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O 136
20 AAC 25.025 - .990 Other 136 1. July 20, 2016 File Opening Request 2. July 21, 2016 Notice of public hearing; affidavits of publication, email distribution, and mailings 3 - -------------------- Public Comments 4. September 27, 2016 Public hearing transcript and sign -in sheet 5. September 30, 2016 Notice of public hearing (Workshop), affidavits of publication, email distribution, and mailings 6. September 30, 2016 Supplemental Notice of public hearing, affidavits of publication, email distribution, and mailings 7. October 27, 2017 Email CIRI 8. November 1, 2016 Sign in Sheet for Workshops 9 - -------------------- Public Comments 10. January 25, 2017 Second Notice of public hearing, affidavits of publication, email distribution, and mailings 11. March 21, 2017 Public hearing transcript, sign -in sheet and comments 12. May 3, 2017 Final Regulations Package to Juneau 13. December 4, 2017 Questions on Regulations 14. December 6, 2017 Supplemental Final Regulations to Juneau 15. January 3, 2018 Final Regulations Package to Juneau Confidential documents held in Secure Storage BRIEF DESCRIPTION The Alaska Oil and Gas Conservation Commission has amended 20 AAC 25.280(f). The proposed change is in response to a public member's request for the AOGCC to provide greater transparency for workover operations that pertain to hydraulic fracturing. The Lieutenant Governor signed and filed the regulation changes on January 11, 2018, with an effective date of February 10, 2018. The regulations will appear in Register 225, April 2018, of the Alaska Administrative Code. For further information or to obtain a copy of the amended regulations, contact Jody Colombie at (907) 793-1221, fax (907) 276-7542, or e-mail iody.colombienn,alaska.gov. Register 225, April 2018 MISCELLANEOUS BOARDS 20 AAC 25.280(f) is amended to read: (f) An Application for Sundry Approvals for a well proposed for stimulation by hydraulic fracturing as defined in 20 AAC 25.283(m) must also comply with 20 AAC 25.283. The commission will post the application on its public Internet website. If the application contains confidential information the operator shall submit, for posting on the commission's public Internet website, an additional copy of the application with all confidential information redacted. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 12/28/2006, Register 180; am 1/7/2015, Register 213; am 02/10/2018, Register 225) Authority: AS 31.05.030 Editor's note: The Alaska Oil and Gas Conservation Commission will post applications on its website at http://doa.alaska.gov/ogc. Colombie, JoclJ (DOA) From: Colombie, Jody 1 (DOA) Sent: Friday, February 16, 2018 8:37 AM To: DOA AOGCC Prudhoe Bay; Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody 1 (DOA); Davies, Stephen F (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); McPhee, Megan S (DOA); Rixse, Melvin G (DOA); Mumm, Joseph (DOA sponsored); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Regg, James B (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Ballantine, Tab A (LAW); Erickson, Tamara K (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity; AKDCWeIIIntegrityCoordinator; Alan Bailey; Alex Demarban; Alicia Showalter; Allen Huckabay; Andrew VanderJack; Ann Danielson; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Ben Boettger; Bill Bredar; Bob Shavelson; Brandon Viator, Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cody Gauer, Cody Terrell; Colleen Miller; Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Danielle Mercurio; Darci Horner, Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; ddonkel@cfl.rr.com; Diemer, Kenneth J (DNR); DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Elwood Brehmer; Evan Osborne; Evans, John R (LDZX); Brown, Garrett A (DNR); George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff; Hurst, Rona D (DNR); Hyun, James J (DNR); Jacki Rose; Jason Brune; Jdarlington Qarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jill Simek; Jim Shine; Jim Watt; Jim White; Young, Jim P (DNR); Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); )on Goltz; Chmielowski, Josef (DNR); Joshua Stephen; Juanita Lovett; Judy Stanek; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Frank, Kevin J (DNR); Kruse, Rebecca D (DNR); Kyla Choquette; Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.haniey@anadarko.com); Mark Landt; Mark Wedman; Michael Bill; Michael Calkins; Michael Moora; Michael Quick; Michael Schoetz, Mike Morgan; M) Loveland; mkm7200; Motteram, Luke A; Mueller, Marta R (DNR); Nathaniel Herz, knelson@petroleumnews.com; Nichole Saunders; Nick Ostrovsky; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Robert Warthen; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharon Yarawsky; Skutca, Joseph E (DNR); Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hannigan; Sternicki, Oliver R; Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Tanisha Gleason; Ted Kramer; Teresa Imm; Tim Jones; Tim Mayers; Todd Durkee; Tom Maloney; trmjr1; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Well Integrity, Well Integrity; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Andy Bond; Bajsarowicz, Caroline J; Bruce Williams; Casey Sullivan; Corey Munk; D. McCraine; Don Shaw, Eppie Hogan; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Heusser, Heather A (DNR); Fair, Holly S (DNR); Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Keith Lopez; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Melonnie Amundson; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Rachel Davis; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); William Van Dyke ubject: AOGCC Final regulations Workover Operations 20 AAC 25.280(f) ttachments: Final Regulation 20 AAC 25.280(f).pdf; Brief Description Notice .pdf BRIEF DESCRIPTION The Alaska Oil and Gas Conservation Commission has amended 20 AAC 25.280(f). The proposed change is in response to a public member's request for the AOGCC to provide greater transparency for workover operations that pertain to hydraulic fracturing. The Lieutenant Governor signed and filed the regulation changes on January 11, 2018, with an effective date of February 10, 2018. The regulations will appear in Register 225, April 2018, of the Alaska Administrative Code. For further information or to obtain a copy of the amended regulations, contact Jody Colombie at (907) 793-1221, fax (907) 276-7542, or e-mail iody.colombie(a)alaska.gov. Jody J. Cotom6ie AOGCC SpeciaC.Assistant ACaska OiCandGas Conservation Commission 333 West 7" Avenue .Anchorage, .Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv. colombie@alaska.aov. Bernie Karl Gordon Severson Penny Vadla K&K Recycling Inc. 3201 Westmar Cir. 399 W. Riverview Ave. P.O. Box 58055 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 Fairbanks, AK 99711 George Vaught, Jr. Darwin Waldsmith Richard Wagner P.O. Boz 13557 P.O. Box 39309 P.O. Box 60868 Denver, CO 80201-3557 Ninilchik, AK 99639 Fairbanks, AK 99706 Byron Mallott Lieutenant Governor iw State Capitol Juneau, Alaska 99811 _ 907.465.3520 W W W.LTGOV.ALASKA.GOV //"'++•+^�� OFFICE OF THE LIEUTENANT GOVERNOR ALASKA MEMORANDUM 530 West 71" Ave, Suite 1700 Anchorage, Alaska 99501 907.269.7460 LT.GOVERNOR@ALASKA.GOV TO: Minta Montalbo Department of Administration FROM: Scott Meriwether, Office of the Lieutenant Governor 4:�i_ 465.4081 DATE: January 12, 2018 RE: Filed Permanent Regulations: Oil and Gas Conservation Commission Alaska Oil and Gas Conservation Commission: Workover Operations (20 AAC 25.280) Attorney General File: JU2016200914 Regulation Filed: 1/11/2018 Effective Date: 2/10/2018 Print: 225, April 2018 cc with enclosures: Linda Miller, Department of Law Judy Herndon, LexisNexis ORDER CERTIFYING TI IE CHANGES TO REGULATIONS OF THE ALASKA OIL AND GAS CONSERATION COMMISSION The attached I page of regulations is certified to be a correct copy of the regulation change that the Alaska Oil and Gas Conservation Commission adopted at its December 6, 2017 meeting, under the authority of AS 31.05 and after compliance with the Administrative Procedure Act (AS 44.62), specifically including notice under AS 44.62.190 and 44.62.200 and opportunity for public comment under AS 44.62.210. This action is not expected to require an increased appropriation. On the record, in considering public comments, the Alaska Oil and Gas Conservation Commission paid special attention to the cost to private persons of the regulatory action being taken. The regulation changes described in this order take effect on the 30th day after they have been filed by the lieutenant governor as provided in AS 44.62.180. Date: December 6, 2017 Hollis S. French, Chair, AOGCC FILING CERTIFICATION Byron Mallo t, Lieutenant Governor for the State of Alaska, certify that on , 2018 at in., I filed the attached regulations according to the pr inions of 44.62.040 - 44.62.120. Lieute'nYpt dovernor Effective: Register: 225 ri ZO/� Register 2ZS, A � ri'l 2018 -MISCELLANEOUS BOARDS 66 Cf V1 kr))) 20 AAC 25.2800 is being amended to read: C(car 20AA (f) An ayplication for Sundry Approvals for a well proposed for stimulation by hydraulic fracturing as defined in 20 AAC 25.283(m) must also coni wit1120 AAC 25.283. The (Eff. 4/2/86, Register 97; am 11 /7/99, Register 152; am 12/28/2006, Register 1 rpm 3�T�s/ic,�K i�t5'eier Xx7- j Register 2131`E 2/io/ZN$Register 2 Authority: AS 31.05.030 11 COr152r✓qNU� Editor's note: The Alaska Oil and GapCommission will Dost annlication: http://doa.alaska.gov/oge. 5, MEMORANDUM To: The Honorable Byron Mallott Lieutenant Governor From: Susan R. Pollard Chief Assistant Attorney General and Regulations Attorney Legislation and Regulations Section State of Alaska Department of Law Date: January11, 2018 File No.: JU2016200914 Tel. No.: 465-3600 Re: Regulation re: 20 AAC 25.280: Alaska Oil and Gas Conservation Commission: Workover Operations The Department of Law has reviewed the attached regulations of the Alaska Oil and Gas Conservation Commission against the statutory standards of the Administrative Procedure Act. Based upon our review, we find no legal problems. This memorandum constitutes the written statement of approval under AS 44.62.060(b) and (c) that authorizes your office to file the attached regulations. The regulations were adopted by the commission after the close of the public comment period. The regulations concern posting of an application for a well proposed for stimulation by hydraulic fracturing on the commission's website. The public notices and the December 6, 2017 certification of adoption order state that this action is not expected to require an increased appropriation. Therefore, a fiscal note under AS 44.62.195 is not required. We have made some technical corrections to conform the regulations in accordance with AS 44.62.125. The corrections are shown on the attached copy of the regulations. SRP:srp cc: Honorable Hollis French, Commissioner Department of Administration (AOGCC) Minta Montalbo, Office of the Commissioner Department of Administration Jody Colombie, Special Assistant Department of Administration (AOGCC) Thomas Ballantine, Sr. Assistant Attorney General Natural Resources Section NOTICE OF PROPOSED CHANGES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION Bob Shavelson, acting on behalf of Cook Inletkeeper, has requested the Alaska Oil and Gas Conservation Commission (AOGCC) hold a hearing on a proposal to amend 20 AAC 25.280. Specifically, Mr. Shavelson proposes that the following phrase, set forth in bold font, be added to 20 AAC 25.280(f): An application for Sundry Approvals for a well proposed for stimulation by hydraulic fracturing as defined in 20 AAC 25.283(m) will be reviewed by the commission in accordance with 20 AAC 25.540 and must also comply with 20 AAC 25.283. The AOGCC has scheduled a public hearing on this application for December 15, 2016 at 9:00 a.m. at 333 West 7'h Avenue, Anchorage, Alaska 99501. You may comment on the proposed regulation change, including the potential costs to private persons of complying with the proposed change, by submitting written comments to Alaska Oil and Gas Conservation Commission at 333 West 7's Avenue, Anchorage, Alaska 99501. Additionally, the Alaska Oil and Gas Conservation Commission will accept comments by facsimile at (907) 276-7542 and by electronic mail atjody.colombie@alaska.gov. The comments must be received no later than 4:30 p.m. on December 15, 2016. Oral or written comments also may be submitted at the December 15, 2016. If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombie at (907) 793-1221 no later than December 10, 2016 to ensure that any necessary accommodation can be provided. After the public comment period ends, the Alaska Oil and Gas Conservation Commission will either adopt the proposed change or decide to take no action on it. The language of any final regulation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authority: AS 31.05.030 and AS 31.05.090 Statutes Being Implemented, Interpreted, or Made Specific: AS 31.05.090 Fiscal Information: The AOGCC estimates the cost of implementation of this change in regulation to be $14,000 a year. DATE: I0-14—/6 �P""' CathyA. Foerster, Chair, Commissioner (- ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.190(g)) I . Adopting agency: Alaska Oil and Gas Conservation Commission 2. General subject of regulation: Workover operations 3. Citation of regulation (may be grouped): 20 AAC 25.280(fl 4. Department of Law file number, if any: 5. Reason for the proposed action: ( ) Compliance with federal law ( ) Compliance with new or changed state statute ( ) Compliance with court order ( ) Development of program standards ( X ) Other (identify): AOGCC response to a request for a public hearing on aproposcd amendment of existing regulations, made on behalf of Cook Inletkeepers. 6. Appropriation/Allocation: DOA/AOGCC Cost of implementation to the state agency and available funding (in thousands of dollars): Initial Year Subsequent FY 2017 Years Operating Cost $ 14. $ 14. Capital Cost $ 0 $ 0 1002 Federal receipts $ 0 $ 0 1003 General fund match $ 0 $ 0 1004 General fund $ 0 _ _ $_ 0 1005 General fund/ program $ 0 $ 0 Other (1162 AOGCC Rcts) $ 14. $ 14. 8. The name of the contact person for the regulation: Name: Jodv J. Colombie Title: Special Assistant to the Commission Address: 333 West 7'" Avenue, Anchorage, AK 99501 Telephone: (907) 793-1221 E-mail address: jodv.colombie@alaska.2ov 9. The origin of the proposed action: Staff of state agency Federal government General public Petition for regulation change X Other (identify) Cook Inletkeepers 10. Date: Prepared by: Name: Jodv J. Colombie Title: AOGCC Special Assistant Telephone: (907) 793-1221 SUPPLEMENTAL NOTA.., OF PROPOSED CHANGES IN TH„ REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION Bob Shavelson, acting on behalf of Cook Inletkeeper, has requested the Alaska Oil and Gas Conservation Commission (AOGCC) hold a hearing on a proposal to amend 20 AAC 25.280. Specifically, Mr. Shavelson proposes that the following phrase, set forth in bold font, be added to 20 AAC 25.280(f): An application for Sundry Approvals for a well proposed for stimulation by hydraulic fracturing as defined in 20 AAC 25.283(m) will be reviewed by the commission in accordance with 20 AAC 25.540 and must also comply with 20 AAC 25.283. This supplemental notice clarifies the cost of implementation to the agency and the origin of the proposed action. The AOGCC has scheduled a public hearing on this application for December 15, 2016 from 9:00 a.m. until 12:00 p.m. at 333 West 7`h Avenue, Anchorage, Alaska 99501. Should testimony take longer than anticipated, the AOGCC may extend the hearing into the afternoon for those who were present by 12:00 p.m. You may comment on the proposed regulation change, including the potential costs to private persons of complying with the proposed change, by submitting written comments to Alaska Oil and Gas Conservation Commission at 333 West 7 1 Avenue, Anchorage, Alaska 99501. Additionally, the Alaska Oil and Gas Conservation Commission will accept comments by facsimile at (907) 276-7542 and by electronic mail atjody.colombie@alaska.gov. The comments must be received no later than 4:30 p.m. on December 15, 2016. Oral or written comments also may be submitted at the December 15, 2016 hearing If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombie at (907) 793-1221 no later than December 10, 2016 to ensure that any necessary accommodation can be provided. After the public comment period ends, the Alaska Oil and Gas Conservation Commission will either adopt the proposed change, possibly with modifications, or decide to take no action on it. The language of any final regulation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authority: AS 31.05.030, AS 31.05.090, and AS 31.05.093. Statutes Being Implemented, Interpreted, or Made Specific: AS 31.05.090 Fiscal Information: Because the proposed changes would be assessed annually as part of the Regulatory Cost Charge, the proposed changes are not expected to require an increased appropriation. DATE: November 7, 2016 Daniel 1'. Seamount, Jr. Commissioner ADDI79O, ., �L REGULATION NOTICE INFORM). flON (AS 44.62.190(g)) 1. Adopting agency: Alaska Oil and Gas Conservation Commission 2. General subject of regulation: Workover operations 3. Citation of regulation (may be grouped): 20 AAC 25.280(f) 4. Department of Law file number, if any: 5. Reason for the proposed action: ( ) Compliance with federal law 91 W ( ) Compliance with new or changed state statute ( ) Compliance with court order ( ) Development of program standards (X) Other (identify): AOGCC response to a request for a public hearing on aproposed amendment of existing regulations, made on behalf of Cook Inletkeepers. Appropriation/Allocation: DOA/AOGCC Cost of implementation to the state agency and available funding (in thousands of dollars): Operating Cost Capital Cost 1002 Federal receipts 1003 General fund match 1004 General fund 1005 General fund/ program Other (1162 AOGCC Rcts) Initial Year Subsequent FY 2017 Years $ 14. $ 14. $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 14. $ 14. The name of the contact person for the regulation: Name: Jodv J. Colombie Title: Special Assistant to the Commission Address: 333 West 71h Avenue, Anchorage, AK 99501 Telephone: (90 7) 793-1221 E-mail address: iody.colombienalaska.gov The origin of the proposed action: Staff of state agency Federal government General public Petition for regulation change X Other (identify) Cook Inletkeepers 10. Date: November 7, 2016 Prepared by:� Name: Jodv J. CColombie Title: AOGCC Special Assistant Telephone: (907) 793-1221 ALASKA OIL AND GAS CONSERVATION COMMISSION On December 15, 2016 the Alaska Oil and Gas Conservation (AOGCC) held a hearing on an amendment to 20 AAC 25.280 proposed by Bob Shavelson acting on behalf of Cook lnletkeeper. The AOGCC will hold a second hearing on the proposal to amend 20 AAC 25.280. The AOGCC is proposing that the following, set forth in bold font, be added to 20 AAC 25.280(f): An application for Sundry Approvals for a well proposed for stimulation by hydraulic fracturing as defined in 20 AAC 25.283(m) must also comply with 20 AAC 25.283. The Commission will post the application on its website. If the application contains confidential information the operator shall submit, for this posting, an additional cony of the application with all confidential information redacted. The Commission will accent public comments for 10 days. Access to submitted applications is available at http://doa.alaska.gov/oac. The public hearing on this proposal is set for March 23, 2017 at 9:00 a.m. at 333 West Vh Avenue, Anchorage, Alaska 99501. You may comment on the proposed regulation change, including the potential costs to private persons of complying with the proposed change, by submitting written comments to Alaska Oil and Gas Conservation Commission at 333 West 7'h Avenue, Anchorage, Alaska 99501. Additionally, the Alaska Oil and Gas Conservation Commission will accept comments by facsimile at (907) 276-7542 and by electronic mail atjody.colombie@alaska.gov. The comments must be received no later than 4:30 p.m. on March 23, 2017. Evidence, including oral or written comments, may also be submitted at the March 23, 2017 hearing. If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombie at (907) 793-1221 no later than March 10, 2017 to ensure that any necessary accommodation can be provided. After the public comment period ends, the Alaska Oil and Gas Conservation Commission will either adopt the proposed change or decide to take no action on it. The language of any final regulation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authority: AS 31.05.030 and AS 31.05.090 Statutes Being Implemented, Interpreted, or Made Specific: AS 31.05.090 Fiscal Information: Because the proposed changes would be assessed annually as part of the Regulatory Cost Charge, the proposed changes are not expected to require an increased appropriation. DATE: 1-2-5-1-7 a, Cathy . Foerster, Chair, Commissioner ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.190(g)) 1. Adopting agency: Alaska Oil and Gas Conservation Commission 2. General subject of regulation: Workover operations 3. Citation of regulation (may be grouped): 20 AAC 25.280(1) 4. Department of Law file number, if any: 5. Reason for the proposed action: ( ) Compliance with federal law ( ) Compliance with new or changed state statute ( ) Compliance with court order ( ) Development of program standards ( X ) Other (identify): AOGCC regulatory amendment made after public hearing, on a regulatory amendment proposed by Cook Inletkeepers. 6. Appropriation/Allocation: DOA/AOGCC 7. Cost of implementation to the state agency and available funding (in thousands of dollars): U Operating Cost Capital Cost 1002 Federal receipts 1003 General fund match 1004 General fund 1005 General fund/ Initial Year Subsequent FY 2017 Years $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 program $ 0 $ 0 Other (1162 AOGCC Rcts) $ 0 $ 0 The name of the contact person for the regulation: Name: Jodv J. Colombie Title: Special Assistant to the Commission Address: 333 West 7th Avenue, Anchorage, AK 99501 Telephone: (907) 793-1221 E-mail address: jody.colombie(a)alaska.gov The origin of the proposed action: X Staff of state agency Federal government General public Petition for regulation change X Other (identify) (We've rewritten it in a way that contains none of Shavelson's proposed language). 10. Date: Prepared by: 0 (SLYc Name: Jody J. Colombie Title: AOGCC Special Assistant Telephone: (907) 793-1221 AFFIDAVIT OF NOTICE OF PROPOSED REGULATION AND FURNISHING OF ADDITIONAL INFORMATION I, Jody J. Colombie, Special Assistant, of the Alaska Oil and Gas Conservation Commission, being sworn, state the following: As required by AS 44.62.190, notice of the proposed adoption of changes to 20 AAC 25-280(0 has been given by being (1) published in a newspaper or trade publication; (2) furnished to interested persons; (3) furnished to appropriate state officials; (4) furnished to the Department of Law, along with a copy of the proposed regulation; (5) furnished electronically to incumbent State of Alaska legislators; (6) furnished to the Legislative Affairs Agency, Division of Legal and Research Services; (7) posted on the Alaska Online Public Notice System as required by AS 44.62.175(a)(1) and (b) and 44.62.190(a)(1); (8) furnished electronically, along with a copy of the proposed regulation, to the Legislative Affairs Agency, the chair of the Resources Committee of the Alaska Senate and House of Representatives, the Administrative Regulation Review Committee, and the legislative council. As required by AS 44.62.190, additional regulation notice information regarding the proposed adoption of the regulation changes described above has been furnished to interested persons and those in (5) and (6) of the list above. The additional regulation notice information also has been posted on the Alaska Online Public Notice System. Date: December 6, 2017 J d Jay0e C& mbie, Special Assistant, AOGCC Subscribed and sworn to before me at Anchorage, Alaska on December 6, 2017. Notary Public in and for thetat of Alaska AFFIDAVIT OF ORAL HEARING I, Hollis S. French, Chair of the Alaska Oil and Gas Conservation Commission, being sworn, state the following: On December 15, 2016 and March 23, 2017, at 9:00 a.m., 333 West 7`h Avenue, Anchorage, Alaska 99501, I presided over a public hearing held under AS 44.62.2 10 for the purpose of taking testimony in connection with the adoption of changes to 20 AAC 25.280(f). Date: December 6, 2017 Hollis S. French, Commissioner, AOGCC Subscribed and sworn to before me at Anchorage, Alaska (onn December 6, 2017. D (d u `- l2 OLI��Am/ NPtoc ifiAnd for the State of Alaska 270227 0001394733 $669.83 AFFIDAVIT OF PUBLICATION STATE OF ALASKA THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on October 21, 2016 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed Subscribed and sworn to before me �iis 21st day of October, 2016 Notary Public Wand for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES NOTICE OF MIOMMO CHARM IN THE SEOULATLONS OF THE ALASKA OIL AND OAS CONSERVATION COMMISSION Bob Shavelson, acting on behalf of Cook mletkeeper, has reqQuested the Alaska 011 and Gas Conserv Commission (AOGCC) hold a hearing on a proposal to amentl 20 AAC 25.280 Sppecifically, Mr. Shav proposes that the following phrase, set forth in bold font, be added to 20 AAC 25.280(q: An application for. Sundry Approvals for a well proposed for stimulation byY hvdrauilc fracturing as defined AAC 25.283(m) will be reviewed by the commission in accordance with 20 AAC 25.540 and must also a with 20 AAC 25.283. The AOGCC has scheduled a public hearing on this application for December 15, 2016 at 9:00 a.m. at 333 7th Avenue, Anchorage, Alaska 99501. to private persc )nd Gas Consen Alaska Oil am by electronic m )ecember 15, 20 Oral or written comments also may be submitted at the December 15, 2016. If you are a person with a disability who needs as pecial accommodation in order to particippate in thisgal please contact Jody Colombie at (907) 793-1221 no later than December 10, 2016 to e0sure tha necessary accommodation can be provided. on Commission will either ado anal regulatlon may, be different your in could be affecte( Statutory Authority: AS 31.05.030 and AS 31.05.090 Statutes Being Implemented. Interpreted, or Made specific: AS 31.05.090 Fiscal Information: The AOGCC estimates the cost of implementation of this change in regulation $14,000 a year. DATE: October 19, 2016 //signature on Cathy P. Foerster, Chair, COMMIE ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.190(g)) 1. Adopting agency: Alaska oil and Gas Conservation Commission 2. General sublect of regulation: Workover operations 3. Citation of reRulatlon (may be grouped): 20 AAC 25.280(0 4. Department of Law file number, if any: 5. Reason for the proposed action: ( ) Compliance with federal law ((( 3) Compliance with new or changed state statute Compliance with court order Develo metnit of rogram standards (x) Other edmeiitolexist ng rregulatilonstrnade on behalf public f Cook Inletkeeper propose 6. Appropriation/Allocatlon: DOA/AOGCC 7. Cost of Implementation to the state agency and available funding (in thousands of dollars): Initial Year Subsequent FY 2017 Years Operating Cost $ 14. $ 14. Capital Cast $ 0 $ 0 receipts Federal $ 0 $ o 1003 General fund match $ 0 $ 0 'ID04 General fund $ D' $ 0 1005 General hmd/program $ 0 $ 0 Other (1 f62 AOGCC Rcts) $ 14, $ 14. B. The name of the contact person for the regulation: Name: Jody J. Colombie Title: Special Assistant to the Commission Address: 333 West 7th Avenue, Anchorage, AK 99501 Telephone: (907)793-1221 E-mail address: ody.colombieOalaska.gov 9. The origin of the proposed action: Staff of state agent Federal governmN General public Petition for regulation change _X_ other (identify) Cook Inletkeepers 270227 r i E K V V E D 0001395597 NOV ( $625.01 4OGG'Y' AFFIDAVIT OF PUBLICATION STATE OF ALASKA THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the 4laska Dispatch News, a daily newspaper. rhat said newspaper has been approved )y the Third Judicial Court, Anchorage, klaska, and it now and has been published n the English language continually as a laily newspaper in Anchorage, Alaska, and f is now and during all said time was rinted in an office maintained at the aforesaid place of publication of said ewspaper. That the annexed is a copy of n advertisement as it was published in egular issues (and not in supplemental )rm) of said newspaper on 'ovember 08, 2016 id that such newspaper was regularly stributed to its subscribers during all of aid period. That the full amount of the fee )arged for the foregoing publication is not excess of the rate charged private dividuals. r gned 1 U ibscribed and sworn to before me S 6th day of November, 2016 CJ - r-- - ,tary Public in and for e State of Alaska. ird Division chorage, Alaska 'COMMISSION EXPIRES SUPPLEMENTAL NOTICE OF PROPOSED CHANGES IN THE REGULATIONS OF THE ALASKA OIL Al OAS CONSERVATION COMMISSION Bob Shavelson, acting on behalf of Cook Inletkeeper, has requested the Alaska 011 and Gas Conserve Commission (AOGCC) hold a hearing on a proposal to amend 20 AAC 25.280. Specificalty, Mc Shaver proposes that the following phrase, set forth In bold font, be added to 20 AAC 25.280(0: An apPpllcation)for, Sun%Approvals for a well proposed for stimulation by hydraulic fracturing as defined li AAC 20.283 25.283 reviewed by the commrssslon In accordance with 20 AAC 25.540 and must also cor This supplemental notice clarifies the cost of implementation to the'agency and the origin of the props action. The AOGCC has scheduled a public hearing on this ap lication for December 15 2016 from 9:00 a.m. 12:00 pp��m. at 333 west 7th Avenue, AnchorsRrne, Alaska 9501. Should testimony fake Iger than anticip the MCC may extend the hearing into the aReoon for those who were present by 12:00 P.M. Oral or written comments also may be submitted at the December 15, 2016 hearing. If you are a person with a disability who needs a special accommodation In order to particiDate in this pre please contact Jody Colombia at (90 793-1221 no later than December 10, 2016 m ensure at necessary accommodation can be provided. After the public comment period ends the Alaska Oil and Gas Conservation Commission will either adop proposedoomansae, possibly with modifications, or decide to take no action on It. The Iaguefe of any your Interests cou different from the proposed regulation. You should comment during the time allmn DATE: November 7, 2016 1. 2. 3. 4. S. of the Regulatory //sl nature on file// Daniel T. Seamount, Jr. Commissi ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.190(lD) Commission state statute public k lenletkgeeperProposetl agency and available funding (In thousands of dollars): ral fund/ 0 14. regulation: the Commission roue, Anchorage, AK 99501 Date: November 7, 2016 Prepared by: //Signature on Subsequent Years S 104. 1D 0 0 S o4 Name: Jody J. Colombk Title: AOGCC Soecial As initial Year nK Cost Capital FY 2017 E 104. Cost ral receipts ral fund match o 0 ral fund 0 ral fund/ 0 14. regulation: the Commission roue, Anchorage, AK 99501 Date: November 7, 2016 Prepared by: //Signature on Subsequent Years S 104. 1D 0 0 S o4 Name: Jody J. Colombk Title: AOGCC Soecial As 270227 RtCEI M ED 0001399287 )till $542.84 AFFIDAVIT OF PUBLICATION STATE OF ALASKA THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and It now and has been pUDllshed in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on January 26, 2017 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. _ Signed (a%i� Subscribed and sworn to before me thJ�26lhh day of January, 2017 1"m 'c hLe-u ,%)-M v)b C-1 Notary Public in`And for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION 9 '�f a3/ aol q IN1MV L. TfIDAMM fora W Melt Ml0sas als" how M at M9 S COND NOTICE OF PROPOSED C"ANOES IN THE REGULATIONS OF THE ALASKA OIL AND OAS CONSERVATION COMMISSION Olt December 15, 2016 the Alaska Oil and Gas Conservation IAbOvGCC) held a hearing on an amendment to 20 AAC 25.280 propposed h Bob Shavelson actiinBng on behalf of Cook Inielkee ,er. The OGCC will old a Is proposinggri that the following, set forth Ino bold be added Oto 20 AAC 25.211 i An application for Sundry Approvals for a well pr sed for stimulation bbyy hydraulic fracturing as defined In 20 AAC P5.2a3(m) must also compl with 20 AAG 25.283. The COmmisslOn will post the apDP�atlon on Its webshe, If the application contains corptfldemlal Information the operator shall submit, for this po ng, an additional copy of the application with all accept public commeRio lorredacted. The Commission will xress to submitted applications Is available at httpwdoa.slaska.gov/ogc. The public hearing on this proposal is set for March 23, 2017 at 9:00 a.m. at 333 West 7th Avenue, Anchorage, Alaska 99501. later than 4:210 p.m. on march zs, zu1r. Evidence including oral or written comments, may also be submitted at the March 23, 2017 heating. if you are a person with a disabill% who needs a special accommodation in order to participate In this process, please contact Jody Colombia at (907) 7931221 no later than March 10, 2017 to ensure that any necessary accommodation can be provided. After the public commentperiod ends, the Alaska Oil and Gas Conservation Commission whi either adopt the proposed change or deet a to take no action on it. ThReuIan nage of any final regulation may tthhedt me allowed the If your Interests could be affeccteUould comment during s tM RNitgolmple„ a„teASlebrpreted�or OMMs Specific: A531.05. 90 Fiscal I nnatlon: Because the proposed changes would be assessed annually as part of the Regulatory Cost Charge, theproposed changes are not expected to require an Increased appropriation. DATE: January 25, 2017 Cathy P. Foerster, ADDITIONAL REGULATION NOTICE INFORMATION (AS 46.62.190(7()) 1. Adoptintt agency: Alaska Oil and Gas Conservation commission 2. General subject of re8ulatlon: Workover o rations 3. Citation of regulation (may be grouped): 2U AAC 25.280(*) 4. Department of Law file number, if any: 5. Reason for the proposed action: Compliance w th federal law Compliance w tit new or changed state statute J) Compliance with court order Development 0f progr m standards Other (Identify); A regulatory amendment made after public hearing on a reggulatorryY amendment pro by Cook Inletkeepers. 6. Appropriatio„1Allocation: DO AOGCC 7. Cost of Implementation to the state agency and available funding (in thousands of dollars): Initial Year Subsequent FY 2017 Years Operating Cost S 0 S o Capital Cost S 0 $ 0 1002 Federal receipts $ 0 S 0 1003 General fund match $ 0 S 0 1004 General fund $ 0 S 0 10p0r55 Geeneral fund/ $ 0 S 0 Other (1162 AOGCC Rcts) S 0 S 0 8. The name of the contact person for the regulation: Name: Jody J. Colombia Title: Special Assistant to the Commission Address: 333 West 7th Avenue, Anchorage, AK 99501 Telephone: (90 793-1221 E-mail address: jodycolGinible0alaska.gov 9. The origin of the proposed action: x staff of state age It Federal governMent General public Petition for rgegulation change Other (ident)(We've r&kitten It in a way that contains none of Shavelson's proposed language). 10. Date: January 25, 2017 Prepared by: //signature on file// Name: Jody J. Colombia Title: AOGCC Special Assistant Telephone: (907) 793.1221 Published: January 26, 2017 AFFIDAVIT OF COMMISSION ACTION 1, Jody J. Colombie, Special Assistant, for the Alaska Oil and Gas Conservation Commission, being duly sworn, state the following: The attached motion dealing with workover operations changes was passed by the Alaska Oil and Gas Conservation Commission during its December 6, 2017 meeting. Date: December 6, 2017 Qjy J. C00e, AOGCC Special Assistant Subscribed and sworn to before me at Anchorage, Alaska on Deccn3jick 6, 2017. % Notary Public in a d for the State f laska ALASKA OIL AND GAS CONSERVATION COMMISSION HEARING December 6, 2017 Excerpt From Unapproved Minutes Commissioner Cathy P. Foerster. moved and Commissioner Daniel T. Seamount, Jr. seconded the following motion: I move to adopt 20 AAC 25.2800 The motion carried unanimously. 15 Colombie, Jody J (DOA) From: Cayce, Jocelyn K (LAW) Sent: Monday, January 08, 2018 3:41 PM To: French, Hollis (DOA) Cc: Montalbo, Minta C (DOA); Colombie, Jody J (DOA); Ballantine, Tab A (LAW); Pollard, Susan R (LAW); Weaver, Steven C (LAW); Miller, Linda J (LAW) Subject: Regulations delivered: 20 AAC 25.022 -.990: Alaska Oil and Gas Conservation Commission: Update and Clarify Regulations: JU2016200655 Attachments: JU2016200655 CC Copy of Regs Delivered.pdf To: Hon. Hollis French, Commissioner Department of Administration (AOGCC) Re: Regulations delivered: 20 AAC 25.022 -.990: Alaska Oil and Gas Conservation Commission: Update and Clarify Regulations: JU2016200655 The regulations project referenced above was delivered to the lieutenant governor's office on January 8, 2018. If you have any questions, please contact Susan Pollard at 465-2168. Attachment: JU2016200655CC Copy of Regs Delivered to Lt Gov.pdf Susan R Pollard, Chief Assistant Attorney General Legislation and Regulations Section Department of Law MEMORANDUM To: The Honorable Byron Mallott Lieutenant Governor From: Susan R. Pollard 0" WZ Chief Assistant Attorney General and Regulations Attorney Legislation and Regulations Section State of Alaska Department of Law Dote: January 8, 2018 File No.: JU2016200655 Tel. No.: 465-3600 Re: Regulation re: 20 AAC 25.020 -.556: Alaska Oil and Gas Conservation Commission: The Department of Law has reviewed the attached regulations of the Alaska Oil and Gas Conservation Commission related to regulations under 20 AAC 25 to modify, update and clarify requirements related to oil and gas wells, reports, and information to be filed against the statutory standards of the Administrative Procedure Act. Based upon our review, we find no legal problems. This memorandum constitutes the written statement of approval under AS 44.62.060(b) and (c) that authorizes your office to file the attached regulations. The regulations were adopted by the Alaska Oil and Gas Conservation Commission after the close of the public comment period. The July 21, 2016 and supplemental September 30, 2016 and January 17, 2017 public notices and the January 3, 2018 certification of adoption order both state that this action is not expected to require an increased appropriation. Therefore, a fiscal note under AS 44.62.195 is not required. We have made some technical corrections to conform the regulations in accordance with AS 44.62.125. The corrections are shown on the attached copy of the regulations. cc: Honorable Hollis French, Commissioner Department of Administration (AOGCC) Minta Montalbo, Office of the Commissioner Department of Administration Jody Colombia, Special Assistant Department of Administration (AOGCC) Thomas Ballentine, Sr. Assistant Attorney General Natural Resources Section CCC POlol 5)Vr! C'enkr heod,jjc,% Register_,_,_,.,_ 2018 L� — — MISCELLANEOUS BOARDS 20 AAC 25.020 is amended by adding a new subsection to read: (b) The operator shall notify the commission in writing not later than 30 days after any change in the operator's office address, primary telephone number, electronic mail address, or principal contact. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am _/ / Register _____) Authority: AS 31.05.030 20 AAC 25.030(d)(5) is amended to read: (5) intermediate and production casing must be cemented with sufficient cement to fill the annular space from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth whichever is greater above all significant hydrocarbon zones and abnormally geo-pressured strata or, if zonal coverage is not required under (a) of this section, from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth, whichever is greater, above the casing shoe; if indications of improper cementing exist, such as lost returns, or if the formation integrity test shows an inadequate cement job, (A) the operator shall notify the commission and obtain approval before drilling ahead; and (B) the commission will require (i) a cement quality log or other approved method to evaluate the adequacy of the cement to contain potential wellbore Pressures and fluids: and (ii) a plan of the remedial actions proposed to bring the well Register _, 2018 MISCELLANEOUS BOARDS into compliance with (a) of this section [REMEDIAL ACTION MUST BE TAKEN]; 20 AAC 25.030(d)(6) is amended to read: (6) if the intermediate or production string is a liner, a minimum of 100 measured feet overlap between the outer and inner strings is required; the interval of overlap must be made pressure competent and must be pressure -tested in accordance with (e) of this section; 20 AAC 25.030(e) is amended to read: (e) A casing pressure test must be performed if BOPE is to be installed on a casing. The casing must be tested to hold a minimum surface pressure equal to 50 percent of the casing internal yield pressure. The test pressure must show stabilizing Pressure and may not decline more than 10 Percent within 30 minutes [REQUIRED WORKING PRESSURE OP THE BOPE AS SPECIFIED IN THE PERMIT TO DRILL UNDER 20 AAC 25.035(e)(3) or 20 AAC 25.036(c)(3)]. The results of this test and any subsequent tests of the casing must be recorded as required by 20 AAC 25.070(1). 20 AAC 25.030(8) is amended to read: (g) Upon written request of the operator showing good cause, the commission may modify a deadline in this section [WILL, IN ITS DISCRETION], approve a variance [VARIANCES] from any requirement of this section if the variance provides at least an Register „__, _ 2018 MISCELLANEOUS BOARDS equally effective means of complying with the requirement or approve a waiver of a requirement of this section if the waiver will not promote waste is based on sound engineering and geoscience principles will not ieonardize the ultimate recovery of hydrocarbons will not ieonardize correlative rights and will not result in an increased risk to health, safety, or the environment including freshwater [THE REQUIREMENTS OF (b) - (f) OF THIS SECTION TO ALLOW FOR SPECIAL OR UNUSUAL CONDITIONS IF THE DESIGN REQUIREMENTS OF (a) OF THIS SECTION ARE SATISFIED]. (Eff. 4/13180, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am _!_/_ Register _) Authority: AS 31.05.030 20 AAC 25.065(c)(1) is amended to read: (1) in addition to the automatic hydrogen sulfide detection system required in 20 AAC 25.066, at least three manual detectors [WITH AN ADEQUATE SUPPLY OF EXTRA DETECTOR TUBES] must be available on the location; (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am Register __) Authority: AS 31.05.030 20 AAC 25.071 is amended to read: 20 AAC 25.071. Logs and geologic (GEOLOGIC] data [AND LOGS]. (a) An operator shall log the [PORTION OF THE] well from total denth to the base of [BELOW THE] conductor pipe by either a complete electrical [LOG] or gamma -ray [A COMPLETE Register___, _ _ 2018 MISCELLANEOUS BOARDS RADIO -ACTIVITY] log unless the commission specifies [WHICH] the type of each log [IS] to be run. (b) Not later than 90 [WITHIN 301 days after completion, suspension, or phipgin [ABANDONMENT] of a well or well branch, or not later than 90 days after the date of acquisition of the data, whichever occurs first, [AND WITHIN 30 DAYS AFTER COMPLETION OR PLUGGING OF A WELL BRANCH, IF OCCURRING AT A DIFFERENT TIME,J the operator shall file with the commission, unless previously filed, (1) an electronic image file in formats acceptable to the commission [A SEPIA AND A REPRODUCED COPY] of a complete mud log or a lithology log consisting of a detailed record and description of the sequence of strata encountered, including the kind and character of the rock and all shows of hydrocarbons; [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA;] (2) a complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; (3) a lithologic description and, if available, photographs of each conventional and sidewall core; conventional core descriptions must include apparent textural, fluid, and lithologic variations, including rock type, porosity, fractures, bedding plane attitudes, sedimentary structure, grain size, and presence of hydrocarbons; (4) chips from each foot of recovered conventional core, except that chips need Register ____, 2018 MISCELLANEOUS BOARDS not be submitted until 30 days after the conventional core is analyzed; the chips must be representative of the one -foot interval, and must be approximately either one cubic inch in volume, or two ounces in weight; (5) a list of the geologic markers and each formation top encountered and the measured and true vertical depths of each marker and formation top; (6) an electronic image file in formats acceptable to the commission [A SEPIA AND A REPRODUCED COPY] of all open -hole logs and mud logs run, including common derivative formats such as tadpole plots of dipmeter data and borehole images produced from sonic or resistivity data, and including composite log formats; however, copies of velocity surveys and experimental logs need not be included; the operator shall provide the commission the opportunity to examine open -hole logs for exploration or stratigraphic test wells not later than 72 hours after the logs are run and before abandonment [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]; (7) digital data [A TAPE, DISKETTE, OR OTHER ELECTRONIC MEDIUM ACCEPTABLE TO THE COMMISSION] and a verification listing [OF THE DIGITAL DATA] for all open -hole logs, all mud logs, and all cased -hole formation evaluation and cement evaluation logs run, except velocity surveys and experimental logs, the logs shall be stored on electronic media and use file formats that are acceptable to the commission [THE VERIFICATION LISTING MUST INCLUDE A WRITTEN DESCRIPTION OF THE LOGICAL AND PHYSICAL FORMAT OF THE DIGITAL DATA]; [AND] (8) the following items, or a written request proposing a date for submitting those Register _,_, ____ 2018 MISCELLANEOUS BOARDS items, subject to commission approval of that date for timeliness, if those items are unavailable within the 90 -day [30 -DAY] filing period set out in this subsection: (A) conies [A COPY] of all drill stem tests [TEST] and production test data and charts; (B) a brief summary of production tests, drill stem tests, wireline formation tests, and other formation tests performed, including test date, time, depth, duration, method of operation, recovered fluid types, fluid amounts, gas -oil ratio, oil gravity, pressure, and choke size; (C) conventional and sidewall core analysis determinations, if any, of porosity, permeability, and fluid saturation; (D) geochemical and formation fluid analyses obtained, if any, and (9) an electronic image file in formats acceptable to the commission of all cased -hole formation evaluation logs and cement evaluation logs run including common derivative formats. (c) The commission may [WILL, IN ITS DISCRETION,] waive or modify the requirements of this section for a well if those requirements would not significantly add to the geologic or engineering knowledge of the area in light of the information that is available from the well or other wells in the area. (d) In this section, (1) "experimental logs" means logs that are not commercially available from a well logging contractor; [AND] (2) 'velocity survey" means a survey,!! [THE PRIMARY] purpose of which is to Register ____, 2018 MISCELLANEOUS BOARDS determine velocity of seismic waves through formations penetrated by a well by measuring travel times of seismic pulses from or near the surface to geophones placed at various depths in the well. