KRS 353.429: Sequestration reservoirs -- Rights and duties of mineral owners, lessees,

pore space owners, oil and gas operators, and sequestration operators -- Duties

of cabinet -- Hearing.

The provisions of this section shall apply to activities occurrin g within or proposed to

occur within a sequestration reservoir:

(1) Nothing contained in KRS 353.411 to 353.459 prohibits the mineral owner or lessee

or the pore space owner or lessee from exploring, developing, or producing oil, gas,

or other minerals above or below a sequestration reservoir or from using other strata

or formations for carbon dioxide sequestration. Wells penetrating sequestration

reservoirs shall protect their integrity and prevent carbon dioxide release. Wells

penetrating oil and gas form ations shall protect their integrity and prevent

contamination or damage;

(2) Before drilling, deepening, reopening, converting, or plugging wells drilled

pursuant to this chapter and KRS Chapter 349 on any property with a permitted

sequestration reservoir, the oil and gas operator shall, at the time of filing with the

cabinet, forward a copy of the application to the sequestration operator via

registered or certified mail or by personal service;

(3) When the cabinet receives a permit application for a well within a sequestration

reservoir or buffer zone, the cabinet shall notify both the oil and gas operator and

sequestration operator by registered or certified mail or by personal service;

(4) Before drilling, deepening, reopening, converting, or plugging a Class VI injection

well or monitoring well on a property where oil, gas, or other minerals are owned

by a person other than the sequestration operator, the sequestration operator shall, at

the time of filing, forward a copy of the application and plat to the oil, gas, or other

mineral owner via registered or certified mail or by personal service;

(5) The sequestration operator shall:

(a) Notify the oil, gas, or other mineral operator when sequestration rights are

acquired on property with:

1. An oil or gas lease or oil and gas operations; or

2. A coal or noncoal lease, or coal or noncoal operations pursuant to KRS

Chapter 350; and

(b) Ensure that notice of future applications to drill Class VI injection wells or

monitoring wells are sent to the oil, gas, coal, or other mineral lessee and

operator, if any;

(6) Upon receiving an application to drill, deepen, convert, reopen, complete, or plug

an oil or gas well or a Class VI injection or monitoring well, the cabinet shall hold

the application for fifteen (15) days to allow non -applicant operators to file

objections. If objections are filed, the objecting non -applicant operator shall serve

the objections on the applicant operator. The cabinet shall schedule a hearing,

pursuant to KRS 353.419(6), within ten (10) days of receiving the objection. If,

during or before the hearing, the parties reach an agreement regarding the

objections, changes to the drilling plan in accordance with the agreement shall be

submitted by the applicant operator in an amended application. If an agreement is

not reached, the cabinet, after considering the objections and the evidence presented

at the hearing, shall ent er an order and issue a permit to drill with modifications to

protect the rights and resources of the parties involved;

(7) If the oil and gas operator and the sequestration operator disagree on the drilling,

deepening, reopening, completing, or plugging of an oil or gas well or a Class VI or

monitoring well, the cabinet shall:

(a) Determine how the costs above those normally incurred in the drilling,

completion, or plugging of the well will be allocated to the applicant operator

and non-applicant operator; and

(b) Specify the payment terms;

(8) Upon receipt of notice of an application to drill, deepen, reopen, complete, or plug

an oil or gas well or a Class VI or monitoring well, a non -applicant operator may

waive his or her objection and specify whether th e waiver applies to one (1) or

more wells, a group of wells, or specific areas. The waiver shall be made by letter

or by telephone with written confirmation. If the waiver is filed and the cabinet

determines that the application is otherwise complete and t he public interest is

served, the permit shall be issued; and

(9) (a) Before plugging and abandoning an oil or gas well that penetrates a

sequestration reservoir or a Class VI or monitoring well that penetrates an oil

or gas formation:

1. The operator prop osing to plug and abandon the well shall notify the

other non-plugging operator and the cabinet of the operator's intention to

plug and abandon the well and shall state the date and time when the

plugging will occur;

2. Notice shall be sufficient to reason ably allow the non -plugging operator

to attend and view the plugging of the well. The operator may proceed

with plugging the well if, after notice, the non -plugging operator does

not attend; and

3. The operator shall:

a. Seek and receive the approval of the cabinet; and

b. Allow a cabinet representative to be present at the well plugging.

(b) Plugging shall not occur except pursuant to the approval of the cabinet and

with a cabinet representative present at the plugging.