KRS 353.449: Agreement of pore space owners -- Nonconsenting owners -- Inclusion of

pore space by order of cabinet -- Pooling order -- Costs -- Hearing -- Seismic

survey -- Liability.

(1) If a sequestration operator is unable, after reasonable effort, to obtain the consent of

all pore space owners within a proposed reservoir for an underground carbon

dioxide sequestration facility, the cabinet may on petition satisfying the conditions

established in this section, issue an order that the identified pore spa ce owned by

nonconsenting owners be included in a sequestration facility for the purpose of

geologic sequestration of carbon dioxide pursuant to subsection (5) of this section.

(2) The Class VI permit applicant shall negotiate in good faith with the pore s pace

owners and acquire rights needed to access the pore space.

(3) Except for temporary access in cases of emergency, the cabinet shall not allow any

surface disturbance on any surface tract or tracts overlying the pore space of a

nonconsenting owner.

(4) The sequestration operator shall provide a list to the cabinet of all persons

reasonably known to own an interest in pore space proposed to be included in the

reservoir.

(5) (a) If the applicant or operator cannot reach an agreement with the owners of the

pore space acreage in a proposed reservoir, but has secured written consent

for at least seventy -five percent (75%) of the pore space acreage in the

proposed reservoir, all the pore space in the sequestration reservoir shall be

declared to be included wit hin the proposed sequestration facility if the

cabinet finds that the requirements of this section have been met.

(b) For the purposes of this section, the interests of any unknown or missing pore

space owners may be declared to be included through the poo ling order

provided reasonable effort to locate and notify the owners has been made and

the sequestration operator has complied with the publication requirements of

subsection (7) of this section. A pooling order shall be made only after the

cabinet provid es notice to all pore space owners proposed to be included

within the order.

(6) The applicant shall pay to the cabinet all costs associated with the conduct of the

administrative hearing as assessed in the pooling order. The payment shall be made

prior to the pooling order becoming effective. These funds shall be deposited into

the carbon dioxide sequestration facility administrative fund established in KRS

353.437.

(7) If the proposed pooling order concerns pore space with unknown or missing

owners, the s equestration operator shall, after reasonable efforts to locate the pore

space owners, publish one (1) notice in the newspaper of the largest circulation in

each county in which the pore space is located. The notice shall appear no more

than forty-five (45) days nor less than thirty (30) days prior to the initial application

for the pooling order. The applicant shall file proof of notice with the cabinet

concurrently with the application. The notice shall:

(a) State that an application for a pooling order has been filed with the cabinet;

(b) Describe the property under which the pore space proposed to be collectively

used is located;

(c) In the case of an unknown pore space owner, indicate the name of the last

known owner;

(d) In the case of a missing pore space owner, identify the owner and the owner's

last known address; and

(e) State that any person claiming an interest in the pore space proposed to be

collectively used shall notify the cabinet and the Class V I permit applicant at

the published address within twenty (20) days of the publication date.

(8) A pooling order shall authorize the injection and sequestration of carbon dioxide

beneath the tract or portion thereof. The pooling order shall identify the

compensation to be paid to unknown, missing, and nonconsenting pore space

owners and the basis for valuation of the collective interest. The cabinet may

consider evidence submitted by nonconsenting pore space owners as to the

valuation of their interest.

(9) Except for temporary access in cases of emergency, the pooling order issued by the

cabinet shall not authorize any surface entry or surface disturbance by the permittee

on any surface tract or tracts overlying the pore space of a nonconsenting, missing,

or unknown owner.

(10) A certified copy of any pooling order and a survey of the sequestration field shall

be maintained by the cabinet.

(11) If the cabinet or US EPA requires a seismic survey of lands owned by the

nonconsenting surface owner and an operato r is unable to reasonably obtain by

negotiation with a property owner the right to conduct seismic surveys on lands

owned by the nonconsenting surface owner, then:

(a) The cabinet may issue an order allowing the operator to conduct a seismic

survey of the lands owned by the nonconsenting surface owner from outside

the boundaries of the lands owned by the nonconsenting surface owner;

(b) The operator shall, prior to conducting the survey, pay the surface owner just

and reasonable compensation as established by the cabinet; and

(c) Any data obtained by the operator through a seismic survey of the lands

owned by a nonconsenting surface owner shall be held as confidential and

shall be used only by the permittee, the cabinet, and US EPA for the purpose

of satisfying statutory or regulatory requirements.

(12) Except for the authorized persons and circumstances in subsection (11) of this

section, any person disclosing confidential seismic survey data may be liable to the

nonconsenting surface owner as provided under law.

(13) The operator shall defend, indemnify, and hold harmless the property owner for all

claims arising out of any surface or subsurface entry onto the property by the

operator, its contractors, and its agents, except those claims arising from the

intentional acts of a property owner.