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am _/_/ Register Authority: AS 31.05.030 AS 31.05.035 20 AAC 25.110(a) is amended to read: (a) If allowed under 20 AAC 25.105, an operator may apply to the commission under this section to approve the suspension of a well or to renew the approval of the suspension of a well. The operator must ,(1) state the reasons the well should be suspended, and why the well should not be completed or abandoned; (2) [, AND MUST] demonstrate to the commission's satisfaction that (A) [(1)] the well Q [(A)] is mechanically sound; ii [(B)] will not allow the migration of fluids; iii [(C)] will not damage freshwater or producing or potentially producing formations; iv [(D)] will not impair the recovery of oil or gas; Lyl [(E)] is secure, safe, and not a threat to public health; [AND] (vi) is located on a valid lease that authorizes the operator to drill for oil, gas, coal bed methane, gas hydrates, or shale gas or to evaluate underground coal gasification or geothermal resources: and Register __ , 2018 MISCELLANEOUS BOARDS vii [(F)] is in compliance with all provisions of AS 31.05, this chapter, and any order, stipulation, or permit issued by the commission; and (BB) [(2)] the well service well; f1i [(A)] has future utility as an exploratory, development, or ii [(B)] is a viable candidate for redrilling; or iii [(C)] is located on a pad or platform with active producing or service wells (3) for a well that does not lie within a unitized area, (A) provide the commission with a list of the leases that the wellbore traverses, from surface location to bottom -hole location, and the expiration date of each lease; and (B) notify the commission not later than 30 days after the change, if the status of any lease changes. 20 AAC 25.110(h) is amended to read: (h) Renewal of an existing suspension may be requested by the submission of an Application for Sundry Approvals (Form 10-403) meeting all requirements of (b) of this section. A renewal is not effective until approved by the commission. If a complete renewal application is submitted at least 60 days before the expiration of an existing suspension, the existing suspension continues [WILL CONTINUE] until the commission acts on the application. Within 24 months before the submission of a request for suspension renewal, a well -site inspection must Register ____ 2018 MISCELLANEOUS BOARDS be completed. If the well does not lie within a unitized area, the application to renew an existing suspension must include a list of all leases that the wellbore traverses, from surface location to bottom -hole location, and the expiration date of each lease. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 11/19/2008, Register 188; am 4/15/2010, Register 194; am _/_/_, Register ) Authority: AS 3I.05.030 AS 31.05.040 AS 31.05.095 20 AAC 25.265(d)(4) is amended to read: (4) an onshore well in a location described under (2) of this subsection and equipped with an electric submersible pump, velocity string, or capillary string run within the tubing is not required to be equipped with a subsurface safety valve; or (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am 12/3/2010, Register 196; am/�/_, Register ___j Authority; AS 31.05.030 AS 31.05.040 AS 31.05.095 The section heading of 20 AAC 25.270 is changed to read: 20 AAC 25.270. Reservoir [INITIAL RESERVOIR] properties. 20 AAC 25.270(b) is amended to read: (b) The operator shall obtain fluid samples from each new pool at the time of discovery or before regular production and determine (1) [THE] crude oil composition [ASSAY]; 0 Register_., 2018 MISCELLANEOUS BOARDS (2) pressure, volume, and temperature properties of the crude oil; and (3) [THE] solution or non -associated gas composition [ASSAY]. 20 AAC 25.270 is amended by adding a new subsection to read: (e) Annually and not later than April I or the date that the operator must submit a pool - specific annual surveillance report for the reservoir under 20 AAC 25.520, whichever date is later, the operator shall submit to the commission an Annual Reservoir Properties Report (Form 10-428). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am H /7/99, Register 152; am _/_/_, Register __j Authority: AS 31.05.030 20 AAC 25.280 is amended by adding a new subsection to read: (g) If workover operations are not commenced within 12 months after the commission approves an Application for Sundry Approvals, the Application for Sundry Approvals expires. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 12/28/2006, Register 180; am 1/7/2015, Register 213; am _/_/ Register___) Authority: AS 31.05.030 20 AAC 25.537(a) is amended to read: (a) The commission will routinely make available to the public, by means of records or reports, in its offices or elsewhere, or by means of regular publication, the following information: (1) surface and proposed bottom -hole locations of each well after approval of the 10 Register, 2018 MISCELLANEOUS BOARDS Permit to Drill (Form 10-401); (2) total depth, bottom -hole location and well status after the Well Completion or Recompletion Report and Log (Form 10-407) is filed; (3) all reports and information required by this chanter for development and service wells; u regular production data and regular production reports, as required to be filed by the operator each month; M [(4)] injection data and injection reports, as required to be filed by the operator each month; and M [(5)] all data filed on a well as required by this chapter upon expiration of the confidential period described in (d) of this section. 20 AAC 25.537(d) is amended to read: (d) Except as provided by (a) of this section, the reports and information required by this chapter to be filed by the operator for exploratory and stratigraphic test wells will be kept confidential by the commission for 24 months following the 30 -day filing period after well completion, suspension, or abandonment unless the operator gives written and unrestricted permission to release all of the reports and information at an earlier date. Upon notification that the commissioner of the Department of Natural Resources has made a finding that the required reports and information from a well contain significant information relating to the valuation of unleased land in the same vicinity, the commission will hold the reports and information confidential beyond the 24 -month period and until notified by the commissioner of the Register_, 2018 MISCELLANEOUS BOARDS Department of Natural Resources to release the reports and information. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am / Register __) Authority: AS 31.05.030 AS 31.05.035 20 AAC 25.556 is amended by adding new subsections to read: (b) Unless otherwise indicated in the order, each conservation order issued by the commission expires two years after activities authorized in that order cease. (c) Unless otherwise indicated in the order, each enhanced recovery, area, storage, and disposal injection order issued by the commission expires (1) two years after the date the order was adopted, if the operator has not commenced the injection operations authorized in the order; or (2) two years after injection operations authorized in that order conclude. (d) Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the commission may administratively waive or amend the requirements of any order issued by the commission if the change does not promote waste orjeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater aquifers. (Eff. 1 ] /7/99, Register 152; am Register_____) Authority: AS 31.05.011 AS 31.05.030 AS 31.05.040 12 ORDER CERTIFYING THE CHANGES TO REGULATIONS OF THE ALASKA OIL AND GAS CONSERATION COMMISSION The attached 12 pages of batch regulations are certified to be a correct copy of the regulation changes that the Alaska Oil and Gas Conservation Commission readopted at its December 6, 2017 meeting, under the authority of AS 31.05 and after compliance with the Administrative Procedure Act (AS 44.62), specifically including notice under AS 44.62.190 and 44.62.200 and opportunity for public comment under AS 44.62.210. This action is not expected to require an increased appropriation. On the record, in considering public comments, the Alaska Oil and Gas Conservation Commission paid special attention to the cost to private persons of the regulatory action being taken. The regulation changes described in this order take effect on the 30th day after they have been filed by the lieutenant governor as provided in AS 44.62.180. Date: January 3, 2018 Hollis S. French, Chair, AOGC FILING CERTIFICATION 1, Byron Mallott, Lieutenant Governor for the State of Alaska, certify that on 2018 at .m., I filed the attached regulations according to the provisions of AS 44.62.040 - 44.62.120. Lieutenant Governor Effective: Register: AFFIDAVIT OF COMMISSION ACTION I, Jody J. Colombie, Special Assistant, for the Alaska Oil and Gas Conservation Commission, being duly sworn, state the following: The attached motion dealing with bulk regulation changes was passed by the Alaska Oil and Gas Conservation Commission during its January 3, 2018 meeting. Date: Januar 3 _2018 J y J Co mbie, AOGCC Special Assistant Subscribed and sworn to before me at Anchorage, Alaska on Janu , 2018. a Notary Public in a d for the State o ska ALASKA OIL AND GAS CONSERVATION COMMISSION HEARING January 3, 2018 Excerpt From Unapproved Minutes Commissioner Cathy P. Foerster moved and Commissioner Daniel T. Seamount, Jr. seconded the following motion: I move to adopt 20 AAC 25.020, 20 AAC.25.030, 20 AAC 25.065, 20 AAC 25.071, 20 AAC 25.110, 20 AAC 25.265, 20 AAC 25.270, 20 AAC 25.280, 20 AAC 25.537 and 20 AAC 25.556. The motion carried unanimously. Register _, 2018 MISCELLANEOUS BOARDS 20 AAC 25.020 is amended by adding a new subsection to read: (b) The operator shall notify the commission in writing not later than 30 days after any change in the operator's office address, primary telephone number, electronic mail address, or principal contact. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am _/ / Register _) Authority: AS 31.05.030 20 AAC 25.030(d)(5) is amended to read: (5) intermediate and production casing must be cemented with sufficient cement to fill the annular space from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth whichever is greater, above all significant hydrocarbon zones and abnormally geo-pressured strata or, if zonal coverage is not required under (a) of this section, from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth, whichever is greater, above the casing shoe; if indications of improper cementing exist, such as lost returns, or if the formation integrity test shows an inadequate cement job, (A) the operator shall notify the commission and obtain approval before drilling ahead,• and (B) the commission will require (i) a cement Quality log or other approved method to evaluate the adequacy of the cement to contain potential wellbore pressures and fluids: and (ii) a plan of the remedial actions Proposed to bring the well Register _, 2018 MISCELLANEOUS BOARDS into compliance with (a) of this section [REMEDIAL ACTION MUST BE TAKEN]; 20 AAC 25.030(d)(6) is amended to read: (6) if the intermediate or production string is a liner, a minimum of 100 measured feet overlap between the outer and inner strings is required; the interval of overlap must be made pressure competent and must be pressure -tested in accordance with (e) of this section; 20 AAC 25.030(e) is amended to read: (e) A casing pressure test must be performed if BOPE is to be installed on a casing. The casing must be tested to hold a minimum surface pressure equal to 50 percent of the casing internal yield pressure. The test pressure must show stabilizing pressure and may not decline more than 10 percent within 30 minutes [REQUIRED WORKING PRESSURE OF THE BOPE AS SPECIFIED IN THE PERMIT TO DRILL UNDER 20 AAC 25.035(e)(3) or 20 AAC 25.036(c)(3)]. The results of this test and any subsequent tests of the casing must be recorded as required by 20 AAC 25.070(1). 20 AAC 25.030(g) is amended to read: (g) Upon written request of the operator showing good cause, the commission may modify a deadline in this section [WILL, IN ITS DISCRETION], approve a variance [VARIANCES] from any requirement of this section if the variance provides at least an 2 Register _, 2018 MISCELLANEOUS BOARDS equally effective means of complying with the requirement or approve a waiver of a requirement of this section if the waiver will not promote waste is based on sound engineering and geoscience principles will not Jeopardize the ultimate recovery of hydrocarbons, will not jeopardize correlative rights and will not result in an increased risk to health, safety, or the environment including freshwater [THE REQUIREMENTS OF (b) - (f) OF THIS SECTION TO ALLOW FOR SPECIAL OR UNUSUAL CONDITIONS IF THE DESIGN REQUIREMENTS OF (a) OF THIS SECTION ARE SATISFIED]. (Eff, 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am —/ / Register _ ) Authority: AS 31.05.030 20 AAC 25.065(c)(1) is amended to read: (1) in addition to the automatic hydrogen sulfide detection system required in 20 AAC 25.066, at least three manual detectors [WITH AN ADEQUATE SUPPLY OF EXTRA DETECTOR TUBES] must be available on the location; (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am Register _) Authority: AS 31.05.030 20 AAC 25.071 is amended to read: 20 AAC 25.071. Logs and geologic [GEOLOGIC] data [AND LOGS]. (a) An operator shall log the [PORTION OF THE] well from total depth to the base of [BELOW THE] conductor pipe by either a complete electrical [LOG] or gamma -ray [A COMPLETE Register _, 2018 MISCELLANEOUS BOARDS RADIO -ACTIVITY] log unless the commission specifies [WHICH] the type of each log [IS] to be run. (b) Not later than 90 [WITHIN 30] days after completion, suspension, or plugging [ABANDONMENT] of a well or well branch, or not later than 90 days after the date of acquisition of the data, whichever occurs first, [AND WITHIN 30 DAYS AFTER COMPLETION OR PLUGGING OF A WELL BRANCH, IF OCCURRING AT A DIFFERENT TIME,] the operator shall file with the commission, unless previously filed, (1) an electronic image file in formats acceptable to the commission [A SEPIA AND A REPRODUCED COPY] of a complete mud log or a lithology log consisting of'a detailed record and description of the sequence of strata encountered, including the kind and character of the rock and all shows of hydrocarbons; [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA;] (2) a complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; (3) a lithologic description and, if available, photographs of each conventional and sidewall core; conventional core descriptions must include apparent textural, fluid, and lithologic variations, including rock type, porosity, fractures, bedding plane attitudes, sedimentary structure, grain size, and presence of hydrocarbons; (4) chips from each foot of recovered conventional core, except that chips need Register _, 2018 MISCELLANEOUS BOARDS not be submitted until 30 days after the conventional core is analyzed; the chips must be representative of the one -foot interval, and must be approximately either one cubic inch in volume, or two ounces in weight; (5) a list of the geologic markers and each formation top encountered and the measured and true vertical depths of each marker and formation top; (6) an electronic image file in formats acceptable to the commission [A SEPIA AND A REPRODUCED COPY] of all open -hole logs and mud logs run, including common derivative formats such as tadpole plots of dipmeter data and borehole images produced from sonic or resistivity data, and including composite log formats; however, copies of velocity surveys and experimental logs need not be included; the operator shall provide the commission the opportunity to examine open -hole logs for exploration or stratigraphic test wells not later than 72 hours after the logs are run and before abandonment [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]; (7) digital data [A TAPE, DISKETTE, OR OTHER ELECTRONIC MEDIUM ACCEPTABLE TO THE COMMISSION] and a verification listing [OF THE DIGITAL DATA] for all open -hole logs, all mud logs and all cased -hole formation evaluation and cement evaluation logs run, except velocity surveys and experimental logs; the logs shall be stored on electronic media and use file formats that are acceptable to the commission [THE VERIFICATION LISTING MUST INCLUDE A WRITTEN DESCRIPTION OF THE LOGICAL AND PHYSICAL FORMAT OF THE DIGITAL DATA]; [AND] (8) the following items, or a written request proposing a date for submitting those Register_, 2018 MISCELLANEOUS BOARDS items, subject to commission approval of that date for timeliness, if those items are unavailable within the 90 -day [30 -DAY] filing period set out in this subsection: (A) co ies [A COPY] of all drill stem tests [TEST] and production test data and charts; (B) a brief summary of production tests, drill stem tests, wireline formation tests, and other formation tests performed, including test date, time, depth, duration, method of operation, recovered fluid types, fluid amounts, gas -oil ratio, oil gravity, pressure, and choke size; (C) conventional and sidewall core analysis determinations, if any, of porosity, permeability, and fluid saturation; (D) geochemical and formation fluid analyses obtained, if anyLand (9) an electronic image file in formats acre )table to the commission of all cased -hole formation evaluation logs and cement evaluation logs run including common derivative formats. (c) The commission may [WILL, IN ITS DISCRETION,] waive or modify the requirements of this section for a well if those requirements would not significantly add to the geologic or engineering knowledge of the area in light of the information that is available from the well or other wells in the area. (d) In this section, (1) "experimental logs" means logs that are not commercially available from a well logging contractor; [AND] (2) "velocity survey" means a survey, a [THE PRIMARY] purpose of which is to Register _, 2018 MISCELLANEOUS BOARDS determine velocity of seismic waves through formations penetrated by a well by measuring travel times of seismic pulses from or near the surface to geophones placed at various depths in the well. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am _/ / Register___) Authority: AS 31.05.030 AS 31.05.035 20 AAC 25.110(a) is amended to read: (a) If allowed under 20 AAC 25.105, an operator may apply to the commission under this section to approve the suspension of a well or to renew the approval of the suspension of a well. The operator must fD state the reasons the well should be suspended, and why the well should not be completed or abandoned) [, AND MUST] demonstrate to the commission's satisfaction that ,(AI [(1)] the well Q [(A)] is mechanically sound; ii [(B)] will not allow the migration of fluids; iM [(C)] will not damage freshwater or producing or potentially producing formations; iv [(D)] will not impair the recovery of oil or gas; Lyl [(E)] is secure, safe, and not a threat to public health; [AND] (vi) is located on a valid lease that authorizes the operator to drill for oil, gas, coal bed methane gas hydrates or shale gas or to evaluate underground coal gasification or geothermal resources and Register_, 2018 MISCELLANEOUS BOARDS vii [(F)] is in compliance with all provisions of AS 31.05, this chapter, and any order, stipulation, or permit issued by the commission; and fM [(2)] the well service well; Q [(A)] has future utility as an exploratory, development, or ii [(B)] is a viable candidate for redrilling; or iii [(C)] is located on a pad or platform with active producing or service wells (3) for a well that does not lie within a unitized area (A) provide the commission with a list of the leases that the wellbore traverses, from surface location to bottom -hole location and the expiration date of each lease; and (B) notify the commission not later than 30 days after the change if the status of any lease changes. 20 AAC 25.110(h) is amended to read: (h) Renewal of an existing suspension may be requested by the submission of an Application for Sundry Approvals (Form 10-403) meeting all requirements of (b) of this section. A renewal is not effective until approved by the commission. If a complete renewal application is submitted at least 60 days before the expiration of an existing suspension, the existing suspension continues [WILL CONTINUE] until the commission acts on the application. Within 24 months before the submission of a request for suspension renewal, a well -site inspection must Register2018 MISCELLANEOUS BOARDS be completed. If the well does not lie within a unitized area the application to renew an existing suspension must include a list of all leases that the wellbore traverses from surface location to bottom -hole location and the expiration date of each lease (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 11/19/2008, Register 188; am 4/15/2010, Register 194; am _/ / Register ) Authority: AS 31.05.030 AS 31.05.040 AS 31.05.095 20 AAC 25.265(d)(4) is amended to read: (4) an onshore well in a location described under (2) of this subsection and equipped with an electric submersible pump, velocity strine, or capillary string run within the tubing is not required to be equipped with a subsurface safety valve; or (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am 12/3/2010, Register 196; am _/_/ Register_) Authority: AS 31.05.030 AS 31.05.040 AS 31.05.095 The section heading of 20 AAC 25.270 is changed to read: 20 AAC 25.270. Reservoir [INITIAL RESERVOIR] properties. 20 AAC 25.270(b) is amended to read: (b) The operator shall obtain fluid samples from each new pool at the time of discovery or before regular production and determine (1) [THE] crude oil composition [ASSAY]; 0 Register_, 2018 MISCELLANEOUS BOARDS (2) pressure, volume, and temperature properties of the crude oil; and (3) [THE] solution or non -associated gas composition [ASSAY]. 20 AAC 25.270 is amended by adding a new subsection to read: (e) Annually and not later than April 1 or the date that the operator must submit a pool - specific annual surveillance report for the reservoir under 20 AAC 25.520, whichever date is later, the operator shall submit to the commission an Annual Reservoir Properties Report (Form 10-428). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am Register _) Authority: AS 31.05.030 20 AAC 25.280 is amended by adding a new subsection to read: (g) If workover operations are not commenced within 12 months after the commission approves an Application for Sundry Approvals, the Application for Sundry Approvals expires. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 12/28/2006, Register 180; am 1/7/2015, Register 213; am _/_/ Register _) Authority: AS 31.05.030 20 AAC 25.537(a) is amended to read: (a) The commission will routinely make available to the public, by means of records or reports, in its offices or elsewhere, or by means of regular publication, the following information: (1) surface and proposed bottom -hole locations of each well after approval of the 10 Register _, 2018 MISCELLANEOUS BOARDS Permit to Drill (Form 10-401); (2) total depth, bottom -hole location and well status after the Well Completion or Recompletion Report and Log (Form 10-407) is filed; (3) all reports and information required by this chapter for development and Service wells: f regular production data and regular production reports, as required to be filed by the operator each month; JQ [(4)] injection data and injection reports, as required to be filed by the operator each month; and W [(5)] all data filed on a well as required by this chapter upon expiration of the confidential period described in (d) of this section. 20 AAC 25.537(d) is amended.to read: (d) Except as provided by (a) of this section, the reports and information required by this chapter to be filed by the operator for exploratory and strati¢raphic test wells will be kept confidential by the commission for 24 months following the 30 -day filing period after well, completion, suspension, or abandonment unless the operator gives written and unrestricted permission to release all of the reports and information at an earlier date. Upon notification that the commissioner of the Department of Natural Resources has made a finding that the required reports and information from a well contain significant information relating to the valuation of unleased land in the same vicinity, the commission will hold the reports and information confidential beyond the 24 -month period and until notified by the commissioner of the 11 Register _, 2018 MISCELLANEOUS BOARDS Department of Natural Resources to release the reports and information. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am Register ___J Authority: AS 31.05.030 AS 31.05.035 20 AAC 25.556 is amended by adding new subsections to read: (b) Unless otherwise indicated in the order, each conservation order issued by the commission expires two years after activities authorized in that order cease. (c) Unless otherwise indicated in the order, each enhanced recovery, area, storage, and disposal injection order issued by the commission expires (1) two years after the date the order was adopted, if the operator has not commenced the injection operations authorized in the order; or (2) two years after injection operations authorized in that order conclude. (d) Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the commission may administratively waive or amend the requirements of any order issued by the commission if the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater aquifers. (Eff. 11 /7/99, Register 152; am /_/_, Register __) Authority: AS 31.05.011 AS 31.05.030 AS 31.05.040 12 14 ORDER CERTIFYING THE CHANGES TO REGULATIONS OF THE ALASKA OIL AND GAS CONSERATION COMMISSION The attached 11 pages of batch regulations are certified to be a correct copy of the regulation changes that the Alaska Oil and Gas Conservation Commission readopted at its December 6, 2017 meeting, under the authority of AS 31.05 and after compliance with the Administrative Procedure Act (AS 44.62), specifically including notice under AS 44.62.190 and 44.62.200 and opportunity for public comment under AS 44.62.210. This action is not expected to require an increased appropriation. On the record, in considering public comments, the Alaska Oil and Gas Conservation Commission paid special attention to the cost to private persons of the regulatory action being taken. The regulation changes described in this order take effect on the 30th day after they have been filed by the lieutenant governor as provided in AS 44.62.180. Date: December 6, 2017 Hollis S. French, Chair, AOGCC FILING CERTIFICATION I, Byron Mallott, Lieutenant Governor for the State of Alaska, certify that on 2018 at .m., I filed the attached regulations according to the provisions of AS 44.62.040 - 44.62.120. Lieutenant Governor Effective: Register: AFFIDAVIT OF COMMISSION ACTION I, Jody J. Colombie, Special Assistant, for the Alaska Oil and Gas Conservation Commission, being duly sworn, state the following: The attached motion dealing with bulk regulation changes was passed by the Alaska Oil and Gas Conservation Commission during its December 6, 2017 meeting. Date: December 6, 2017 J d J. n. i , AOGCC Special Assistant Subscribed and sworn to before me at Anchorage, Alaska on December 6, 2017. Notary Public m and or the State of A. asl�2a Register _, 2018 MISCELLANEOUS BOARDS 20 AAC 25.020 is amended by adding a new subsection to read: (b) The operator shall notify the commission in writing not later than 30 days after any change in the operator's office address, primary telephone number, electronic mail address, or principal contact. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am _/_/ Register __) Authority: AS 31.05.030 20 AAC 25.030(d)(5) is amended to read: (5) intermediate and production casing must be cemented with sufficient cement to fill the annular space from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth, whichever is greater, above all significant hydrocarbon zones and abnormally geo-pressured strata or, if zonal coverage is not required under (a) of this section, from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth, whichever is greater, above the casing shoe; if indications of improper cementing exist, such as lost returns, or if the formation integrity test shows an inadequate cement job, (A) the operator shall notify the commission and obtain approval before drilling ahead; and (B) the commission will require (i) a cement quality log or other approved method to evaluate the adequacy of the cement to contain potential wellbore pressures and fluids; and (ii) a plan of the remedial actions proposed to bring the well into compliance with (a) of this section; Register 2018 MISCELLANEOUS BOARDS 20 AAC 25.030(d)(6) is amended to read: (6) if the intermediate or production string is a liner, a minimum of 100 measured feet overlap between the outer and inner strings is required; the interval of overlap must be made Pressure competent and must be pressure -tested in accordance with (e) of this section; 20 AAC 25.030(e) is amended to read: (e) A casing pressure test must be performed if BOPE is to be installed on a casing. The casing must be tested to hold a minimum surface pressure equal to 50 percent of the casing internal yield pressure. The test pressure must show stabilizing pressure and may not decline more than 10 percent within 30 minutes. The results of this test and any subsequent tests of the casing must be recorded as required by 20 AAC 25.070(1). 20 AAC 25.030(g) is amended to read: (g) Upon written request of the operator showing good cause, the commission may modify a deadline in this section, approve a variance from any requirement of this section if the variance provides at least an equally effective means of complying with the requirement, or approve a waiver of a requirement of this section if the waiver will not promote waste, is based on sound engineering and geoscience principles, will not jeopardize the ultimate recovery of hydrocarbons, will not jeopardize correlative rights, and will not result in an increased risk to health, safety, or the environment, including freshwater. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am _/ / Register _) 2 Register _, 2018 Authority: AS 31.05.030 20 AAC 25.065(c)(1) is amended to read: MISCELLANEOUS BOARDS (1) in addition to the automatic hydrogen sulfide detection system required in 20 AAC 25.066, at least three manual detectors must be available on the location; (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am Register -_) Authority: AS 31.05.030 20 AAC 25.071 is amended to read: 20 AAC 25.071. Logs and geologic data. (a) An operator shall log the well from total depth to the base of conductor pipe by either a complete electrical or gamma -ray log unless the commission specifies the type of each log to be run. (b) Not later than 90 days after completion, suspension, or plugging of a well or well branch, or not later than 90 days after the date of acquisition of the data, whichever occurs first, the operator shall file with the commission, unless previously filed, (1) an electronic image file in formats acceptable to the commission of a complete mud log or a lithology log consisting of a detailed record and description of the sequence of strata encountered, including the kind and character of the rock and all shows of hydrocarbons; (2) a complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a Register 2018 MISCELLANEOUS BOARDS minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; (3) a lithologic description and, if available, photographs of each conventional and sidewall core; conventional core descriptions must include apparent textural, fluid, and lithologic variations, including rock type, porosity, fractures, bedding plane attitudes, sedimentary structure, grain size, and presence of hydrocarbons; (4) chips from each foot of recovered conventional core, except that chips need not be submitted until 30 days after the conventional core is analyzed; the chips must be representative of the one -foot interval, and must be approximately either one cubic inch in volume, or two ounces in weight; (5) a list of the geologic markers and each formation top encountered and the measured and true vertical depths of each marker and formation top; (6) an electronic image file in formats acceptable to the commission of all open - hole logs and mud logs run, including common derivative formats such as tadpole plots of dipmeter data and borehole images produced from sonic or resistivity data, and including composite log formats; however, copies of velocity surveys and experimental logs need not be included; the operator shall provide the commission the opportunity to examine open -hole logs for exploration or stratigraphic test wells not later than 72 hours after the logs are run and before abandonment; (7) digital data and a verification listing for all open -hole logs, all mud logs, and all cased -hole formation evaluation and cement evaluation logs run, except velocity surveys and experimental logs; the logs shall be stored on electronic media and use file formats that are 0 Register_, 2018 MISCELLANEOUS BOARDS acceptable to the commission; (8) the following items, or a written request proposing a date for submitting those items, subject to commission approval of that date for timeliness, if those items are unavailable within the 90 -day filing period set out in this subsection: (A) copies of all drill stem tests and production test data and charts; (B) a brief summary of production tests, drill stem tests, wireline formation tests, and other formation tests performed, including test date, time, depth, duration, method of operation, recovered fluid types, fluid amounts, gas -oil ratio, oil gravity, pressure, and choke size; (C) conventional and sidewall core analysis determinations, if any, of porosity, permeability, and fluid saturation; (D) geochemical and formation fluid analyses obtained, if any; and (9) an electronic image file in formats acceptable to the commission of all cased - hole formation evaluation logs and cement evaluation logs run, including common derivative formats. (c) The commission may waive or modify the requirements of this section for a well if those requirements would not significantly add to the geologic or engineering knowledge of the area in light of the information that is available from the well or other wells in the area. (d) In this section, (1) "experimental logs" means logs that are not commercially available from a well logging contractor; (2) 'velocity survey" means a survey, a purpose of which is to determine velocity Register_, 2018 MISCELLANEOUS BOARDS of seismic waves through formations penetrated by a well by measuring travel times of seismic pulses from or near the surface to geophones placed at various depths in the well. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am _/_/ Register _ ) Authority: AS 31.05.030 AS 31.05.035 20 AAC 25.110(a) is amended to read: (a) If allowed under 20 AAC 25.105, an operator may apply to the commission under this section to approve the suspension of a well or to renew the approval of the suspension of a well. The operator must (1) state the reasons the well should be suspended, and why the well should not be completed or abandoned; (2) demonstrate to the commission's satisfaction that (A) the well (i) is mechanically sound; (ii) will not allow the migration of fluids; (iii) will not damage freshwater or producing or potentially producing formations; (iv) will not impair the recovery of oil or gas; (v) is secure, safe, and not a threat to public health; (vi) is located on a valid lease that authorizes the operator to drill for oil, gas, coal bed methane, gas hydrates, or shale gas, or to evaluate underground coal gasification or geothermal resources; and 0 Register _, 2018 MISCELLANEOUS BOARDS (vii) is in compliance with all provisions of AS 31.05, this chapter, and any order, stipulation, or permit issued by the commission; and well; (B) the well (i) has future utility as an exploratory, development, or service (ii) is a viable candidate for redrilling; or (iii) is located on a pad or platform with active producing or service wells; and (3) for a well that does not lie within a unitized area, (A) provide the commission with a list of the leases that the wellbore traverses, from surface location to bottom -hole location, and the expiration date of each lease; and (B) notify the commission not later than 30 days after the change, if the status of any lease changes. 20 AAC 25.110(h) is amended to read: (h) Renewal of an existing suspension may be requested by the submission of an Application for Sundry Approvals (Form 10-403) meeting all requirements of (b) of this section. A renewal is not effective until approved by the commission. If a complete renewal application is submitted at least 60 days before the expiration of an existing suspension, the existing suspension continues until the commission acts on the application. Within 24 months before the submission of a request for suspension renewal, a well -site inspection must be completed. If the Register _, 2018 MISCELLANEOUS BOARDS (2) pressure, volume, and temperature properties of the crude oil; and (3) solution or non -associated gas composition. 20 AAC 25.270 is amended by adding a new subsection to read: (e) Annually and not later than April 1 or the date that the operator must submit a pool - specific annual surveillance report for the reservoir under 20 AAC 25.520, whichever date is later, the operator shall submit to the commission an Annual Reservoir Properties Report (Form 10-428). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am Register _) Authority: AS 31.05.030 20 AAC 25.280 is amended by adding a new subsection to read (g) If workover operations are not commenced within 12 months after the commission approves an Application for Sundry Approvals, the Application for Sundry Approvals expires. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 12/28/2006, Register 180; am 1/7/2015, Register 213; am _/_/ Register _) Authority: AS 31.05.030 20 AAC 25.537(a) is amended to read: (a) The commission will routinely make available to the public, by means of records or reports, in its offices or elsewhere, or by means of regular publication, the following information: (1) surface and proposed bottom -hole locations of each well after approval of the 0 Register _, 2018 MISCELLANEOUS BOARDS Permit to Drill (Form 10-401); (2) total depth, bottom -hole location and well status after the Well Completion or Recompletion Report and Log (Form 10-407) is filed; service wells; (3) all reports and information required by this chapter for development and (4) regular production data and regular production reports, as required to be filed by the operator each month; (5) injection data and injection reports, as required to be filed by the operator each month; and (6) all data filed on a well as required by this chapter upon expiration of the confidential period described in (d) of this section. 20 AAC 25.537(d) is amended to read: (d) Except as provided by (a) of this section, the reports and information required by this chapter to be filed by the operator for exploratory and stratigraphic test wells will be kept confidential by the commission for 24 months following the 30 -day filing period after well completion, suspension, or abandonment unless the operator gives written and unrestricted permission to release all of the reports and information at an earlier date. Upon notification that the commissioner of the Department of Natural Resources has made a finding that the required reports and information from a well contain significant information relating to the valuation of unleased land in the same vicinity, the commission will hold the reports and information confidential beyond the 24 -month period and until notified by the commissioner of the 10 Register _, 2018 MISCELLANEOUS BOARDS Department of Natural Resources to release the reports and information. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; am Register _) Authority: AS 31.05.030 AS 31.05.035 20 AAC 25.556 is amended by adding new subsections to read: (b) Unless otherwise indicated in the order, each conservation order issued by the commission expires two years after activities authorized in that order cease. (c) Unless otherwise indicated in the order, each enhanced recovery, area, storage, and disposal injection order issued by the commission expires (1) two years after the date the order was adopted, if the operator has not commenced the injection operations authorized in the order; or (2) two years after injection operations authorized in that order conclude. (d) Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the commission may administratively waive or amend the requirements of any order issued by the commission if the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater aquifers. (Eff. 11/7/99, Register 152; am Register _) Authority: AS 31.05.011 AS 31.05.030 AS 31.05.040 ALASKA OIL AND GAS CONSERVATION COMMISSION HEARING December 6, 2017 Excerpt From Unapproved Minutes Commissioner Cathy P. Foerster moved and Commissioner Daniel T. Seamount, Jr. seconded the following motion: I move to adopt 20 AAC 25.020, 20 AAC.25.030, 20 AAC 25.065, 20 AAC 25.071, 20 AAC 25.110, 20 AAC 25.265, 20 AAC 25.270, 20 AAC 25.280, 20 AAC 25.537 and 20 AAC 25.556. The motion carried unanimously. 13 Colour From: Roby, David S (DOA) Sent: Monday, December 04, 2017 4:15 PM To: Bredar, William L Cc: Davies, Stephen F (DOA) Subject: RE: Questions on regs an See answers in red below Dave Roby (907)793-1232 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sendi (907)793-1232 or dove robe@olaska aov. ng it to you, contact Dave Roby at From: Bredar, William L [mailto:William.Bredar@bp.com] Sent: Monday, December 04, 2017 2:04 PM To: Roby, David S (DOA) <dave.roby@alaska.gov> Subject: RE: Questions on regs Thanks Dave, None of these is very significant, however have a few questions. 1) Is 25.055 - Drilling Units and Well Spacing deliberately out of the draft regs? Yes, we took this out after the pushback from CIRI. 2) RE: 25.030(f) — is it not on the draft because it has no changes? When AOGCC publishes the reg should we assume (f) text will be in? (I guess that's what is meant by "is amended to read" i.e. only portions with changes are quoted). Yes, the way the Lt Gov's office/Department of Law does reg changes is they only show the stuff that has changed, so if a portion of a reg has not changed that portion is not included in this reg pack. So yes the current (f) will continue after the new regs come into effect. 2 of last 3 are around formatting convention. 3) RE: 25.071(d) (1) - should following text be bolded? "experimental logs" means logs that are not commercially available from a well logging contractor No, the "experimental logs".... stuff is in the existing regulations and is not changing. What is changing is that this formatting of the part is being tweaked with for some odd reason. If there is no change between the existing and proposed regs they show up in plain formatted text. If there's a deletion it shows up in [BRACKETED ALL CAPS], and if there's an addition it shows up in bold underscore. 4) RE: 25.071 (d) (2) — we note there is no 25.990 (velocity survey) in draft. Is that because it ended up/was addressed here? Yes, velocity survey is already defined in .071, and is being modified slightly by these proposed regs, so there's no need to define it in two locations. 5) RE: 25.270 (e) -a new subsection: should this text be bolded as it is new? I'm not positive, but I think since the whole thing is brand new they just show it in plain text instead of the bold underline which shows where something existing is being modified. ianks again, Jill Bredar. ;tate of Alaska Interactions -Reservoirs; Surveillance Champion Alaska Region performance Management Team 3P Exploration (Alaska) Inc ;907) 564-5348 - office (907) 227-7252 - mobile From: Roby, David 5 (DOA) [ora'' .a a ruby@alaska.Ko�l Sent'. Monday, December 4, 2017 12:46 PM To: Bredar, William L< illi nradar@bD.com> Subject: Questions on regs Hi Bill, going ou could email me your questions so I can have a chance to on the reg changes that are g g to be discussed at our monthly public meeting on I understand you have some questions Monday. I'm in and out of meetings most of the afternoon, but if y look at them I'll give you a call When I get a chance. Thanks, Dave Roby Sr. Reservoir Engineer Alaska Oil and Gas Conservation Commission (907) 793-1232 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas conservation ificii it may use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, Commission (AOGCC) tate of Alaska and is for the sole use oft ih intended AOGCC isaware (oi the m slake in sendingitto youacontarctl DaveRobyatlon. The unauthorized review, please delete it, without first saving or forwarding it, and, so tha (907)793-1232 or dave robov. 