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Alabama Code (Last Updated: November 28, 2014) |
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Title9 CONSERVATION AND NATURAL RESOURCES. |
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Chapter17. OIL AND GAS. |
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Article1. Conservation and Regulation of Production. |
§9-17-1. Definitions.
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Unless the context otherwise requires, the following terms shall have the following meanings:
(1) BOARD. The State Oil and Gas Board created by this article.
(2) DEVELOPED AREA or DEVELOPED UNIT. A drainage unit having a well completed thereon which is capable of producing oil or gas in paying quantities; however, in the event it is shown and the board finds that a part of any unit is nonproductive, then the developed part of the unit shall include only that part found to be productive.
(3) DRAINAGE OR PRODUCTION UNIT. The area in a pool which may be drained efficiently and economically by one well.
(4) DRILLING UNIT. An administrative unit established by the board to provide and allow for the drilling of a well. Prior to establishment of a field and drainage or production unit within the field, the board may establish a drilling unit to allow for the drilling of a well in search of oil and gas.
(5) FIELD. The general area which is underlain or appears to be underlain by at least one pool, and such term shall include the underground reservoir or reservoirs containing crude oil or natural gas or both. The words "field" and "pool" have the same meaning when only one underground reservoir is involved; however, the word "field," unlike "pool," may relate to two or more pools.
(6) GAS. All natural gas, including casinghead gas, and all other hydrocarbons not defined as oil in subdivision (10).
(7) HORIZONTAL WELL. A well initially drilled vertically and then turned and drilled at an angle of 75 degrees or greater from vertical.
(8) ILLEGAL GAS. Gas which has been produced within the State of Alabama from any well or wells in excess of the amount allowed by any rule, regulation, or order of the board, as distinguished from gas produced within the State of Alabama not in excess of the amount so allowed, which is "legal gas."
(9) ILLEGAL OIL. Oil which has been produced within the State of Alabama from any well or wells in excess of the amount allowed by any rule, regulation, or order of the board, as distinguished from oil produced within the State of Alabama not in excess of the amount so allowed, which is "legal oil."
(10) ILLEGAL PRODUCT. Any product of oil or gas, any part of which was processed or derived in whole or in part from illegal oil or illegal gas or from any product thereof, as distinguished from "legal product," which is a product processed or derived to no extent from illegal oil or illegal gas.
(11) OIL. Crude petroleum oil and other hydrocarbons, regardless of gravity, which are produced at the well in liquid form by ordinary production methods and which are not the result of a condensation of gas after it leaves the pool.
(12) OPERATOR. The person who is authorized by the board to operate an oil, gas, or Class II injection well, or production facility, or processing facility, or engages in the transportation of hydrocarbons by pipeline, including the handling and disposal of wastes that may be generated during operation of a well, or production facility, or processing facility.
(13) OWNER. The person who has the right to drill into and to produce from any pool and to appropriate the production either for himself or herself or for himself or herself and another or others.
(14) PERSONS. Any natural person, firm, corporation, association, partnership, joint venture, receiver, trustee, guardian, executor, administrator, fiduciary, representative of any kind, or any other group acting as a unit.
(15) POOL. An underground reservoir containing a common accumulation of crude petroleum oil or natural gas or both and each zone of a general structure which is completely separated from any other zone in the structure.
(16) PRODUCER. The owner of a well or wells capable of producing oil or gas or both; provided, however, that the word "producer" as used in Section 9-17-25 shall also include any person receiving money or other valuable consideration as royalty or rental for oil or gas produced or because of oil or gas produced, whether produced by him or her or by some other person on his or her behalf, either by lease, contract, or otherwise, and whether the royalty consists of a portion of the oil or gas produced being run to his or her account or a payment in money or other valuable consideration.
(17) PRODUCT. Any commodity made from oil or gas and shall include refined crude oil, crude tops, topped crude, processed crude petroleum, residue from crude petroleum, cracking stock, uncracked fuel oil, fuel oil, treated crude oil, residuum, gas oil, casinghead gasoline, natural gas gasoline, naphtha, distillate, gasoline, kerosene, benzine, wash oil, waste oil, blended gasoline, lubricating oil, blends or mixtures of oil with one or more liquid products or byproducts derived from oil or gas and blends or mixtures of two or more liquid products or byproducts derived from oil or gas, whether hereinabove enumerated or not.
(18) REASONABLE MARKET DEMAND. As to oil, the amount of oil reasonably needed for current consumption and use, together with a reasonable amount of oil for storage and working stock and, as to gas, the amount of gas of any type reasonably needed to supply the current consumption and use of such type of gas.
(19) TENDER. A permit or certificate of clearance, approved and issued or registered under the authority of the board, for the transportation of oil, gas, or products.
(20) WASTE. In addition to its ordinary meaning, such term shall mean "physical waste" as that term is generally understood in the oil and gas industry. It shall include any of the following:
a. The inefficient, excessive, or improper use or dissipation of reservoir energy and the locating, spacing, drilling, equipping, operating, or producing of any oil or gas well or wells in a manner which results or tends to result in reducing the quantity of oil or gas ultimately to be recovered from any pool in this state.
b. The inefficient storing of oil and the locating, spacing, drilling, equipping, operating, or producing of any oil or gas well or wells in a manner causing or tending to cause unnecessary or excessive surface loss or destruction of oil or gas.
c. Abuse of the correlative rights and opportunities of each owner of oil and gas in a common reservoir due to nonuniform, disproportionate, and unratable withdrawals causing undue drainage between tracts of land.
d. Producing oil or gas in such manner as to cause unnecessary water channeling or coning.
e. The operation of any oil well or wells with an inefficient gas-oil ratio.
f. The drowning with water of any stratum or part thereof capable of producing oil or gas.
g. Underground waste however caused and whether or not defined.
h. The creation of unnecessary fire hazards.
i. The escape into the open air, from a well producing both oil and gas, of gas in excess of the amount which is necessary in the efficient drilling or operation of the well.
j. The use of gas, except sour gas, for the manufacture of carbon black.
k. The escape of gas into the open air, from a well producing gas, in excess of the amount which is necessary for safety reasons or for the efficient drilling, testing, and operation of the well.
l. Production of oil and gas in excess of reasonable market demand.