any activity which is not in compliance with the requirements of this chapter.
(C) Words used in this chapter, unless otherwise defined, shall be the common meaning of such words as generally understood in the oil and gas industry, unless the content of this chapter clearly implies otherwise.
(Ord. 211, passed 1-5-2021)
It shall be unlawful for any person, partnership, association of persons, syndicate, combination, corporation or estate 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 the secondary recovery thereof, or to extend to deepen one already drilled without first having applied for and received a permit therefor by the authority of the City Council in accordance with the terms of this chapter and the applicant having complied with the terms of this chapter.
(Ord. 211, passed 1-5-2021) Penalty, see § 118.99
(A) The producer or owner of any proposed well shall fill out, sign and file an application in writing therefor upon forms provided by the City Clerk. The application shall contain the information as to the location where the proposed well is to be drilled, and attached thereto shall be a map, plat or survey of the area to be drilled and the location of the well on said spacing and the exact location of tanks, flowlines, fences and details incident to the proposed location. The location of said 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 owners of the oil and gas in all of the area to be drilled and the lease or leases thereon. Said application shall also be accompanied by the consent in writing of the owner or owners of the drill site to be drilled consenting to the drilling of the well on his, or their property as well as any approvals or denials received from the State of Michigan. Attached to said application shall be duly certified, sworn or photo copies of all leases for the discovery and removal of oil and gas and ratifications thereof, executed by the owners of the oil or gas in such area, owned or controlled by the application, and also a statement of other leases insofar as known setting forth the names of the lessors and lessee of each such respective lease. In the event said lease or leases shall by express terms and provisions provide for and consent to such drilling, the consent therein provided shall qualify for and be deemed sufficient compliance with the requirements for consent of lessor as herein provided. Bond as hereinafter set forth shall also accompany and be filed with such application.
(B) All applicants for a permit to drill a well for oil or gas shall at the time of making such applications pay to the City Clerk the sum of $500 as an application fee to apply on the cost and expenses of the administration of this chapter, of which amount $400 thereof shall be refunded if the application is not granted and the balance retained.
(Ord. 211, passed 1-5-2021)
(A) If it appears, either upon the face of such application or by other satisfactory proof, that the applicant for permission to drill a well for oil and gas is the owner of or has under his control, either as owner or lessee, or both, all interests in said area to be drilled, and said application showing compliance with the requirements of this chapter, the City Council, or its designee, may grant the permit without further notice.
(B) If said application shows that the applicant to drill a well for oil or gas is not the owner, or does not have under his control for drilling purposes as owner or lessee, or both, or assignee under a valid and recorded assignment of lease, all the interest in all the oil or gas in the area which it is proposed to drill, or in the event the City Council shall for other cause shown refuse an application for a permit, then the City Council shall fix a time and place for the hearing thereon and enter the same of record. The following shall apply if City Council determines a hearing is necessary:
(1) 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 thereof 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 thereto, said 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 thereof in not less than five public places in the city at least five days prior to said hearing. Such notices shall be dated and contain a description of the property affected, state the time, date, place and purpose of the hearing. An affidavit of the applicant or someone in his behalf shall be executed showing such mailing, posting and publishing and shall be prima facie evidence of the compliance with all the requirements of this for notice and the same shall be filed with the City Clerk at or prior to the time set for the hearing.
(2) The City Council shall at the time set and place designated in said notice, or at some later date to which the hearing may be adjourned, conduct the hearing upon the application to drill such well for oil, gas, petroleum or other hydrocarbons. At such hearing all persons interested may be heard. All witnesses shall be examined under oath and documentary evidence may be introduced. The City Council shall keep a record of its proceedings as regards the granting of said permits and the hearings thereon and may require the pooling of properties, or parts thereof, within the area or areas to be drilled and shall make any and all reasonable requirements necessary to protect and safeguard the rights of all parties affected by such order or orders. The City Council shall have the power and reserve the authority to refuse any application for a permit where by the reason for the location of the proposed well, and the character and value of the permanent improvements already erected in or adjacent to the area in question and the use of which the land and surroundings are adapted for civic purposes or for sanitary reasons, the drilling of any oil or gas well will be 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 said permit shall be creative of fire hazards or otherwise destructive of property interests.
(Ord. 211, passed 1-5-2021)
The application shall also be accompanied by and no permit for the drilling of any well shall be issued without:
(A) A duly executed bond in the penal amount of not less than $10,000 given by the applicant as principal and executed by a bonding or indemnity company authorized to do business in the state as surety, running to the City of Memphis, Michigan, for the benefit of the city and all persons, firms and corporations concerned, conditioned that if the permit be granted the applicant and his or its assignees will comply with all the terms and conditions of this chapter and with all laws of the state and the federal government and with the rules and regulations of the Supervisor of Wells and of the Department of Conservation of the State in the drilling and operation of the proposed well and that the applicant will clear from the area to be drilled all litter, machinery, derricks, trenches, pits, debris, oil and other substances used thereon in the drilling or producing operations whenever the well shall be abandoned or the operation thereof discontinued and that the applicant will promptly clear or pay any legal or other expense necessary to clear the title to any leased property for which said permit may be granted.
(B) An insurance policy issued by an insurance company authorized to do business in the state specifically naming the city as a party insured in amount of not less than $1,000,000 to insure the city against all claims, demands, actions, causes of action, and all other liability whatever for damages on account of injury to property, either public or private, and bodily injury, or death, received or suffered by any person or persons, firm or corporation, and resulting from the drilling, operating, maintaining or abandoning of any well or any structures, equipment, machinery, vehicles, lines or appurtenances thereto used or allowed in the drilling or producing operations of the applicant and his or its assignees.
(C) In case any bond or insurance policy required herein shall lapse or become void for any reason whatever, the permit issued under the terms of this chapter shall immediately become inoperative and void until a new bond or insurance policy shall have been provided and filed with the City Clerk and approved or the existing bond or insurance policy reinstated in full force, and such well and the drilling operations and production thereunder shall be forthwith shut down, suspended and discontinued until the filing of such new bond or insurance policy or reinstatement of such existing bond or insurance policy. Each and every bond and insurance policy, both original and renewal, shall be approved by the City Council and shall be filed with the City Clerk. Said bonds and insurance policies shall be made for a term of not less than one year, and a new bond and insurance policy shall be furnished at the expiration of any existing one if the operation of such well covered thereby is continued.
(Ord. 211, passed 1-5-2021)
All drilling operations for the discovery of oil, gas, petroleum or other hydrocarbons, equipping of wells, producing and marketing of oil, gas, petroleum and hydrocarbons, plugging of wells and all material used and work done in connection with the exploring for, producing and marketing petroleum products shall be in conformity with all state and federal laws and statutes and rules and regulations pertaining thereto and particularly with the statutes of the state and the regulations of the Supervisor of Wells of the State.
(Ord. 211, passed 1-5-2021) Penalty, see § 118.99
The city Fire Chief, Superintendent of Public Works or such other employee or designee of the city as shall be designated for that purpose by the Council shall have the right and privilege at any time to enter upon the premises where any well or proposed operation covered by this chapter is located for the purpose of making inspections thereof to determine if the requirements of this chapter are complied with or the requirements of any other ordinance of this city are met.
(Ord. 211, passed 1-5-2021) Penalty, see § 118.99
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