12 `I'l 11: S I ATE `'ALASKA (,t11!1:RD!41A fit ], `t'sLKF}i Memorandum DATE: May 3, 2017 TO: Susan Pollard, Regulations Attorney Legislative and Regulations Section Department of Law FROM: Jody J. Colombie, Regulations Conta Department of Administration, Alask Oil and Gas Conservation Commission Alaska Oil and Gas (Conservatiatt Commission SUBJECT: Request for legal review of regulation project regarding batch regulations updates 20 AAC 25.020 - .990 FILE NO.: JU2016200655 333 West Seventh Avenue Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 009CC.alaSka.gov We are requesting legal review and approval of the attached updated regulations that were adopted by the Alaska Oil and Gas Conservation Commission. Enclosed are the following documents: (1) the original and two copies of the final regulation for use by the Department of Law; (2) the original of the public notices; (3) the original of the additional regulation notice information form distributed with the notices; (4) the original of the publisher's affidavit of publications; (5) order certifying the changes to regulations of the Alaska Oil and as Conservation Commission (6) affidavit of notice of proposed regulation and furnishing of additional information (7) the original of the affidavit of oral hearing; (8) excerpt from unapproved minutes; and (9) affidavit of commission action. project. We have worked with Assistant Attorney General Thomas Ballantine on the Upon completion of your review, please forward the regulation to the lieutenant governor for filing. Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.020 is being amended to read. 20 AAC 25.020(a) Designation of Operator. Lal If an owner of a property wishes to designate a new operator for the property, the owner shall submit to the commission for approval a Designation of Operator (Form 10-411). The commission will not approve the designation of a new operator without the signature of the newly designated operator on the same Designation of Operator form. By signing the Designation of Operator form, the newly designated operator agrees to accept the obligations of an operator. The newly designated operator shall furnish a bond and, if required, security as provided for in 20 AAC 25.025. The commission's acceptance of the designated operator's bond constitutes the release of the former operator's bonding obligation for the property indicated on the Designation of Operator form. (b) The operator shall notify the commission within 30 days in writing of any changes in office address primary telephone number, email address or principal contact(s). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152, Eff. _/ / , Register _.) Authority: AS 31.05.030 20 AAC 25.030 is being amended and new sections added to read: 20 AAC.25.030 Casing and cementing. (d) Register 2017 MISCELLANEOUS BOARDS (5) intermediate and production casing must be cemented with sufficient cement to fill the annular space from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth whichever is greater, above all significant hydrocarbon zones and abnormally geo-pressured strata or, if zonal coverage is not required under (a) of this section, from the casing shoe to a minimum of 500 feet measured death or 250 feet true vertical depth, whichever is greater above the casing shoe; if indications of improper cementing exist, such as lost returns, or if the formation integrity test shows an inadequate cement job, [REMEDIAL ACTION MUST BE TAKEN;] (A) the operator shall not the commission and obtain approval before drilling ahead• and (B) provide: (i) a cement quality log or other approved method to evaluate the adequacy of the cement to contain potential wellbore pressures and fluids; and (ii) a plan setting forth the remedial actions proposed to bring the well into compliance with the requirements of (a) of this section (6) if the intermediate or production string is a liner, a minimum of 100 measured feet overlap between the outer and inner strings is required; the interval of overlap must be made pressure competent and must be pressure -tested in accordance with (e) of this section; Register 2017 MISCELLANEOUS BOARDS (7) for intermediate or production casing in a service well used for injection, a cement quality log or other evaluation log approved by the commission must be run to demonstrate isolation of the injected fluids to the approved interval. (e) A casing pressure test must be performed if BOPE is to be installed on a casing. The casing must be tested to hold a minimum surface pressure equal to 50 percent of the casing internal yield Pressure [REQUIRED WORKING PRESSURE OF THE BOPE AS SPECIFIED IN THE PERMIT TO DRILL UNDER 20 AAC 25.035(E)(3) OR 20 AAC 25.036(C)(3).] The casing pressure test must be held a minimum of 30 minutes and not show a decline greater than 10 percent. The results of this test and any subsequent tests of the casing must be recorded as required by 20 AAC 25.070(1). (f) Except for through -tubing drilling, a formation integrity test must be performed if BOPE is installed on a casing. The test must be performed to a predetermined equivalent mud weight, leak -off, or fracture pressure as specified in the application for the Permit to Drill. The test must be conducted after drilling out of the casing shoe into at least 20 feet but not more than 50 feet of new formation. The test results must demonstrate that the integrity of the casing shoe is sufficient to contain anticipated wellbore pressures identified in the application for the Permit to Drill. The test procedure followed and the data from the test and any subsequent tests of the formation must be recorded as required by 20 AAC 25.070(1). (g) [UPON REQUEST OF THE OPERATOR, THE COMMISSION WILL, IN ITS DISCRETION, APPROVE VARIANCES FROM THE REQUIREMENTS OF (B) - (F) OF THIS SECTION TO ALLOW FOR SPECIAL OR UNUSUAL CONDITIONS IF THE DESIGN REQUIREMENTS OF (A) OF THIS SECTION ARE SATISFIED.] Upon written request of Register 2017 MISCELLANEOUS BOARDS the operator showing good cause the commission may modify a deadline in this section approve a variance from any requirement of this section if the variance provides at least an equally effective means of complying with the requirement or approve a waiver of a requirement of this section if the waiver will not promote waste is based on sound engineering and geoscience principles will not jeopardize the ultimate recovery of hydrocarbons, will not jeopardize correlative rights and will not result in an increased risk to health, safety or the environment including freshwater. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. _/ / Register ) Authority: AS 31.05.030 20 AAC 25.065(c)(1) is being amended to read: 20 AAC 25.065(c)(1) Hydrogen Sulfide. In addition to the automatic hydrogen sulfide detection system required in 20 AAC 25.066, at least three manual detectors [WITH AN ADEQUATE SUPPLY OF EXTRA DETECTOR TUBES] must be available on the location; (Repealed 11/7/99. Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. _/ / Register ) Authority: AS 31.05.030 20 AAC.25.071 is amended to read: 20 AAC 25.071. Logs and Geologic data[AND LOGS]. An operator shall log the [PORTION OF THE] well [BELOW] from total depth to the base of [THE] conductor pipe by Register 2017 MISCELLANEOUS BOARDS either a complete electrical [LOG] or [A COMPLETE RADIO-ACTIVITY]gamma-rav log unless the commission specifies [WHICH]the type of log or loes[IS] to be run. (b) Within [30] 90 days after completion, suspension, or [ABANDONMENT]plugeine of a well or well branch, [WHICHEVER OCCURS FIRST, AND WITHIN 30 DAYS AFTER COMPLETION OR PLUGGING OF A WELL BRANCH, IF OCCURRING AT A DIFFERENT TIME,]or within 90 days of the date of acquisition of the data whichever occurs first, the operator shall file with the commission, unless previously filed[,]; (1) [A SEPIA] effective January 1 2018 an electronic imaee file in formats acceptable to the commission [AND A REPRODUCED COPY] of a complete mud log or a lithology log consisting of a detailed record and description of the sequence of strata encountered, including the kind and character of the rock and all shows of hydrocarbons [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]; (2) a complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; (3) a lithologic description and, if available, photographs of each conventional and sidewall core; conventional core descriptions must include apparent textural, fluid, and Register 2017 MISCELLANEOUS BOARDS lithologic variations, including rock type, porosity, fractures, bedding plane attitudes, sedimentary structure, grain size, and presence of hydrocarbons; (4) chips from each foot of recovered conventional core, except that chips need not be submitted until 30 days after the conventional core is analyzed; the chips must be representative of the one -foot interval, and must be approximately either one cubic inch in volume, or two ounces in weight; (5) a list of the geologic markers and formation tons encountered and the measured and true vertical depths of each marker and formation ton; (6) [A SEPIA] effective January 1 2018 an electronic image file in formats acceptable to the commission [AND A REPRODUCED COPY] of all open -hole logs and mud logs run, including common derivative formats such as tadpole plots of dipmeter data and borehole images produced from sonic or resistivity data, and including composite log formats; however, copies of velocity surveys and experimental logs need not be included; [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]. The operator shall provide the commission the opportunity to examine open -hole logs for exploration or stratigraphic test wells within 72 hours of being run and prior to abandonment; (7) effective January 1, 2018, an electronic image file in formats acceptable to the commission of all cased -hole formation evaluation logs and cement evaluation los run including common derivative formats- Register 2017 MISCELLANEOUS BOARDS M [A TAPE, DISKETTE, OR OTHER ELECTRONIC MEDIUM ACCEPTABLE TO THE [COMMISSION] digital data and a verification listing [OF THE DIGITAL DATA] for all [LOGS RUN] open -hole logs, all mud logs and all cased hole formation evaluation and cement evaluation los run except velocity surveys and experimental logs(;1, stored on electronic media and using file formats that are acceptable to the commission [THE VERIFICATION LISTING MUST INCLUDE A WRITTEN DESCRIPTION OF THE LOGICAL AND PHYSICAL FORMAT OF THE DIGITAL DATA]; and [(8)] JD the following items, or a written request proposing a date for submitting those items, subject to commission approval of that date for timeliness, if those items are unavailable within the [30] 90 -day filing period set out in this subsection: charts; (A) [A COPY]copies of all drill stem tests and production test data and (B) a brief summary of production tests, drill stem tests, wireline formation tests, and other formation tests performed, including test date, time, depth, duration, method of operation, recovered fluid types, fluid amounts, gas -oil ratio, oil gravity, pressure, and choke size; (C) conventional and sidewall core analysis determinations, if any, of porosity, permeability, and fluid saturation; (D) geochemical and formation fluid analyses obtained, if any. Register 2017 MISCELLANEOUS BOARDS (c) The commission [WILL, IN ITS DISCRETION,] may waive or modify the requirements of this section [for a well]if those requirements would not significantly add to the geologic or engineering knowledge of the area in light of the information that is available from the well or other wells in the area. Eff. 4/2/86, Register 97; am 11/7/99, Register 152, Eff. Register_.) Authority: AS 31.05.030 AS 31.05.035 20 AAC 25.110(a) is being amended to read: 20 AAC 25.110 Suspended wells. (a) If allowed under 20 AAC 25.105, an operator may apply to the commission under this section to approve the suspension of a well or to renew the approval of the suspension of a well. The operator must state the reasons the well should be suspended, and not completed or abandoned, and must demonstrate to the commission's satisfaction that 1. the well (A) is mechanically sound; (B) will not allow the migration of fluids; (C) will not damage freshwater or producing or potentially producing formations; (D) will not impair the recovery of oil or gas; (E) is secure, safe, and not a threat to public health; [and] (F) is located on a valid lease or leases where he applicant has the right to drill for oil, gas, coal bed methane, gas hydrates or shale gas or to evaluate underground coal gasification or geothermal resources; and Register 2017 MISCELLANEOUS BOARDS LG) is in compliance with all provisions of AS 31.05, this chapter, and any order, stipulation, or permit issued by the commission; 2. the well (A)has future utility as an exploratory, development, or service well; (B) is a viable candidate for redrilling; or (C) is located on a pad or platform with active producing or service wells[.]; b. If the well does not lie within a unitized area the operator (A) shall provide the commission with a list of the leases that the wellbore traverses, from surface location to bottom hole location and the expiration date of each lease: and (B) is required to notify the commission within 30 days if the status of any lease chanties. 20 AAC 25.110(h) is being amended to read: (h) Renewal of an existing suspension may be requested by the submission of an Application for Sundry Approvals (Form 10-403) meeting all requirements of (b) of this section. A renewal is not effective until approved by the commission. If a complete renewal application is submitted at least 60 days before the expiration of an existing suspension, the existing suspension will continue until the commission acts on the application. Within 24 months before the submission of a request for suspension renewal, a well -site inspection must be completed. If the well does not lie Register 2017 MISCELLANEOUS BOARDS within a unitized area the application to renew an existing suspension must include a list of all leases that the wellbore traverses from surface location to bottom hole location, and the expiration date of each lease History: (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; Eff. 11/19/2008, Register 188; am 4/15/2010, Register 194; Eff. _/ / , Register_.) Authority: AS 31.05.030 AS 31.05.095 AS 31.05.040 20 AAC 25.265(d)(4) Well safety valve systems is being amended to read: (4) an onshore well in a location described in (2) of this subsection and equipped with an electric submersible pump, velocity string, or capillary string run within the tubing is not required to be equipped with a subsurface safety valve; or (Eff. 4/13/80, Register 74; am 4/27/86, Register 97; am 11/7/99, Register 152; Eff. Register _ .) Authority: AS 31.05.030 20 AAC 25.270 is amended to read. 20 AAC 25.270 [INITIAL RESERVOIR] Reservoir properties. (a) The operator shall determine the initial reservoir pressure in each new pool before regular production. The results must be reported to the commission on a Reservoir Pressure Report (Form 10-412). 10 Register 2017 MISCELLANEOUS BOARDS (b) The operator shall obtain fluid samples from each new pool at the time of discovery or before regular production and determine (1) [THE]crude oil composition [ ASSAY]; (2) pressure, volume, and temperature properties of the crude oil; and (3) [THE]solution or non -associated gas composition[ASSAY]. (c) Sampling and analysis must be conducted and reported in accordance with good oil field engineering practices. Reports must be submitted to the commission within 45 days following the completion of the determinations required in (b) of this section. (d) The operator shall determine within three months after discovery of each new oil pool the original solution gas -oil ratio by a well test conducted in a manner approved by the commission. The operator shall report the results on the Well Status Report and Gas -Oil Ratio Tests (Form 10-409) within 45 days after the test. (e) By April 1st of each year or the date each Year that the operator must submit its Annual Surveillance Report for the reservoir pursuant to pool rules established under 20 AAC 25.520, whichever date is later, the operator shall submit to the commission an Annual Reservoir Properties Report (Form 10-428). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; AM 11/7/99, Register 152; Eff. _/ / , Register_.) Authority: AS 31.05.030 11 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.280(8) is being added to read: 20 AAC 25.280. Workover operations. (L) If workover operations are not commenced within 12 months after the commission approves an Application for Sundry Approvals the Application for Sundry Approvals expires. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 12/28/2006, Register 180; 1/7/2015, Register 213; Eff. _/ / , Register _.) Authority: AS 31.05.030 20 AAC 25.537(a)(3) is being amended to read: 20 AAC 25.537(a)(3) Public and confidential information. (a) The commission will routinely make available to the public, by means of records or reports, in its offices or elsewhere, or by means of regular publication, the following information: (1) surface and proposed bottom -hole locations of each well after approval of the Permit to Drill (Form 10-401); (2) total depth, bottom -hole location and well status after the Well Completion or Recompletion Report and Log (Form 10-407) is filed; service wells; (3) all reports and information required by this chapter for development and 12 Register 2017 MISCELLANEOUS BOARDS (4) regular production data and regular production reports, as required to be filed by the operator each month; month; and (5) injection data and injection reports, as required to be filed by the operator each (6) all data filed on a well as required by this chapter upon expiration of the confidential period described in (d) of this section. 20 AAC 25.537(d) is being amended to read: (d) Except as provided by (a) of this section, the reports and information required by this chapter to be filed by the operator for exploratory and strati2raphic test wells will be kept confidential by the commission for 24 months following the 30 -day filing period after well completion, suspension, or abandonment unless the operator gives written and unrestricted permission to release all of the reports and information at an earlier date. Upon notification that the commissioner of the Department of Natural Resources has made a finding that the required reports and information from a well contain significant information relating to the valuation of unleased land in the same vicinity, the commission will hold the reports and information confidential beyond the 24 -month period and until notified by the commissioner of the Department of Natural Resources to release the reports and information. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. /_/ , Register Authority: AS 31.05.030 AS 31.05.035 13 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.556 is being amended to read. 20 AAC 25.556. Orders. (a) Orders of the commission require approval of at least two commissioners. (b) Unless otherwise indicated within the order, all conservation orders issued by the commission shall expire two years after activities authorized by that order cease. (c) Unless otherwise indicated in the order, all enhanced recovery, area storage and disposal iniection orders issued by the commission shall expire: (1) two years after the date the order was adopted if injection operations have not commenced; or (2) two years after iniection operations authorized by that order concluded. (d) Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the commission may administratively waive or amend the requirements of any order issued by the commission as lone as the chance does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater aquifers. (Eff. 11/7/99, Register 152; Eff. / / , Register_.) Authority: AS 31.05.011 AS 31.05.040 AS 31.05.030 20 AAC 25.990. Definitions. 14 Register 2017 MISCELLANEOUS BOARDS (--) "experimental logs" means logs that are not commercially available from a well logging contractor: and (--) "velocity survey" means a survey, a purpose of which is to determine velocity of seismic waves through formations penetrated by a well by measuring travel times of seismic pulses from or near the surface to geophones placed at various depths in the well; (Eff. 11/7/99, Register 152; am 1/5/2006, Register 177; am 9/30/2010, Register 195; am 11/3/2013, Register 208; am 1/7/2015, Register 213; Eff. _/ / , Register .) Authority: AS 31.05.030 AS 41.06.035 AS 41.06.005 AS 41.06.040 15 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.020 is being amended to read. 20 AAC 25.020(a) Designation of Operator. Lal If an owner of a property wishes to designate a new operator for the property, the owner shall submit to the commission for approval a Designation of Operator (Form 10-411). The commission will not approve the designation of a new operator without the signature of the newly designated operator on the same Designation of Operator form. By signing the Designation of Operator form, the newly designated operator agrees to accept the obligations of an operator. The newly designated operator shall furnish a bond and, if required, security as provided for in 20 AAC 25.025. The commission's acceptance of the designated operator's bond constitutes the release of the former operator's bonding obligation for the property indicated on the Designation of Operator form. (b) The operator shall notify the commission within 30 days in writing of any changes in office address primary telephone number, email address or principal contact(s). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152, Eff. Register _.) Authority: AS 31.05.030 20 AAC 25.030 is being amended and new sections added to read: 20 AAC.25.030 Casing and cementing. (d) Register 2017 MISCELLANEOUS BOARDS (5) intermediate and production casing must be cemented with sufficient cement to fill the annular space from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth, whichever is greater, above all significant hydrocarbon zones and abnormally geo-pressured strata or, if zonal coverage is not required under (a) of this section, from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth, whichever is greater, above the casing shoe; if indications of improper cementing exist, such as lost returns, or if the formation integrity test shows an inadequate cement job, [REMEDIAL ACTION MUST BE TAKEN;] (A) the operator shall notify the commission and obtain approval before drilling ahead; and (B) provide: (i) a cement quality log or other approved method to evaluate the adequacy of the cement to contain potential wellbore pressures and fluids; and (ii) a plan setting forth the remedial actions proposed to bring the well into compliance with the requirements of (a) of this section; (6) if the intermediate or production string is a liner, a minimum of 100 measured feet overlap between the outer and inner strings is required; the interval of overlap must be made pressure competent and must be pressure -tested in accordance with (e) of this section; Register 2017 MISCELLANEOUS BOARDS (7) for intermediate or production casing in a service well used for injection, a cement quality log or other evaluation log approved by the commission must be run to demonstrate isolation of the injected fluids to the approved interval. (e) A casing pressure test must be performed if BOPE is to be installed on a casing. The casing must be tested to hold a minimum surface pressure equal to 50 percent of the casing internal Yield Pressure, REQUIRED WORKING PRESSURE OF THE BOPE AS SPECIFIED IN THE PERMIT TO DRILL UNDER 20 AAC 25.035(E)(3) OR 20 AAC 25.036(C)(3).] The casing pressure test must be held a minimum of 30 minutes and not show a decline treater than 10 percent. The results of this test and any subsequent tests of the casing must be recorded as required by 20 AAC 25.070(1). (f) Except for through -tubing drilling, a formation integrity test must be performed if BOPE is installed on a casing. The test must be performed to a predetermined equivalent mud weight, leak -off, or fracture pressure as specified in the application for the Permit to Drill. The test must be conducted after drilling out of the casing shoe into at least 20 feet but not more than 50 feet of new formation. The test results must demonstrate that the integrity of the casing shoe is sufficient to contain anticipated wellbore pressures identified in the application for the Permit to Drill. The test procedure followed and the data from the test and any subsequent tests of the formation must be recorded as required by 20 AAC 25.070(1). (g) [UPON REQUEST OF THE OPERATOR, THE COMMISSION WILL, IN ITS DISCRETION, APPROVE VARIANCES FROM THE REQUIREMENTS OF (B) - (F) OF THIS SECTION TO ALLOW FOR SPECIAL OR UNUSUAL CONDITIONS IF THE DESIGN REQUIREMENTS OF (A) OF THIS SECTION ARE SATISFIED.] Upon written request of Register 2017 MISCELLANEOUS BOARDS the operator showing good cause the commission may modify a deadline in this section approve a variance from anv requirement of this section if the variance provides at least an wally effective means of complying with the requirement or approve a waiver of a requirement of this section if the waiver will not promote waste is based on sound engineering and geoscience principles will not jeopardize the ultimate recovery of hydrocarbons, will not jeopardize correlative rights and will not result in an increased risk to health, safety, or the environment including freshwater. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. _/ / , Register ) Authority: AS 31.05.030 20 AAC 25.065(c)(1) is being amended to read: 20 AAC 25.065(c)(1) Hydrogen Sulfide. In addition to the automatic hydrogen sulfide detection system required in 20 AAC 25.066, at least three manual detectors [WITH AN ADEQUATE SUPPLY OF EXTRA DETECTOR TUBES] must be available on the location; (Repealed 11/7/99. Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. /_, Register_.) Authority: AS 31.05.030 20 AAC.25.071 is amended to read: 20 AAC 25.071. Logs and Geologic data[AND LOGS]. An operator shall log the [PORTION OF THE] well [BELOW] from total depth to the base of [THE] conductor pipe by Register 2017 MISCELLANEOUS BOARDS either a complete electrical [LOG] or [A COMPLETE RADIO-ACTIVITY]gamma-ray log unless the commission specifies [WHICH]the type of log or logs[IS] to be run. (b) Within [30] 90 days after completion, suspension, or [ABANDONMENT] plugging of a well or well branch, [WHICHEVER OCCURS FIRST, AND WITHIN 30 DAYS AFTER COMPLETION OR PLUGGING OF A WELL BRANCH, IF OCCURRING AT A DIFFERENT TIME,]or within 90 days of the date of acquisition of the data whichever occurs first, the operator shall file with the commission, unless previously filed[,]_ (1) [A SEPIA] effective January 1, 2018, an electronic image file in formats acceptable to the commission [AND A REPRODUCED COPY] of a complete mud log or a lithology log consisting of a detailed record and description of the sequence of strata encountered, including the kind and character of the rock and all shows of hydrocarbons [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]; (2) a complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; (3) a lithologic description and, if available, photographs of each conventional and sidewall core; conventional core descriptions must include apparent textural, fluid, and Register 2017 MISCELLANEOUS BOARDS lithologic variations, including rock type, porosity, fractures, bedding plane attitudes, sedimentary structure, grain size, and presence of hydrocarbons; (4) chips from each foot of recovered conventional core, except that chips need not be submitted until 30 days after the conventional core is analyzed; the chips must be representative of the one -foot interval, and must be approximately either one cubic inch in volume, or two ounces in weight; (5) a list of the geologic markers and formation tops encountered and the measured and true vertical depths of each marker and formation top; (6) [A SEPIA] effective January 1, 2018, an electronic image file in formats acceptable to the commission [AND A REPRODUCED COPY] of all open -hole logs and mud logs run, including common derivative formats such as tadpole plots of dipmeter data and borehole images produced from sonic or resistivity data, and including composite log formats; however, copies of velocity surveys and experimental logs need not be included; [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]. The operator shall provide the commission the opportunity to examine open -hole logs for exploration or stratigraphic test wells within 72 hours of being run and prior to abandonment; (7) effective January 1, 2018, an electronic image file in formats acceptable to the commission of all cased -hole formation evaluation logs and cement evaluation logs run including common derivative formats; Register 2017 MISCELLANEOUS BOARDS [A TAPE, DISKETTE, OR OTHER ELECTRONIC MEDIUM ACCEPTABLE TO THE [COMMISSION] digital data and a verification listing [OF THE DIGITAL DATA] for all [LOGS RUN] open -hole logs, all mud logs and all cased -hole formation evaluation and cement evaluation logs run except velocity surveys and experimental logsrJ, stored on electronic media and using file formats that are acceptable to the commission [THE VERIFICATION LISTING MUST INCLUDE A WRITTEN DESCRIPTION OF THE LOGICAL AND PHYSICAL FORMAT OF THE DIGITAL DATA]; and [(8)] L91 the following items, or a written request proposing a date for submitting those items, subject to commission approval of that date for timeliness, if those items are unavailable within the [30] 90 -day filing period set out in this subsection: charts; (A) [A COPY]copies of all drill stem tests and production test data and (B) a brief summary of production tests, drill stem tests, wireline formation tests, and other formation tests performed, including test date, time, depth, duration, method of operation, recovered fluid types, fluid amounts, gas -oil ratio, oil gravity, pressure, and choke size; (C) conventional and sidewall core analysis determinations, if any, of porosity, permeability, and fluid saturation; (D) geochemical and formation fluid analyses obtained, if any. Register 2017 MISCELLANEOUS BOARDS (c) The commission [WILL, IN ITS DISCRETION,] may waive or modify the requirements of this section [for a well]if those requirements would not significantly add to the geologic or engineering knowledge of the area in light of the information that is available from the well or other wells in the area. Eff. 4/2/86, Register 97; am 11/7/99, Register 152, Eff. Register .) Authority: AS 31.05.030 AS 31.05.035 20 AAC 25.110(a) is being amended to read: 20 AAC 25.110 Suspended wells. (a) If allowed under 20 AAC 25.105, an operator may apply to the commission under this section to approve the suspension of a well or to renew the approval of the suspension of a well. The operator must state the reasons the well should be suspended, and not completed or abandoned, and must demonstrate to the commission's satisfaction that 1. the well (A) is mechanically sound; (B) will not allow the migration of fluids; (C) will not damage freshwater or producing or potentially producing formations; (D) will not impair the recovery of oil or gas; (E) is secure, safe, and not a threat to public health; [and] (F) is located on a valid lease or leases where the applicant has the right to drill for oil, gas, coal bed methane, gas hydrates, or shale gas or to evaluate underground coal gasification or geothermal resources; and Register 2017 MISCELLANEOUS BOARDS LGI is in compliance with all provisions of AS 31.05, this chapter, and any order, stipulation, or permit issued by the commission; 2. the well (A) has future utility as an exploratory, development, or service well; (B) is a viable candidate for redrilling; or (C) is located on a pad or platform with active producing or service wells[.]; b. If the well does not lie within a unitized area the operator (A) shall provide the commission with a list of the leases that the wellbore traverses, from surface location to bottom hole location and the expiration date of each lease; and (B) is required to notify the commission within 30 days if the status of anv lease changes. 20 AAC 25.110(h) is being amended to read: (h) Renewal of an existing suspension may be requested by the submission of an Application for Sundry Approvals (Form 10-403) meeting all requirements of (b) of this section. A renewal is not effective until approved by the commission. If a complete renewal application is submitted at least 60 days before the expiration of an existing suspension, the existing suspension will continue until the commission acts on the application. Within 24 months before the submission of a request for suspension renewal, a well -site inspection must be completed. If the well docs not lie Register 2017 MISCELLANEOUS BOARDS within a unitized area the application to renew an existing suspension must include a list of all leases that the wellbore traverses from surface location to bottom hole location, and the expiration date of each lease History: (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; Eff. 11/19/2008, Register 188; am 4/15/2010, Register 194; Eff. _/ / Register _.) Authority: AS 31.05.030 AS 31.05.095 AS 31.05.040 20 AAC 25.265(d)(4) Well safety valve systems is being amended to read: (4) an onshore well in a location described in (2) of this subsection and equipped with an electric submersible pump, velocity string, or capillary string run within the tubing is not required to be equipped with a subsurface safety valve; or (Eff. 4/13/80, Register 74; am 4/27/86, Register 97; am 11/7/99, Register 152; Eff. Register_.) Authority: AS 31.05.030 20 AAC 25.270 is amended to read. 20 AAC 25.270 [INITIAL RESERVOIR] Reservoir properties. (a) The operator shall determine the initial reservoir pressure in each new pool before regular production. The results must be reported to the commission on a Reservoir Pressure Report (Form 10-412). 10 Register 2017 MISCELLANEOUS BOARDS (b) The operator shall obtain fluid samples from each new pool at the time of discovery or before regular production and determine (1) [THE]crude oil composition [ ASSAY]; (2) pressure, volume, and temperature properties of the crude oil; and (3) [THE]solution or non -associated gas composition[ASSAY]. (c) Sampling and analysis must be conducted and reported in accordance with good oil field engineering practices. Reports must be submitted to the commission within 45 days following the completion of the determinations required in (b) of this section. (d) The operator shall determine within three months after discovery of each new oil pool the original solution gas -oil ratio by a well test conducted in a manner approved by the commission. The operator shall report the results on the Well Status Report and Gas -Oil Ratio Tests (Form 10-409) within 45 days after the test. (e) By April Is' of each year, or the date each year that the operator must submit its Annual Surveillance Report for the reservoir pursuant to pool rules established under 20 AAC 25.520, whichever date is later the operator shall submit to the commission an Annual Reservoir Properties Report (Form 10-428). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; AM 11/7/99, Register 152; Eff. _/_/_ Register _.) Authority: AS 31.05.030 11 Register , 2017 MISCELLANEOUS BOARDS 20 AAC 25.280(g) is being added to read: 20 AAC 25.280. Workover operations. W If workover operations are not commenced within 12 months after the commission approves an Application for Sundry Approvals the Application for Sundry Approvals expires. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 12/28/2006, Register 180; 1/7/2015, Register 213; Eff. _/ / , Register _.) Authority: AS 31.05.030 20 AAC 25.537(a)(3) is being amended to read: 20 AAC 25.537(a)(3) Public and confidential information. (a) The commission will routinely make available to the public, by means of records or reports, in its offices or elsewhere, or by means of regular publication, the following information: (1) surface and proposed bottom -hole locations of each well after approval of the Permit to Drill (Form 10-401); (2) total depth, bottom -hole location and well status after the Well Completion or Recompletion Report and Log (Form 10-407) is filed; service wells: (3) all reports and information required by this chapter for development and 12 Register 2017 MISCELLANEOUS BOARDS (4) regular production data and regular production reports, as required to be filed by the operator each month; month; and (5) injection data and injection reports, as required to be filed by the operator each (6) all data filed on a well as required by this chapter upon expiration of the confidential period described in (d) of this section. 20 AAC 25.537(d) is being amended to read: (d) Except as provided by (a) of this section, the reports and information required by this chapter to be filed by the operator for exploratory and stratieraphic test wells will be kept confidential by the commission for 24 months following the 30 -day filing period after well completion, suspension, or abandonment unless the operator gives written and unrestricted permission to release all of the reports and information at an earlier date. Upon notification that the commissioner of the Department of Natural Resources has made a finding that the required reports and information from a well contain significant information relating to the valuation of unleased land in the same vicinity, the commission will hold the reports and information confidential beyond the 24 -month period and until notified by the commissioner of the Department of Natural Resources to release the reports and information. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. _/ / , Register Authority: AS 31.05.030 AS 31.05.035 13 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.556 is being amended to read. 20 AAC 25.556. Orders. (a) Orders of the commission require approval of at least two commissioners. (b) Unless otherwise indicated within the order, all conservation orders issued by the commission shall expire two years after activities authorized by that order cease (c) Unless otherwise indicated in the order, all enhanced recovery, area storage and disposal infection orders issued by the commission shall expire: (1) two years after the date the order was adopted if iniection operations have not commenced: or (2) two years after injection operations authorized by that order concluded (d) Upon proper application or its own motion and unless notice and public hearing are otherwise required the commission may administratively waive or amend the requirements of any order issued by the commission as long as the change does not promote waste or ieopardize correlative rights is based on sound engineering and geoscience principles and will not result in an increased risk of fluid movement into freshwater aquifers. (Eff. 11/7/99, Register 152; Eff. / , Register_.) Authority: AS 31.05.011 AS 31.05.040 AS 31.05.030 20 AAC 25.990. Definitions. 14 Register 2017 MISCELLANEOUS BOARDS (--) "experimental logs" means logs that are not commercially available from a well logging contractor; and 1--) "velocity survey" means a survey a purpose of which is to determine velocity of seismic waves through formations penetrated by a well by measuring travel times of seismic pulses from or near the surface to geophones placed at various depths in the well; (Eff. 11/7/99, Register 152; am 1/5/2006, Register 177; am 9/30/2010, Register 195; am 11/3/2013, Register 208; am 1/7/2015, Register 213; Eff. / / , Register_.) Authority: AS 31.05.030 AS 41.06.035 AS 41.06.005 AS 41.06.040 15 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.020 is being amended to read. 20 AAC 25.020(a) Designation of Operator. Laj If an owner of a property wishes to designate a new operator for the property, the owner shall submit to the commission for approval a Designation of Operator (Form 10-411). The commission will not approve the designation of a new operator without the signature of the newly designated operator on the same Designation of Operator form. By signing the Designation of Operator form, the newly designated operator agrees to accept the obligations of an operator. The newly designated operator shall furnish a bond and, if required, security as provided for in 20 AAC 25.025. The commission's acceptance of the designated operator's bond constitutes the release of the former operator's bonding obligation for the property indicated on the Designation of Operator form. (b) The operator shall notify the commission within 30 days in writing of any changes in office address primary telephone number, email address or principal contact(s). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152, Eff. Register_.) Authority: AS 31.05.030 20 AAC 25.030 is being amended and new sections added to read: 20 AAC.25.030 Casing and cementing. (d) Register 2017 MISCELLANEOUS BOARDS (5) intermediate and production casing must be cemented with sufficient cement to fill the annular space from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth whichever is greater, above all significant hydrocarbon zones and abnormally geo-pressured strata or, if zonal coverage is not required under (a) of this section, from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth, whichever is greater, above the casing shoe; if indications of improper cementing exist, such as lost returns, or if the formation integrity test shows an inadequate cement job, [REMEDIAL ACTION MUST BE TAKEN;] (A) the operator shall notify the commission and obtain approval before drilling ahead; and (B) provide: (i) a cement quality log or other approved method to evaluate the adequacy of the cement to contain potential wellbore pressures and fluids; and (ii) a plan setting forth the remedial actions proposed to bring the well into compliance with the requirements of (a) of this section; (6) if the intermediate or production string is a liner, a minimum of 100 measured feet overlap between the outer and inner strings is required; the interval of overlap must be made pressure competent and must be pressure -tested in accordance with (e) of this section; Register 2017 MISCELLANEOUS BOARDS (7) for intermediate or production casing in a service well used for injection, a cement quality log or other evaluation log approved by the commission must be run to demonstrate isolation of the injected fluids to the approved interval. (e) A casing pressure test must be performed if BOPE is to be installed on a casing. The casing must be tested to hold a minimum surface pressure equal to 50 percent of the casin¢ internal yield pressure.[REQUIRED WORKING PRESSURE OF THE BOPE AS SPECIFIED IN THE PERMIT TO DRILL UNDER 20 AAC 25.035(E)(3) OR 20 AAC 25.036(C)(3).] The casing pressure test must be held a minimum of 30 minutes and not show a decline greater than 10 Percent. The results of this test and any subsequent tests of the casing must be recorded as required by 20 AAC 25.070(1). (f) Except for through -tubing drilling, a formation integrity test must be performed if BOPE is installed on a casing. The test must be performed to a predetermined equivalent mud weight, leak -off, or fracture pressure as specified in the application for the Permit to Drill. The test must be conducted after drilling out of the casing shoe into at least 20 feet but not more than 50 feet of new formation. The test results must demonstrate that the integrity of the casing shoe is sufficient to contain anticipated wellbore pressures identified in the application for the Permit to Drill. The test procedure followed and the data from the test and any subsequent tests of the formation must be recorded as required by 20 AAC 25.070(1). (g) [UPON REQUEST OF THE OPERATOR, THE COMMISSION WILL, IN ITS DISCRETION, APPROVE VARIANCES FROM THE REQUIREMENTS OF (B) - (F) OF THIS SECTION TO ALLOW FOR SPECIAL OR UNUSUAL CONDITIONS IF THE DESIGN REQUIREMENTS OF (A) OF THIS SECTION ARE SATISFIED.] Upon written request of Register 2017 MISCELLANEOUS BOARDS the operator showing good cause the commission may modify a deadline in this section approve a variance from anv requirement of this section if the variance provides at least an equally effective means of complying with the requirement or approve a waiver of a reguirement of this section if the waiver will not promote waste is based on sound en2ineering and geoscience principles will not jeopardize the ultimate recovery of hydrocarbons, will not jeopardize correlative rights and will not result in an increased risk to health, safety, or the environment including freshwater. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. / / Register ) Authority: AS 31.05.030 20 AAC 25.065(c)(1) is being amended to read: 20 AAC 25.065(c)(1) Hydrogen Sulfide. In addition to the automatic hydrogen sulfide detection system required in 20 AAC 25.066, at least three manual detectors [WITH AN ADEQUATE SUPPLY OF EXTRA DETECTOR TUBES] must be available on the location: (Repealed 11/7/99. Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. / / , Register _.) Authority: AS 31.05.030 20 AAC.25.071 is amended to read: 20 AAC 25.071. Logs and Geologic data[AND LOGS]. An operator shall log the [PORTION OF THE] well [BELOW] from total depth to the base of [THE] conductor pipe by Register 2017 MISCELLANEOUS BOARDS either a complete electrical [LOG] or [A COMPLETE RADIO-ACTIVITY]gamma-ray log unless the commission specifies [WHICH]the type of log or loas[IS] to be run. (b) Within [30] 90 days after completion, suspension, or [ABANDONMENTIplu2gin of a well or well branch, [WHICHEVER OCCURS FIRST, AND WITHIN 30 DAYS AFTER COMPLETION OR PLUGGING OF A WELL BRANCH, IF OCCURRING AT A DIFFERENT TIME,]or within 90 days of the date of acquisition of the data whichever occurs first, the operator shall file with the commission, unless previously Sled[,]_ (1) [A SEPIA] effective January 1, 2018 an electronic image file in formats acceptable to the commission [AND A REPRODUCED COPY] of a complete mud log or a lithology log consisting of a detailed record and description of the sequence of strata encountered, including the kind and character of the rock and all shows of hydrocarbons [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]; (2) a complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; (3) a lithologic description and, if available, photographs of each conventional and sidewall core; conventional core descriptions must include apparent textural, fluid, and Register 2017 MISCELLANEOUS BOARDS lithologic variations, including rock type, porosity, fractures, bedding plane attitudes, sedimentary structure, grain size, and presence of hydrocarbons; (4) chips from each foot of recovered conventional core, except that chips need not be submitted until 30 days after the conventional core is analyzed; the chips must be representative of the one -foot interval, and must be approximately either one cubic inch in volume, or two ounces in weight; (5) a list of the geologic markers and formation tons encountered and the measured and true vertical depths of each marker and formation ton; (6) [A SEPIA] effective January 1 2018 an electronic image file in formats acceptable to the commission [AND A REPRODUCED COPY] of all open -hole logs and mud logs run, including common derivative formats such as tadpole plots of dipmeter data and borehole images produced from sonic or resistivity data, and including composite log formats; however, copies of velocity surveys and experimental logs need not be included; [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]. The operator shall provide the commission the opportunity to examine open -hole logs for exploration or stratigraphic test wells within 72 hours of being run and prior to abandonment,- (7) bandonment; (7) effective January 1.2018 an electronic image file in formats acceptable to the commission of all cased -hole formation evaluation logs and cement evaluation logs run including common derivative formats• M Register 2017 MISCELLANEOUS BOARDS M [A TAPE, DISKETTE, OR OTHER ELECTRONIC MEDIUM ACCEPTABLE TO THE [COMMISSION] digital data and a verification listing [OF THE DIGITAL DATA] for all [LOGS RUN] open -hole logs, all mud logs and all cased -hole formation evaluation and cement evaluation logs run except velocity surveys and experimental logsk], stored on electronic media and using file formats that are acceptable to the commission [THE VERIFICATION LISTING MUST INCLUDE A WRITTEN DESCRIPTION OF THE LOGICAL AND PHYSICAL FORMAT OF THE DIGITAL DATA]; and [(8)] (9) the following items, or a written request proposing a date for submitting those items, subject to commission approval of that date for timeliness, if those items are unavailable within the [30] 90 -day filing period set out in this subsection: (A) [A COPY]co ies of all drill stem tests and production test data and charts; (B) a brief summary of production tests, drill stem tests, wireline formation tests, and other formation tests performed, including test date, time, depth, duration, method of operation, recovered fluid types, fluid amounts, gas -oil ratio, oil gravity, pressure, and choke size; (C) conventional and sidewall core analysis determinations, if any, of porosity, permeability, and fluid saturation; (D) geochemical and formation fluid analyses obtained, if any. Register 2017 MISCELLANEOUS BOARDS (c) The commission [WILL, IN ITS DISCRETION,] may waive or modify the requirements of this section [for a well]if those requirements would not significantly add to the geologic or engineering knowledge of the area in light of the information that is available from the well or other wells in the area. Eff. 4/2/86, Register 97; am 11/7/99, Register 152, Eff. Register_.) Authority: AS 31.05.030 AS 31.05.035 20 AAC 25.110(a) is being amended to read: 20 AAC 25.110 Suspended wells. (a) If allowed under 20 AAC 25.105, an operator may apply to the commission under this section to approve the suspension of a well or to renew the approval of the suspension of a well. The operator must state the reasons the well should be suspended, and not completed or abandoned, and must demonstrate to the commission's satisfaction that 1. the well (A) is mechanically sound; (B) will not allow the migration of fluids; (C) will not damage freshwater or producing or potentially producing formations; (D) will not impair the recovery of oil or gas; (E) is secure, safe, and not a threat to public health; [and] (F) is located on a valid lease or leases where the applicant has the right to drill for oil, gas, coal bed methane gas hydrates or shale gas or to evaluate underground coal gasification or geothermal resources; and Register 2017 MISCELLANEOUS BOARDS is in compliance with all provisions of AS 31.05, this chapter, and any order, stipulation, or permit issued by the commission; 2. the well (A)has future utility as an exploratory, development, or service well; (B) is a viable candidate for redrilling; or (C) is located on a pad or platform with active producing or service wells[.]; b. If the well does not lie within a unitized area the o erator (A) shall Provide the commission with a list of the leases that the wellbore traverses from surface location to bottom hole location and the expiration date of each lease: and (B) is required to notify the commission within 30 days if the status of any lease chamm 20 AAC 25.110(h) is being amended to read: (h) Renewal of an existing suspension may be requested by the submission of an Application for Sundry Approvals (Form 10-403) meeting all requirements of (b) of this section. A renewal is not effective until approved by the commission. If a complete renewal application is submitted at least 60 days before the expiration of an existing suspension, the existing suspension will continue until the commission acts on the application. Within 24 months before the submission of a request for suspension renewal, a well -site inspection must be completed. If the well does not lie Register 2017 MISCELLANEOUS BOARDS within a unitized area, the application to renew an existing suspension must include a list of all leases that the wellbore traverses, from surface location to bottom hole location, and the expiration date of each lease History: (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; Eff. 11/19/2008, Register 188; am 4/15/2010, Register 194; Eff. _/_/ Register _.) Authority: AS 31.05.030 AS 31.05.095 AS 31.05.040 20 AAC 25.265(d)(4) Well safety valve systems is being amended to read: (4) an onshore well in a location described in (2) of this subsection and equipped with an electric submersible pump, velocity string, or capillary string run within the tubing is not required to be equipped with a subsurface safety valve; or (Eff. 4/13/80, Register 74; am 4/27/86, Register 97; am 11/7/99, Register 152; Eff. Register Authority: AS 31.05.030 20 AAC 25.270 is amended to read. 20 AAC 25.270 [INITIAL RESERVOIR] Reservoir properties. (a) The operator shall determine the initial reservoir pressure in each new pool before regular production. The results must be reported to the commission on a Reservoir Pressure Report (Form 10-412). 10 Register 2017 MISCELLANEOUS BOARDS (b) The operator shall obtain fluid samples from each new pool at the time of discovery or before regular production and determine (1) [THE]crude oil composition [ ASSAY]; (2) pressure, volume, and temperature properties of the crude oil; and (3) [THE]solution or non -associated gas composition[ASSAY]. (c) Sampling and analysis must be conducted and reported in accordance with good oil field engineering practices. Reports must be submitted to the commission within 45 days following the completion of the determinations required in (b) of this section. (d) The operator shall determine within three months after discovery of each new oil pool the original solution gas -oil ratio by a well test conducted in a manner approved by the commission. The operator shall report the results on the Well Status Report and Gas -Oil Ratio Tests (Form 10-409) within 45 days after the test. (e) By April V of each Year, or the date each Year that the operator must submit its Annual Surveillance Report for the reservoir pursuant to pool rules established under 20 AAC 25.520, whichever date is later, the operator shall submit to the commission an Annual Reservoir Properties Report (Form 10-428). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; AM 11/7/99, Register 152; Eff. _/ / , Register_.) Authority: AS 31.05.030 11 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.280(8) is being added to read: 20 AAC 25.280. Workover operations. (e) If workover operations are not commenced within 12 months after the commission approves an Application for Sundry Approvals the Application for Sundry Approvals expires. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 12/28/2006, Register 180; 1/7/2015, Register 213; Eff. _/_/ , Register Authority: AS 31.05.030 20 AAC 25.537(a)(3) is being amended to read: 20 AAC 25.537(a)(3) Public and confidential information. (a) The commission will routinely make available to the public, by means of records or reports, in its offices or elsewhere, or by means of regular publication, the following information: (1) surface and proposed bottom -hole locations of each well after approval of the Permit to Drill (Form 10-401); (2) total depth, bottom -hole location and well status after the Well Completion or Recompletion Report and Log (Form 10-407) is filed; service wells; (3) all reports and information required by this chapter for development and 12 Register , 2017 MISCELLANEOUS BOARDS (4) regular production data and regular production reports, as required to be filed by the operator each month; month; and (5) injection data and injection reports, as required to be filed by the operator each (6) all data filed on a well as required by this chapter upon expiration of the confidential period described in (d) of this section. 20 AAC 25.537(d) is being amended to read: (d) Except as provided by (a) of this section, the reports and information required by this chapter to be filed by the operator for exploratory and stratigraphic test wells will be kept confidential by the commission for 24 months following the 30 -day filing period after well completion, suspension, or abandonment unless the operator gives written and unrestricted permission to release all of the reports and information at an earlier date. Upon notification that the commissioner of the Department of Natural Resources has made a finding that the required reports and information from a well contain significant information relating to the valuation of unleased land in the same vicinity, the commission will hold the reports and information confidential beyond the 24 -month period and until notified by the commissioner of the Department of Natural Resources to release the reports and information. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. _/_/ Register Authority: AS 31.05.030 AS 31.05.035 13 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.556 is being amended to read. 20 AAC 25.556. Orders. (a) Orders of the commission require approval of at least two commissioners. (b) Unless otherwise indicated within the order, all conservation orders issued by the commission shall expire two years after activities authorized by that order cease (c) Unless otherwise indicated in the order, all enhanced recovery, area storage and disposal injection orders issued by the commission shall expire: (1) two years after the date the order was adopted if injection operations have not commenced; or (2) two years after injection operations authorized by that order concluded. (d) Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the commission may administratively waive or amend the requirements of any order issued by the commission as long as the change does not promote waste or jeopardize correlative rights is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater aquifers. (Eff. 11/7/99, Register 152; Eff. Register .) Authority: AS 31.05.011 AS 31.05.040 AS 31.05.030 20 AAC 25.990. Definitions. 14 Register 2017 MISCELLANEOUS BOARDS (--) "experimental logs" means logs that are not commercially available from a well logging contractor: and (--) "velocity survey" means a survey, a purpose of which is to determine velocity of seismic waves through formations penetrated by a well by measuring travel times of seismic pulses from or near the surface to geophones placed at various depths in the well; (Eff. 11/7/99, Register 152; am 1/5/2006, Register 177; am 9/30/2010, Register 195; am 11/3/2013, Register 208; am 1/7/2015, Register 213; Eff. Register .) Authority: AS 31.05.030 AS 41.06.035 AS 41.06.005 AS 41.06.040 15 NOTICE OF PROPOSED CHANGES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission (AOGCC) proposes to adopt regulation changes in Title 20, Chapter 25 of the Alaska Administrative Code, dealing with Oil and Gas regulations: Specifically, AOGCC is making the modifications described below to the following regulations: 1) 20 AAC 25.022: adding a 30 day notice requirement for any change in the contact information for the information contained in the Notice of Ownership; 2) 20 AAC 25.030: clarifying the required actions when there exist indications of improper or inadequate cementing; clarifying the casing and cementing information to be provided for hydraulic fracturing operations; clarifying the requirements for casing pressure tests when blowout prevention equipment is to be used; allowing for approval of extensions of deadlines, variances and waivers; 3) 20 AAC 25.055: to require spacing exceptions based on proximity to property lines where the owner and the landowner are not the same on both sides of the line and clarifying the notification requirements for an application for a spacing exception; 4) 20 AAC 25.065(c)(1): clarifying the requirements for hydrogen sulfide detection systems; 5) 20 AAC 25.071: clarifying the requirement for providing logging and geologic data, including the forms in which such information may be provided; 6) 20 AAC 25.110(a): adding a requirement that an operator demonstrate it has valid leases for all parts of any well for which suspended status is sought; 7) 20 AAC 25.110(h): adding a requirement that an application to renew an existing "suspended" status for a well include all leases the wellbore traverses and the expiration date for each; 8) 20 AAC 265(d)(4): adding an exemption from the well safety valve system requirements for onshore wells with a velocity string; 9) 20 AAC 25.270: adding a requirement that reservoir sampling and analyses be conducted in accordance with good laboratory analysis practices and setting an annual due date for an operator's Annual Reservoir Properties Report; 10) 20 AAC 25.280: providing for expiration of sundry approvals of workovers if the workover operations are not commenced within 12 months of the approval; 11) 20 AAC 25.537(a)(3): clarifying that all reports and information required to be filed for service and production wells are public information; 12) 20 AAC 25.537(d): clarifying that all reports and information required to be filed for exploratory and stratigraphic test wells are entitled to confidentiality for approximately two years after the filing period; 13) 20 AAC 25.556: providing for automatic expiration of orders absent reauthorization; 14) 20 AAC 25.990: adding a definition of the phrase "velocity survey." The proposed changes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, improve understanding, and streamline the implementation of the regulations. You may comment on the proposed regulation changes, including the potential costs to private persons of complying with the proposed change, by submitting written comments to Alaska Oil and Gas Conservation Commission at 333 West 7'h Avenue, Anchorage, Alaska 99501. Additionally, the Alaska Oil and Gas Conservation Commission will accept comments by facsimile at (907) 276-7542 and by electronic mail atjody.colombie@alaska.gov. The comments must be received no later than 4:30 p.m. on September 27, 2016. Oral or written comments also may be submitted at a hearing to be held on September 27, 2016, at 333 West 71h Avenue, Anchorage, Alaska 99501. The hearing will be held at 9:00 a.m. and might be extended to accommodate those present before 9:30 a.m. who did not have an opportunity to comment. You may submit written questions relevant to the proposed action to Jody J. Colombie, Alaska Oil and Gas Conservation Commission by email atjody.colombie@alaska.gov. The questions must be received at least 10 days before the end of the public comment period. The Alaska Oil and Gas Conservation Commission will aggregate its response to substantially similar questions and make the questions and responses available on the Alaska Online Public Notice System and agency website. If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombie at (907) 793-1221 no later than September 20, 2016 to ensure that any necessary accommodation can be provided. For a copy of the proposed regulation changes, contact Jody Colombie at (907) 793-1221 or go to www.aogec.alaska.gov. A copy of material proposed for adoption by reference is available on the Alaska Online Public Notice System or though the electronic link to the complete text. A copy of material proposed for adoption by reference may be viewed at the agency's office at 333 West Seventh Avenue, Anchorage, AK 99501. After the public comment period ends, the Alaska Oil and Gas Conservation Commission will either adopt these or other provisions dealing with the same subject, without further notice, or decide to take no action on them. The language of any final regulation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authority: AS 31.05.030 and AS 31.05.090 Statutes Being Implemented, Interpreted, or Made Specific: AS 31.05.090 Fiscal Information: The proposed regulation changes are not expected to require an increased appropriation. 0,1 DATE: 7 - � —16 _ Cathy 7. Toerster, Chair, Commissioner ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.190(g)) I. Adopting agency: Alaska Oil and Gas Conservation Commission 2. General subject of regulation: Batch regulation updates 3. Citation of regulation (may be grouped): 20 AAC 25.022 - 990 4. Department of Law file number, if any: 5. Reason for the proposed action: ( ) Compliance with federal law 91 91 a ( ) Compliance with new or changed state statute ( ) Compliance with court order ( ) Development of program standards ( X) Other (identify): The proposed changes are in response to AOGCC'serp iodic regulation reviews In general the proposed modifications aim to update and Appropriation/Allocation: Zero Cost of implementation to the state agency and available funding (in thousands of dollars): Initial Year Subsequent FY 2017 Years Operating Cost $ 0 $ 0 Capital Cost $ 0 $ 0 1002 Federal receipts $ 0 $ 0 1003 General fund match $ 0 $ 0 1004 General fund $ 0 $ 0 1005 General fund/ program $ 0 $ 0 Other (identify) $ 0 $ 0 The name of the contact person for the regulation: Name: Jody J. Colombie Title: Special Assistant to the Commission Address: 333 West 7h Avenue, Anchorage AK 99501 Telephone: (907) 793-1221 E-mail address: iody.colombiec@alaska.gov The origin of the proposed action: X Staff of state agency Federal government General public Petition for regulation change Other (identify) 10. Date: July 20, 2016 Title: Special Assistant, Telephone: (907) 793-1221 270227 0001389821 $776.90 AFFIDAVIT OF PUBLICATION STATE OF ALASKA THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on July 21, 2016 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed r " Subscribed and sworn to before me A 25th day of July, ' 016 Notary Public in and for The State of Alaska. Third Division Anchorage, Alaska MYCOMMI SIOMEXPIRES =,} Notary Public R MP �My Commission Expires Feb 23, 2019Commission Expires Feb 23, 2019 R EGf E C VE fid'.. AUG 0 3 Z01F AOGCC NOTICE OF PROPOSED CHANGES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission (AOGCC) proposes to Ad Pt regulation changes in. Title 20 Chapter 25 of the Alaska Administrative Code, dealing with Oil and Gas regulations: ecifically, AGGCC is making the modifications described below to the fSp01lowing regulations: 1) 20 AAC 25.022: adding a 30 day notice requirement for any change inthe contact information for the information contained in the Notice of Ownership; 2) 20 AAC_25.030: clarifying the required actions when there 3) 20 AAC 25.055: to require spacing exceptions based on Proximity to properly lines Where the owner and the andowner are not the same on both sides of the line and clarifying the notification requirements for an application for a spacm8 excepption; 4) 20 AA 25.065(C)(1): clarifying the requirements for hydrogen sulfide detection systems; 5) 20 AAC 25.071: clarifyink� the requirement for pproviding logging and geologic data, mclur7ing the corms in which_such information mayy be provided; 6) 20 AAC 25.110(a): adding a requirement that an operator demonstrappteee it hhas validleases for all parts of any well for 7) 20haAAC 25.110d(hj: addng a requliement that an application to renew an existing "Suspended status for a well include all leases the wellbore traverses and the expiration date for each; 8) 20. AAC 265(d)(4): adding an exemption from the well safety 9) 20 AAC 25.270: adding a date r_ 10) 20 AAC the providing for expiration of sundry approvals of workoversrs if if the workover operations are not commenced 11) 20 AAC 25.537(a)(3): clarifyirig th6t all reports and information required to be (filed for service and production wells are public information; 12) 20 AAC 25.537(d): clarifying that all reports and information 13) 20 AAC`2&55 'providing for automatic expiration of orders absent reauthorization; 14) 20 AAC 25.990: adding a definition of the phrase "velocity survey." The proposed chanSes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarity the requirements, impProve understanding, and streamline the implementation of the regulatlons. You may comment on the proposed regulation Chan as, including the potential costs to Drivate persons of comps ing with the proposed change, by submitting written comments t0 Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Anchorage, Alaska 99501. Additionally, the Alaska Oil and Gas Conservation Commission will accept comments by facsimile at(907) 276-7542 and by eleCVonic mail at.jody.colombie0alaska.gov. The comments must be received no later than 4:30 P.M. on September 27, 2016. Oral or written comments also may he suhmitted at a haarinv m he an a.m. wno aid not rou mayy submit written questions relevant to the proposed action to Jody 1.0010 bie, Alaska Oil and Gas Conservation Commission by email It jody.Colo mbie0alaska.SSOV. The questions must be received at least 10 days before the end of the public comment period. The'Alaska Oil Ind Gas Conservation Commission will aggregate its response to iubSte ally similar questions and make the questions and responses Ivailable on the Alaska Online Public Notice System and agency vebsite. f you are a person with a disability who needs a special accommodation in order to participate in this process, please contact ody Colombia at (907) 793-'1221 no later than September 20, 2016 to insure that any necessary accommodation can be provitld. For a copy of the proposed regwation changes, contact Jody LOIOMDie at (907) 793-1221 or go to www.aogcc.alaska.gov. A copy of material proposed for adoption by reference Is available on the Alaska Online Public NoticeSystem or though the electronic link to the complete text. A copy of material proposed for adoption by reference may be viewed at the agency's office at 333 West Seventh Avenue, Anchorage, AK 99501. After the public comment period ends, the Alaska Oil and Gas Conservation Commission will either adopt these or other provisions dealinK with the same subject, without further notice, or decide to take no action on them. The language of any fins! regulation may be different from the proposed regulation. You should comment during the time allowed If your interests could be affected. Statutory Authority AS 31.05.030 and AS 31.05.090 Statutes Being Implemented Interpreted, or Made Specific: AS 31.05.090 Fiscal Information: The proposed regulation changes are not expected to require an increased appropriation. DATE: July 20, 2016 Cathy P. Foerster, Chair, C ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.190(8,)) opting agency: Alaska Oil and Gas Conservation 2. General subject of regulation: Batch regulation updates 3. Citation of r ulation (maybe grouped): 20 AAC 25.022-990 4. Department of Law file number, If any: 5. Reason for theproposed action: Compliance with federal law Compliance with new or changed state statute Compliance with court order Development of program standards the X ) or (Itlentify):_The proposed changes are in response to of 6. Appropriation/Allocation: Zero 7. Cost of implementation to the state agency and available funding (in thousands of dollars): Initial Year Subsequent Operating Cost FY 2017 0 Years$ $ 0 Capital Cost $ 0 $ 0 General 1003 fund match $ 0 $ 0 1004 General fund $ 0 $ 0 1005 General fund/ program $ 0 Other $ 0 (identify) $ 0 $ 0 8. The name of Tp contact person for the regulation: Jotl Name: J. Colombia Title: ma Assts Int to the Commission Address. 3 �'esf 7 t t venue nc Orae AK 99501 Telephone Zms E-mail adeco 9. The origin of the proposed action X Staff of state agency Federal government General public Petition _ for regulation change _ Other (identify) 10. Date: JUIV 20, 2016 Prepared by: I.1ame: lotly 1. Colombia Title: SMCla) Assistant Telep`Ane�907Si93-1331 I Published: July 21, 2016 _ 1 SUPPLEMENTAL NOTICE OF PROPOSED CHANGES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission (AOGCC) is proposing to adopt regulation changes in Title 20, Chapter 25 of the Alaska Administrative Code, dealing with Oil and Gas regulations. The proposed changes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, improve understanding, and streamline the implementation of the regulations. This is a SUPPLEMENTAL NOTICE adding to the NOTICE OF PROPOSED CHANGES that was issued on July 20, 2016, concerning these proposed regulations revisions contained in the Department of Law file number JU2016200655; this SUPPLEMENTAL NOTICE incorporates by reference information in the July 20, 2016 notice of proposed regulations. This SUPPLEMENTAL NOTICE is being issued because the AOGCC has decided to hold a second oral hearing on those proposed provisions. The AOGCC held its first public hearing on these proposed regulation changes on September 27, 2016. As a result of concerns raised during the September 27, 2016 hearing, a second oral hearing is scheduled for November 1, 2016 at 9:00 a.m. at the AOGCC, 333 West 7'h Avenue, Anchorage Alaska 99501. The purpose of the hearing is to permit interested persons to provide more input to AOGCC staff regarding the regulatory amendments introduced at the AOGCC's Public Hearing held September 27, 2016. The pending proposed changes to the regulations are available on the AOGCC website http://doa.alaska goy/ogc/. Written comments will not be taken at the second oral hearing. The hearing might be extended to accommodate those present before 9:30 a.m. who did not have an opportunity to comment. If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombie at (907) 793-1221 no later than October 30, 2016 to ensure that any necessary accommodation can be provided. For a copy of the proposed regulation changes, contact Jody Colombie at (907) 793-1221 or go to aww.aogcc.alaska.gov. A copy of material proposed for adoption by reference is available on the Alaska Online Public Notice System or though the electronic link to the complete text. A copy of material proposed for adoption by reference may be viewed at the agency's office at 333 West Seventh Avenue, Anchorage, AK 99501. After the November 1, 2016 oral hearing, the Alaska Oil and Gas Conservation Commission will notice another hearing, adopt these or other provisions dealing with the same subject, or decide to take no action on them. The language of any final regulation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authority: AS 31.05.030 and AS 31.05.090 Statutes Being Implemented, Interpreted, or Made Specific: AS 31.05.090 Fiscal Information: The proposed regulation changes are not expected to require an increased appropriation. DATE: �'2%'��p ` Cathy P. roerster, Chair, Commissioner 270227 0001393658 $308.78 STATE OF ALASKA RECEIVED OrT06?016 AFFIDAVIT OF PUBLICATION A0G00 THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on September 30, 2016 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed Subscribed and sworn to before me this 30th day of September, 2016 Notary P in and for The State of Alaska. Third Division Anchorage, Alaska My COMMISSION EXPIRES a r 423 ) �61c7 NOTICE S PROPOSED CHANPLEIMENTAL GES IN THE REIN LA71 ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil I Gas Conservation Commission (gOGCC) is roposing to adopt regulation changes p ijtle 20, Chapter 25 of the Alaska The Administrative han dealing with Oil and Gas regulations. The proposed Chan are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim o u clarify the requirements, Impprove understanding, and streamline the implementation of the regulations. update and This is a SUPPLEMENTAL NOTICE adtlin1 to the NOTICE OF PROPOSED JU reggulations revisions issued 11 lin the Dep6paconcerning these proposed information I 'this SUPPLEMENTAL NOTICEr Me incorporates file reference information in the July 20 2016 notice of roposed regulations. This decldetl to hold a secolnd I's l helarriing nnetl.,9ecaus- the gOGCC haS For i 907 opy of the proposed regulation changes, contactProvided. Jody COlomble ( 1793-1221 or go to www.aogcc.alaska.gov. A copy of material proposed for adoption by reference is available on refthe Alaska Online Public Notice System or though the electronic link to erencepimay be viewed at the agency's proposed for adoption by Avenue, Anchorage, AK 99501. g y nice at 333 West Seventh After the vember 1 otherral hearin Consr onCommscion wjj not notice anotBerthearAlaska Oil and Gas other provisions dealing with the same subject or g adopt these r action on them The Ian guage of any final regulation may allowedef your Interests Naga be affected Id comment during the time y be different Statutese "t Omplim SrI 1 05.030 and AS 3105 0 090 s AS 37.05.090 8 pInterpreted, Fiscal Informatterc The proposed re pede expected to require an increased appropriation. regulation changes are not DATE: September 29, 2016 Published: September 30, 2016 Cathy P. Foerster, Nolan; ;'vblic ARITN'EY L THOMPSUII State of Al2si:,, IL,r Commission Expires reb"', SECOND NOTICE OF PROPOSED CHANGES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission (AOGCC) proposes to adopt changes to Title 20, Chapter 25 of the Alaska Administrative Code, which contains oil and gas regulations, including the following: Specifically, AOGCC is making the modifications described below to the following regulations: 1) 20 AAC 25.020: adding a 30 -day notice requirement for any change in the contact information for the information contained in the Designation of Operator; 2) 20 AAC 25.030: clarifying the required actions when there exist indications of improper or inadequate cementing; clarifying the casing and cementing information to be provided for hydraulic fracturing operations; clarifying the requirements for casing pressure tests when blowout prevention equipment is to be used; allowing for approval of extensions of deadlines, variances and waivers; 3) 20 AAC 25.055: to require spacing exceptions based on proximity to property lines where the owner and the landowner are not the same on both sides of the line and clarifying the notification requirements for an application for a spacing exception; 4) 20 AAC 25.065(c)(1): clarifying the requirements for hydrogen sulfide detection systems; 5) 20 AAC 25.071: clarifying the requirement for providing logging and geologic data, including the forms in which such information may be provided; 6) 20 AAC 25.110(a): adding a requirement that an operator demonstrate it has valid leases for all parts of any well for which suspended status is sought; 7) 20 AAC 25.110(h): adding a requirement that an application to renew an existing "suspended" status for a well include all leases the wellbore traverses and the expiration date for each; 8) 20 AAC 265(d)(4): adding an exemption from the well safety valve system requirements for onshore wells with a velocity string; 9) 20 AAC 25.270: adding a requirement that reservoir sampling and analyses be conducted in accordance with good laboratory analysis practices and setting an annual due date for an operator's Annual Reservoir Properties Report; 10) 20 AAC 25.280: providing for expiration of sundry approvals of workovers if the workover operations are not commenced within 12 months of the approval; 11) 20 AAC 25.537(a)(3): clarifying that all reports and information required to be filed for service and production wells are public information; 12) 20 AAC 25.537(d): clarifying that all reports and information required to be filed for exploratory and stratigraphic test wells are entitled to confidentiality for approximately two years after the filing period; 13) 20 AAC 25.556: providing for automatic expiration of certain orders; 14) 20 AAC 25.990: adding a definition of the phrase "velocity survey", "experimental logs", "log" and "common derivative format". The proposed changes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, improve understanding, and streamline the implementation of the regulations. The hearing will be held on March 21, 2017 at 9:00 a.m. and might be extended to accommodate those present before 9:30 a.m. who did not have an opportunity to comment. Oral or written comments also may be submitted at the hearing to be held on March 21, 2017, at 333 West 7`s Avenue, Anchorage, Alaska 99501. This is the second hearing held in this matter. You may comment on the proposed regulations changes, including the potential costs to private persons of complying with the proposed change, by submitting written comments to Alaska Oil and Gas Conservation Commission at 333 West 7' Avenue, Suite 100, Anchorage, Alaska 99501. Additionally, the Alaska Oil and Gas Conservation Commission will accept comments by facsimile at (907) 276-7542 and by electronic mail at jody.colombie@alaska.gov. The comments must be received no later than 4:30 p.m. on March 21, 2017. If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombie at (907) 793-1221 no later than March 5, 2017 to ensure that any necessary accommodation can be provided. For a copy of the proposed regulation changes, contact Jody Colombie at (907) 793-1221 or go to www.aogcc.alaska.gov. After the public comment period ends, the Alaska Oil and Gas Conservation Commission will either adopt these or other provisions dealing with the same subject, without further notice, or decide to take no action on them. The language of any final regulation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authority: AS 31.05.030 and AS 31.05.090 Statutes Being Implemented, Interpreted, or Made Specific: AS 31.05.030 and 31.05.090 Fiscal Information: The proposed regulation changes are not expected to require an increased appropriation. DATE: I— Z547 �& Cathy P. Foerster, Chair, Commissioner ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.190(g)) 1. Adopting agency: Alaska Oil and Gas Conservation Commission 2. General subject of regulation: Batch regulation updates 3. Citation of regulation (may be grouped): 20 AAC 25.022 - 990 4. Department of Law file number, if any: 5. B Reason for the proposed action: ( ) Compliance with federal law ( ) Compliance with new or changed state statute ( ) Compliance with court order ( ) Development of program standards ( X ) Other (identify): The proposed changes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, improve understanding, and streamline the implementation of the regulations. Appropriation/Allocation: DOA/AOGCC Cost of implementation to the state agency and available funding (in thousands of dollars): Operating Cost Capital Cost 1002 Federal receipts 1003 General fund match 1004 General fund 1005 General fund/ program Other (identify) Initial Year Subsequent FY 2017 Years $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 $ 0 8. The name of the contact person for the regulation: Name: Jody J. Colombie Title: Special Assistant to the AOGCC Address: 333 West 7th Avenue, Anchorage, AK 99501 Telephone: (907) 793-1221 E-mail address:-iody.colombie@alaska.gov 9. The origin of the proposed action: X Staff of state agency Federal government General public Petition for regulation change Other 10. Date: 1 Title: Special Assistant to the AOGCC Telephone: (907) 793-1221 270227 RECEIVE 0001399332 JAN 3 12017 $761.96 AO ff ��aa AFFIDAVIT OF PUBLICATION STATE OF ALASKA THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on January27, 2017 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Subscribed and sworn to before me this 27th day of January, 2017 Notary Public in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES I 'Notary Public BRITNEY L. THOMPSON State of Alaska My CNMWNIon Expire$ Feb 23, 20119 NOTICEPROPOSED CHANGES IN THE REGULATIONS OF SECOND THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission (AOGCC) DrOpOses to adopt changes to Title 20, Chapter 25 of the Alaska Administrative Code, which contains oil and gas regulations, including the following: Specifically, AOGCC is making the modifications described below to the following regulations: 1) 20AAC 25.020: adding a 30 -day notice requirement for any C hange in the contact information for the information contained in the Designation of Operator 2) 20 AAC 25.030: clarifying the required actions when there exist Indications of Improper or inadequate cementi ,KK, clarLifyng the casing and cementing information to be provides 3) 20 AAC 25.055: t0 -require spacing exceptions based on Paroximity to property lines where the owner and the ndowner are not the same on both sides of the line and clarifying the notification requirements for an application for a sgacmg exception, 4) 2U AAC 25.065(c)(1): clarifying the requirements for hydrogen 5) sulfide 0 fAAC detection 5 071 clarifying therequirement for providing logging and geologic data, including the forms In which sucFi information maybe provided; 6) 20 AAC 25.110(8): adding a re uirement that an operator' de monsVate it has valid leases for all parts of any well for. which susppended status is sought; 7) 20 AAC 25.110(h): adding a requirement that an application to leases the wellbore traverses and the expat o dalte for each I' a) 20 AAC 265(d)(4): adding an exemntinn frnm tho wun enrol„ 9) 10) „ uie -umpf operations are not coma 11) within AC 25 537(�aj(3);tclerr)nOg that all reports and iIlior required t0 be Ilei for service and production wells are information; 12) 20 AAC_ 25,537(d): clarifvine that all tenons and inmr, 13) 20 AAC 15.556: providing for automatic expiration of orders; 14) 20 AAC 25.990: addina a definition of the phrase " survey, experimentalglogs", "log" and "common d, The proposed Changes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, Improve understanding, and streamline the implementation of the regulations. The hearing will be held on March 21, 2017 at 9:00 a.m. and migght be extended to accommodate those present before 9:30 a.m. who did not no later than 4:30 P.M. on If you are a person With adisabil'tty who needs a special accommodation in order to participate in thispprocess, please contact Jody Colombie at (907) 793-1221 no later than Nlarch 5, 2017 to ensure that any necessary accommodation can be provided, For a copy of the proposed regulation changes, contact Jody Colombia at (907) 793-1221 or go to www.aogcc.alask5.gov. After the public comment period ends, the Alaska oil and Gas Conservation Commission will either ado these or other provisions dealing with the same subject, without further notice, or decide to take no action on them. The language -of any final regulation me y be different from the proposed regulation. Vou should comment during the time allowed it y��oyyur interests could be affected. StatutStatutes Being InAuthoro lame ted, Into prre As 31 Made Specific: o5 o90 AS 31.05.030 and 31.05.090 Fiscal Information: The proposedregulation changes are not expected to require an increased appropriation. DATE: January 25, 2017 //signature on fllei Cathy P. Foerster, Chair, Commission ADDITIONAL REGULATION NOTICE INFORMATION (AS ".62.190(g)) 1 oomm agency: Alaska Oil and Gas Conservation 2. General subject of regulation: Batch regulation updates 3. Citatibn of regulation (may be grouped): 20 AAC 25.022 - 990 4. Department of Law file number, h any: 5. Reason for the proposed action: Compliance with federal law )!) Compliance with new or changed state statute Compliance with court order Development ofprogram standards X) Other ((identify): The proposed changes are in response to AOGCPs periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, I understanding, and streamline the implementation of the regulations. 6. Appropriation/Allocation: DOA/AOGCC 7. Cost of Implementation to the state agency and available funding (in thousands of dollars): initial Year Subsequent FY 2017 Years Operatig Cost S 0 0 Capital Cost $ o 0 1002 Federal receipts 0 $ 0 1003 General fund match 0 1004 General fund 0 g p 1005 General fund/ program g 0 g 0 0er (identify) $ 0 $ 0 3. The name of the contact person for the regulation: Name: Jody J. Colombia ritle: Special Assistant to the AOGCC 4ddress: 333 West 7th Avenue, Anchorage, AK 99501 relephone: (907) 793.1221 c -mail address: jody.colombie@aalaska.gov >. The origin of the proposed action: X Staff of state agency Federal government General public Petition for regulation change _.Other (idendf)q 0. Date: January 25, 2017 Prepared by: //signature on file// Name: Jody J.Colomble Title: Sq ecial Assistant to the AOGCC Telephone: (907) 793.1221 'ublished: January 27, 2017 ORDER CERTIFYING THE CHANGES TO REGULATIONS OF THE ALASKA OIL AND GAS CONSERATION COMMISSION The attached 15 pages of batch regulations are certified to be a correct copy of the regulation changes that the Alaska Oil and Gas Conservation Commission adopted at its May 3, 2017 meeting, under the authority of AS 31.05 and after compliance with the Administrative Procedure Act (AS 44.62), specifically including notice under AS 44.62.190 and 44.62.200 and opportunity for public comment under AS 44.62.210. This action is not expected to require an increased appropriation. On the record, in considering public comments, the Alaska Oil and Gas Conservation Commission paid special attention to the cost to private persons of the regulatory action being taken. The regulation changes described in this order take effect on the 30th day after they have been filed by the lieutenant governor as provided in AS 44.62.180. Date: May 3, Cathyf- Foer, ter, Chair, AOGCC FILING CERTIFICATION I, Byron Mallott, Lieutenant Governor for the State of Alaska, certify that on 2017 at .m., I filed the attached regulations according to the provisions of AS 44.62.040 - 44.62.120. Lieutenant Governor Effective: Register: AFFIDAVIT OF NOTICE OF PROPOSED REGULATION AND FURNISHING OF ADDITIONAL INFORMATION I, Jody J. Colombie, Special Assistant, of the Alaska Oil and Gas Conservation Commission, being sworn, state the following: As required by AS 44.62.190, notice of the proposed adoption of changes to 20 AAC 25-020 - 990 has been given by being (1) published in a newspaper or trade publication; (2) furnished to interested persons; (3) furnished to appropriate state officials; (4) furnished to the Department of Law, along with a copy of the proposed regulation; (5) furnished electronically to incumbent State of Alaska legislators; (6) furnished to the Legislative Affairs Agency, Division of Legal and Research Services; (7) posted on the Alaska Online Public Notice System as required by AS 44.62.175(a)(1) and (b) and 44.62.190(a)(1); (8) furnished electronically, along with a copy of the proposed regulation, to the Legislative Affairs Agency, the chair of the Resources Committee of the Alaska Senate and House of Representatives, the Administrative Regulation Review Committee, and the legislative council. As required by AS 44.62.190, additional regulation notice information regarding the proposed adoption of the regulation changes described above has been furnished to interested persons and those in (5) and (6) of the list above. The additional regulation notice information also has been posted on the Alaska Online Public Notice System. Date: May 3, 2017 Jody-VayleiQ CoWmbieSpecial Assistant, AOGCC Subscribed and sworn to before me at Anchorage, Alaska on May 3, 2017. Public in and for the tate o Alaska AFFIDAVIT OF ORAL HEARING I, Cathy P. Foerster, Chair of the Alaska Oil and Gas Conservation Commission, being sworn, state the following: On September 27, 2016 and March 21, 2017, at 9:00 a.m., 333 West 7`h Avenue, Anchorage, Alaska 99501, I presided over a public hearing held under AS 44-62.2 10 for the purpose of taking testimony in connection with the adoption of changes to 20 AAC 25.020 — 990, bulk regulations. Date: May 3, 2017 Cathy P. F erster, Chair, AOGCC Subscribed and sworn to before me at Anchorage, Alaska on May 3, 2017. Notary Public in and for the State o Alaska ALASKA OIL AND GAS CONSERVATION COMMISSION HEARING May 3, 2017 Excerpt From Unapproved Minutes Commissioner Hollis S. French. moved and Commissioner, Chair Cathy P. Foerster seconded the following motion: I move to adopt 20 AAC 25.020, 20 AAC.25.030, 20 AAC 25.065, 20 AAC 25.071, 20 AAC 25.110, 20 AAC 25.265, 20 AAC 25.270, 20 AAC 25.280, 20 AAC 25.537, 20 AAC 25.556 and 20 AAC 25.990 The motion carried unanimously. AFFIDAVIT OF COMMISSION ACTION I, Jody J. Colombie, Special Assistant, for the Alaska Oil and Gas Conservation Commission, being duly sworn, state the following: The attached motion dealing with bulk regulation changes was passed by the Alaska Oil and Gas Conservation Commission during its May 3, 2017 meeting. Date: May 3, 2017 Cathy P. Foers%er, Chair, AOGCC Subscribed and sworn to before me at Anchorage, Alaska on May 3, 20!12. Notary Public in and or the State f A aska 11 PUBLIC HEARING 3/21/2017 DOCKET NO R-16-001 ALASKA OIL AND GAS CONSERVATION COMMISSION Before Commissioners: Cathy Daniel Hollis Foerster, Chair T. Seamount French In the Matter of Proposed Changes to ) Regulations: 20 AAC 25.020(a) designation of operator; 20 AAC 25.030, ) casing and cementing; 20 AAC 25.055, ) drilling units and well spacing; 20 AAC 25.065(c)(1), hydrogen sulfide; ) 20 AAC 25.071, logs andgeolo) 20 AAC 25.110(a) and gic data; ) wells; 20 AAC 25.265 ( d 4), well ) valve systems; 20 AAC 25 2 ll safety ) 25.270, reservoir ) Properties; 20 AAC 25.280(8), workover ) Operations, 20 AAC 25.537(a)(3) and (d), ) Public and confidential information; 20 AAC 25.556, orders; 20 AAC 25.990, definitions. Docket No.: R-16-001 ) ALASKA OIL and GAS CONSERVATION COMMISSION Anchorage, Alaska March 21, 2017 9:00 o'clock a.m. PUBLIC HEARING BEFORE: Cathy Foerster, Chair Daniel T. Seamount, Commissioner Hollis French, Commissioner Computer Matrix, LLC 135 Christensen Dr., Ste. 2., Anch. AK 99501 Phone: 907-24 Fax: 907-243-1473 Email: sahile@gci.net PUBLIC HEARING 3/21/2017 DOCKET NO R-16-001 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net Page 2 1 TABLE OF CONTENTS 2 Opening remarks by Chair Foerster 03 3 Comments by Mr. Kindred 07 4 Comments by Mr. Roby 10 5 Comments by Ms. Colombie 11 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net PUBLIC HEARING 3/21/2017 DOCKET NO R-16-001 1 P R o CE E D I N G S 2 (On record - 9:02 a.m.) 3 CHAIR FOERSTER: Good morning. I'll call this 4 hearing to order. This is a public hearing to consider 5 Proposed regulations. The hearing is being held on the 6 morning of March 21st, 2017, it is 9:02 a.m. The 7 location is the offices of the Alaska Oil and Gas 8 Conservation Commission, or AOGCC, 333 West Seventh 9 Avenue, Anchorage Alaska. Before we begin I'll 10 introduce the Commissioners. To my left is 11 Commissioner Dan Seamount, to my right is Commissioner 12 Hollis French and Ism Cathy Foerster. 