Request By:
Mr. Henry M. Morgan, Director
Division of Oil and Gas Conservation
Department of Mines and Minerals
P.O. Box 680
Lexington, Kentucky 40586
Opinion
Opinion By: Steven L. Beshear, Attorney General; By: David K. Martin, Acting Director, Division of Environmental Law
You have requested an opinion of the Attorney General concerning whether the Kentucky Oil and Gas Conservation Commission has jurisdiction under K.R.S. 353.652 to hold a hearing on the unit operation of a pool to be developed by shallow oil wells. Since K.R.S. 353.652 was enacted as a part of Kentucky Acts 1974, chapter 45, which created new provisions concerning deep wells, you question whether K.R.S. 353.652 has any application to shallow wells.
Deep wells are defined generally as wells drilled to a depth exceeding 4,000 feet. K.R.S. 353.510(16). Kentucky Acts 1974, chapter 45 created the Kentucky Oil and Gas Conservation Commission and authorized it to administer and enforce K.R.S. 353.651 and 353.652. See K.R.S. 353.565(5). The commission is authorized in administering K.R.S. 353.651 and 353.652 to make reasonable rules, regulations and orders to prevent waste and protect correlative rights of each person entitled to recover oil and gas under his tract or tracts. K.R.S. 353.565(7)(a). K.R.S. 353.651 expressly restricts its application to deep wells. It empowers the commission to establish deep well drilling units and forced pooling of interests in deep well drilling units.
K.R.S. 353.652, on the other hand, contains no reference to deep wells. It merely states in part that:
(1) Upon the application of any operator in a pool productive of oil or gas, or both . . . the commission may enter an order requiring the unit operation of a pool or of any portion or combination thereof within a field. . . .
Nothing within K.R.S. 353.652 suggests that its applicability is limited to situations requiring deep wells. Moreover, no other portion of Kentucky Acts 1974, chapter 45 suggests that K.R.S. 353.652 was intended to be limited to deep wells. The title of the Act was simply, "An act relating to oil and gas conservation". Additionally, other portions of the Act have no particular connection with deep wells, such as changes in penalty provisions and provisions for judicial review. There appears to be no cognizable evidence either from the language of the statute or by necessary implication that indicates a legislative intent to limit the application of K.R.S. 353.652 to deep wells. K.R.S. 353.565(8) requires the Kentucky Oil and Gas Conservation Commission to call a hearing for the purpose of taking action with respect to any matter within the commission's jurisdiction when an interested person requests a hearing in writing. It is the opinion of this office that a request for a hearing by an interested person seeking to unitize a shallow well pool under K.R.S. 353.652 must be granted. Of course, this opinion does not address the possible outcomes of such a hearing. It merely indicates that K.R.S. 353.652 is not limited to deep well pool unitization.