Article 5.5 - Subsidence

California Public Resources Code — §§ 3315-3347

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Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

It is hereby found and determined:

(a)That the people of the State of California have a direct and primary interest in arresting and ameliorating the subsidence and compaction of land in those areas overlying or immediately adjacent to producing oil or gas pools within the State where valuable buildings, harbor installations and other improvements are being injured or imperiled or where subsidence is interfering or may interfere with commerce, navigation and fishery, or where substantial portions of such areas may be inundated if subsidence continues, thereby endangering life, health, safety, public peace, welfare and property;
(b)That in certain of such areas of the State land already has subsided to a great extent and is continuing to subside at an alarming rate, resulting in injury to surface and underground improvements through land movement or the threat of inundation from the sea, necessitating extensive filling and construction of levees and dikes; and requiring the raising, repair and reconstruction of highways, bridges, buildings, utility and transportation facilities, vital national defense installations and other improvements;
(c)That the results of studies by qualified engineers, which have been conducted in certain of such affected areas, indicate that the only feasible method that can be expected to arrest or ameliorate subsidence in such areas is by repressuring subsurface oil and gas formations thereunder and that such repressuring operations, in addition thereto, should increase the amount of oil ultimately recoverable from the formations underlying such areas and protect the oil or gas in such lands from unreasonable waste;
(d)That unit or co-operative operation of such pool or pools in such areas is necessary in order to repressure or maintain pressure in said pool or pools in order to arrest or ameliorate subsidence;
(e)That, in view of the special characteristics of the subsidence problem in such areas, it is necessary, therefore, that the State of California, through authority vested in the State Oil and Gas Supervisor, exercise its power and jurisdiction to require the carrying on of repressuring operations which will tend to arrest or ameliorate subsidence by maintaining or replenishing underground pressures in formations underlying such areas, thereby safeguarding life, health, property, and the public welfare, and to require such co-operative or unit plan or plans as may be necessary for repressuring which tend to arrest or ameliorate subsidence subject to the limitations on the authority of the supervisor contained in this article;
(f)That it is also desirable to encourage the carrying on of voluntary repressuring operations pursuant to voluntary unit or co-operative agreements in order to arrest or ameliorate subsidence, and as a means to that end it is necessary that the power of eminent domain be exercised to acquire the properties of nonconsenting owners of interests in oil and gas under the circumstances and subject to the limitations set forth in this article.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

Unless the context otherwise requires, the general provisions and definitions contained in this chapter govern the construction of this article.

Amended by Stats. 1994, Ch. 1010, Sec. 204. Effective January 1, 1995.

As used in this article, “person” means any natural person, corporation, association, partnership, limited liability company, joint venture, receiver, trustee, executor, administrator, guardian, fiduciary or other representative of any kind and includes the state and any city, county, city and county, district or any department, agency or instrumentality of the state or of any governmental subdivision whatsoever.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Increased production” means that portion of the oil or gas produced from all wells bottomed within a unit area, or within any other area where the supervisor finds repressuring operations feasible, during any year over and above the oil or gas that would have been produced from all wells bottomed within the same area during the identical year at the projected rate of decline for the wells in the absence of repressuring operations conducted pursuant to this article.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Working interest” means an interest held in lands by virtue of fee title, including lands held in trust, a lease, operating agreement or otherwise, under which the owner of such interest has the right to drill for, develop and produce oil and gas. A working interest shall be deemed vested in the owner thereof even though his right to drill or produce may be delegated to an operator under a drilling and operating agreement, unit agreement, or other type of operating agreement.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Working interest owner” means a person owning a working interest.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Royalty interest” means a right to or interest in oil and gas produced from any lands or in the proceeds of the first sale thereof other than a working interest.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Royalty interest owner” means a person owning a royalty interest.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Unit operator” means the person or persons designated by the unit agreement or in accordance with subdivisions (g) and (j) of Section 3322 as operator or operators of the unitized area.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Land” means both surface and mineral rights.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Pool” means an underground reservoir containing, or appearing at the time of determination to contain, a common accumulation of crude petroleum oil or natural gas or both. Each zone of a general structure which is separated from any other zone in the structure is a separate pool.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Field” means the same general surface area which is underlaid or reasonably appears to be underlaid by one or more pools.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Repressuring operations” means gas injection operations, water injection operations, water flooding operations, or any combination thereof, or any other operations intended primarily to arrest or ameliorate subsidence, or to restore or increase the pressure in a pool, or to avoid or minimize a reduction of pressure within a pool.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Subsidence” means sinking, lowering, collapsing, compaction or other movement of the land whether covered by water or not.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Unit area” means all or part of a pool or pools included within the area embraced by a unit created pursuant to an order of the supervisor as provided in Section 3322, or created by a unit agreement voluntarily entered into.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Unit production” means all oil, gas and other hydrocarbon substances produced from a unit area from the effective date of the order of the supervisor creating the unit, or from the effective date of a unit agreement approved by the supervisor.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Fieldwide repressuring plan” means a plan based upon a competent engineering study or studies, prepared by a petroleum engineer licensed by the State, of all the pools in a field, designed so as to provide for a program of pressure restoration or maintenance as to most effectively arrest or ameliorate subsidence with respect to those land areas referred to in Section 3315.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

“Unit agreement” means and includes, in addition to the unit agreement, any unit operating agreement, consent agreement and other agreement entered into in connection with and supplemental to such unit agreement, but shall not include any preliminary agreement confined to effectuating any exchange of interests in tracts of land which the parties to such preliminary agreement may desire.

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

This article applies only to lands, referred to in Section 3315, overlying or immediately adjacent to a producing pool or pools, when such lands are subsiding, portions of which lands are subject to threat of inundation from the sea and which subsidence is endangering the life, health and safety of persons or which is damaging or is threatening to cause damage to, any surface or underground improvements located on such lands overlying or immediately adjacent to such pool or pools. The area within the exterior boundaries established pursuant to Section 3336 shall be known as a “subsidence area.”

Added by Stats. 1958, 1st Ex. Sess., Ch. 73.

An order of the supervisor which involves tide or submerged lands which may have been granted to any city, county, or city and county, or district, shall prohibit any impairment of the public trust for commerce, navigation, or fisheries to which the granted lands are subject. The Legislature hereby finds and declares that compliance with any such order containing such prohibition will not impair the public trust for commerce, navigation, or fisheries to which the granted lands are subject, and that any acts or things done pursuant to the terms thereof or resulting therefrom are consistent with and not in violation of the terms and conditions of any such grant or of any trusts, restrictions, or conditions of appertaining thereto. No such order shall effect or result in, or be construed to effect or result in a revocation of or change in any trust pertaining to the granted lands, or in any grant, conveyance, alienation, or transfer of the granted lands, or any part thereof, to any other individual, firm, or corporation, even though such order provides for the pooling of oil, gas, or other hydrocarbon substances produced from the granted lands with oil, gas, or other hydrocarbon substances produced from other lands, or results in the migration of any oil, gas or other hydrocarbon substances between the granted lands and other lands. If any of the granted lands are contained in any unit created or approved by an order of the supervisor, and, when applicable, the State Lands Commission, then any trust, restrictions, or conditions pertaining to any production from the granted lands included within such a unit, or to any proceeds from such production, shall apply only to that part of the production or that part of the proceeds therefrom which is allocated to such city, county, or city and county or district on account of the granted lands under any such order, and shall not apply to any other production or the proceeds therefrom, whether or not the same may have been produced from the granted lands or other lands.

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