13 Computer P Matrix will be recording todayls 14 proceedings and upon completion and preparation of the 15 transcript Computer Matrix will have the transcript 16 available and anyone who's interested may obtain a copy 17 of it from them. 18 AOGCC Proposes to adopt changes in Title 20 19 Chapter 25 of the Alaska Administrative Code. This 20 hearing is being held in accordance with AS 44.62 and 21 20 AAC 25.540 of the Alaska Administrative Code. 22 A few little housekeeping bits. There will be 23 a time limit of 30 minutes for oral testimony for each 24 participant. 25 If you submitted written testimony you may also testify, but there's no need to reiterate your Computer Matrix, LLC 135 Christensen Dr., Ste. 2., gnch. AK 99501 Phone: 907-243-0668 Fax:907-243-1473 Email: sahile@gci.net PUBLIC HEARING 3/21/2017 DOCKET NO R-16-001 1 testimony, we'll takePage 4 everything into consideration 2 whether it,s written or spoken. Oral testimony must 3 have relevance to the topic of these draft regulations. 4 We'll use the sign in sheet to help format the hearing 5 testimony so if you plan to testify make sure you 6 signed in and indicated that 7 you will be testifying. Is anybody planning to testify who has not 8 signed in saying such? 9 (No comments) 10 CHAIR FOERSTER: Okay. Ind like to remind you 11 when you testify be sure that the microphones in front 12 of you are turned on and speak into them so that people 13 in the back of the room can hear you and so that the 14 court reporter can get a clear recording. If you wish 15 to be recognized as an expert in any particular area 16 please state so as you start to testify and be prepared 17 to provide the relevant information supporting your 18 recognition as an expert witness. If you have a 19 question that you need directed to a speaker write your 20 question down and give it to Jody Colombie and 21 Commissioners will consider it and if we deem it 22 necessary to assist us in eliciting relevant 23 information to make our decisions we will ask it. 24 This notice - - the notice of this hearing was 25 published in the Alaska Dispatch on January 27th, 2017, Computer Matrix, LLC 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax:907 243 147733 3 0 Email: sahile@gci.net PUBLIC HEARING 3/21/2017 DOCKET NO R-16-001 1 it was also posted on the State of Alaska Page 5 online notice 2 website as well as the AOGCC's own website. 3 If you need a copy of the proposed regulations 4 see Jody Colombie and if you have written comments that 5 you haven't already submitted please also see Jody and 6 give those to her. 7 In regards to regulations when considering the 8 factual substantive and other relevant matter we do pay 9 special attention to the cost to private persons of the 10 proposed regulatory action. 11 All right. On November 1st, 2016 we had a 12 public workshop to address the proposed regulations. 13 So this is the second public hearing on the matter and 14 the regulations we'll be discussing today are as 15 follows. We'll see how clearly and quickly I can say 16 these. 20 AAC 25.020, designation of operator; 20 AAC 17 25.030, casing and cementing; 20 AAC 25.055, drilling 18 units and well spacing; 20 AAC 25.065, hydrogen 19 sulfide; 20 AAC 25.071, logs and geologic data; 20 AAC 20 25.110, suspended wells; 20 AAC 25.265, well safety 21 valve systems; 20 AAC 25.270, reservoir properties; 20 22 AAC 25.280, workover operations, 20 AAC 25.537, public 23 and confidential information; 20 AAC 25.556, orders, 24 and 20 AAC 25.990, definitions. 25 At the September 27th, 2016 hearing there was Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net PUBLIC HEARING 3/21/2017 DOCKET NO R-16-001 Page 6 1 discussion on amending 20 AAC 25.022, but after careful 2 consideration and further discussion at the public 3 workshop held on November 1st, 2016 it was decided that 4 the proposed new language in section (b) would better 5 fit inserted in 20 AAC 25.020., designation of 6 operator. 7 All right. Commissioner Seamount, do you have 8 anything else for the good of the order before we go 9 into testimony? 10 COMMISSIONER SEAMOUNT: I think you said it 11 all, Madam Chair. 12 CHAIR FOERSTER: Thank you. Commissioner 13 French. 14 COMMISSIONER FRENCH: No questions. 15 CHAIR FOERSTER: All right. Looking at the 16 list of people choosing to testify, I see only that 17 Josh Kindred from AOGA is listed as a yes. So come on 18 up, Mr. Kindred. 19 And before we begin make sure your mics are 20 turned on and then raise your right hand. 21 (Oath administered) 22 MR. KINDRED: I do. 23 CHAIR FOERSTER: All right. Do you wish to be 24 recognized as an expert in any particular area? 25 MR. KINDRED: No, ma'am. Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK99501 Fax: 907-243-1473 Email: sahile@gci.net PUBLIC HEARING 3/21/2017 DOCKET NO R-16-001 Page 71 1 CHAIR FOERSTER: Okay. This is the time for 2 the joke, I'm a lawyer, I'm not an expert. 3 MR. KINDRED: Well, I -- I'm..... 4 CHAIR FOERSTER: Just kidding. 5 MR. KINDRED: .....trying to speak as little as 6 possible, that tends to keep me out of trouble. 7 But..... 8 CHAIR FOERSTER: Please proceed. 9 MR. KINDRED: Sure. 10 JOSH KINDRED 11 called as a witness on behalf of the AOGA, stated as 12 follows on: 13 DIRECT EXAMINATION 14 MR. KINDRED: And I'll be brief, Madam Chair. 15 So, you know, ultimately there are two things that AOGA 16 wanted to express. We expressed them in written 17 comments, I wanted to provide a little greater context. 18 First I'd like to express appreciation from 19 AOGA's perspective for the entire process of these 20 regulation modifications. The workshop was incredibly 21 beneficial not only in providing I think operators some 22 context for why these regulations were being modified 23 in the way they were which often helps, you know, we 24 spend a lot of time looking at new regulation packages 25 wondering what the catalyst was. And once we find out Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net PUBLIC HEARING 3/21/2017 DOCKET NO R-16-001 1 what that catalyst is sometimes the regulations 2 themselves become more palatable. But the workshop 3 also allowed for a fairly thorough, intelligent 4 discourse about maybe different options that could be 5 pursued that would satisfy the Commission's endeavors, 6 but had less adverse affect to the operator. So we do 7 want to say thank you for that. 8 Ultimately there was only one ask in AOGA's 9 written comments and I'll reiterate it here. Under 20 10 AAC 25.270(e), the proposed modification is by April 11 1st of each year the operator shall submit to the 12 Commission an annual reservoir properties report, form 13 10-428. AOGA would propose the following modification. 14 April 1st of each year or the date each year that the 15 operator must submit its annual surveillance report for 16 the reservoir pursuant to pool rules established under 17 20 AAC 25.520, whichever date is later the operator 18 shall submit to the Commission an annual reservoir 19 properties report, form 10-428. 20 Now the reason for this is sort of just to 21 avoid duplicative burdens. I think for most operators 22 they wouldn't necessarily avail themselves of this 23 later deadline, but I think for some key operators this 24 would represent a pretty satisfactory conclusion to 25 this in the sense that if they have an annual Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net PUBLIC HEARING 3/21/2017 DOCKET NO R-16-001 Page 9 1 surveillance report that's due June 15th they wouldn,t 2 be doing the work twice preparing this report for April 3 1st and then two months later kind of doing a lot of 4 the same work for that June 15th deadline. And again I 5 don't think it's something at would affect each and 6 every operator, but the benefits that it would provide 7 to some operators would be fairly significant. 8 And that concludes..... 9 CHAIR FOERSTER: Commissioner Seamount, do you 10 have any questions? 11 COMMISSIONER SEAMOUNT: No, I don't. 12 CHAIR FOERSTER: Commissioner French. 13 COMMISSIONER FRENCH: None. 14 CHAIR FOERSTER: I do. Was this suggestion 15 discussed during the workshop? 16 MR. KINDRED: I tried to think about that and I 17 went back and looked at my notes and I think we had a 18 casual conversation just about the facts that the April 19 1st deadline would be problematic from a duplicative 20 reporting standpoint, but I don't believe if I recall 21 correctly that this alternative was actually 22 articulated. I think it was more just a general 23 concern. 24 CHAIR FOERSTER: Okay. Is there anyone from 25 AOGCC in the room who was at that workshop who has Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net PUBLIC HEARING 3/21/2017 DOCKET NO R-16-00 Page 101 1 anything to add to that answer to that question? 2 UNIDENTIFIED VOICE: (Indiscernible - away from 3 microphone)..... 4 CHAIR FOERSTER: Well, you need to..... 5 UNIDENTIFIED VOICE: I need this. 6 CHAIR FOERSTER: You need that. Okay. Guy, 7 Dave, Steve, Patricia, do any of you recollect any 8 information that could help, could add to that? 9 MR. ROBY: This is Dave Roby, I'm senior 10 reservoir engineer for the AOGCC. I don't..... 11 CHAIR FOERSTER: Wait. 12 (Oath administered) 13 MR. ROBY: I do. 14 CHAIR FOERSTER: All right. 15 DAVE ROBY 16 called as a witness on behalf of the AOGCC, stated as 17 follows on: 18 DIRECT EXAMINATION 19 MR. ROBY: I don't specifically recall 20 discussing this specific change. Off the top of my 21 head I think the only thing it would apply to is BP 22 satellite fields. I think that's -- I think those -- I 23 think GPMA area and the western satellites are the only 24 two pools that I -- two areas I can remember off the 25 top of my head that the annuals surveillance report wmpmer iviatnx, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net PUBLIC HEARING 3/21/2017 DOCKET No R-1 �-hr Page III 1 isn't due April 1st, 2 CHAIR FOERSTER: Okay. Thank you. 3 MS. COLOMBIE: Commissioner Foerster, according 4 to my notes on..... 5 CHAIR FOERSTER: Wait, wait, wait, wait. My 6 name is Jody Colombie, I'm the..... 7 MS. COLOMBIE: Oh, my name's Jody Colombie. 8 CHAIR FOERSTER: Okay. Raise your right hand. 9 (Oath administered) 10 MS. COLOMBIE: Yes. 11 CHAIR FOERSTER: I can't treat them special and 12 not treat our own staff special as well. 13 MS. COLOMBIE: Okay. Thank you. 14 JODY COLOMBIE 15 called as a witness on behalf of the AOGCC, stated as 16 follows on: 17 DIRECT EXAMINATION 18 MS. COLOMBIE: So under (e) the only note that 19 I actually have is -- at the very end is to a schedule 20 agreed upon by the Commission is what was discussed. 21 CHAIR FOERSTER: Okay. 22 MS. COLOMBIE: Other than that they wanted to 23 leave the language in and see, there was a discussion 24 there and of course there was a typo on the form. 25 That's it. 1V1mnx, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile u)gci.nci PUBLIC HEARING 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 all. 3/21/2017 nnrwp�Nrn o ,c ., Page 12 I CHAIR FOERSTER: Okay. Thank you. Thank you All right. Do you have any other questions? COMMISSIONER SEAMOUNT: I do not. CHAIR FOERSTER: Commissioner French? COMMISSIONER FRENCH: No. CHAIR FOERSTER: Thank you. Did you have anything to add, Mr. Kindred? MR. KINDRED: No, ma'am. CHAIR FOERSTER: All right. Is there anyone else in the audience wishing to testify? (No comments) CHAIR FOERSTER: Seeing no one, this hearing is adjourned. (Adjourned - 9:14 a.m.) (END OF PROCEEDINGS) --- Fhone:907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gci.net PUBLIC HEARING 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 3/21/2017 DOCKET NO R-16-001 Page 13 1 TRANSCRIBER'S CERTIFICATE I, Salena A. Hile, hereby certify that the foregoing pages numbered 02 through 13 are a true, accurate, and complete transcript of proceedings in re: Docket No.: R-16-001 public hearing, transcribed under my direction from a copy of an electronic sound recording to the best of our knowledge and ability. e Salena A. Hile, Transcriber Computer Matrix, LLC Phone: 907-243-0668 135 Christensen Dr., Ste. 2., Anch. AK 99501 Fax: 907-243-1473 Email: sahile@gei.net STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Docket No. R-16-001 March 21, 2017 at 9:00 am NAME AFFILIATION Testify (yes or no) OGC ►c.Hia, G..�cjc. AO CL !Jo VA�-)DAcx--, �,.1�p4 �Pa Ivo oh ia„IfL GP,4 Lin s Wa hace A©ac C �No `O2ve 'P Qb A.o cT cc y Cs RECEIVED MAR 2 12017 Alaska Oil and Gas AssociatiaPGCC 121 W. Fireweed Lane, Suite 207 Anchorage, Alaska 99503-2035 Phone: (907) 272-1481 Fax: (907) 279-8114 Email: kindred@aoga.org Joshua Kindred, Environmental Counsel March 21, 2017 Commissioner Cathy P. Foerster, Chair Alaska Oil & Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, AK 99501 Submitted by E -Mail to: iodv.colombienalaska ,.o Dear Commissioner Foerster: Thank you for the opportunity to provide the Alaska Oil and Gas Conservation Commission ("AOGCC" or "Commission") with comments and suggestions regarding Proposed regulation revisions related to 20 AAC 25.022-20 AAC 25.990 ("proposed modifications,,). The members of the Alaska Oil and Gas Association ("AOGA") account for the majority of oil and gas exploration, development, production, transportation, refining, and marketing activities in Alaska. On September 27, 2016, AOGA provided written comments and testimony regarding the comprehensive regulation modification package. On November 1, 2016, AOGA and its members participated in a workshop, which afforded AOGGC staff to discuss the merits and rationale behind the proposed modifications in greater detail. Ultimately, the workshop proved incredibly fruitful, and AOGA was pleased with the level of discourse and the subsequent regulation package that the Commission has proposed. However, AOGA would offer one final discrete suggestion that is minor in scope, but would be beneficial to its members, without sacrificing the Commission's endeavors. AOGCC proposes the following modification to 20 AAC 25.270(e): By April 1st of each year, the operator shall submit to the commission an Annual Reservoir Properties Report (Form 10-428). Through the Commission statements and subsequent workshop, AOGA understands the reasons for this proposed addition to 20 AAC 25.270(e). For the most part, the proposed Commissioner Cathy P. Foerster Alaska Oil & Gas Conservation Commission March 21, 2017 Page 2 of 2 modification will not result in adverse impacts to AOGA members. However, AOGA would propose the following: By April 1 st of each year, or the date each year that the operator must submit its Annual Surveillance Report for the reservoir pursuant to pool rules established under 20 AAC 25.520, whichever date is later, the operator shall submit to the commission an Annual Reservoir Properties Report (Form 10- 428). By adding the additional modification, it would greatly reduce the burdens on operators by temporally aligning the submissions of the Annual Reservoir Properties Report with the Annual Surveillance Report. For instance, in the Prudhoe Bay Unit, Annual Surveillance Reports for the Greater Pt. McIntrye and the Western Satellites pools are due on June 15' and September 15' each year, respectively. Once again, AOGA would like to express its appreciation for the manner in which the Commission has approached these proposed regulation modifications. The workshop both allowed for operators to garner a more thorough understanding of the goals the Commission was hoping to achieve and afford an opportunity for operators to express their thoughts and engage in a meaningful discourse with AOGCC staff. Sincerely, oshua Kindred Alaska Oil & Gas Association Environmental Counsel Cc: Commissioner Hollis French Commissioner Dan Seamount March 21, 2017 Commissioners Alaska Oil and Gas Conservation Commission 333 West 7"' Avenue, Suite 100 Anchorage, Alaska 99501 Re: Proposed Changes to 20 AAC 25.022 through 20 AAC 25.990 Dear Commissioners: Cook Inlet Region (CIRI) previously provided comments of support and concern regarding three revisions the Alaska Oil and Gas Conservation Commission (AOGCC or Commission) proposed to its regulations.' CIRI's comments today are focused specifically on the AOGCC's proposed deletions in 20 AAC 25.055, because it appears the Commission continues to support them. As you know, Buccaneer Alaska LLC illegally drained both State of Alaska and CIRI land from January 14, 2012 through May 22, 2014, until this Commission first issued Conservation Order No. 691. That order properly required escrow of all proceeds until an appropriate allocation among the three relevant royalty owners could be established. CIRI's petition to this Commission was based on Section 25.055, and the petition is attached here for the Commission's convenience. 20 AAC 25.055(b) and (c) protect the correlative rights of landowners and working interest owners, prevent waste, help maximize recovery of oil and gas for the benefit of Alaska's citizens, and make it clear to oil and gas companies that they cannot produce without an appropriate pooling agreement .2 It was through 20 AAC 25.055(b) that CIRI and the State of Alaska were afforded the opportunity to object, protect their respective correlative rights, and obtain compensation for the production of its resources. The provisions of 20 AAC ' See attached letter, first submitted on September 27, 2016, and incorporated here. Z CIRI's suggestions for increasing the regulation's clarity are found at pages 4-5 of its September 27, 2016, letter, which is attached. P.O. Box 93330, Anchorage, AK 99509-3330 • P: 907-274-8638 • F: 907-279-8836 • www.ciri.com 25.055(a)(4) were also significant in protecting the State's and CIRI's rights .3 Restoring the regulations codified at 20 AAC 25.055(a)(3-4), (b), and (c), will protect correlative rights and prevent waste. It also will help ensure there are no gaps in the Commission's regulations that make it easy for companies to avoid their responsibilities or otherwise claim a lack of knowledge of their obligations. Considering these factors, the minimal requirements that are established for oil and gas companies exploring and developing projects in Alaska in 20 AAC 25.055 are reasonable and not excessive. CIRI and all landowners in Alaska rely on the AOGCC to protect the correlative rights of all landowners and prevent waste. One way to do this is to establish clear, fair, and reasonable regulations. The proposed changes to 20 AAC 25.055(a -c) released by the AOGCC appear to relinquish some of the provisions which allowed CIRI to successfully protect our rights and prevent long-term monetary harm. We respectfully request that the Commission restore the provisions in 20 AAC 25.055(a)(3), (a)(4), (b) and (c). Thank you for this opportunity to provide comments on the AOGCC's proposed regulation changes. Please contact me if you have any questions. Sincerely, LJ Jason W. Brune Senior Director, Land and Resources 3 See attached letter dated August 13, 2013, which set forth CIRI's initial comments when Buccaneer opted to drill a well directly adjacent to CIRI's property. Although the Commission was unable to stop Buccaneer from drilling that well, the AOGCC's proposed changes to 20 AAC 25.055(a)(1) and (a)(2) would provide that authority if they are adopted. �1� I -1- _ CRI It August 13, 2013 Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission 333 West 7" Avenue, Suite 100 Anchorage, AK 99501 RE: Docket Numbers CO -13-08 and CO -13-12 Buccaneer Alaska Operations, LLC Requests for Multiple Spacing Exceptions -Proposed Wells Kenai Loop #14 and #1-4ST Dear Chairperson Foerster: This letter is submitted to formally notify the Alaska Oil and Gas Conservation Commission (AOGCC) that Cook Inlet Region, Inc. (CIRI) objects to all of Buccaneer Alaska Operations, LLC's (Buccaneer) requests for exceptions for spacing requirements under 20 AAC 25.055 for wells Kenai Loop # 1-4 and #14ST (the "wells"). This objection applies to Buccaneer's requests for both proposed wells including the drilling, testing and producing of each well as stated in the Public Notices issued by the AOGCC for Docket Numbers CO -13-08 and CO -13-12. The wells are proposed to be drilled in Section 33 of T 06N, R 11 W SM. The CIRI oil and gas ownership interests in Section 33 and in Section 34 are not under lease to Buccaneer. The CIRI oil and gas interests in both Sections are not leased to any third party at this time. Nor have the CIRI oil and gas interests in either Section 33 or Section 34 been pooled with any other oil and gas interests in those sections. Enclosed is a map indicating the CIRI oil and gas interests in Sections 33 and 34. Granting any of the exceptions to the spacing requirements requested by Buccaneer would violate CIRI's correlative rights and potentially cause waste. Regulation 20 AAC 25.055 in this instance specifically disallows the drilling of either of the wells without an exception and again in this instance specifically disallows production from either of the wells without pooling. The CIRI oil and gas interests in Sections 33 and 34 are not 7 2.525 E S7REE I', SUnTi 500, ANCHORAGE, ALASKA 99%3-2633/110 BOX 93330. ANCHORAGE. ALASKA 995093330 907-274-86.38 • FAX: 907-279-8836 • wwwxhixom C I R 1 pooled. While not a subject of this hearing, the fact the CIRI oil and gas interests in Section 33 are not pooled raises questions about the legitimacy of the past and ongoing production from Buccaneer wells #1-1 and #1-3 also located in Section 33 on a Mental Health Land Trust oil and gas lease. Buccaneer is clearly and unfairly advantaged relative to CIRI as production from these two wells continues. CIRI's oil and gas lease interests in Sections 33 and 34 had been previously leased by Buccaneer Alaska, LLC but that oil and gas lease has terminated. Please see the enclosed recorded release of Oil and Gas lease. But again, the CIRI lease interests were never pooled. To our knowledge there are no individual pool rules established for the gas pool(s) located in Section 33. Hence, we assume that the statewide well spacing rules apply. CIRI objects to the granting of all the requests by Buccaneer for the spacing exceptions for both the wells for the following reasons. 1 . CIRI's oil and gas interests located in Section 33 are not pooled at this time. CIRI's correlative rights would be violated if the proposed well #1-4 is drilled. This well is located within 1500 feet of CIRI's oil and gas interests in Section 33. 2. CIRI's oil and gas interests located in Sections 33 and 34 are not pooled at this time. CIRI's correlative rights would be violated if the proposed well #1-4ST is drilled. That well is located within 1500 feet of CIRI's oil and gas interests both in Section 33 and 34. 3. Well #1-4 as proposed would be within 3000 feet of an existing well in Section 33. 4. Assuming that well #1-4 is drilled first then well #1-4ST as proposed would be within 3000 feet of an existing well in Section 33. 5. There are no individual well spacing or drilling units established for the individual wells in Section 33 that would allow wells #1-4 or #14ST to be drilled, tested or produced as proposed. Other than the statewide rules, there are no applicable individual pool rules that cover Section 33 or Section 34. We do not believe that Conservation Order 231 currently applies to Section 33 or Section 34. That Conservation Order was written to apply to the Cannery Loop Unit Area. 6. There are no individual well spacing or drilling units established for the individual wells in Section 33 that would allow wells #1-1 or #1-3 to be in regular production now or in the past without a pooling agreement. Well 91-3 was brought into production after the CIRI lease terminated and without a pooling agreement. Well #1-1 was brought into 2 ?.525C SIRE -T, SUPT[ 500, ANCHORAGE, ALASKA 99503-2633 /PO BOX 93330, ANCHORAGE, ALASKA 99509-33;30 907-274-8638 • PAX: 907-279-8836 • www.cinxom CIRI ................................ .................................... . ................. production while the CIRI/Buccaneer lease was still in effect, but without a pooling agreement. 7. Buccaneer's request to voluntarily unitize the Kenai Loop area was denied by the Department of Natural Resources. The request to voluntarily unitize was not supported by CIRI. The DNR/DOG decision is publically available on the Division of Oil and Gas web site. 8. There are no geologic or geophysical data or evidence in the record (at least as of August 7, 2013) that would support Buccaneer's requests for exceptions, especially given the diverse nature of the oil and gas ownership rights in Sections 33 and 34. 9. There is no evidence on record that Buccaneer has attempted to pool the various ownership interests in Section 33 or Section 34. 10. Buccaneer in its applications acknowledges that it is not the working interest owner for the unleased CIRI acreage in either Section 33 or Section 34. We do not believe that Buccaneer's requests for exceptions to the spacing requirements will promote the goals or provide any of the protections stated in the AOGCC statutes and regulations. They will not protect adjacent property owners; they will clearly violate CIRI's correlative rights; and they may result in waste. We formally ask the AOGCC to deny all the Buccaneer requests. If you have any questions please contact Colleen Miller at (907) 263-5117. Sincerely, Colleen Miller Resources Manager Enclosures 3 2525 C STIZFEir, SUITE, 5W. ANCHORAGE, ALASKA 99503-20.3 3 11 / 1'O BOX 93330, ANCI10RAOE. ALASKA 99509-3330 907-274-8638 • rAX: 907279-8836 - ww%kwhi.com _ ... �.....,...a i I!1!lllu LV and Subsurface Estate Ownershi 29 �M i is is Pad 1-1 1-2® Cook Inlet Region, Inc. —�W . �'......,. Buccaneer ProposedWell BHL aw.... Ci o-uccwv¢ Nof rCenai. Alaska -CIRI 28 1-40 9z : 2-1® 2-1"J 27 it & Gas Units �-T® State Lease Boundaries Roads Existing Surface Hole Locations ® Existing Bottom Hole Locations 0 0.25 0.57SI MIIBuccaneer Proposed Bottom Hole Locations 391095 CIRI SSE CIRI SE/SSE State SSE AMHTA SSE A 2013-004391-0 A Recording Dist: 302 - Kenai s 5/8/2013 10:32 AM Pages: 1 of 2 K A IIIIII�IIIIIII�IIIINIIIIIIIIlINIIIIIIINIIINIIIIIIIIIINIIIIIIIIIIIIII�NI After recording, return to: Cook Inlet Region, inc. Attn: land & Resources Department 2525 C Street, Suite Soo Anchorage AK 99503 RELEASE OF OIL AND GAS LEASE C-061667 Kenai Recording District ' Original Recordine Information Title: Memorandum of Oil and Gas Lease C-061667 Recording District: Kenai Serial Number: 2011-002923-0 Recording Date: 3/29/2011 WHEREAS, Cook Inlet Region, Inc. ("CIRI") as LESSOR, entered into an Oil and Gas Lease C•061667 (the "Lease') with Buccaneer Alaska, LLC ("Buccaneer") as LESSEE, dated March I, 2011, and covering the subsurface rights in the lands described on EXHIBIT A hereto (the "Lease"); and, WHEREAS, the Lease terminated on January 9, 2013, and Buccaneer did not record a release acknowledging the termination within 90 days as required by Section 3 of the Lease. THEREFORE, CIRI confirms the release of Oil and Gas Lease C-061667 effective January 9, 2013 on behalf of Buccaneer. DATED this 110� day of April, 2013. COOK INLET REGION, INC. By: Ethan G. Schutt Its: Senior Vice President Land and Energy Development STATE OF ALASKA ) ) ss. THIRD JUDICIAL,{MYPW-iprJ The fgiragoing}}�tt�u lehI Ethan G. Schutt, Siirti 699 Alaska Nativ¢corj omtlftr,, fi beh " � 'OC/BL�� • cPj •. OF A�PSd cknowledgcd before me this �'"�1 clay of April, 2013, by Land and Energy Development, Cook Inlet Region, Inc., an the corporation. & 'vxC ;; I Notary Public in an or the State of Alaska My Commission Expires: Ce" {;.' 1 t -L' EXHIBIT A • SUBJECT LANDS Seward Meridian. Alaska ToWnvh1,12.5.,Na.,Rx'ttr;;ttp 1 W. section 3, Lots 1 to 4, inclusive, SWIANWI/4, SWI/,, WAWA, Sl/)SEI/4; Section 4, Lots I and 2, 5'/2NEI/4, NEI/4SEIA. Containing approximately 680.00 acres, more or Icss, Town hip.6 N. Range 11 W. Section 33, Lots 1, 2, 3, 4, 7, 10, 11 and 12, N'hNEV4, SEIANE'A, W/6MN1:114, W44SW'/4SE'/4, E h5WASEIA; Section 34, Lots 1, 2, 3, 4, S, 9, 10, 12, 13, '14, 37, 38, 54, 56, 72, 76, 93, 94, 96, 97, 99, 100, 101, 103, 104, 1011, 109, 118, 120, 121, 126, 127, 120, 129, 142, 143, 145, 147, 150, 153, 154, 160, 162, 163, 160, 169, 170 and 172, NIhNW114NLYs, WhSIhNWIANEIA, WI/ WIhSWIANF.IA, NV2NWI/4, NWASW94NW114, E'/LSE'ANW/4, NI/2NE'/4NF'/4SW'/4,SEIANPASEV4, NF'ASC'IASPA, SIMEIASE'/a; Section 35, NW'ANE'/•,, NEIhNW114. Containing approximately 595.00 acres, more or less. Aggregating approximately 1,275.00 acres more or less 111 111111111111011 2 of 2 2013-004391-0 ^Cy Iroi,� 4L7, . .lames L 'Torgerson (Bar No. 8509120) 'Tina M. Grovier (Bar No. 9411088) S'l OEL RIVES I.i.P 1, 510 L Street, Suite 500 Anchorage, AK. 99501 I`elephone: (907)277-1900 Facsimile: (907) 277-1920 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION 333 West Seventh Avenue, Suite 100 Anchorage, Alaska 99501 Re: Tl PETITION OF Cool: Inlet Region, Inc. (CIRI) for relief from the illegal drainage caused by production from the Kenai Loop Nos. I-1 and 1-3 wells in violation of 20 AAC 25.055(b). Docket No.: CO-13- PETITION FOR RFI IFF REGARDING KENAI LOOP NOS. 1-1 AND 1-3 WELLS Pursuant to Alaska Statute 31,05.060. Cook Inlet Region, Inc. (CIRI) hereby petitions the Alaska Oil and Gas Conservation Commission (Commission or AOG(.*C) Ior relief from the illegal drainage caused by Buccaneer' producing gas from the Kenai 1 It is not clear whether Buccaneer Alaska Operations. LI.C, Buccaneer Alaska, Ll_(". Buccaneer Alaska Drilling, LLC, Buccaneer Royalties, LLC and!or Buccaneer Energ. Limited is the entity producing .from the wells. The reference to Buccaneer herein is intended to encompass the appropriate entity or entities as the case may be, with a rq aest that the Commission determine which of the Buccaneer entities are responsib'c 1'or jurisdictional activities. C"IRI'S PFTHION FOR RELIEF RE KENAI LOOP NOS, 1-1 ANI) 1-3 WELLS Cook Inlet Region, Inc. r. Buccaneer, Docket No.: CO -13 - Page I of 7 - Loop No. 1-1 (KL 1-1) and Kenai Loop No. 1-3 (K).. 1->j' welts Wit.h(ut a poo;inc agreement as required by 20 AAC 25.055(b).' CIRI is the subsurface o� ner of 200 acres in Township 6 North, Ran-, I ] I West, Section 33, Seward Meridian (Section 33). CIRI has been and will continue to be ' adversely afTected by Buccaneer's iIIegal production of nattn•al gas from the KL I -I and ! KL 1-3 wells in the absence of a pooling agreement.' I i 2. Title 20 of the Alaska Administrative Code, section 25,055(b) expre_ssh provides that "[a] well may not ... begin regular production of gas horn a property that is smaller than the governmental section upon which the well is located, unless the inter-ests of the persons owning the drilling rights in and the right to share in the production from the ... section, ... have been pooled under AS 31.05.100.11 Buccaneer initially identified the KL 1-1 well its the KL #1 well. Likewise the oriltinal name of the KI., 1-3 was the KL #4 well. 3 The Commission has noted in footnote 1 of Conservation Order Nos. 676 and 679 that the issues raised in this petition were not previously before the Commission. CIRI respectfully notes that Alaska Statute 31.05.160(a) requires Commission action: Whenever it appears that a person is violating or threatening to violate any provision of this chapter, or any regulation or order of the commission, the commission shall bring suit against that person in the superior court of the judicial district where the violations occurs or is threatened, to restrain the person From continuing the violation ... In the suit, the com shall have jurisdiction to grant to the commission. without bond or otherwise undertaking, such prohibitory and mandatory injunctions as the facts warrant. (Emphasis added), If the Commission believes it is appropriate, the Commission should take action in conjunction with this Petition. -1'he Commission also could have taken action on its own motion under AS 31.05.060(a). ' T`he State of Alaska is the owner of 120 acres o1.'subsurfaee estate in Section 33, and the Alaska Mental health Trust Authority is the. 0% ner of the remaining 320 acres. CIRI'S PETITION FOR RBLIE'F RE KE'h1A1 LOOP NOS. 1-1 AND .1-3 WELLS Cook Inlet Region, Inc, ,_. Buccaneer, Docket No.: C OA 3- Page 2 of 7 ___ 3. Although the Commission authorized spacing eseeptions 1ior pro&.11 0r from the KL 1-1 and 1-3 wells, those orders expressly provided that "Buccan:,r ma% proceed with regular production as long as it complies with ... applicable Alaska laws " (Emphasis added.) 4. Buccaneer did not comply with applicable Alaska law prior to beginning production. Buccaneer has been in violation of 20 AAC 25.055(b) since JanuarN 14, 2012, when it began regular production of natural gas from the KL 1-I well even though the interests in Section 33, the governmental section where the wells are located, had not C been pooled. Buccaneer's violation of 20 AAC 25.055(b) was compounded on February I 10, 2013, when Buccaneer began regular production of natural gas from the KL 1-3 well. j 5. The Commission is charged with protecting landowners" correlative rights. 6. Buccaneer has benefitted from and should not be permitted to keep past proceeds from, or to continue its illegal production of., natural gas from the KL 1-1 and I- 3 wells without a mechanism to protect the correlative rights of adjacent landowners within the governmental section. 7. The Commission has previously ordered operators to escrow production where pooling agreements are not yet in place, Vee Conservation Order Nos. 450 aria 532. 8. Establishing an interest-bearing escrow account in an Alaska financial institution (a) whose deposits are insured by an agency of the federal government or ('b) that is subject to regulation by the Division of' Corporations, Business and Professional Licensing in the Department of Commerce.. Community, and Faconomic Development CIRPS PETMON 1 -'OR RELIEF RB KENAI LOOP NOS, 1-1 AND 1-3 WELLS Cook Inlet Region, Inc, ". Buccareer. Docket No,: CO -13 - Page 3 of 7 — (Escrow Account) will protect CTRI's correlative rights in Section 33. t, \� ell as these of I I the State and AMVIA. Any and all fees and costs for the Escroxv Account should be paid by Buccaneer. To adequately protect the correlative rights of all land owners itt the governmental section, the Escrow Account should be subject to the condition that no funds may be disbursed from the account exceptby prior written order of tine Commission. 9. CIRI requests that the Commission direct Buccaneer to deposit into the Escrow Account an amount equal to the volume of gas that has been produced from the KL 1-1 and 1-3 wells from the start of regular production for each well to the end of the f month specified hi the Commission's order multiplied by 31.25%,5 multiplied by the applicable prevailing value of Cook Inlet gas under 15 ICAC 55.173(b) (or, if higher. 31.25% multiplied by the actual revenues received by Buccaneer from gas sales from the KI, 1-1 and 1-3 wells). This would account for prior production from the wells. 10. CIIU also requests that the Commission direct Buccaneer to deposit in the Escrow Account no later than the 10th day of each month (or the next business dao• if tile 10th day falls on a weekend or legal holiday). an amount equal to the volume of gas I produced from the KL 1-1 and 1-3 wells during the previous month multiplied by 31.25% multiplied by the applicable prevailing value of Cook Inlet gas under 15 AAC 55.173(b) (or, if higher, 31.25% multiplied by the actual revenues received by Buccaneer li•o:m gas j I This is the percentage of CIRI subsurface acreav�e to the total acreage %�, othin Sect)on 3 . CIRI would not object to the Commission increasing this number to account for 11-1-1 state of Alaska's interest within Section 33 too. CIRI'S PlE"JITION FOR RELIEF RE, KEXAl LOOP NOS. 1-1 AND 3-3 IXTL1..5 Cook Inlet Region. Inc. v. Buccaneer, Docket No.: C0- 13 - Page 4 of 7 sales from the K-1. 1-1 and 1-3 wells), This would account for production on a going- forward basis. 11, if the Commission takes these actions, the ComiaEssit?n),Vill fulrIll i;, statutory duties, cure any improper authorization of Buccaneer production of gas ftom ; wells in the absence of a proper pooling agreement, and adequately protect CIRI's and other subsurface landowners' correlative rights until an allocation of production between l the lands is determined either by agreement among Buccaneer, CIRI, the State and the " AMIITA or by the Commission pursuant to a separate petition for compulsory pooBnvz. 12. For the foregoing reasons, CIRI respectfully requests that the Commission: x I;' a. direct the appropriate Buccaneer entities to establish an Escrow v W V s � Account as described in detail in this Petition after determining and establishing whicil L4 �- Buccaneer corporate entities are responsible for which activities: T b. require the appropriate Buccaneer entity or entities to escrow Funds ow sufficient to cover its/their past illegal production and all future production prior to the establishment and implementation of a pooling agreement for the KL 1-1 and 1-3 wells i C. consider the imposition of civil penalties against Buccaneer under AS 31.05.150 as may be appropriate; and d. take any other steps required to ensure CIRPs correlative rights are protected from Buccaneer's illegal acts, C'IRPS PETITION FOR RE:LILF TLEE' KENAI LOOP NOS. 1-1 AN1) i-3 4k'l 1,i,5 Cook Inlet Region, Inc r. Buccaneer, Docket No.: CO -13- Page 5 of 7 — DATED: October 8, 2013 STOEL RIVES LLP By: E. TORGIt NO. 8509120) "TINA M. GROVIER (BAR NO. 9411088) Attorneys for Petitioner Cook Inlet Region, Inc. CIRI'S PETITION FOR RELIEF RE KENAI LOOP NOS. Cook Inlet Region, Inc. v. Buccaneer, Docket No.: CO -13 - Page 6 of 7 1-1 AND 1-3 WELLS CERTIFICATE OF SERVICE This certifies that on October , 2013, a copy of this Petition of CIRI for Relief Regarding Kenai Loop Nos. I -I and 1-3 Wells was served via first class mail on: Department of Natural Resources c/o Richard Todd, Esq. Attorney General's Office 1031 W. Fourth Avenue, Suite 200 Anchorage, AK 99501 Alaska Mental Health Trust Land Office c/o James D. Linxwiler, Esq. Guess & Rudd, P.C. 510 L Street, Suite 700 Anchorage, AK 99501-1964 Jim Watt President and COO Buccaneer Alaska, LLC 1029 West Third Avenue, Suite 110 Anchorage, AK 99501 Colleen T. O�� Practice Assistant 747447962 0034044-00017 CIRI'S PETITION FOR RELIED' RE KENAI LOOP NOS. 1-1 AND 1-3 WELLS Cook Inlet Region, Inc. i� Buccaneer, Docket No.: CO -13- Page 7 of 7 — — I R I September 27, 2016 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, AK 99501 RE: Proposed Changes to 20 AAC 25.022 through 20 AAC 25.990 Dear Commissioners: Cook Inlet Region, Inc. ("CIRI"), an Alaska Native Corporation, appreciates the opportunity to provide comments on the proposed changes to the Alaska Oil and Gas Conservation Commission's ("AOGCC" or "Commission") regulations in Title 20, Chapter 25 of the Alaska Administrative Code. I. Introduction As a landowner in Cook Inlet and as an oil and gas lessor, CIRI is interested in ensuring AOGCC's regulations provide clear and fair direction for parties interested in oil and gas development and that those regulations are consistent with the AOGCC's statutory mandates to prevent waste, protect correlative rights, and enhance production. As such, the AOGCC's intent to update and clarify its regulatory requirements, improve understanding, and streamline the implementation of its regulations is laudable. Although the AOGCC is proposing many changes, CIRI has comments only on the three regulations discussed below. II. CIRI encourages AOGCC to reconsider and/or revise some of its proposed changes to the regulations. A. The AOGCC should not adopt the proposed changes to 20 AAC 25.055(x) that are contrary to the AOGCC's statutory obligations in AS 31.05.100(a), do not sufficiently protect correlative rights and prevent waste, and create an undue administrative burden. The proposed changes to 20 AAC 25.055 alter from mandatory to permissive the AOGCC's obligation to establish drilling units, and delete the existing rules for creating drilling units and well spacing in the absence of an AOGCC order regarding the same. CIRI objects to this proposed change for three reasons. First, the introductory sentence to 20 AAC 25.055(a) that changes the AOGCC's obligation to establish drilling units from mandatory to permissive by removing "will, in its P.O. Sox 93330, Anchorage, AK 99509-3330 • P: 907-274-8638 • F: 907-279-8836 • www.ciri.com discretion"] and replacing it with "may" suggests that the AOGCC need not establish drilling units to govern well spacing or prescribe other spacing patterns for pools. Such a result would be contrary to AS 31.05. 1 00(a), which provides, in pertinent part, that "the commission shall, after a hearing, establish a drilling unit or units for each pool." (Emphasis added). The proposed change also would contravene the language in 20 AAC 25.520, which provides that the AOGCC "will," upon request or its own motion after the discovery of oil or gas in a field or pool, hold a hearing and "will" prescribe "rules to govern the proposed development and operation of the pool." Second, the proposed changes in 20 AAC 25.055(a)(3) and (4) that delete the existing rules establishing drilling units in the absence of an AOGCC order regarding the same should not be adopted because they are contrary to AOGCC obligations under AS 31.05. 1 00(a). Current rules set a governmental quarter section as the statewide drilling unit for oil wells and a governmental section for gas wells, which rules are clear and understandable for all stakeholders. The proposed regulations eliminate that clarity and do not address the drilling unit size if the AOGCC has not yet issued an order regarding that particular pool.3 The minimum property -line - spacing distances do not fill this regulatory gap because they do not establish drilling units. Adopting these changes would result in the AOGCC disregarding its statutory mandate in AS 31.05.100(a) to establish drilling rules for "each pool," unless the AOGCC holds individual hearings for each well drilled after the discovery of oil or gas and sets individual pool rules.' CIRI believes the requirement to hold an individual hearing for each discovered pool would strain the AOGCC's resources, those of oil and gas companies seeking to develop a pool, affected landowners, and other stakeholders. The proposed regulation would require an AOGCC hearing be held for the first development well to be drilled in a pool, even if the well was the only one within the drilling unit that would otherwise have been established by the AOGCC's statewide rules. Without the existing provisions which provide certainty and clarity, oil and gas companies and landowners would have to spend time and money to ensure that appropriate drilling unit sizes were established via the Commission's hearing process, even in cases where the statewide rules would have led to the same result. The AOGCC should reconsider its ' It is CIRI's understanding that the phrase "in its discretion" does not modify the verb "will" given the AOGCC's enabling statutes, but instead reflects the AOGCC's discretion in determining the appropriate drilling unit and spacing pattern. 2 It is not clear whether the AOGCC intended to delete the statewide drilling and spacing unit provisions discussed here, as the substance of these changes were not reflected in the Commission's first or second public notice related to the proposal. 3 To the extent the proposed changes to 20 AAC 25.556 are adopted, it appears that all of the AOGCC's prior orders establishing drilling unit and spacing rules that are more than five years old as of the regulation's effective date will have to be revisited. ' CIRI assumes the existing regulation satisfies the AOGCC's obligation under AS 31.05.100(a) if it was adopted after a hearing. See also AS 31.05.100, which provides that drilling units for each pool should be established "[flor the prevention of waste, to protect and enforce the correlative rights of lessees in a pool, and to avoid the augmenting or accumulation of risks arising from the drilling of an excessive number of wells." 2 proposal to eliminate the clear and useful rules setting drilling units in the absence of a commission order establishing specific pool rules. Third, CIRI objects to the proposed changes in 20 AAC 25.055(a)(3) and (4) that delete the existing rules establishing statewide well spacing requirements, including the spacing distances between wells,5 as to adopt them would violate the AOGCC's statutory and policy duties to protect correlative rights, avoid waste, and ensure efficient recovery.6 It is well- established that "[a] typical oil and gas conservation statute consists of a series of provisions that seek to balance public interest and private rights. The most important of those provisions are well -spacing rules.... [A]n important step toward controlling the problem[s of over-drilling and protection from drainage] is to require that wells be located far enough from boundary lines and from one another so that excessive drainage will not occur."' The current regulation satisfies these obligations by establishing statewide spacing rules that rationally develop pools while allowing each landowner to extract his share of the oil or gas.& If those statewide rules are eliminated, spacing rules will have to be established for each pool. Spacing rules are necessary not only to protect correlative rights, but also to maximize recovery.9 For the same reasons described above in relation to establishing individual drilling units, having to set spacing rules for each discovered pool creates an undue administrative burden on the AOGCC, oil and gas companies, landowners, and other stakeholders.10 CIRI encourages AOGCC to consider the 5 It is not clear if the Commission intended to delete this rule, since its proposed language regarding applications for exceptions retain the 1000 feet and 3000 feet references to the statewide well spacing rules. ° AS 31.05.095 ("The waste of oil and gas in the state is prohibited"); AS 31.05.030(b) ("the commission shall investigate if waste exists or is imminent"); AS 31.05.030(d)(9) (the AOGCC may require plans for a pool "to prevent waste, ensure a greater ultimate recovery of oil and gas, and protect the correlative rights of persons owning interests in the tracts of land affected"). ' See Lowe, John S., Oil and Gas Law in a Nutshell, 6th Edition, 23 (2014) (emphasis added). 81d. 9 Lowe at 23. The short-term overproduction that comes from wells being drilled too close together is likely to result in lower borehole pressure leading to inefficient and lower ultimate recovery from the reservoir. Lower ultimate recovery is a form of waste. See Lowe at 20. "[R]ational development prevents waste because it maximizes ultimate recovery." Drainage is a product of the rule of capture and greed, resulting in too many wells drilled too closely together. Lowe at 23. 10 Alaska Statute 31.05.100(b) provides that each well shall be drilled "in accordance with the spacing pattern as the commission prescribes for the pool." Without the statewide spacing pattern that currently exists, the AOGCC will have to hold a hearing for the first development well drilled in each pool. administrative inefficiency and burden created by the proposed revisions to 20 AAC 25.055 and instead reinstate the proposed deletions to 20 AAC 25.055(a)(3) and (4). CIRI agrees that the AOGCC's proposed changes to 20 AAC 25.055(a)(1) and (2) for new and recompleted wells, when different owners or landowners I are on either side of the property line, should be adopted. The prior language allowed owners to begin drilling a well that could not be tested or produced without permission from the AOGCC. Addressing such issues, which directly impact correlative rights, before drilling rather than after it has been completed, is a sound decision. The AOGCC's proposed clarification that the rule is applicable if "any portion of the well" is within the specified area is a logical interpretation and provides the AOGCC with the best information to make decisions. It should be adopted, as should the AOGCC's proposed addition of having recompleted wells expressly subject to the same rule, as is proposed in (a)(3) and (a)(4). CIRI believes, however, that the language regarding recompleted wells should be moved to (a)(1) and (2), and the deleted language from (a)(3) and (a)(4) restored as discussed above. B. The proposed deletion of 20 AAC 25.055(b) and (c) is inconsistent with the AOGCC's statutory obligations to protect correlative rights. The language of 20 AAC 25.055(b) protects correlative rights by precluding production from wells unless the interests of all persons owning the drilling rights and rights to share in the production have been pooled. This provision is a safeguard and ensures that oil and gas development companies are acting in a prudent and responsible manner by coming to an agreement with those parties who should share the proceeds of production before that production begins. While the provision may benefit from clarification, it cannot be deleted if the AOGCC is to fulfill its obligations to land and royalty owners. The importance of this provision was recently demonstrated, as it and other AOGCC precedent were the basis of the relief the AOGCC granted which stopped Buccaneer Alaska LLC's illegal drainage from CIRI and State of Alaska lands in the Kenai Loop unit. In its Order directing Buccaneer to escrow proceeds from Kenai Loop production pending the parties' agreement on allocation, the AOGCC noted, "in order to protect correlative rights a production allocation agreement must be established[.]" Rather than delete subsection (b), CIRI suggests the Commission instead adopt the following modifications to 25.055(b). First rather than referring to the quarter section and section set forth in the statewide drilling unit provisions, these terms could be replaced by the term "drilling unit." That would clarify that the appropriate area is the proposed drilling unit, whether established in the statewide rules or in an AOGCC order. Second, in addition to a pooling agreement under AS 31.05.100, the acceptable agreements should be expanded to include a voluntary unit agreement with allocation provisions, an agreement under AS 31.05.110, an agreement specifying how production is to be allocated, or if the parties are unable to reach consensus, an agreement to escrow production proceeds subject to AOGCC approval. Similarly, subsection (c) should be reinstated and modified to require one of these forms of allocation " An "owner" is the person holding the right to drill and produce from a pool; a "landowner" is the person who holds title to the subsurface estate of the affected tract. AS 31.05.170(7), (10). M agreements to be filed with the Commission before regular production begins. For these reasons, CIRI requests that the language in 20 AAC 25.055(b) and (c) either remain the same, or be modified as set forth above. C. The proposed additions to be codified at 20 AAC 25.055(b) should be adopted, with one change. CIRI agrees that the proposed changes to the information that must be submitted to the AOGCC to receive an exception to the rules set forth in 20 AAC 25.055 protect correlative rights by adding clarity and ensuring that applicants properly notify all stakeholders. CIRI does believe that a subsection should be added to ensure all stakeholders within the applicable drilling unit are also notified of the application and given a copy of it. This addition will further protect correlative rights and ensure all impacted stakeholders have been properly notified. D. The additions to 20 AAC 25.110 that protect landowner rights when an operator proposes to suspend a well or seeks to renew a suspension approval should be adopted. CIRI agrees that the AOGCC's proposed changes to 20 AAC 25.110 should be implemented. By requiring the operator to prove that its leases are valid and that it properly obtained drilling rights related to that land, the AOGCC is protecting correlative rights. These changes also give the AOGCC valuable information regarding the landowners who are directly impacted by the AOGCC's decision whether to suspend a well, renew a suspension, complete the well, or require the operator to plug and abandon the well. The requirements of landowner information for all portions of the well and notice to the AOGCC when the lease status changes, eliminate ambiguity and provide clear information for the AOGCC in its efforts to protect correlative rights. CIRI encourages AOGCC to adopt the proposed changes to 20 AAC 25.110. E. The AOGCC should consider modifying its proposed changes to 20 AAC 25.556 to reduce the administrative burden on the Commission, oil and gas companies, and other interested stakeholders. The proposed changes to 20 AAC 25.556 would cause certain AOGCC orders to expire after a particular time has passed or after a designated event. With respect to the provisions automatically terminating certain orders five years after they were issued, the regulation is not, on its face, limited to orders issued after the regulation's effective date. If the AOGCC intends for the regulation to apply to all of its conservation, enhanced recovery, area, storage, and disposal orders, this would cause all such orders that were issued more than five years before the regulation's effective date to automatically expire. This result would cause a tremendous administrative burden for the AOGCC and also would create uncertainty for operators, landowners, and other stakeholders. Indeed, the expiration of all prior orders that were more than five years old as of the regulation's effective date would cause many operators to be in immediate violation of AOGCC's existing statutes and regulations, as well as the proposed new regulation at 20 AAC 25.556(d) that applications for reauthorization of orders "must be timely filed" to allow a hearing under 20 AAC 25.540, if necessary, and an AOGCC decision before the he order expires." 12 If this was not the AOGCC I s intent, it should consider adopted repofter h d regulation to clarify that 20 AAC 25.556(b) and (c) will only apply orders p regulation's effective date, provide a reasonable period of time after the effective date to allow operators to comply, or reauthorize all such orders the day the regulation becomes effective. Is intent, it appears that the automatic expiration of a conservation, Regardless of the AOGCC enhanced recovery, area, storage, and disposal order five years after the order is issued will create an unnecessary administrative burden for the AOGCC, oil and gas companies and other stakeholders. As an alternative to the five year rule, and in addition to the proposed rule requiring review when the operator changes, CIRI respectfully suggests that the AOGCC consider re- evaluating orders when a unit contracts, expands or terminates, or when production terminates. This would allow the Commission to evaluate whether changes to prior orders are necessary and also terminate any outdated orders that should no longer be in effect. This would also diminish the risk that a conservation order impacting correlative rights or otherwise restricting an operator's actions might be allowed to expire rather than be renewed since, as drafted, the operator is the only person who can file such an application. 13 Thank you for the opportunity to comment. If you have any questions or I can provide additional information, please contact me at esehuttCaciri.com or 907-274-8638. Sincerely, COOK INLET REGION, INC. Ethan G. Schutt Senior Vice President, Land and Energy Development 12 See proposed 20 AAC 25.556(d). 13 The AOGCC may also do so on its own motion, but no other person is authorized to do so. Thus, the AOGCC may want to consider allowing applications for reauthorization to be filed by parties other than the operator. ConocoPhillips March 21, 2017 RECEIVED MAR 2 12017 AOGCC Alaska Oil and Gas Conservation Commission 333 W. 7th Ave #100 Anchorage, Alaska, 99501-3539 RE: Comments on Proposed Regulation Changes Dear Commissioners: Erik Keskula Manager, North Slope Development North Slope Operations and Development ConocoPhillips Alaska, Inc. ATO -1220 700 G Street Anchorage, AK 99501 phone 907.263.4822 ConocoPhillips Alaska, Inc., ("ConocoPhillips") respectfully submits the attached comments in response to the Public Hearing Notice of Draft Regulations for R16-001 of the Alaska Oil and Gas Conservation Commission ("AOGCC") dated January 25, 2017. ConocoPhillips would like to commend the AOGCC for conducting the November 1St workshop to allow industry and the public to work with the AOGCC staff on the technical merits of the regulation changes as initially proposed. The latest version of proposed changes is improved, in our view, largely because of the workshop. ConocoPhillips sees merit in many of the proposed changes, and we support the goal of updating and clarifying the regulations. We still see some aspects of the proposed regulation changes, however, that are unnecessary and could have material adverse impacts to oil and gas producers. ConocoPhillips submits the attached comments to help improve the proposals. Thank you for the opportunity to comment on the proposed regulation changes. Regards, Erik Keskula Attachments ConocoPhillips Alaska, Inc. Comments on AOGCC Proposed Regulation Changes March 21, 2017 Proposed Changes to 20 AAC 25.030(d)(5). The proposed changes in 20 AAC 25.030(d)(5) would require cementing to 500 measured depth or 250 vertical feet, whichever is greater. The current regulation refers to 500 feet without specifying vertical feet or measured feet. Historically, AOGCC has approved cementing with 500 feet measured depth of cement above hydrocarbon zones and the production casing shoe. This has historically proven to provide zonal isolation for hydrocarbon zones, hydraulic fracturing fluids, and enhanced oil recovery and waterflood fluids, thus demonstrating that current practices under the existing regulations have been working adequately. ConocoPhillips has already commented extensively on this proposed change, both in writing and orally at the workshop, and our position has not changed. We maintain that it is unnecessary to specify a requirement for cement in vertical feet, and that doing so will, in some cases, create additional risk in achieving zonal isolation. This is particularly likely for the type of wells typically drilled on the North Slope. Wells drilled it the Colville River Unit and the Kuparuk River Unit are often directionally drilled, high departure or horizontal wells from multi -well pads. These types of wells usually require a long, geometrically complicated intermediate casing run. The changes that would be necessary in these wells to comply with a requirement for 250 vertical feet of cement would increase the risk of breaking down a weak interval and losing returns, as was discussed in more detail in ConocoPhillips September 27, 2016 and December 1, 2016 submittals. For the technical reasons discussed in those prior submittals, ConocoPhillips does not see any benefits for zonal isolation under the proposed new requirement of 250 vertical feet of cement. As those prior submittals show, 500 feet of cement, measured depth, would provide zonal isolation, even for highly deviated wells, without creating a new risk of breaking down the formation and losing returns. Because of the additional risk with no offsetting benefit, ConocoPhillips recommends that AOGCC reject the requirement for 250 vertical feet of cement and stay with the longstanding practice of requiring 500 measured depth of cement above the casing shoe. History has proven that the current practice provides adequate zonal isolation for intermediate casing. Proposed Changes to 20 AAC 25.055. AOGCC is proposing to amend 20 AAC 25.055 to require spacing exception if "any portion" of the wellbore is within 500 feet of property line. This would be a change from the current regulation, which requires a spacing exception only when the wellbore is open to production within 500 feet of a property line. ConocoPhillips Alaska inc oposed Regulation Changes Comments on AOGCC Pr March 21, 2017 Page 2 Proposed change and recommends that the no ConocoPhillips sees no reason for this prop portion of the wellbore is not open s current language remain in effect. TheProroximate pof a wellbore to a property impact on correlative rigto hts when the p authority. However, if the AOGCC proceeds to adopt production. Thus, we see no reason for Y is regulation and believe it falls outside e scope of the n, we bell statutory pool or unit remain valid this regulation, we believe it is important for the tonsrwi witd tchin acp clear that existing poo rules that eliminate the need f r spacing reguxemlation. and would not be sup ropcmultiple changes to this Proposed Changes to 20 AAC 25.071. AOGCC pegulation would require the data. Thep p table to the regulation on logs and geologic standards submission of information in "an electronic tthat image f le formats and industry practicality of allowing the AOGCC to keep pace commission". ConocoPhillips recognizesprudent to specify that the can change over time, and we see the p with changes in technology. However, we think it would be p standard LAS format is an acceptable format. That would still allow current industry in the future at AOGCC's discretion, but it would give other formats to be accepted operators and hee preseGCC the clarity of at least one nt the foreseeable future.format that is known to e adequate forP t ato amend 20 AAC 25.110 Proposed Changes to 20 AAC 25.110. AOGCC is proposing to in a new subsection (b) requiring the operator of a non -unitized suspended well ConocoPhillips opposes to keep the AOGCC informed ofthe ro osed In 20 AAC 25.110(h) ion dates of all leases the we complication, and we traverses. A similar change is p P authority of AOGCC. these proposed changes as a potential fallroutside the statutory believe the propose regulatory ate the ConocoPhillips recognizes that AOGCC has jurisdiction to and abanand ldonment of that an operator must have legal means of access suspension of wells, and the eventual return to service or plugging erators to suspended wells. We also recognize to wells to perform necessary work. But lease rights are a matter or opiated reeoften negot and not always a address with awell n aNners and rrange sometimeserelated to other ag re often potential commercial 9 including theirmatter of public record. The status ot thing that should be forced into the public record or made a contingencies, are Hoversight atgthe AOGCC. matter of regulatory ex ress or implied in AOGCC enabling legislation p AOGCC informed ch authorizes There is nothing P responsibility of well operators, well AOGCC to monitor lease status, or to require well operators to keep proposed regulatory of such matters. Lease status should remain the respThese owners, and lando exceed the legalauthorityAOGCC and should be rejected. changes io SECOND NOTICE OF PROPOSED CHANGES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission (AOGCC) proposes to adopt changes to Title 20, Chapter 25 of the Alaska Administrative Code, which contains oil and gas regulations, including the following: Specifically, AOGCC is making the modifications described below to the following regulations: 1) 20 AAC 25.020: adding a 30 -day notice requirement for any change in the contact information for the information contained in the Designation of Operator; 2) 20 AAC 25.030: clarifying the required actions when there exist indications of improper or inadequate cementing; clarifying the casing and cementing information to be provided for hydraulic fracturing operations; clarifying the requirements for casing pressure tests when blowout prevention equipment is to be used; allowing for approval of extensions of deadlines, variances and waivers; 3) 20 AAC 25.055: to require spacing exceptions based on proximity to property lines where the owner and the landowner are not the same on both sides of the line and clarifying the notification requirements for an application for a spacing exception; 4) 20 AAC 25.065(c)(1): clarifying the requirements for hydrogen sulfide detection systems; 5) 20 AAC 25.071: clarifying the requirement for providing logging and geologic data, including the forms in which such information may be provided; 6) 20 AAC 25.110(a): adding a requirement that an operator demonstrate it has valid leases for all parts of any well for which suspended status is sought; 7) 20 AAC 25.110(h): adding a requirement that an application to renew an existing "suspended" status for a well include all leases the wellbore traverses and the expiration date for each; 8) 20 AAC 265(d)(4): adding an exemption from the well safety valve system requirements for onshore wells with a velocity string; 9) 20 AAC 25.270: adding a requirement that reservoir sampling and analyses be conducted in accordance with good laboratory analysis practices and setting an annual due date for an operator's Annual Reservoir Properties Report; 10) 20 AAC 25.280: providing for expiration of sundry approvals of workovers if the workover operations are not commenced within 12 months of the approval; 11) 20 AAC 25.537(a)(3): clarifying that all reports and information required to be filed for service and production wells are public information; 12) 20 AAC 25.537(d): clarifying that all reports and information required to be filed for exploratory and stratigraphic test wells are entitled to confidentiality for approximately two years after the filing period; 13) 20 AAC 25.556: providing for automatic expiration of certain orders; 14) 20 AAC 25.990: adding a definition of the phrase "velocity survey", "experimental logs", "log" and "common derivative format". The proposed changes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, improve understanding, and streamline the implementation of the regulations. The hearing will be held on March 21, 2017 at 9:00 a.m. and might be extended to accommodate those present before 9:30 a.m. who did not have an opportunity to comment. Oral or written comments also may be submitted at the hearing to be held on March 21, 2017, at 333 West 7s Avenue, Anchorage, Alaska 99501. This is the second hearing held in this matter. You may comment on the proposed regulations changes, including the potential costs to private persons of complying with the proposed change, by submitting written comments to Alaska Oil and Gas Conservation Commission at 333 West 70' Avenue, Suite 100, Anchorage, Alaska 99501. Additionally, the Alaska Oil and Gas Conservation Commission will accept comments by facsimile at (907) 276-7542 and by electronic mail at jody.colombie@alaska.gov. The comments must be received no later than 4:30 p.m. on March 21, 2017. If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombie at (907) 793-1221 no later than March 5, 2017 to ensure that any necessary accommodation can be provided. For a copy of the proposed regulation changes, contact Jody Colombie at (907) 793-1221 or go to www.aogcc.alaska.gov. After the public comment period ends, the Alaska Oil and Gas Conservation Commission will either adopt these or other provisions dealing with the same subject, without further notice, or decide to take no action on them. The language of any final regulation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authority: AS 31.05.030 and AS 31.05.090 Statutes Being Implemented, Interpreted, or Made Specific: AS 31.05.030 and 31.05.090 Fiscal Information: The proposed regulation changes are not expected to require an increased appropriation. DATE: January 25, 2017 //signature on file// Cathy P. Foerster, Chair, Commissioner ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.190(g)) 1. Adopting agency: Alaska Oil and Gas Conservation Commission 2. General subject of regulation: Batch regulation updates 3. Citation of regulation (may be grouped): 20 AAC 25.022 - 990 4. Department of Law file number, if any: 5. 21 7 Q Reason for the proposed action: ( ) Compliance with federal law ( ) Compliance with new or changed state statute ( ) Compliance with court order ( ) Development of program standards ( X ) Other (identify): The Proposed changes are in response to AOGCC's periodic regulation reviews. In aeneral the proposed modifications aim to update and clarify the requirements improve understanding and streamline the implementation of the regulations. Appropriation/Allocation: DOA/AOGCC Cost of implementation to the state agency and available funding (in thousands of dollars): Operating Cost Capital Cost 1002 Federal receipts 1003 General fund match 1004 General fund 1005 General fund/ Initial Year Subsequent FY 2017 Years $ 0 $L-0 $ 0 $ 0 $ 0 $ 0 $ 0 $-0- 0$ $- 0 $ 0 program $_0 $-0— Other 0Other (identify) $ 0 $ 0 The name of the contact person for the regulation: Name: Jody J. Colombie Title: Special Assistant to the AOGCC Address: 333 West 71 Avenue. Anchorage, AK 99501 Telephone: (907)793-1221 E-mail address: iody.colombiegalaska gov 9. The origin of the proposed action: X Staff of state agency Federal government General public Petition for regulation change Other (identifv) 10. Date: Jan 2uary 5, 2017 Prepared by: //signature on file// Name: Jody J. Colombie Title: Special Assistant to the AOGCC Telephone: 19071793-1221 270227 0001399332 $761.96 AFFIDAVIT OF PUBLICATION STATE OF ALASKA THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was Printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on January 27, 2017 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. _ Signed Subscribed and sworn to before me this 27th day of January, 20� 17 � J'(�f _M -I abv Notary Public in and for The State of Alaska. Third Division Anchorage, Alaska My COMMISSION EXPIRES ( (Notary Public BRRNEY L. THOMPSON SHIM M MNIu MY Cbinn WM BON Feb 28, 2019 REIVEL JAN 3 12017 0G G0 NOTICE OF PROPOSED C SN EAN6ES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMpIrSSION atlopAtl changes to 'as conservation Chapter Comm I tele AlaTke AAininiSVaatNe Code, which contains oil and gas regulations, including the following: Specificalry, AOGCC is making the modifications described below to the fallowing regulations: W11. , 20 AAC 25.030: clanfying the required actions when 3) 20 AAC 25.055: tom"reqlure spacing exceptions based on roxim)ty to property Tines where the owner and the clatl ' rmareotif.i , n requirements for an appliccatilon far a spacing exceptio 1 4) 20 AA 25.065(c)(1): clariryfrog the requirements for hydrogen 5) 20 AAC25.071: lan ding therequirement for provid)ng logging and geologic data, including the forms In which such information mayy be provided; 6) 20 AAC 25.110(a): addinK it requirement that an operator' ons ate it hhas valid leases for all parts of any well for, which sus ppendeCis tatus is sought; 7) 20 AAC 25.110(h): adding a requirement that an aoDlication to: EV '_.-....-.�"����.��,,,� ,m -wluie weus min a 9) 20 C 25.270: addlne a rennirpmant that 10) 20 AAC 25.280: providing for expiration of sundry apprc workovers if the workover operations are not coma withi11) 0 AAC 25537t 12 as 3t:tciaafpvlpn that all reports and infor required to be tied for service and production wells are Information; 12) 20 AAC 25.537fd): clariMno that au .o,,,..... »a :»..... 13) 2f'-Ord 0 A'A 25.5561 providing for automatic expiration Of certain 14) 20rS eAAAC 25.990: acI a definition of the phrase "velocity Purvey; "experlmentalglogs", "log" and "common derivative The proposed Chan as are in response to AOGCC's periodic regulation clarifyyttheirequirementss, Ihe moproovve�undeerrstaanding and meamlliine the implementation of the regulations. The hearing will be held on March 21, 2017 at 9:00 a.m. and mi ht be extended to accommodate those present before 9:30 a.m. who d not have an opportunity.to comment. Oral or written comments also may wmnrcno must oe received no later than 4:30 P.M. on NlaFCfi 21, 2017. If you are a person with a disability who needs a special accommodation In order to participate in this process, please contact Jody Colombia at (907) 793-1221 no later than March 5, 2017 to ensure that any necessary accommodation can be provided, v`.v For a copy of the proposed regulatlon changes, contact Jody Colombli at (907) 793-1221 or go to www.aogcc.alaska.gov. Ahpr the public comment eriod endsthethe Alaska Oil and Ga: Conservationli, ih hCommission Sj ct, without upeither oriherhese or notice, ortdeC de to take no ac ion on them. The language -of any final regulation may be different from the proposed regulation. You should comment durinf the time allowed if your interests could be affected. StatutarY AuthorltY: AS 3105.030 and AS 3105 090 Statutes Being Implemented, Interpreted, or Made Specific: F si cel 5inforinstlpns'�The proposed _regulation changes are not expected to require an Increased appropriation. DATE: January 25, 2017 Cathy P. Foerster, Chavn Commissiioi ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.1"(g)) 1. Adopting agency: Alaska Oil and Gas Conservation 2. General subject of regulation: Batch regulation updates 3. Citation of regulation (may be grouped): 20 AAC 25.022.990 4. Department of Law file number, if any: S. Reason for the proposed action: Compliance with federal law Compliance with new or changed state statute Compliance with court order Devel Ment of program standards X) Other (i(dentify): The proposed changes are In response to AOGCC 's periodic regulation reviews. In general, the proposed improve understanding, and streamll a the Implementation of the regulations. 6. ApprOprlation/Allocation: DOA/AOGCC 7. Cost of Implementation to the state agency and available funding (in thousands of dollars): Initial Year Subsequent Operating Cost FYo2017 Years Capital Cost Sb o $� 0 1003 Federal ll fund match $ 0 $ 0 1005 General fund/ $ 0 $ 0 program $ o S o Der(Identify) S O 0 3. The name of the contact person for the regulation: Jame: Jody J. Colombie itle: Special Assistant to the AOGCC \ddress: 333 West 7th Avenue, Anchorage, AK 99501 !emalladdress: (907) 793-1221 The origin of the proposed action: X Staff of state agency Federal government General public Petition for regulation change Other (Identify) ). Date: January 25, 2017 Prepared by: //signature on file// Title: Special ASSdsta^ConOhalnnrr•r Published: January 27, 2017 STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT. ADVERTISING ORDER NUMBER AO-1/1�f —O2O FROM: AGENCY CONTACT: Jody Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O. AGENCY PHONE: 333 West 7th Avenue 01/25/17 (907) 279-1433 Anchors e, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907)276-7542 TO PUBLISHER: Alaska Dispatch News SPECIAL INSTRUCTIONS: PO Box 149001 Anchorage, Alaska 99514 TYPE OF ADVERTISEMENT:-d LEGAL_"- DISPLAY CLASSIFIED OTHER (Specify below) DESCRIPTION PRICE R-16-001 Initials of who prepared AO: Alaska Non -Taxable 92-600185 SUBMIT INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION N'ITfI ATTACHED COPV OF ADVERTISMF,NT TO: Department of Administration Division of AOGCC 333 Nest 7th AvenueTotal Anchors e, Alaska 99501 Pee I oL 1 of All Pa es $ REF Tye I Number Amount Date Commems I PVN JADN89311 2 AD AO-17.020 3 4 FIN AMOUNT SY AppeUnit PGM LGR Object I FY I DIST LIQ 1 17 021147717 3046 1 17 2 3 4 s Purchasing Authority Name: Title: Purchasing Authority's Signature Telephone Number 7. A.O. a ntl re v g n e must ear on all invoices and documents relating to this purchase. 2. The at eis reg er rF tran slns antler Chapter 32, IRScotle. Registration number 92-730006 K. Items are for the exclusive use of the state and not for resale. DISTRIBUT[ Division Fisca / riginal AO Cop es: Publisher (faxed), Division Fiscal, Receiving Form: 02-901 Revised: 1/25/2017 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Wednesday, January 25, 2017 3:36 PM To: DOA AOGCC Prudhoe Bay, Fisher, Sheldon A (DOA); Varni, Pam (LEG); Resregs@akleg.gov, Bender, Makana K (DOA); Bettis, Patricia K (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Guhl, Meredith D (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Paladijczuk, Tracie L (DOA); Pasqua], Maria (DOA); Quick, Michael J (DOA); Regg, lames B (DOA); Roby, David S (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); Begich, Tom; Birch, Chris; Bishop, Click (LEG); Chenault, Mike (LEG); Claman, Matt (LEG); Coghill, John (LEG); Costello, Mia C (LEG); Drummond, Harriet A (LEG); Dunleavy, Mike (LEG); Eastman, David; Edgmon, Bryce E (LEG); Egan, Dennis W (LEG); Fansler, Zach; Foster, Neal W (LEG); Gara, Les (LEG); Gardner, Berta (LEG); Giessel, Cathy (LEG); Grenn, Jason; Guttenberg, David (LEG); Hoffman, Lyman F (LEG); Hughes, Shelley; jenniferjohnston (representativejenniferjohnston@ak]eg.gov); Johnson, Delena (LEG); Josephson, Andrew L (LEG); Kawasaki, Scott Jw (LEG); Kelly, Pete (LEG); Kito, Sam (LEG); Knopp, Gary; Kopp, Chuck, Kreiss- Tomkins, Jonathan S (LEG); Ledoux, Gabrielle R (LEG); MacKinnon, Anna (LEG); Meyer, Kevin G (LEG); Micciche, Peter A (LEG); Millett, Charisse E D (LEG); Natasha von Imhof (Senator. Natasha.vonImhof@akleg.gov); Neuman, Mark A (LEG); Olson, Donny (LEG); Ortiz, Dan (LEG); Parish, Justin; Pruitt, Lance (LEG); Rauscher, George; Reinbold, Lora (LEG); Saddler, Dan (LEG); Seaton, Paul (LEG); Spohnholz, Ivy A (LEG); Stedman, Bert K (LEG); Stevens, Gary L (LEG); Stutes, Louise B (LEG); Sullivan -Leonard, Colleen; Talerico, David M (LEG); Tarr, Geran L (LEG); Thompson, Steve (LEG); Tilton, Cathy (LEG); Tuck, Christopher (LEG); Westlake, Dean; Wielechowski, Bill (LEG); Wilson, David; Wilson, Tammie (LEG); Wool, Adam L (LEG); AK, GWO Projects Well Integrity, AKDCWellIntegrityCoordinator, Alan Bailey, Alex Demarban; Alexander Bridge; Allen Huckabay; Andrew Vandedack; Ann Danielson; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Ben Boettger; Bill Bredar; Bob Shavelson; Brandon Viator, Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cocklan-Vendl, Mary E; Colleen Miller, Connie Downing; Crandall, Krissell; D Lawrence; Dale Hoffman; Dave Harbour David Boelens; David Duffy, David House, David McCaleb; David McCraine; David Tetta; ddonkel@cfl.rr.com; DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones, Elizabeth Harball; Elowe, Kristin; Evan Osborne; Evans, John R (LDZX); Gary Oskolkosf, George Pollock, Gordon Pospisil; Greeley, Destin M (DOR); Gretchen Stoddard; gspfoff; Hurst, Rona D (DNR); Hyun, James J (DNR); Jacki Rose; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jim Watt; Jim White; Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Larsen, John M (DOR); John Stuart; Ion Goltz; Chmielowski, Josef (DNR); Juanita Lovett; Judy Stanek; Kari Moriarty, Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Frank, Kevin J (DNR); Kruse, Rebecca D (DNR); Gregersen, Laura S (DNR); Leslie Smith; Lori Nelson; Louisiana Cutler; Luke Keller, Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.han]ey@anadarko.com); Mark Landt; Mark Wedman; Mealear Tauch; Michael Bill; Michael Calkins; Michael Moora; MJ Loveland; mkm7200; Mueller, Marta R (DNR); Munisteri, Islin W M (DNR); knelson@petro]eumnews.com; Nichole Saunders; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shahla Farzan; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R, Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Ted Kramer; Davidson, Temple (DNR); Teresa Imm; Thor Cutler, Tim Jones; Tim Mayers; Todd Durkee, trmjrl; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Well Integrity, Well Integrity; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron To: Sorrell; Ajibola Adeyeye; Alan Dennis; Assmann, Aaron A, Bajsarowicz, Caroline J; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Catie Quinn; Don Shaw; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Heusser, Heather A (DNR); Fair, Holly S (DNR); Holly Pearen; Jamie M. Long; Jason Bergerson; Jesse Chielowski; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); Wayne Wooster, William Van Dyke Subject: AOGCC Public Hearing Notice and Draft Regulations for R16-001 Attachments: R-16-001 2nd Hearing Notice.pdf, Regulation Package R-16-OOl.pdf The Alaska Oil and Gas Conservation Commission (AOGCC) proposes to adopt changes to Title 20, Chapter 25 of the Alaska Administrative Code, which contains oil and gas regulations, including the following: Specifically, AOGCC is making the modifications described below to the following regulations: 1) 20 AAC 25.020: adding a 30 -day notice requirement for any change in the contact information for the information contained in the Designation of Operator; 2) 20 AAC 25.030: clarifying the required actions when there exist indications of improper or inadequate cementing; clarifying the casing and cementing information to be provided for hydraulic fracturing operations; clarifying the requirements for casing pressure tests when blowout prevention equipment is to be used; allowing for approval of extensions of deadlines, variances and waivers; 3) 20 AAC 25.055: to require spacing exceptions based on proximity to property lines where the owner and the landowner are not the same on both sides of the line and clarifying the notification requirements for an application for a spacing exception; 4) 20 AAC 25.065(c)(1): clarifying the requirements for hydrogen sulfide detection systems; 5) 20 AAC 25.071: clarifying the requirement for providing logging and geologic data, including the forms in which such information may be provided; 6) 20 AAC 25.110(a): adding a requirement that an operator demonstrate it has valid leases for all parts of any well for which suspended status is sought; 7) 20 AAC 25.110(h): adding a requirement that an application to renew an existing "suspended" status for a well include all leases the wellbore traverses and the expiration date for each; 8) 20 AAC 265(d)(4): adding an exemption from the well safety valve system requirements for onshore wells with a velocity string; 9) 20 AAC 25.270: adding a requirement that reservoir sampling and analyses be conducted in accordance with good laboratory analysis practices and setting an annual due date for an operator's Annual Reservoir Properties Report; 10) 20 AAC 25.280: providing for expiration of sundry approvals of workovers if the workover operations are not commenced within 12 months of the approval; 11) 20 AAC 25.537(a)(3): clarifying that all reports and information required to be filed for service and production wells are public information; 12) 20 AAC 25.537(d): clarifying that all reports and information required to be filed for exploratory and stratigraphic test wells are entitled to confidentiality for approximately two years after the filing period; 13) 20 AAC 25.556: providing for automatic expiration of certain orders; 14) 20 AAC 25.990: adding a definition of the phrase "velocity survey", "experimental logs", "log" and "common derivative format'. Jody J. CoCombie -AOGCC SpeciaC-Assistant Alaska Oft and(jas Conservation Commission 333 West 71h Avenue Anchorage, Alaska 99501 Office: (907) 793-1221 fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv.colombie@oloska.aov. Bernie Karl K&K Recycling Inc. Gordon Severson Penny Vadla P.O. Box 58055 3201 Westmar Or. 399 W. Riverview Ave. Fairbanks, AK 99711 Anchorage, AK 99508-4336 Soldotna, AK 99669-7714 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 -z-t-2ok-t Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.020 is being amended to read. 20 AAC 25.020(a) Designation of Operator. (a) If an owner of a property wishes to designate a new operator for the property, the owner shall submit to the commission for approval a Designation of Operator (Form 10-411). The commission will not approve the designation of a new operator without the signature of the newly designated operator on the same Designation of Operator form. By signing the Designation of Operator form, the newly designated operator agrees to accept the obligations of an operator. The newly designated operator shall furnish a bond and, if required, security as provided for in 20 AAC 25.025. The commission's acceptance of the designated operator's bond constitutes the release of the former operator's bonding obligation for the property indicated on the Designation of Operator form. (b) The operator shall notify the commission within 30 days in writine of any changes in office address, primary telephone number, email address, or principal contact(s). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152, Eff. Register .) Authority: AS 31.05.030 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.030 is being amended and new sections added to read: 20 AAC.25.030 Casing and cementing. (d) (5) intermediate and production casing must be cemented with sufficient cement to fill the annular space from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth, whichever is greater, above all significant hydrocarbon zones and abnormally geo-pressured strata or, if zonal coverage is not required under (a) of this section, from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth, whichever is greater, above the casing shoe; if indications of improper cementing exist, such as lost returns, or if the formation integrity test shows an inadequate cement job, [REMEDIAL ACTION MUST BE TAKEN;] (A) the operator shall notify the commission and obtain approval before drilling ahead; and (B) provide: (i) a cement quality log or other approved method to evaluate the adequacy of the cement to contain potential wellbore pressures and fluids; and (ii) a plan setting forth the remedial actions proposed to bring the well into compliance with the requirements of (a) of this section; (6) if the intermediate or production string is a liner, a minimum of 100 measured feet overlap between the outer and inner strings is required; the interval of overlap must be made pressure competent and must be pressure -tested in accordance with (e) of this section; (7) for intermediate or production casing in a service well used for injection, a cement quality log or other evaluation log approved by the commission must be run to demonstrate isolation of the injected fluids to the approved interval. (e) A casing pressure test must be performed if BOPE is to be installed on a casing. The casing must be tested to hold a minimum surface pressure equal to 50 percent of the casing internal Yield pressure.fREQUIRED WORKING PRESSURE OF THE BOPE AS SPECIFIED IN THE PERMIT TO DRILL UNDER 20 AAC 25.035(E) (3) OR 20 AAC 25.036(C)(3).] The casing pressure test must be held a minimum of 30 minutes and not show a decline greater than 10 percent. The results of this test and any subsequent tests of the casing must be recorded as required by 20 AAC 25.070(1). (f) Except for through -tubing drilling, a formation integrity test must be performed if BOPE is installed on a casing. The test must be performed to a predetermined equivalent mud weight, Register 2017 MISCELLANEOUS BOARDS leak -off, or fracture pressure as specified in the application for the Permit to Drill. The test must be conducted after drilling out of the casing shoe into at least 20 feet but not more than 50 feet of new formation. The test results must demonstrate that the integrity of the casing shoe is sufficient to contain anticipated wellbore pressures identified in the application for the Permit to Drill. The test procedure followed and the data from the test and any subsequent tests of the formation must be recorded as required by 20 AAC 25.070(1). (g) [UPON REQUEST OF THE OPERATOR, THE COMMISSION WILL, IN ITS DISCRETION, APPROVE VARIANCES FROM THE REQUIREMENTS OF (B) - (F) OF THIS SECTION TO ALLOW FOR SPECIAL OR UNUSUAL CONDITIONS IF THE DESIGN REQUIREMENTS OF (A) OF THIS SECTION ARE SATISFIED.] Upon written request of the operator showing good cause, the commission may modify a deadline in this section, approve a variance from any requirement of this section if the variance provides at least an equally effective means of complying with the requirement, or approve a waiver of a requirement of this section if the waiver will not promote waste, is based on sound engineering and geoscience principles, will not jeopardize the ultimate recovery of hydrocarbons, will not ieopardize correlative rights, and will not result in an increased risk to health, safety, or the environment, including freshwater. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. _/ / , Register _.) Authority: AS 31.05.030 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.055 is being amended to read: 20 AAC 25.055. Drilling units and well spacing. (a) The commission may [WILL, IN ITS DISCRETION,] establish drilling units to govern well spacing and prescribe a spacing pattern by pool rules adopted in accordance with 20 AAC 25.520. In the absence of an order by the commission establishing drilling units or prescribing a spacing pattern for a pool, the following statewide spacing requirements apply: (1) [FOR A WELL DRILLING FOR OIL, A WELLBORE MAY BE OPEN TO TEST OR REGULAR PRODUCTION WITHIN 500 FEET OF A PROPERTY LINE ONLY IF ]an oil well or service well may not be drilled if any portion of the well will be within 500 feet of a property line unless the owner [IS THE SAME] and the landowner [IS]are the same on both sides of the line; (2) [FOR A WELL DRILLING FOR GAS, A WELLBORE MAY BE OPEN TO TEST OR REGULAR PRODUCTION WITHIN 1500 FEET OF A PROPERTY LINE ONLY IF ]a gas well may not be drilled if any portion of the well will be within 1500 feet of a property line unless the owner [IS THE SAME] and the landowner [IS] are the same on both sides of the line; (3) [IF OIL HAS BEEN DISCOVERED, THE DRILLING UNIT FOR THE POOL IS A GOVERNMENTAL QUARTER SECTION; NOT MORE THAN ONE WELL MAY BE DRILLED TO AND COMPLETED IN THAT POOL ON ANY GOVERNMENTAL QUARTER SECTION; A WELL MAY NOT BE DRILLED OR COMPLETED CLOSER THAN 1,000 FEET TO ANY WELL DRILLING TO OR CAPABLE OF PRODUCING FROM THE SAME POOLjno well may be recompleted in an oil pool or a disposal interval if any portion of the well within that oil pool or disposal interval is within 500 feet of a property line unless the owner and the landowner are the same on both sides of the line; (4) [IF GAS HAS BEEN DISCOVERED, THE DRILLING UNIT FOR THE POOL IS A GOVERNMENTAL SECTION; NOT MORE THAN ONE WELL MAY BE DRILLED TO AND COMPLETED IN THAT POOL ON ANY GOVERNMENTAL SECTION; A WELL MAY NOT BE DRILLED OR COMPLETED CLOSER THAN 3,000 FEET TO ANY WELL DRILLING TO OR CAPABLE OF PRODUCING FROM THE SAME POOL]no well may be recompleted in a gas pool if any portion of the well is within 1,500 feet of a property line unless the owner and the landowner are the same on both sides of the line. (b) [A WELL MAY NOT BEGIN REGULAR PRODUCTION OF OIL FROM A PROPERTY THAT IS SMALLER THAN THE GOVERNMENTAL QUARTER SECTION UPON WHICH THE WELL IS LOCATED OR BEGIN REGULAR PRODUCTION OF GAS FROM A PROPERTY THAT IS SMALLER THAN THE GOVERNMENTAL SECTION UPON WHICH THE WELL IS LOCATED, UNLESS THE INTERESTS OF THE PERSONS OWNING THE DRILLING RIGHTS IN AND THE RIGHT TO SHARE IN THE PRODUCTION FROM THE QUARTER SECTION OR SECTION, RESPECTIVELY, HAVE BEEN POOLED UNDER AS 31.05. 100 (C) A POOLING AGREEMENT UNDER AS 31.05. 100 MUST BE FILED WITH THE COMMISSION BEFORE REGULAR Register 2017 MISCELLANEOUS BOARDS PRODUCTION FROM THE AFFECTED PROPERTY BEGINS. (D) THE COMMISSION WILL REVIEW AN APPLICATION FOR AN EXCEPTION TO THE PROVISIONS OF THIS SECTION IN ACCORDANCE WITH 20 AAC 25.540. THE APPLICANT FOR AN EXCEPTION SHALL SEND NOTICE OF THE APPLICATION BY CERTIFIED MAIL TO THE OWNERS, LANDOWNERS, AND OPERATORS DESCRIBED IN (1) OF THIS SUBSECTION AND SHALL FURNISH THE COMMISSION WITH A COPY OF THE NOTICE, THE DATE OF MAILING, AND THE ADDRESSES TO WHICH THE NOTICE WAS SENT.]Upon application by the operator, the commission may approve an exception to the provisions of this section. Review of the application will be in accordance with the provisions of 20 AAC 25.540. The applicant for an exception, whether for an individual well or on a pool wide basis, shall send notice of the application by certified mail to the owners, landowners, and operators described in (1) of this subsection and shall furnish the commission with a copy of the notice, the date of mailing, the addresses to which the notice was sent, and proof of certified mailing. The application must include: (1) the names of all owners, landowners, and operators of all properties: A. within 1,000 feet of a well drilling for oil[OR], a well drilling for disposal purposes, or a well that is being recompleted in an oil pool or disposal interval for which an exception is sought; B. within 1,000 feet of the proposed affected area of an oil pool or disposal interval for which a blanket spacing exception is sought; C. within 3,000 feet of a well drilling for gas or for a well that is being recompleted in a gas pool for which an exception is sought; or D. within 3,000 feet of the proposed affected area of a gas pool or gas storage pool for which a blanket spacing exception is sought. (2) a plat drawn to a scale of one inch equaling 2,640 feet or larger, showing: A. the location of the well for which the exception is sought[,]; B. State or Federal lease numbers or private landownership information; C. all other completed and drilling wells on the property[, AND]= D. all adjoining properties and wells; and (3) an affidavit by a person acquainted with the facts, verifying that: A. all facts are true; [AND THAT] B. the plat correctly portrays pertinent and required data[.]i C. the list of all the owners, landowners, and operators identified in (1) is complete and accurate; and D. all such owners, landowners, and operators have been provided notice of this application. Register 2017 MISCELLANEOUS BOARDS [E](c) Upon application by the operator, the commission [WILL] may [ESTABLISH] approve a variance from the notice requirements [DIFFERENT FROM THOSE ]of [(D)] (b) of this section if the operator demonstrates [TO THE COMMISSION'S SATISFACTION]that compliance with the notice requirements in [(D)](b) of this section is not feasible because of the complexity of ownership within the notice area. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152, Eff. _/_/ Register _.) Authority: AS 31.05.030 AS 31.05.100 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.065(c)(1) is being amended to read: 20 AAC 25.065(c)(1) Hydrogen Sulfide. In addition to the automatic hydrogen sulfide detection system required in 20 AAC 25.066, at least three manual detectors [WITH AN ADEQUATE SUPPLY OF EXTRA DETECTOR TUBES] must be available on the location; (Repealed 11/7/99. Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. / / , Register _.) Authority: AS 31.05.030 Register 2017 MISCELLANEOUS BOARDS 20 AAC.25.071 is amended to read: 20 AAC 25.071. Logs and Geologic data[AND LOGS]. An operator shall log the [PORTION OF THE] well [BELOW] from total depth to the base of [THE] conductor pipe by either a complete electrical [LOG] or [A COMPLETE RADIO-ACTIVITY]gamma-ray log unless the commission specifies [WHICH]the type of log or logs[IS] to be run. (b) Within [30] 90 days after completion, suspension, or [ABANDONMENT] plugging of a well or well branch, [WHICHEVER OCCURS FIRST, AND WITHIN 30 DAYS AFTER COMPLETION OR PLUGGING OF A WELL BRANCH, IF OCCURRING AT A DIFFERENT TIME,]or within 90 days of the date of acquisition of the data, whichever occurs first, the operator shall file with the commission, unless previously filed[,]_ (1) [A SEPIA] effective January 1, 2018, an electronic image file in formats acceptable to the commission [AND A REPRODUCED COPY] of a complete mud log or a lithology log consisting of a detailed record and description of the sequence of strata encountered, including the kind and character of the rock and all shows of hydrocarbons [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]; (2) a complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; (3) a lithologic description and, if available, photographs of each conventional and sidewall core; conventional core descriptions must include apparent textural, fluid, and lithologic variations, including rock type, porosity, fractures, bedding plane attitudes, sedimentary structure, grain size, and presence of hydrocarbons; (4) chips from each foot of recovered conventional core, except that chips need not be submitted until 30 days after the conventional core is analyzed; the chips must be representative of the one -foot interval, and must be approximately either one cubic inch in volume, or two ounces in weight; (5) a list of the geologic markers and formation tops encountered and the measured and true vertical depths of each marker and formation top; (6) [A SEPIA] effective January 1, 2018, an electronic image file in formats acceptable to the commission [AND A REPRODUCED COPY] of all open -hole logs and mud logs run, including common derivative formats such as tadpole plots of dipmeter data and borehole images produced from sonic or resistivity data, and including composite log formats; however, copies of velocity surveys and experimental logs need not be included; [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]. The operator shall provide the commission the Register , 2017 MISCELLANEOUS BOARDS opportunity to examine open -hole logs for exploration or stratigraphic test wells within 72 hours of being run and prior to abandonment; (7) effective January 1, 2018, an electronic image file in formats acceptable to the commission of all cased -hole formation evaluation logs and cement evaluation logs run, including common derivative formats: [A TAPE, DISKETTE, OR OTHER ELECTRONIC MEDIUM ACCEPTABLE TO THE [COMMISSION] digital data and a verification listing [OF THE DIGITAL DATA] for all [LOGS RUN] open -hole logs, all mud logs, and all cased -hole formation evaluation and cement evaluation logs run, except velocity surveys and experimental logskl, stored on electronic media and using file formats that are acceptable to the commission [THE VERIFICATION LISTING MUST INCLUDE A WRITTEN DESCRIPTION OF THE LOGICAL AND PHYSICAL FORMAT OF THE DIGITAL DATA]; and [(8)] (9) the following items, or a written request proposing a date for submitting those items, subject to commission approval of that date for timeliness, if those items are unavailable within the [30] 90 -day filing period set out in this subsection: (A) [A COPY]E2RjLs of all drill stem tests and production test data and charts; (B) a brief summary of production tests, drill stem tests, wireline formation tests, and other formation tests performed, including test date, time, depth, duration, method of operation, recovered fluid types, fluid amounts, gas -oil ratio, oil gravity, pressure, and choke size; (C) conventional and sidewall core analysis determinations, if any, of porosity, permeability, and fluid saturation; (D) geochemical and formation fluid analyses obtained, if any. (c) The commission[ WILL, IN ITS DISCRETION,] may waive or modify the requirements of this section [for a well]if those requirements would not significantly add to the geologic or engineering knowledge of the area in light of the information that is available from the well or other wells in the area. Eff. 4/2/86, Register 97; am 11/7/99, Register 152, Eff. Register _.) Authority: AS 31.05.030 AS 31.05.035 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.110(a) is being amended to read: 20 ACC 25.110 Suspended wells. (a) If allowed under 20 AAC 25.105, an operator may apply to the commission under this section to approve the suspension of a well or to renew the approval of the suspension of a well. The operator must state the reasons the well should be suspended, and not completed or abandoned, and must demonstrate to the commission's satisfaction that 1. the well (A) is mechanically sound; (B) will not allow the migration of fluids; (C) will not damage freshwater or producing or potentially producing formations; (D) will not impair the recovery of oil or gas; (E) is secure, safe, and not a threat to public health; [and] (F) is located on a valid lease or leases where the applicant has the right to drill for oil, gas, coal bed methane, gas hydrates, or shale gas, or to evaluate underground coal gasification or geothermal resources; and is in compliance with all provisions of AS 31.05, this chapter, and any order, stipulation, or permit issued by the commission; 2. the well (A)has future utility as an exploratory, development, or service well; (B) is a viable candidate for redrilling; or (C) is located on a pad or platform with active producing or service wells[.]; b. If the well does not lie within a unitized area. the operator (A) shall provide the commission with a list of the leases that the wellbore traverses, from surface location to bottom hole location, and the expiration date of each lease; and (B) is required to notify the commission within 30 days, if the status of any lease changes. 20 AAC 25.110(h) is being amended to read: (h) Renewal of an existing suspension may be requested by the submission of an Application for Sundry Approvals (Form 10-403) meeting all requirements of (b) of this section. A renewal is not effective until approved by the commission. If a complete renewal application is submitted at least 60 days before the expiration of an existing suspension, the existing suspension will continue until the commission acts on the application. Within 24 months before the submission of a request for suspension renewal, a well -site inspection must be completed. If the well does not lie within a unitized area, the application to renew an existing suspension must include a list of all leases that the wellbore traverses, from surface location to bottom hole location, and the expiration date of each lease. History: (Eff. 4/2/86, Register 2017 MISCELLANEOUS BOARDS Register 97; am 11/7/99, Register 152; Eff. 11/19/2008, Register 188; am 4/15/2010, Register 194; Eff. /_/ Register .) Authority: AS 31.05.030 AS 31.05.095 AS 31.05.040 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.265(d)(4) Well safety valve systems is being amended to read: (4) an onshore well in a location described in (2) of this subsection and equipped with an electric submersible pump, velocity strine, or capillary string run within the tubing is not required to be equipped with a subsurface safety valve; or (Eff. 4/13/80, Register 74; am 4/27/86, Register 97; am 11/7/99, Register 152; Eff. Register .) Authority: AS 31.05.030 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.270 is amended to read. 20 AAC 25.270 [INITIAL RESERVOIR] Reservoir properties. (a) The operator shall determine the initial reservoir pressure in each new pool before regular production. The results must be reported to the commission on a Reservoir Pressure Report (Form 10-412). (b) The operator shall obtain fluid samples from each new pool at the time of discovery or before regular production and determine (1) [THE]crude oil composition[ ASSAY]; (2) pressure, volume, and temperature properties of the crude oil; and (3) [THE]solution or non -associated gas composition[ASSAY]. (c) Sampling and analysis must be conducted and reported in accordance with good oil field engineering practices. Reports must be submitted to the commission within 45 days following the completion of the determinations required in (b) of this section. (d) The operator shall determine within three months after discovery of each new oil pool the original solution gas -oil ratio by a well test conducted in a manner approved by the commission. The operator shall report the results on the Well Status Report and Gas -Oil Ratio Tests (Form 10-409) within 45 days after the test. (e) By April 15t of each year, the operator shall submit to the commission an Annual Reservoir Properties Report (Form 10-428). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; AM 11/7/99, Register 152; Eff. /_/ Register .) Authority: AS 31.05.030 Form 16628 Rev. 0112017 STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION ANNUAL RESERVOIR PROPERIES REPORT 1. Opemiw: 2. Maness 3. FIeM and Pool Cade'. <. Pool Name 5, Re(ereoee 6. Ta.,.. ], Porosity 8. Pennemility Datum (d, (•F) (16) (md) TVDSS) 9. S i (%) 10.011 11. Oil 12. 0,vol 13. BUENA 16. Cumm" 15.011 16, Gas Vzwsky@ Views" Pressure Polntor Dew Resermlr Gravity SpeNfic Odgirnt Saturation (ps) Point Pressure (-API) Gmey(or= Pressure Plasmas (did) Pressure (pap 1.0) 1T. Gross 18. Net Pay 19, Olginal Pay Oft) (fl) Formation Volume food, 20, Stable Point 21. Gas 22. Original GOR 23, Cumard Fmmatkn LDmpresalkl8y (SCFISTB) GOR(SOFISTB) Volume Fameor Factor (Z) (RBISTB) I hereby cedify that the foregoing is tme and coned to the East of my Fnaxkdge. Sgnatum armed Nom This Data Form 16628 Rev. 0112017 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.280(g) is being added to read: 20 AAC 25.280. Workover operations. W If workover operations are not commenced within 12 months after the Approvals expires. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 12/28/2006, Register 180; 1/7/2015, Register 213; Eff. / /_, Register _.) Authority: AS 31.05.030 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.537(a)(3) is being amended to read: 20 AAC 25.537(a)(3) Public and confidential information. (a) The commission will routinely make available to the public, by means of records or reports, in its offices or elsewhere, or by means of regular publication, the following information: (1) surface and proposed bottom -hole locations of each well after approval of the Permit to Drill (Form 10-401); (2) total depth, bottom -hole location and well status after the Well Completion or Recompletion Report and Log (Form 10-407) is filed; (3) all reports and information required by this chapter for development and service wells; (4) regular production data and regular production reports, as required to be filed by the operator each month; (5) injection data and injection reports, as required to be filed by the operator each month; and (6) all data filed on a well as required by this chapter upon expiration of the confidential period described in (d) of this section. 20 AAC 25.537(d) is being amended to read: (d) Except as provided by (a) of this section, the reports and information required by this chapter to be filed by the operator for exploratory and stratigraphic test wells will be kept confidential by the commission for 24 months following the 30 -day filing period after well completion, suspension, or abandonment unless the operator gives written and unrestricted permission to release all of the reports and information at an earlier date. Upon notification that the commissioner of the Department of Natural Resources has made a finding that the required reports and information from a well contain significant information relating to the valuation of unleased land in the same vicinity, the commission will hold the reports and information confidential beyond the 24 -month period and until notified by the commissioner of the Department of Natural Resources to release the reports and information. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. _/ / , Register_.) Authority: AS 31.05.030 AS 31.05.035 Register , 2016 MISCELLANEOUS BOARDS 20 AAC 25.556 is being amended to read. 20 AAC 25.556. Orders. (a) Orders of the commission require approval of at least two commissioners. (b) Unless otherwise indicated within the order, all conservation orders issued by the commission shall expire two years after activities authorized by that order cease. (c) Unless otherwise indicated in the order, all enhanced recovery, area, storage, and disposal injection orders issued by the commission shall expire: (1) two years after the date the order was adopted if injection operations have not commenced; 0r (2) two years after infection operations authorized by that order concluded. (d) Upon proper application, or its own motion, and unless notice and public hearing are otherwise required, the commission may administratively waive or amend the requirements of any order issued by the commission as long as the change does not promote waste or jeopardize correlative rights, is based on sound engineering and geoscience principles, and will not result in an increased risk of fluid movement into freshwater aquifers. (Eff. 11/7/99, Register 152; Eff. _/ / , Register .) Authority: AS 31.05.011 AS 31.05.040 AS 31.05.030 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.990. Definitions. (--) "experimental logs" means logs that are not commercially available from a well logging contractor; and (--) "velocity survey" means a survey, a purpose of which is to determine velocity of seismic waves through formations penetrated by a well by measuring travel times of seismic pulses from or near the surface to geophones placed at various depths in the well: (Eff. 11/7/99, Register 152; am 1/5/2006, Register 177; am 9/30/2010, Register 195; am 11/3/2013, Register 208; am 1/7/2015, Register 213; Eff. / / , Register _.) Authority: AS 31.05.030 AS 41.06.035 AS 41.06.005 AS 41.06.040 by RECEIVED DEC 14 2016 0 AOGVC BPExploration 1AlaskInc. 900 East Benson Boulevard vard P.O. Box 196612 Anchorage, Alaska 99519-6612 (907)561-5111 December 8, 2016 Alaska Oil and Gas Conservation Commission 330 W. 71 Ave #100 Anchorage, AK 99501-3539 RE: Docket Number: R-16-001 Comments on Proposed Regulation Changes 20 AAC 25.071 Geologic data and logs Dear Commissioners: BP Exploration Alaska, Inc (BPXA) appreciates the approach and process adopted by the Commission with respect to all proposed regulation changes. BPXA respectfully submits the attached comments dealing with proposed Regulation Change to 20AAC.25.071 in follow-up to the public workshop held on November 1, 2016. If you have any questions on 20 AAC 25.071 or would like to discuss further, please contact Danielle Ohms at (907) 564-5759 and Bill Bredar (907)564-5348. Th k you fort opportunity comment further on the proposed regulation changes. Diane Richmond Reservoir Development Performance Management Team Lead Cc: Hank Jamieson, ExxonMobil Emil Klein, ExxonMobil Phil Tsunemori, ConocoPhillips Randy Kanady ConocoPhillips Jon Cookson ConocoPhillips Dave White, Chevron Dale Hoffman, Caelus Larry Greenstein, Hilcorp Josh Kindred, AOGA Page 1 of 4 BP Exploration (Alaska) Inc. (BPXA) Post Workshop Comments on AOGCC Proposed Regulation Changes December 8, 2016 20 AAC.25.071 AOGCC Proposed amended language: 20 AAC 25.071. Logs and Geologic data (AND LOGS). An operator shall log the [PORTION OF THE] well [BELOW] from total depth to the base of [THE] conductor pipe by either a complete electrical [LOG] or [A COMPLETE RADIO- ACTIVITY] gamma -ray log unless the commission specifies [WHICH] the type of log or logs [IS] to be run. (b) Within [30] 90 days after completion, suspension, or [ABANDONMENT plugging of a well or well branch, [WHICHEVER OCCURS FIRST, AND WITHIN 30 DAYS AFTER COMPLETION OR PLUGGING OF A WELL BRANCH, IF OCCURRING AT A DIFFERENT TIME,] or within 90 days of the date of acquisition of the data, whichever occurs first, the operator shall file with the commission, unless previously filed [,] (1) ........... (7) for cased -hole logs: (AA) an electronic image file in a format acceptable to the commission and a reproduced copy of all cement auahri logs and casing evaluation logs a sepia may be substituted for the electronic image file. (B) an electronic image file in a format acceptable to the commission of all other logs run including common derivative formats; a sepia may be substituted for the electronic image file; BPXA follow-up proposal: BPXA recommends changing the phrase "all other logs run" in (b)(7)(B) to "all cased hole formation evaluation logs run across the reservoir interval and cement evaluation logs". Cased hole formation evaluation logs would include various forms of neutron and resistivity logs, injection and production profiles, and borax logs across the production reservoir interval. Non commercially available, experimental logs would be the exception. We also note that other subsurface information is already reported to the commission through the requirements for submittal of Sundry Approval (10-403) and subsequent Report of Sundry Well Operations (10-404) in accordance with 20 AAC 25.280, as well as through the requirements of individual Conservation Orders. Page 2 of 4 Additional Comments: BPXA maintains compliance with AOGCC regulations through a rigorous process designed to ensure required information is submitted to the commission. This process takes time and is costly. With the broad reference to "all other logs run" in the proposed regulations, it would be challenging to maintain compliance as the volume of these "other logs" would approximately triple from what's currently reported, and the usefulness of this extra volume of data is greatly less. BPXA's compliance process entails specifying to vendors what logs need to be sent to AOGCC and we track compliance with those stated specifications. Our proposed change to "all cased hole formation evaluation logs run across the reservoir interval and cement evaluation logs" would allow us to more readily provide these logs, as they are actively evaluated shortly after receiving and are tracked closely. A large number of other logs ("other logs") generated are useful primarily for the onsite crews. These other logs have a very short shelf life in that the raw data obtained is relevant only to the particular operation and would not be useful for future operations. Examples of some of our high volume wellwork for which "other logs" are generated though not actively referenced or utilized once the onsite work is complete: The summary data for static bottom hole pressure surveys (SBHPs) is sent to the petroleum engineers (PEs) and our PetroTechnical Data Center (PDC) via e-mail from the vendor, reviewed to confirm pressure at datum and forwarded for entry into the database. The vendor also sends a log to the PDC, though since it is infrequently reviewed in detail, these are not meticulouslyhe commid. nAll aobtained of pressures are ual summarized, mapped, and provided Surveillance Report for each Pool. Coil flags are useful onsite while doing Coiled Tubing (CT) interventions such as drifting, perforating, cleanouts, and setting/pulling plugs for profile modification, as we have no real-time depth correlation for service coiled tubing units. The depths reached are noted in the reports of Well Operations for each job. CT flags are performed every 2-3 runs to check depth for almost every CT wellwork operation. The CT flag logs are infrequently referenced after completion of the wellwork operation, and often have little to no comments in the log themselves as to purpose of the run and therefore are unlikely to have future utility. Having to confirm what logs were generated during these jobs just to ensure they are provided to AOGCC would add an excessive administrative burden on BPXA. Page 3 of 4 Because many of these other logs have little utility in future operations, Engineers, Geologists, and Petrophysicists in town infrequently reference such information (i.e. SBHP's, coil flags, etc.) and instead use the vendor summary of work completed reports 01 completed Well Operation Reports. For many types of wellwork operations, the summary of workand the associated Well Operation reports are already sent to AOGCC in the form of a Sundry Report or Annual Surveillance Report. While BPXA does maintain a large data base of all logs received from vendors, due to the large volume of these other logs, if we were required to report time and effort to ensure that all of these additional them we would have to devote significant s by our vendors. Having is rigorously track an logs were identified and transmitted to uy of which estimated additional 900-1000 of these other logs per year, man h us with little to no do not typically spend time evaluating, would add a large administrative burden and cost on u incremental value over what is currently sent to the commission. The attached table shows types of cased hole information, most of which is not currently provided to the commission except through the Sundry Process or Annual Surveillance Reports. A large portion of this information is either raw data, meaning it has not been QC'd or refined to a useful or meaningful product, or is temporal data, meaning it was useful only at the time of the operation, but serves little to no long term value. BPXA respectfully submits that the provision of this other log information would provide little to no additional value to A as it would the commission while significantly increasing the administrative burden on BPX be expensive and difficult to supply. Log Currently Provided IN N IJ N N Associated Wellwork Requiring Sundries log l fll No - explicity fisted in Sundry Matrix as 104031 g itself irrlequenily, Summarytableddetae 1,404Ndl ReWiMd'. Pressureconectedto uerd0 us ed to calculate to Re wed through An..0 Suhaillance Yes - pedaalirg, semng permarenl plugs and patches on service Coil typically Mum a 10403 ardor1vill4. coil flags are also obtained during CTPPROFs, PROFS andneutronao�mmnd to those separately generated lq IIa „_.__...a, _ listed in Sundry Matrix as "10403110 to supper MNO ucm ^^" No - rot listed in Sundry Matrix. Temperature required but often sets to AOGCC Surveys and Spirxrer Surveys often used for Ilk to swulantY With formation spinner .—e 4n, "t�ui�listed n Sundry Matrix as "to - to Pressure and Spimer SMs often used hr gas data - used to help optimize Iia analysis explidtly listed in Sundry Matrix as ._... m, uA GMIMRd' Page 4 of 4 daW verage#of Associated gs per year iv-dy results (based on to AOGCC 201412015) Idbal Hein pass and fir each gun Ue+ntp= Ipass indicate CGL location'Temp data 10 perbabas onsdtice coil. A coil flag would havevires a 10403 ardor 10404.been odnaired on Prerl S run to assisaaa is iMe�s expliclly does notwith depN control, Nagh coil lag laghN does not specifically note ped locatiother.e4ire plug set record contains theinitial be4n pass and indicates CCLlocation ror plug set.Temp data far Derfaations ontting permanent plugs lyincally rewire aservice coil. A Coil flag Wald havebeen obtained on pre`das mn to asands 10404.wiN depth conlyd, though coil lag lex rcll lislingrpulllrg reaievable plugs of . Y.�...w �wrifically note plug s�..._.... •,nervi 1n404 dol Requin N iasuml. useful at time of operations, serves little to m1009 term 'sue .. _ .__ ., i...a.nbmfid oroduct f Y zi Y 262 ConocoPhillips December 5, 2016 Shon Robinson Drilling and Wells Manager Phone 907-265-6306 Mobile 907-360-9011 Email: shon.d.robinson@cop.com Hand Delivered 'DECEIVED DEC 0 5 2016 Commissioner Cathy Foerster, Chair AOGCC Alaska Oil and Gas Conservation Commission 333 West 7'" Avenue, Suite 100 Anchorage, AK 99501 Subject: AOGCC Proposed Change 20 AAC 25.030(d)(5) on Casing and Cementing Dear Commissioner Foerster: The Alaska Oil and Gas Conservation Commission has proposed changes to 20 AAC 25.030(d)(5) that would modify the current requirement for cementing so that it applies to 500 vertical feet. As currently written, the regulation refers to 500 feet without specifying vertical feet or measured feet. Historically, AOGCC has approved cementing with 500' measured depth (MD) of cement above hydrocarbon zones and the production casing shoe. This has historically proven to provide zonal isolation for hydrocarbon zones, hydraulic fracturing fluids and EOR / waterflood fluids thus demonstrating, in our view, that current practices under the existing regulations have been working adequately. ConocoPhillips has previously submitted comments opposing the proposed change to casing and cementing requirements, and we participated in a workshop with AOGCC at which the issue was discussed. ConocoPhillips is providing this additional information to better explain why we feel the proposed change, upon full consideration, should be rejected as unnecessary and potentially harmful. The Regulation Should Be Appropriate for the Majority of Wells Permitted ConocoPhillips understands that the proposed change is based on the idea that a vertical cementing requirement should be imposed for ultra -extended reach wells with high sail angles in the intermediate section. As explained below, we do not believe there is a technical justification or empirical evidence to support the proposed requirement. But even if there were, it is important that the regulations be written in a way that makes sense for most wells, not for the small number of wells with high sail angles. If the AOGCC were to determine that ultra - extended reach wells require more cement, this unique circumstance could be addressed in the permit to drill process on the basis of existing regulations. It is not necessary for AOGCC to adopt a more burdensome requirement that increases costs and creates new problems for all wells just to address the possibility of rare cases that require special treatment. Texas Railroad Commission regulations on casing cementing, Texas Administrative Code Title 16 Part 1 Chapter 3.13 (a)(4) (D): "Casing shall be cemented across and above all productive zones, potential flow zones, and zones with corrosive formation fluids, as follows:... (iii) if the top of cement is determined through the performance of a cement evaluation log, across and extending 100 feet (measured depth) above the zones; ... or (v) as otherwise approved by the district director." increased Risk of Higher Equivalent Circulating Density on Highly Deviated Wells The proposed change to specify vertical feet could create additional risk in achieving zonal isolation. This is particularly pertinent for the extended reach wells drilled on the North Slope today, which are directionally drilled horizontal wells from a multi -well pad. These types of wells usually require a long geometrically complicated intermediate casing run. By increasing the cement height, there is a significant risk in breaking down a weak interval which would result in losing returns and increase the risk of not getting zonal isolation. A critical factor when cementing intermediate casing is ensuring the Equivalent Circulating Density (ECD) does not increase to a point where a weak zone can fracture, which can cause the well to lose circulation to surface during the cement job. ECD is the effective density of the circulating fluid in the wellbore, which results from the sum of the hydrostatic pressure imposed by the static fluid column and the friction pressure. Increasing the cement height to 500' TVD above hydrocarbon zones on intermediate casing increases the ECD when pumping cement and increases the risk of losing circulation during cementing. Key factors effecting ECD's include: 1) mud weight, 2) viscosity, 2) hole size and 3) pumping rate. 7 5/8" Intermediate Casing Shoe 7399' SSTVD / 14340' MD A Sand Frac Gradient: 12.0 ppg 500' MD Cement Requirement 5001 TVD Cement Requirement ECD 11.9 PPG ECD 12.5 PPG 7 5/8" Casing Shoe 7399'iSSTVD / 14340' MD Figure 2 3 R` Exceeds Frac Gradient Increase TOC to 500' TVD Actual TOC 6822' SSTVD / 12670' MD Relative TOC 500' TVD / 1678' MD sm _ SPWLA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3•6, 1970 NEW DEVELOPMENTS IN SONIC WAVE TRAIN DISPLAY AND ANALYSIS IN CASED HOLES H. D. Brown, V. E. Grijalva, and L. L. Raymer Schlumberger Surenco, S.A. Caracas, Venezuela F ABSTRACT The usefulness of acoustic information for the analysis of cementa- tion quality has been enhanced by the simultaneous recording of the full -wave display (Variable Density Log) with the first -arrival amplitude (Cement Bond Log). The optimum -spacing requirements of the two logs are somewhat different. For the Cement Bond Log a short spacing is desired in order to show more clearly the attenuation rate of the casing arrival. For the VDL a longer spacing is desired in order to show the forma- tion arrivals in well bonded intervals. To satisfy these differing requirements, a two -receiver system is being used to provide a 3 -foot spacing Cement Bond Log (CBL) and a 5 -foot -spacing Variable Density Log (VDL) simultaneously. New re- cording equipment permits the VDL and CBL signals to be recorded directly on the same film. Problems of separate film processing and depth mismatch are thus eliminated. Field examples show that this combination of the long -spacing VDL with the short -spacing CBL can provide a more thorough understanding of cementation quality. Cases of microannulus and cement channeling, as well as good and poor cement bond, can be recognized. More importantly, rules are proposed which equate CBL-VDL response with hydraulic -seal effectiveness. These have been derived from compari- sons of the CBL-VDL response with isolation tests in actual field wells. These comparisons are presented. Field examples from South America illustrate the interpretation techniques. - 1 - 4 41 3 3 SPWLA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3-6, 1970 �i SOUND ATTENUATION (db/ft) Fig. 1. Amplitude response of CBL versus sonic attenuation for different transmitter -receiver spacings in 7 -inch casing. - 3 - F SPWLA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3-6, 1970 recording of formation signal can be made without interference with the casing signal. In hard formations, the differences between casing- and formation - arrival times are small. However, the attenuation in the formation is usually low (in the order of 4 db/ft) compared to the attenuation in cemented casing (normally considerably greater than 4 db/ft). Thus, increasing the spacing enhances formation arrivals relative to casing arrivals. The longer the VDL spacing, the better the formation arrivals would be shown and recognized. A 5 -foot VDL spacing has given good F results. Even longer spacings could be used, provided the energy level at the receiver is sufficient to permit reliable measurement. Be- cause the spacing requirements for CBL and VDL logs differ, a system which permits recording a 3 -foot CBL simultaneously with a 5 -foot VDL has been used. This combination has performed successfully. THE TOOL Fig. 2 shows the basic schematic diagram of the 3 -foot CBL/5-foot VDL tool. The downhole section consists of a sonic transmitter and two receivers located respectively 3 feet and 5 feet from the trans- mitter. The transmitter emits pulses at a rate of 10 to 20 per second. The rate is selectable. The signals are sent uphole to a surface panel containing timing, control, and computation circuits. Included in this panel are some logic digital circuits which separate the 3 -foot receiver signals from the 5 -foot receiver signals. The former pass to the amplitude - measuring circuits which compute the CBL amplitude and total transit time. These are then recorded on the logging film in the standard optical truck recorder. The 5 -foot VDL signals go to a Cathode Ray Tube Unit, which is mounted on the optical recorder in the truck (Fig. 3). Inthis unit, a reference pulse, generated at the instant the transmitter is energized, triggers the horizontal sweep which moves the electron beam across the face of the cathode-ray display tube. The signal from the 5 -foot receiver, which appears a short time later, is applied to the light - intensity circuit such that the sweeping electron beam will be varied in brightness as a function of the signal amplitude. The result is an intensity -modulated display appearing on the face of the tube. This display is used as the light source for the VDL optical record. It is projected into the optical truck recorder through a system of mirrors - 5 - SPWLA ELEVENTH ANNUAL LOGGING yMPOSIUM, MAY 3.6, 1970 Fig. 3. Cathode Ray Tube Unit mounted on photographic recorder. and lenses (Fig. 2) and recorded on the logging film simultaneously and on depth with the 3 -foot CBL. A light -intensity meter monitors the amount of light sent to the film in order to give uniformly high quality recordings. It assures operation in the linear region of the film's photographic emulsion curve. This recording system permits the CBL and the VDL to be recorded on the same film. The CBL is recorded in the middle track of the film (Fig. 5), and the VDL is recorded in the right-hand track. The - 7 - SPWLA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3-6, 1970 where the attenuation is determined from Chart M-1 of Ref. 5, entered with CBL amplitude and casing size. A Bond Index of 1 indicates complete bonding. Incomplete bonding is indicated by a Bond Index less than 1. The advantage of this Bond Index approach is that the Bond Index depends on the ratio of attenuations and not on the absolute values of the attenuations. Possible errors resulting from unknown environ- mental parameters or conditions are therefore minimized. The method is similar to the normalizing of open -hole electrical logs in a clean water sand when formation factors are unknown. F If a well cemented section is not available for normalization of the log, then the maximum attenuation must be determined from Chart M-1, Ref. 5, using the estimated compressive strength of the cement and the casing thickness. Compressive strength can be estimated from the setting time and type of cement using Fig. 6 of Ref. 2. The computed Bond Index value gives an indication of the quality of cementation and whether isolation can be expected. The minimum value of Bond Index necessary for good hydraulic seal varies depending on local conditions. In practice a figure of 0.8 has given good results in South America. However, the Bond Index, by itself, is not sufficient to guarantee zone isolation. The length of the bonded interval must also be considered. Field experience indicates that the minimum bonded interval needed for effective zone isolation depends on the casing size. Fig. 4 was derived from observations and isolation tests in field wells. The figure shows, versus casing size, the interval of Bond Index of 0.8 required in order to insure zone isolation. The larger the casing, the more bonded interval required. The results can be physically visualized by noting that the Bond Index gives an indication of the percentage of the casing circumference bonded. Thus for equal percentages of bonding, the actual size of the uncemented casing "channel" is larger for a large diameter casing than for a small casing, and fluid communication is likely to be greater. Although Fig. 4 applies only for a Bond Index of 0.8, it suggests that hydraulic seal could exist for Bond Index values slightly less than 0.8 provided the continuous bonded interval is greater than that given by the plot. Conversely, a bonded interval slightly less than that in- dicated by Fig. 4 is probably sufficient if Bond Index is greater than 0. 8. Or, for a given bonded interval, the Bond Index needed for zone isolation depends on casing size. A larger casing requires a higher Bond Index. SPWLA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3-6, 1970 TABLE I SUMMARY OF COMPARISON OF BOND INDEX AND COMMUNICATION TESTS WELL Caning Sfze (inches) Lowest CBL Amplitude on Log imilli,olts) Amplitude Needed for BI = 0.8 (millivolts) Log Footage with BI 0.8 (feet) Length of Interval Tested for Communication (feet) Communication Yea/No Remarks 1 2 S 4 6 6 7 8 9 5-112 5-112 7 7 7 7 9318 9-518 8-518 1.5 3 1 1 1 1.5 1.5 1.5 3.3 2 5 4 4 2.5 2.5 3 3 3 12 15 54 16 35 70 79 116 80 7.5 8 3 3 26 20 88 105 70-1] No No Yee Yee No No No No No B09 palg 100 peig Possible mfcro- annulus 30 I1 ly 13 14 IS 18 9-518 9-518 8-518 9 -sig 9-510 B -5/B 8-516 1 5 2 2 1 2 2 2 3 4 q 4 4 4 q 45 44 92 26 40 22 58 10 ly 50 26 40 15 44 Yee Yee No No No No No 100 peig 500 petit annulus, in which the interpretation of the interval tested was not strictly in accord with the use of Fig. 4. The VDL is strongly recommended as a companion log to the CBL to confirm the CBL Bond Index interpretation or to recognize unusual cementation conditions such as microannulus. The following discusses how the VDL is used to recognize various conditions of bonding between pipe, cement and formation. Uncemented Pipe In free pipe most of the acoustic energy will travel through the casing to the receiver, with very little coupling to the formation. In this case the casing arrivals will be very strong with weak formation arrivals or none at all. Both CBL and VDL signals will agree in showing large casing signals with no change versus depth in amplitude nor transit time except at the casing collars. CBL and VDL characteristics of free pipe are., - Large casing arrivals - Very weak or no formation arrivals 11 F SPWLA ELEVENTH ANNUAL LOGGING JYMPOSIUM, MAY 3.6, 1970 The CBL and VDL are thus presented, automatically depth matched, on the same film. Between the transmitter firing and the first pipe arrival, the signal level is zero so that a gray interval was recorded on the VDL. The casing signals are shown as black and white lines which are parallel due to the uniform pipe transit -time. The high contrast of the dark and light lines shows the signals are large. This confirms the interpretation of the high -amplitude CBL as free pipe. No forma- tion arrival is evident. Occasionally, the casing is eccentered in the borehole and resting firmly against the formation. This permits direct acoustical coupling with the formation although no cement is present. In this case, both casing and formation arrivals are present. The result is high - amplitude CBL readings (although not quite as high, perhaps, as in completely free pipe) showing free pipe and a VDL showing both strong casing arrivals and formation arrivals. Fig. 6 illustrates such a case. Fig. 6. Casing eccentered in borehole and making contact with forma- tion. VOL log shows both casing and formation arrivals. - 13 - SPWLA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3.6, 1970 Fig. 7. CBL/VDL in a well bonded interval. CBL indicates good bond index. VOL indicates weak casing arrivals and strong forma- tion arrivals. Mud arrivals can also be seen. Good Casing Bond but Poor Formation Acoustical Coupling In this case very little acoustic energy will remain in the casing and the cement will attenuate the transmitted energy. Moreover, because of the lack of good acoustical coupling to the formation, the energy trans- mitted into and received from the formation will be weak. The characteristics of a good bond to casing but poor acoustical coupling to formation are; - Weak casing arrivals - Weak or no formation arrivals - 15 - SPWLA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3-6, 1970 Eccentralization of the tool in casing or of the casing in the borehole may also produce reduced first -arrival amplitudes plus lower and distorted later arrivals because of the destructive interference from signals traveling through different length paths and arriving out of phase at the receiver. The eccentered tool can be recognized by a wiggly casing arrival or by a subtle decrease in the casing arrival time as seen on the total transit time curve or on the VDL. In some cases of very thin cement sheaths, a moderately large casing signal may exist even through good casing bond exists. This occurs when the cement sheath is less than 3/4 -inch thick. In this case, the thin cement sheath does not attenuate the casing arrival F greatly. Some formation acoustical coupling may also exist. Thus, a weak -to -moderate formation arrival, especially the Rayleigh wave, may appear. Thin cement sheaths may occur when thick mud cakes exist at time of cementing. Microannulus or Channeling It is possible to have a condition where a small annulus gap is formed between the casing and cement in a well cemented but unbonded casing. This can be caused by several factors. For example, casing expansion through application of pressure while the cement is setting, mill varnish on new pipe, or grease on the casing. Microannulus due to pressurization is more apt to occur opposite washed-out hole than opposite competent formations. Nevertheless, the cement -to -casing seal may be sufficient to prevent fluid movement even through the casing and cement are not bonded, but separated by a small gap or "microannulus . Since the pipe is not effectively coupled to the cement, considerable acoustic energy remains in the casing so that moderately large amounts of energy pass through the casing. If the cement -to -formation acoustical coupling is good, some energy is transmitted across the microannulus and into the for- mation. The result is that casing arrivals will be moderately high while at the same time a strong formation signal is evident. The CBL log and its Bond Index in this case will be too pessimistic, as good hydraulic seal exists in spite of the moderately high casing signal amplitude. - 17 - SPWLA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3-6, 1970 Fig. 9. CBLIVDL response to microannulus run with and without pressure in the casing. When casing is pressurized casing arrivals are weakened and formation arrivals strengthened. The log of Fig. 10 showed strong formation and casing signals over the entire cemented interval. Since these characteristics existed over such a long section, the condition was interpreted as microannulus. Accordingly, no squeeze cementing was performed. The well was shot for production with no communication problems encountered. Note the simultaneous Neutron (reversed recording) and casing collar log. Fast Formation Arrivals In well consolidated formations, high velocity formation waves sometimes arrive at the receiver concurrent with or sooner than casing signals. In this case, the CBL shows the formation compressional - arrival amplitude and not the casing -arrival amplitude. Thus, in terms of cement quality, the CBL could be misinterpreted if the situation is not recognized. - 19 - SPWLA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3-6, 1970 resulting VDL can provide information on the characteristics of the formation. When the sonic transducer is fired, the emitted energy travels in several modes and through several paths. The received signal is the sum of the individual wave components. Fig. 11 shows an idealized picture of the sonic waveform resulting from a single transmitter firing. The Stoneley wave arrival is seldom recognized in standard VDL logs because it comes late in time (often after the end of the re- cording) and it is marked by interference from other arrivals. Under favorable conditions, compressional, Rayleigh (shear), and mud wave arrivals can be recognized from the VDL log. Estimations of velocities and relative amplitudes can be made. The velocity of the Rayleigh wave is slightly more than one-half that of the compressional wave. Thus, the time required for it to travel from the transmitter to the receiver is about 1.8 times that of the compressional arrival. The Rayleigh arrival can be distinguished from the compressional arrival, if it is sufficiently strong, by its greater rate of travel -time change (steeper slope on the VDL recording) with respect to depth. It also may exhibit a stronger "black -white" contrast on the VDL because its amplitude is greater than the later compressional arrivals. M COMPRESSIONAL RAYLE IGH MUD STONELEY Z ARRIVALS ARRIVALS ARRIVALS ARRIVALS a Fig. 11. Sonic waveform, idealized. - 21 SPWLA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3-6, 1970 In addition to these primary wave arrivals, there are many secon- dary wave arrivals added into the resulting waveform. These secondary arrivals are caused by the following: 1. Reflections and conversions at bed boundaries. 2. Borehole reverberations. 3. Reflections and conversions at borehole size irregulari- ties. 4. Casing collar reflections. It is these secondary waves which produce the characteristic chevron patterns noted on the VDL. The chevron slope is a function of the incident and reflected or converted wave velocities. CONCLUSIONS Spacing requirements for optimum CBL and VDL recording differ. The CBL requires a short spacing; the VDL requires a long spacing. A two -receiver system (3 -foot for CBL and 5 -foot for VDL) overcomes this limitation. Improved recording techniques produce a simultaneous single film log of better quality, thereby facilitating interpretation reliability. Hydraulic seal effectiveness appears to be a function of Bond Index, bonded interval and casing size. For a Bond Index of 0.8, the minimum interval of bonding required for hydraulic seal has been determined empirically for various casing sizes. This work is supported by zone - isolation tests in field wells. The VDL is a valuable adjunct to the CBL. 1. Its strong casing arrivals confirm the CBL in free pipe. 2. Good bond quality is confirmed when weak casing and strong formation arrivals are present. 3. The VDL may help distinguish between microannulus and channeling. In cases of microannuli, hydraulic seal can exist even though the CBL indicates poor bonding. 4. Very fast formation arrivals can be distinguished from casing arrivals, thus permitting a correct interpretation of the CBL. 5. If the mud contains gas, the VDL can indicate the readings to be unreliable (whole wave train attenuated) whereas the CBL might suggest good bonding. - 23 - HARRY BROWN SPVILA ELEVENTH ANNUAL LOGGING SYMPOSIUM, MAY 3.6, 1970 VICTOR GRIJALVA ABOUT THE AUTHORS LEWIS RAYMER HARRY BROWN is North Region Sales Manager with Schlumberger Surenco, based in Caracas, Venezuela. He received his B.S. degree in electrical engineering from Louisiana Polytechnical Institute in 1948. Following his graduation he was employed by Schlumberger as a field engineer in South Louisiana. He has spent the past twenty years in South America, serving as log analyst, district and division manager, and sales manager. He is the author of several papers and is a member of SPWLA, AIME, and AVGMP. VICTOR GRIJALVA is Assistant Region Manager for Schlumberger, located in Buenos Aires, Argentina. A native of Ecuador, he received his B.S. in electrical engineering from Carnegie Institute of Technology in 1962, and his M.S. in E.E. from the University of Pennsylvania in 1963. From May 1963 to June 1964 he worked for General Electric Co. in Philadelphia, Pa., as a Systems Design Engineer. He joined Schlumberger Well Services in 1964 as a Senior Development Engineer, and in 1966 he was transferred to Schlumberger Surenco as an Operations Staff Engineer -Electrical Services. LEWIS RAYMER is Manager, Interpretation/ Sales for Schlumberger Surenco, South America, in Caracas, Venezuela. He received his B.S. in electrical engineering from Rice University, and is a graduate of the Harvard Graduate School of Business. He joined Schlumberger in 1955 where he worked as a field engineer, specialist engineer on the wireline tester, a staff specialist in the company's Houston, Texas Interpretation Section, and a research engineer at the Schlumberger -Doll Research Center in Ridgefield, Connecticut. - 25 - NAME STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Docket Number: R-16-001 Public Workshop Regulations November 1, 2016 AFFILIATION nhnA< Testify (yes or no) f; wPwl) Ff �tA„ L- CAyiS wY.,t "v_ n 1( 11 /Nc� C -el Jnr V 10l� gc��Ce�sr Nfl !-A V',tA �0 J�LA COOL" C o P Y <<,Oar / Y .I �oh l�01 GOA/lP _ Vales m 42 c -r r- XV\ R k JL R�p j k), NAME AFFILIATION Testify (yes or no) (A C ye s Continuation Page NAME AFFILIATION TESTIFY (Please Print) (Yes or No) ��n C.i.21 %c f Colombi From: Wallace, Chris D (DOA) Sent: Thursday, October 27, 2016 8:45 AM To: Colombie, Jody J (DOA) Subject: FW: Second Oral Hearing Regarding Proposed Regulation Changes in AAC Title 20, Chapter 25 Thanks and Regards, Chris Wallace, Sr. Petroleum Engineer, Alaska Oil and Gas Conservation Commission, 333 West 71h Avenue, Anchorage, AK 99501, (907) 793- 1250 (phone), (907) 276-7542 (fax), chris.wallacePalaska ¢ov CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It mai contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Chris Wallace at 907-793- 1250 or chris.wallace@alaska.gov. From: Davies, Stephen F (DOA) Sent: Wednesday, October 19, 2016 9:45 AM To: Ethan Schutt <ESchutt@ciri.com>; JBrune@ciri.com Cc: Colombie, Jody J (DOA) <jody.colombie@alaska.gov>; Wallace, Chris D (DOA) <chris.wallace@alaska.gov> Subject: Second Oral Hearing Regarding Proposed Regulation Changes in AAC Title 20, Chapter 25 Dear Mr. Schutt and Mr. Brune, The Alaska Oil and Gas Conservation Commission (AOGCC) is holding a second oral hearing to permit interested persons to provide more input to AOGCC staff regarding the proposed regulation changes introduced at the AOGCC's Public Hearing held September 27, 2016. This second oral hearing is scheduled for November 1, 2016 at 9:00 a.m. at the AOGCC, 333 West 7th Avenue, Anchorage Alaska 99501. The public notice for this hearing is available on the AOGCC website at httl2://doa alaska e0v/oec/hear/Supplemental%20Notice%20of91620Hearine odf, and the pending proposed changes to the regulations are available at http://doa.alaska-gov/ogc/hear/AOGCC%2OProl2osed%2OReRulations%2007 20 16 pdf. If Cook Inlet Region, Inc. (CIRI) has concerns regarding drilling units and/or spacing distances between wells, these topics will be discussed at the hearing. After the hearing, the AOGCC will notice another hearing, adopt these or other provisions dealing with the same subject, or decide to take no action on them. The language of any final regulation may be different from the proposed regulation. Please comment during the time allowed if CIRI's interests could be affected. Regards, Steve Davies Senior Petroleum Geologist Alaska Oil and Gas Conservation Commission (AOGCC) CONFIDENTIALITY NOTICE. This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this a-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Steve Davies at 907-793-1224 or steve.davies(@alaska.gov. Form: 02-901 Revised: 9/29/2016 STATE OF ALASKA ADVERTISING ADVERTISING ORDER NUMBER NOTICE TO PUBLISHER AFmAVIOFPBLCAT WmiCOPYRTISING BRORDER UONpTPACHED OF ADVERrNMEhO. Ao-17-007 FROM: AGENCY CONTACT: Jed Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A. 0. AGENCY PHONE: 333 West 7th Avenue 09/29/16 (907)279-1433 Anchorage, Alaska 99501 DAT ES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907)276-7542 TO PUBLISHER: Alaska Dispatch News SPECIAL INSTRUCTIONS: PO Box 149001 Anchorage, Alaska 99514 TYPE OF ADVERTISEMENT: '✓ LEGAL DISPLAY i CLASSIFIED ... OTHER (Specify below( DESCRIPTION PRICE R-16-001 Initials of who pre ared AO: Alaska Non -Taxable 92-600185 &t7BMIT B'NOICBSRQWING:ADYFE7'F4NlG Department of Administration '.'.pxpERNIF1EpARFIUAV[i' UJ<';:': Division of AOGCC PUBcteATlaN WUTIC ATTncHED coPYO$: ADVERTISMBNT... 333 West 7th Avenue Total of REF Type Number Anchora e, Alaska 995111 Pae I of I All Pa es $ I PVN ADN893I1 Amount Data Continents 2 AO AO -17-007 3 4 FIN AMOUNT SY Appr Unit 11 PGM 11 LCR Object FY DIST LIQ 1 17 021147717 3046 }7 2 3 4 5 c ain 1 r Name- PurchasingAuthority's ori ty's Sigimture Telephone Number 1, A O M an racmmag agency name must appear on all invoices and documents relating to this purchase. 2. T e state is registered for tae free transactions under Chapter resse, 32, IRS code. Registration number 92-73-0006 K. hams are for the exclusive use of the state and not for D.ISTRISiITIOPI Divtston F�scaVOngtnal el© CBptes Publisher (fazed);:DruTston Fitscal Recervrrig Form: 02-901 Revised: 9/29/2016 SUPPLEMENTAL NOTICE OF PROPOSED CHANGES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission (AOGCC) is proposing to adopt regulation changes in Title 20, Chapter 25 of the Alaska Administrative Code, dealing with Oil and Gas regulations. The proposed changes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, improve understanding, and streamline the implementation of the regulations. This is a SUPPLEMENTAL NOTICE adding to the NOTICE OF PROPOSED CHANGES that was issued on July 20, 2016, concerning these proposed regulations revisions contained in the Department of Law file number JU2016200655; this SUPPLEMENTAL NOTICE incorporates by reference information in the July 20, 2016 notice of proposed regulations. This SUPPLEMENTAL NOTICE is being issued because the AOGCC has decided to hold a second oral hearing on those proposed provisions. The AOGCC held its first public hearing on these proposed regulation changes on September 27, 2016. As a result of concerns raised during the September 27, 2016 hearing, a second oral hearing is scheduled for November 1, 2016 at 9:00 a.m. at the AOGCC, 333 West 7'h Avenue, Anchorage Alaska 99501. The purpose of the hearing is to permit interested persons to provide more input to AOGCC staff regarding the regulatory amendments introduced at the AOGCC's Public Hearing held September 27, 2016. The pending proposed changes to the regulations are available on the AOGCC website http://doa.alaska.gov/oLyc/. Written comments will not be taken at the second oral hearing. The hearing might be extended to accommodate those present before 9:30 a.m. who did not have an opportunity to comment. If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombie at (907) 793-1221 no later than October 30, 2016 to ensure that any necessary accommodation can be provided. For a copy of the proposed regulation changes, contact Jody Colombie at (907) 793-1221 or go to www.aogcc.alaska.gov. A copy of material proposed for adoption by reference is available on the Alaska Online Public Notice System or though the electronic link to the complete text. A copy of material proposed for adoption by reference may be viewed at the agency's office at 333 West Seventh Avenue, Anchorage, AK 99501. After the November 1, 2016 oral hearing, the Alaska Oil and Gas Conservation Commission will notice another hearing, adopt these or other provisions dealing with the same subject, or decide to take no action on them. The language of any final regulation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authority: AS 31.05.030 and AS 31.05.090 Statutes Being Implemented, Interpreted, or Made Specific: AS 31.05.090 Fiscal Information: The proposed regulation changes are not expected to require an increased appropriation. DATE: September 29, 2016 //signature on file// Cathy P. Foerster, Chair, Commissioner NOTICE OF PROPOSED SUPPLEMENTALCHANGES IN THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission (AOGCC) isDroposing to adopt regulation changes in Title 20 Chapter 25 of tnie Alaska Administrative Code, dealing with Oil and Gas regulations. The proposed changes are in response toAOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, Improve Understanding, and streamline the implementation of the regulations. NTAL NOTICE addingg CHANGES that was s IS a Essed on July 20, 2016, cto oncerning thesE OF PROPOSED proposed reeggulations revisions contained In the Department of .law file number JU2016200655; this SUPPLEMENTAL NOTICE incorporates by reference Information in the July 20, 2016 notice of roposed regulations. This SUPPLEMENTAL NOTICE Is being issued because the AOGCC has decided to hold a Second oral hearing on hose proposed provisions. If you are a person with adisability who needs a special accommodation in order to participate in this process please contact Jody Colombia at (907) 793-1221 no later than October 30, 2016 to ensure that any necessary accommodation can be provided. For a copy of the proposed regulation changes, contact Jody Colombia at (907) 793-1221 or go to www.aogcc.alaska.gov. A copy of material proposed for adoption by reference is available on he COX Online Public Notice System or though the electronic link to the complete text. A copy of material proposed for adoption by reference may be viewed at the agency's Office at 333 West Seventh Avenue, Anchorage, AK 99501. After the November 1, 2016 oral hearing, the Alaska Oil and Gas Conservation Commission will notice anotFler hearing, adopt these or other provisions dealing with he same subject( or tlecide to take no action on them. The language of any final reg u ation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authorl : AS 31.05.030 and AS 31.05.090 Statutes Being Implemented, Interpreted, or Made Specific: as 31.05.090 "Iscal Information: The proposed regulation changes are not )Kpected to require an increased appropriation. )ATE: September 29, 2016 Cathy P. Foerster 'ublished: September 30, 2016 Rep. Mike Chenault Rep. Matt Claman Rep. Jim Colver 145 Main St Loop, Ste 620 716 W 4th Ave, Ste 312 600 E Railroad Ave Kenai, AK 99611 Anchorage, AK 99501 Wasilla, AK 99654 Rep. Harriet Drummond Rep. Bryce Edgmon Rep. Neal Foster 716 W 4th Ave, Ste 100 716 W 4th Ave, Ste 612 1204 th Street, RM 3 Anchorage, AK 99501 Anchorage, AK 99501 Juneau, AK 99801 Rep. Les Gara Rep. Lynn Gattis Rep. David Guttenberg 716 W 4th Ave, Ste 100 600 E Railroad Ave, Ste 1 1292 Sadler Way, Ste 304 Anchorage, AK 99501 Wasilla, AK 99654 Fairbanks, AK 99701 Rep. Mike Hawker Rep. Bob Herron Rep. Shelley Hughes 1204 th Ave, RM 3 1204 th Street, RM 3 600 E Railroad Ave, Ste 1 Juneau, AK 99801 Juneau, AK 99801 Wasilla, AK 99654 Rep. Craig Johnson Rep. Andrew Josephson Rep. Scott Kawasaki 716 W 4th Ave, Ste 300 716 W 4th Ave, Ste 100 1292 Sadler Way, Ste 308 Anchorage, AK 99501 Anchorage, AK 99501 Fairbanks, AK 99701 Rep. Wes Keller Rep. Sam Kito Rep. Jonathan Kreiss-Tomkins 600 E Railroad Ave, Ste 1 1204 Ih Ave, RM 3 201 Kaitlin ST, Ste 103 Wasilla, AK 99654 Juneau, AK 99801 Sitka, AK 99835 Rep. Gabrielle LeDoux Rep. Bob Lynn Rep. Charisse Millett 716 W 4th Ave, Ste 100 716 W 4th Ave, Ste 100 716 W 4th Ave, Ste 100 Anchorage, AK 99501 Anchorage, AK 99501 Anchorage, AK 99501 Rep. Cathy Munoz Rep. Mark Neuman Rep. Benjamin Nageak 1204 th Street, RM 3 600 E Railroad Ave, Ste 1 120 4th Ave. Juneau, AK 99801 Wasilla, AK 99654 Juneau, AK 99801 Rep. Kurt Olson Rep. Dan Ortiz Rep. Lance Pruitt 145 Main St. Loop, Ste 217 1204 Ih Ave, RM 3 716 W 4th Ave, Ste 100 Kenai, AK 99611 Juneau, AK 99801 Anchorage, AK 99501 Rep. Lora Reinbold Rep. Dan Saddler Rep. Paul Seaton 12641 Old Glenn Hwy, Ste 201 12641 Old Glenn Hwy, Ste 201 270 W Pioneer Ave, Ste B Eagle River, AK 99577 Eagle River, AK 99577 Homer, AK 99603 Rep. Ivy Spohnholz Rep. Louise Stutes Rep. Dave Talerico 716 West 4th Ave 305 Center Ave, Ste 1 1292 Sadler Way, Ste 308 Anchorage, AK 99501 Kodiak, AK 99615 Fairbanks, AK 99701 Rep. Geran Tarr Rep. Steve Thompson Rep. Cathy Tilton 716 W 4th Ave, Ste 100 1292 Sadler Way, Ste 308 600 E Railroad Ave, Ste 1 Anchorage, AK 99501 Fairbanks, AK 99701 Wasilla, AK 99654 Rep. Chris Tuck Rep. Liz Vazquez Rep. Tammie Wilson 716 W 4th Ave, Ste 100 716 W 4th Ave, Ste 313 301 Santa Claus Lane, Ste 3-13 Anchorage, AK 99501 Anchorage, AK 99501 North Pole, AK 99705 Rep. Adam Wool Sen. Click Bishop Sen. John Coghill 1292 Sadler Way, Ste 308 1292 Sadler Way, Ste 308 1292 Sadler Way, Ste 340 Fairbanks, AK 99701 Fairbanks, AK 99701 Fairbanks, AK 99701 Sen. Mia Costello Sen. Mike Dunleavy Sen. Dennis Egan 716 W 4th Ave Ste 100 600 East Railroad Ave, Ste 1 120 4th Street, RM 3 Anchorage, AK 99501 Wasilla, AK 99654 Juneau, AK 99801 Sen. Johnny Ellis Sen. Berta Gardner Sen. Cathy Giessel 716 W 4th Ave, Ste 100 716 W 4th Ave, Ste 100 716 W 4th Ave, Ste 100 Anchorage, AK 99501 Anchorage, AK 99501 Anchorage, AK 99501 Sen. Lyman Hoffman Sen. Charlie Huggins Sen. Pete Kelly 120 4th Street, RM 3 1204 th Street, RM 3 1292 Sadler Way, Ste 308 Juneau, AK 99801 Juneau, AK 99801 Fairbanks, AK 99701 Sen. Anna MacKinnon Sen. Lesil McGuire Sen. Kevin Meyer 12641 Glenn Hwy, Ste 201 716 W 4th Street, Ste 515 716 W 4th Ave, Ste 100 Eagle River, AK 99577 Anchorage, AK 99501 Anchorage, AK 99501 Sen. Peter Micciche Sen. Donald Olson Sen. Bert Stedman 145 Main Street Loop, Ste 226 716 W 4th Ave, Ste 100 1204 th Street, RM 3 Kenai, AK 99611 Anchorage, AK 99501 Juneau, AK 99801 Sen. Gary Stevens Sen. Bill Stoltze Sen. Bill Wielechowski 1204 th Street, RM 3 600 E Railroad Ave, Ste 201 716 W. 4th Ave, Ste 409 Juneau, AK 99801 Wasilla, AK 99654 Anchorage, AK 99501 Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Thursday, September 29, 2016 3:51 PM To: Varni, Pam (LAA); Resregs@akleg.gov; Fisher, Sheldon A (DOA); Weaver, Steven C (LAW); Pollard, Susan R (LAW); Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Hill, Johnnie W (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity; AKDCWellIntegrityCoordinator, Alan Bailey; Alex Demarban; Alexander Bridge; Allen Huckabay; Andrew VanderJack; Ann Danielson; Anna Ralf, Barbara F Fullmer, bbritch; bbohrer@ap.org; Bill Bredar; Bob Shavelson; Brian Havelock; Bruce Webb; Caleb Conrad; Candi English; Cocklan-Vendl, Mary E; Colleen Miller; Crandall, Krissell; D Lawrence; Dale Hoffman; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; David Tetta; ddonkel@cfl.rr.com; DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Evan Osborne; Evans, John R (LDZX); Gary Oskolkosf; George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Gregg Nady; Gretchen Stoddard; gspfoff; Hyun, James 1 (DNR); Jacki Rose; Jdarlington (arlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jerry McCutcheon; Jim Watt; Jim White; Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Jon Goltz; Juanita Lovett; Judy Stanek; Julie Little; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Kruse, Rebecca D (DNR); Gregersen, Laura S (DNR); Leslie Smith; Louisiana Cutler, Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Kremer, Marguerite C (DNR); Mealear Tauch; Michael Bill; Michael Calkins; Michael Moora; MJ Loveland; mkm7200; Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Delbridge, Rena E (LAS); Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly, Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Skutca, Joseph E (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R; Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Ted Kramer, Davidson, Temple (DNR); Teresa Imm; Thor Cutler, Tim Jones; Tim Mayers; Todd Durkee; trmjr1; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Assmann, Aaron A; Bajsarowicz, Caroline 1; Brian Gross; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Catie Quinn; Don Shaw; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Heusser, Heather A (DNR); Holly Pearen; Jamie M. Long; Jason Bergerson; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); Wayne Wooster; William Van Dyke; David Johnson; Elizabeth To: Rensch; Joseph Flack; Tiffany Stebbins; Bishop, Click (LAA); Chenault, Mike (LAA); Claman, Matt (LAA); Coghill, John (LAA); Colver, Jim (LAA); Costello, Mia C (LAA); Drummond, Harriet A (LAA); Dunleavy, Mike (LAA); Edgmon, Bryce E (LAA); Egan, Dennis W (LAA); Ellis, Johnny (LAA); Foster, Neal W (LAA); Gara, Les (LAA); Gardner, Berta (LAA); Gattis, Lynn A (LAA); Giessel, Cathy (LAA); Guttenberg, David (LAA); Hawker, Mike (LAA); Herron, Bob (LAA); Hoffman, Lyman F (LAA); Huggins, Charlie (LAA); Hughes, Shelley (LAA); Johnson, Craig W (LAA); Josephson, Andrew L (LAA); Kawasaki, Scott Jw (LAA); Keller, Wes (LAA); Kelly, Pete (LAA); Kito, Sam (LAA); Kreiss-Tomkins, Jonathan S (LAA); Ledoux, Gabrielle R (LAA); Lynn, Bob (LAA); MacKinnon, Anna (LAA); McGuire, Lesil L (LAA); Meyer, Kevin G (LAA); Micciche, Peter A (LAA); Millett, Charisse E D (LAA); Munoz, Cathy N (LAA); Nageak, Benjamin P (LAA); Neuman, Mark A (LAA); Olson, Donny (LAA); Olson, Kurt E (LAA); Ortiz, Dan (LAA); Pruitt, Lance (LAA); Reinhold, Lora (LAA); Saddler, Dan (LAA); Seaton, Paul (LAA); Spohnholz, Ivy A (LAA); Stedman, Bert K (LAA); Stevens, Gary L (LAA); Stoltze, Bill (LAA); Stutes, Louise B (LAA); Talerico, David M (LAA); Tarr, Geran L (LAA); Thompson, Steve (LAA); Tilton, Cathy (LAA); Tuck, Christopher (LAA); Vazquez, Liz (LAA); Wielechowski, Bill (LAA); Wilson, Tammie (LAA); Wool, Adam L (LAA) Subject: AOGCC Proposed Regulation Changes Attachments: Supplemental Notice of Hearing.pdf; AOGCC Proposed Regulations 07-20-16.pdf This is a SUPPLEMENTAL NOTICE adding to the NOTICE OF PROPOSED CHANGES that was issued on July 20, 2016, concerning these proposed regulations revisions contained in the Department of Law file number JU2016200655; this SUPPLEMENTAL NOTICE incorporates by reference information in the July 20, 2016 notice of proposed regulations. This SUPPLEMENTAL NOTICE is being issued because the AOGCC has decided to hold a second oral hearing on those proposed provisions. Specifically, AOGCC is making the modifications described below to the following regulations: 1) 20 AAC 25.022: adding a 30 day notice requirement for any change in the contact information for the information contained in the Notice of Ownership; 2) 20 AAC 25.030: clarifying the required actions when there exist indications of improper or inadequate cementing; clarifying the casing and cementing information to be provided for hydraulic fracturing operations; clarifying the requirements for casing pressure tests when blowout prevention equipment is to be used; allowing for approval of extensions of deadlines, variances and waivers; 3) 20 AAC 25.055: to require spacing exceptions based on proximity to property lines where the owner and the landowner are not the same on both sides of the line and clarifying the notification requirements for an application for a spacing exception; 4) 20 AAC 25.065(c)(1): clarifying the requirements for hydrogen sulfide detection systems; 5) 20 AAC 25.071: clarifying the requirement for providing logging and geologic data, including the forms in which such information may be provided; 6) 20 AAC 25.110(a): adding a requirement that an operator demonstrate it has valid leases for all parts of any well for which suspended status is sought; 7) 20 AAC 25.110(h): adding a requirement that an application to renew an existing "suspended" status for a well include all leases the wellbore traverses and the expiration date for each; 8) 20 AAC 265(d)(4): adding an exemption from the well safety valve system requirements for onshore wells with a velocity string; 9) 20 AAC 25.270: adding a requirement that reservoir sampling and analyses be conducted in accordance with good laboratory analysis practices and setting an annual due date for an operator's Annual Reservoir Properties Report; 10) 20 AAC 25.280: providing for expiration of sundry approvals of workovers if the workover operations are not commenced within 12 months of the approval; 11) 20 AAC 25.537(a)(3): clarifying that all reports and information required to be filed for service and production wells are public information; 12) 20 AAC 25.537(d): clarifying that all reports and information required to be filed for exploratory and stratigraphic test wells are entitled to confidentiality for approximately two years after the filing period; 13) 20 AAC 25.556: providing for automatic expiration of orders absent reauthorization; 14) 20 AAC 25.990: adding a definition of the phrase "velocity survey." Jody J. Colombie AOGCC SyeciaCAssistant Alaska OiCandGas Conservation Commission 333 west 7`fi Avenue Anchorage, Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC(, State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv.colombie@alaska.ggv. Jack Hakkila Bernie Karl P.O. Box 190083 K&K Recycling Inc. Gordon Severson P.O. Box 58055 3201 Westmar Cir. Anchorage, AK 99519 Fairbanks, AK 99711 Anchorage, AK 99508-4336 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Colombie, Jody J (DOA) From: Adam Peitz <apeltz@edf.org> Sent: Friday, September 30, 2016 6:02 AM To: Colombie, Jody 1 (DOA) Subject: RE: Chapter 25 rulemaking comments Ms. Colombie, I saw the notice for a supplementary hearing on 11/1 to address this rulemaking. Has AOGCC made any changes to its proposed rule language as a result of comments already submitted? Or is that all to be settled at the 11/1 hearing? Thanks, Adam Peitz From: Adam Peitz Sent: Monday, September 26, 2016 5:59 PM To: 'jody.colombie@alaska.gov'<iodv.colombie@alaska.eov> Cc: Foerster, Catherine P (DOA) (cathy.foerster@alaska.eov) <cathv.foerster@alaska.Rov> Subject: Chapter 25 rulemaking comments Dear Ms. Colombie, Please find attached the Environmental Defense Fund's comments on the AOGCC's Chapter 25 rulemaking. Best, Adam Peitz Attorney, Climate and Energy Program Environmental Defense Fund 257 Park Ave South, 17" FI New York, NY 10010 T 212 616 1212 C 917 903 3482 F 212 254 7408 aoeltz(&edf.org This e-mail and any attachments may contain confidential and privileged information. If you are not the intended recipient, please notify the sender immediately by return e-mail, delete this e-mail and destroy any copies. Any dissemination or use of this information by a person other than the intended recipient is unauthorized and may be illegal. STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBMIT NVOICE SHOWING ADVERTISNG ORDERNO.,CERT@'IED AFFHIAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERT6MENT. ADVERTISING ORDER NUNOSR AO-17-006 FROM: Alaska Oil and Gas Conservation Commission AGENCY CONTACT: Jody Colombie/Samantha Carlisle DATE OF A.O. 09/28/16 AGENCY PHONE: (907) 279-1433 333 West 7th Avenue Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907)276-7542 TO PUBLISHER: Alaska Dispatch News SPECIAL INSTRUCTIONS: PO Box 149001 Anchorage, Alaska 99514 TYPE OF ADVERTISEMENT: V LEGAL DISPLAY CLASSIFIED OTHER (Specify below) DESCRIPTION PRICE 1t-16-1101 Initials of who prepared AO: Alaska Non -Taxable 92-600185 BUBMIT 1Nv01GE'sHDWING_AUY68TI§ir[6: -ORDER NO,;CER1P1EDAFF?DAYfI'QF;:': PDBLICnrtory wlTR ATritciiso corXoE: 'ADVERTISMpN7:T0 is :.>: .... ":-...: Department of Administration Division of AOGCC 333 West 7th Avenue Anchorage, Alaska 99501 Pace I of 1 Total of All Paces S - REF Type Number Amount Date Com meats I PVN ADN89311 2 AO AO.17-006 3 4 FIN AMOUNT SY Appr Unit PGM LGR Object FY DIST LIQ I 17 021147717 3046 17 2 3 4 ame: e: Purchasing Authority's Signature Telephone Number r agency name must appear on all inoices and documents relating to this purchaseered for tax free transactions under Chapter 32, IRS code. Registration number 9273-0006 K. Items are for the exclusive use of the state and not for M Dwlslon Fisral/Onglnal::AO ':':Copies ... ..,..., .., Yubpsher (fated), Dlvision'Fiscat, Receiving Form: 02-901 Revised: 9/28/2016 Notice of Public Hearing STATE OF ALASKA ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: R-16-001 A Public Workshop will be held November 1, 2016 at 9:00 a.m. at the Alaska Oil and Gas Conservation Commission (AOGCC), 333 West 7`s Avenue, Anchorage Alaska 99501. The purpose of the workshop is to permit interested parties to provide input to AOGCC staff regarding the regulatory amendments introduced at the AOGCC's Public Hearing held September 27, 2016. The pending proposed changes to the regulations are available on the AOGCC website httv://doa.alaska. ovg /ogc/. If, because of a disability, special accommodations may be needed to comment or attend the hearing, contact the AOGCC at (907) 279-1433, no later than October 15, 2016. Cathy . Foerster Com issioner 270227 0001393656 $84.68 STATE OF ALASKA ECEIVED OCT 062015 AFFIDAVIT OF PUBLICATION ' CGCC THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on September 30, 2016 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed «« Subscribed and sworn to before me this 30th day of Se t ber, 2016 ^ ' (/Y v Notary P is in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES a3 9 Pu Notice Of blic ASKA Hoehn$ STATE OF AL ALASKA OIL AND GAS CONSERVATION COMMISSION Re: Docket Number: R-16-001 are no //signature on file// Cathy P. Foerster Commissioner 1 I Published: Seotember 30, 2016 Notary Public BRITNEY L. TlgW,1FS0N State of Alaska r:"y Commission Expires Feb 23, 2019 Jack Hakkila Bernie Karl Gordon Severson P.O. Box 190083 K&K Recycling Inc. 3201 Westmar Cir. Anchorage, AK 99519 P.O. Box 58055 Anchorage, AK 99508-4336 Fairbanks, AK 99711 Penny Vadla 399 W. Riverview Ave. Soldotna, AK 99669-7714 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 George Vaught, Jr. P.O. Box 13557 Denver, CO 80201-3557 Darwin Waldsmith P.O. Box 39309 Ninilchik, AK 99639 Colombie, Jody J (DOA) From: Colombie, Jody 1 (DOA) Sent: Wednesday, September 28, 2016 8:23 AM To: Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); French, Hollis (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Hill, Johnnie W (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); AK, GWO Projects Well Integrity; AKDCWelllntegrityCoordinator; Alan Bailey; Alex Demarban; Alexander Bridge; Allen Huckabay; Andrew Vanderlack, Ann Danielson; Anna Raff; Barbara F Fullmer, bbritch; bbohrer@ap.org; Bill Bredar; Bob Shavelson; Brian Havelock, Bruce Webb; Caleb Conrad; Candi English; Cocklan-Vendl, Mary E; Colleen Miller; Crandall, Krissell; D Lawrence; Dale Hoffman; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb, David Tetta; ddonkel@cfl.rr.com; DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elizabeth Harball; Elowe, Kristin; Evan Osborne; Evans, John R (LDZX); Gary Oskolkosf; George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Gregg Nady; Gretchen Stoddard; gspfoff; Hyun, James J (DNR); Jacki Rose; Jdarlington Oarlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jerry McCutcheon; Jim Watt; Jim White; Joe Lastufka; Radio Kenai; Burdick, John D (DNR); Easton, John R (DNR); Jon Goltz; Juanita Lovett; Judy Stanek; Julie Little; Kari Moriarty; Kasper Kowalewski; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Kruse, Rebecca D (DNR); Gregersen, Laura S (DNR); Leslie Smith; Louisiana Cutler; Luke Keller; Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Kremer, Marguerite C (DNR); Mealear Tauch; Michael Bill; Michael Calkins; Michael Moora; MJ Loveland; mkm7200; Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nikki Martin; NSK Problem Well Supv; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Delbridge, Rena E (LAS); Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Skutca, Joseph E (DNR); Smart Energy Universe, Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Sternicki, Oliver R, Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Ted Kramer, Davidson, Temple (DNR); Teresa Imm; Thor Cutler; Tim Jones; Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Umekwe, Maduabuchi P (DNR); Vinnie Catalano; Weston Nash; Whitney Pettus; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Assmann, Aaron A; Bajsarowicz, Caroline J; Brian Gross; Bruce Williams; Bruno, Jeff J (DNR); Casey Sullivan; Catie Quinn; Don Shaw; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Heusser, Heather A (DNR); Holly Pearen; Jamie M. Long; Jason Bergerson; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck, Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Umekwe, Maduabuchi P (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); Wayne Wooster; William Van Dyke Subject: Docket R-16-001 Public Workshop Attachments: R-16-001 Workshop Public Hearing Notice .pdf Jody J. CoCombie AOGCC SyeciaCAssistant Alaska Oil and Gras Conservation Commission 333 -Vest 7" ?Avenue .Anchorage, Alaska 99501 Office: (907) 793-1221 FOX: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC(, State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv.colombieQalaska.aov. 4 1ALASKA OIL AND GAS CONSERVATION COPM4ISSION 2 Before Commissioners: Cathy Foerster, Chair 3 Daniel T. Seamount 4 Hollis French 5 In the Matter of Proposed Changes to ) 6 Regulations: 20 AAC 25.002(a), notice ) 7 of ownership; 20 AAC 25.030, casing ) 8 and cementing; 20 AAC 25.055, drilling ) 9 units and well spacing; ) 10 20 AAC 25.065(c)(1), hydrogen sulfide; ) 11 20 AAC 25.071, logs and geologic data; ) 12 20 AAC 25.110(a) and (h), suspended ) 13 wells; 20 AAC 25.265(d)(4), well safety ) 14 valve systems; 20 AAC 25.270, reservoir ) 15 properties; 20 AAC 25.280(g), workover ) 16 operations, 20 AAC 25.537(a)(3) and (d), ) 17 public and confidential information; ) 18 20 AAC 25.556, orders, 20 AAC 25.990, ) 19 definitions. ) 20 21 Docket No.: R-16-001 22 ALASKA OIL and GAS CONSERVATION COMMISSION 23 Anchorage, Alaska 24 September 27, 2016 25 9:00 o'clock a.m. 1 APPEARANCES (Continued): 2 PUBLIC HEARING 3 BEFORE: Cathy Foerster, Chair 4 Daniel T. Seamount, Commissioner 5 Hollis French, Commissioner 2 1 TABLE OF CONTENTS 2 Opening remarks by Chair Foerster 03 3 Comments by Mr. Kanady 09 4 Comments by Ms. Moriarty 13 5 Comments by Mr. Kindred 20 6 Comments by Mr. Shavelson 38 3 I P R O C E E D I N G S 2 (On record - 9:03 a.m.) 3 CHAIR FOERSTER: Good morning. I'll call this 4 hearing to order. It's 9:05 a.m. on September 27, 5 2016. This is a public hearing to consider proposed 6 regulations. We are located at the offices of the 7 Alaska Oil and Gas Conservation Commission, 333 West 8 Seventh Avenue, Anchorage, Alaska. I'll introduce the 9 Commissioners. To my left is Commissioner Dan 10 Seamount, to my right is Commissioner Hollis French and 11 I'm Cathy Foerster. 12 If there's anyone here who needs any special 13 accommodations in order to hear or otherwise 14 participate in these proceedings please alert our 15 special assistant, Jody Colombie, and she will try to 16 accommodate you. 17 The notice of this hearing was published in the 18 Alaska Dispatch on July 21st, 2016, it was also posted 19 on the state of Alaska online notices website as well 20 as the AOGCC's own website. 21 I£ you want a copy of today's proceedings -- if 22 you want a copy of the proposed regulations Jody 23 Colombie can also provide that to you. And if you have 24 any written comments that you'd like to submit again 25 give them to Jody Colombie. E 1 Computer Matrix will be recording today's 2 proceedings and if you'd like a copy of the proceedings 3 you can obtain it from Computer Matrix. 4 All right. Specifically today we propose to 5 adopt changes in Title 20, Chapter 25 of the Alaska 6 Administrative Code and this hearing is being held in 7 accordance with Alaska statute 44.62 and regulations 20 8 AAC 25.540 of the Alaska Administrative Code, the 9 regulations governing public hearings. 10 We received comments regarding these regulation 11 changes from ConocoPhillips and from the Environmental 12 Defense Fund. These comments are part of the public 13 record and interested parties can request copies again 14 from Jody. There are also comments from AOGA. So if 15 anyone wants copies of any of those request them of 16 Jody or Sam. 17 In addition to the public comments that we 18 receive relevant to these regulations changes Cook 19 Inlet Keepers also contacted me by telephone on 20 September 6th and advised that they would be submitting 21 a request that as part of today's hearing we consider 22 adding a regulation requiring notice and comment period 23 prior to approval of permit to conduct hydraulic 24 fracturing. On September 17th they followed up by 25 submitting that request in writing. We advised them 5 1 that they -- that we would not consider that proposal 2 in today's hearing, but that we would schedule a notice 3 of proposal for a separate hearing. Due to multiple 4 scheduling conflicts the earliest we can conduct that 5 hearing is December 15th at 9:00 a.m. and we will 6 schedule that hearing for that date and time and notice 7 should be coming out shortly. The comments we received 8 regarding that request will not be included in the 9 public record for today's hearing, but will be part of 10 the public record for the December 15th hearing. 11 All right. A few bits of instruction on how to 12 provide testimony before we begin. The sign -in sheet 13 will be used to help format hearing testimony so if you 14 plan to testify make sure you have signed in and 15 indicated that you will be testifying. Is there 16 anybody that needs to do that at this point? 17 (No comments) 18 CHAIR FOERSTER: Okay. Oral testimony must 19 have relevance to the topic that we're here to discuss 20 today, the proposed regulations. If you submitted 21 written comments you may provide additional oral 22 testimony, but there's no need to reiterate your 23 testimony. I£ you're shy and you wrote something down, 24 don't tremble, you don't need to speak about it. 25 All right. I'd like to remind those who are 1 testifying to speak into the microphones so that 2 persons in the rear of the room can hear you and so 3 that the court reporter can get a clear recording. If 4 you're testifying you will have the opportunity to 5 request recognition as an expert in a particular field. 6 If your -- if you choose to testify as an expert you 7 will be asked to enumerate the credentials that qualify 8 you as an expert in that area, in other words your 9 background, your schooling, training and experience. 10 The Commissioners will likely ask questions during 11 testimony, we may also call for a recess to confer with 12 our technical staff. If any member of the audience has 13 a question that you think will assist the Commission in 14 reaching its decision today you can provide your 15 questions in writing along with your name and the name 16 of the witness to whom you'd like the question 17 directed, to Jody Colombie or Sam up front, and before 18 the end of the hearing the Commission will review your 19 quest -- all the questions that have been submitted to 20 us and we will ask those that we believe will be 21 helpful in eliciting relevant information to assist us 22 in making our decisions. 23 One of the things that we always consider in 24 adopting regulations is that we pay attention to the 25 cost to private persons of any proposed regulatory 7 I action that we're about to take. So if you feel that 2 there's a cost impact on you of our regulation changes 3 we will definitely look into that. 4 The regulations that we will be discussing 5 today are as follows. 20 AAC 25.002(a), notice of 6 ownership; 20 AAC 25.030, casing and cementing; 20 AAC 7 25.055, drilling units and well spacing; 20 AAC 8 25.065(c)(1), hydrogen sulfide; 20 AAC 25.071, logs and 9 geologic data; 20 AAC 25.110(a) and (h), suspended 10 wells; 20 AAC 25.265(d)(4), well safety valve systems; 11 20 AAC 25.270, reservoir properties; 20 AAC 25.280(g), 12 workover operations, 20 AAC 25.537(a)(3) and (d), 13 public and confidential information; 20 AAC 25.556, 14 orders, 20 AAC 25.990, definitions. 15 16 All right. Commissioner Seamount, before we 17 start taking testimony do you have anything to add? 18 COMMISSIONER SEAMOUNT: I have nothing. 19 CHAIR FOERSTER: Commissioner French. 20 COMMISSIONER FRENCH: No. 21 CHAIR FOERSTER: You don't want to list off a 22 bunch of numbers and letters and -- you think I've done 23 enough of that. Okay. Well, then we will proceed with 24 hearing testimony. 25 All right. I'm going to look -- I see on the 0 1 -- ConocoPhillips has someone who wants to provide 2 testimony, AOGA has someone who wants to provide 3 testimony, and Cook Inlet Keeper has someone who's a 4 maybe. I think ConocoPhillips and AOGA, we'll start 5 with you guys. Do you have a preference as to which of 6 you goes first? 7 (No comments) 8 CHAIR FOERSTER: No. All right. I don't have 9 a coin so I'll just go by the first one who got here. 10 The first one who got here was Randy Kanady. So, 11 ConocoPhillips, why don't you all start. 12 All right. So before you begin would you raise 13 your right hand. 14 (Oath administered) 15 MR. KANADY: I do. 16 CHAIR FOERSTER: All right. Mr. Kanady, would 17 you like to be recognized as an expert in anything 18 relevant to these regulations? 19 MR. KANADY: Not today..... 20 CHAIR FOERSTER: Not today. 21 MR. KANADY: .....I don't need to be recognized 22 as an expert, at least not right now. 23 CHAIR FOERSTER: Okay. 24 MR. KANADY: But -- not right now. 25 CHAIR FOERSTER: Beg pardon. E I MR. KANADY: Not right now. 2 CHAIR FOERSTER: Okay. If you change your mind 3 let us know. 4 MR. KANADY: All right. 5 CHAIR FOERSTER: Okay. Well, then please 6 proceed with your testimony. 7 MR. KANADY: Okay. Thank you very much. 6 RANDALL KANADY 9 called as a witness on behalf of ConocoPhillips, stated 10 as follows on: 11 DIRECT EXAMINATION 12 ConnocoPhillips applauds AOGCC-s efforts to 13 update, to clarify, the regulatory requirements, 14 improve understanding and streamline implementation of 15 Alaska oil and gas regulations. ConocoPhillips 16 appreciates the opportunity to submit questions and 17 comments on the AOGCC proposed regulation changes 18 issued on July 20th, 2016. 19 As the Commission knows ConocoPhillips 20 submitted written questions to the AOGCC on September 21 15, 2016 and additionally ConocoPhillips is submitting 22 detailed comments on the proposed regulations today. 23 At today's hearing ConocoPhillips will not be providing 24 a detailed technical review of our written comments. 25 We are interested in hearing from the AOGCC feedback 10 1 from our questions today, answers to those questions 2 will inform our understanding of the Commission's 3 goals. Our questions were also submitted with the 4 intention of developing an understanding of the 5 material impact of the proposed regulations. Better 6 understanding of the goals and the impact to the 7 proposed regulations will help us better contribute 8 constructive comments on how to achieve the 9 Commission's goals while avoiding unnecessary burden, 10 cost or complications and guide further engagement with it the AOGCC. 12 The written comments that ConocoPhillips is 13 submitting today include detailed technical discussion 14 on several proposed regulations that could have a 15 material impact on our operations. The key regulatory 16 changes that ConocoPhillips has the biggest concerns 17 with include proposed regulations to 20 AAC 25.030, 18 casing and cementing, subpart (d)(5), the requirement 19 increasing the cement column to 500 feet true vertical 20 depth above the hydrocarbon zones. The second one is 21 proposed regulation 25.030, casing and cementing, 22 subpart (e), the requirement for casing test pressure 23 to be 50 percent of the internal yield of the casing. 24 And the third one is 25.556, orders expiration. AOGCC 25 has proposed short term, automatic expirations for I1 1 conservation, area injection and other types of orders. 2 We would like to give the AOGCC an opportunity to 3 review ConocoPhillips' written comments submitted today 4 before engaging in a technical review. ConocoPhillips 5 would further -- would welcome further constructive 6 interaction with the AOGCC after the initial hearing 7 because of potential impacts of the proposed regulation 8 changes. 9 ConocoPhillips proposes a public workshop with 10 the AOGCC staff to give industry, the public and AOGCC 11 an opportunity to fully vet the technical and 12 administrative issues associated with these proposed 13 changes. The results from this workshop will provide 14 industry and the public better insight to the AOGCC's 15 goals of proposed regulation changes to help ensure 16 that the best -- for the best final result. These 17 results will also allow for more informed comments on 18 the proposed changes which could be reviewed in a 19 second public hearing. If a public workshop is not 20 possible ConocoPhillips would request that the AOGCC 21 consider the written comments submitted today and 22 conduct a second public hearing to provide industry an 23 opportunity to comment on these proposed regulation 24 changes before they are finalized. 25 Thank you for your time. 12 1 CHAIR FOERSTER: Thank you, Mr. Kanady. 2 Commissioner Seamount, do you have any questions for 3 Mr. Kanady? 4 COMMISSIONER SEAMOUNT: I just have one 5 question. Mr. Kanady, this proposed workshop, who 6 would -- who would be participating, who would you 7 recommend participate? 8 MR. KANADY: Well, the public, industry and 9 AOGCC staff. 10 COMMISSIONER SEAMOUNT: Okay. Thank you. 11 CHAIR FOERSTER: Okay. Commissioner French, do 12 you have any questions? 13 COMMISSIONER FRENCH: No. 14 CHAIR FOERSTER: Okay. Thank you, Mr. Kanady. 15 Please remember that as long as this hearing is going 16 on that you will remain under oath and we may call you 17 back up for more -- we may have questions for you or 18 something and you will remain under oath. 19 RD: Okay. Thank you very much. 20 CHAIR FOERSTER: Thank you. All right. 21 (Off record comments) 22 MR. KANADY: Thank you. 23 CHAIR FOERSTER: Thank you. All right. So I 24 see that we have a team from AOGA that wants to come up 25 so go, team. That's what it says here, team. IN 1 So please identify yourself and then I'll swear 2 you in. 3 MS. MORIARTY: Okay. Good morning. My name is 4 Kara Moriarty and I'm the president and CEO of the 5 Alaska Oil and Gas Association. 6 MR. KINDRED: And I'm Joshua Kindred, I'm 7 environmental counsel for the Alaska Oil and Gas 8 Association. 9 CHAIR FOERSTER: Okay. Would you both please 10 raise your right hand. 11 (Oath administered) 12 MS. MORIARTY: Yes, ma'am. 13 MR. KINDRED: Yes. 14 CHAIR FOERSTER: Okay. Please proceed with 15 your testimony. 16 KARA MORIARTY 17 called as a witness on behalf of AOGA, stated as 18 follows on: 19 DIRECT EXAMINATION 20 MS. MORIARTY: Well, thank you to the 21 Commission for allowing us to be here. Mr. Kindred 22 serves as the staff that organizes our AOGCC task group 23 that we have internally at AOGA and obviously so we're 24 here combined. I'm here to offer the easy stuff and he 25 will answer all of the hard questions today. 14 1 AOGA is the professional trade association as 2 you know for the industry and our mission is to foster 3 the long term viability of the oil and gas industry for 4 the benefit of all Alaskans. And our members have a 5 long history of prudent and environmentally responsible 6 oil and gas exploration and development in Alaska and 7 we do appreciate the opportunity to provide both the 8 written comments that we submitted this morning as well 9 as the oral comments today. 10 CHAIR FOERSTER: Ms. Moriarty, I'm sorry to 11 interrupt you, but I failed to ask if either one of you 12 wanted to be recognized as an expert in any particular 13 area? 14 MS. MORIARTY: No. No, thank you. 15 CHAIR FOERSTER: Okay. All right. I apologize 16 for the interruption. 17 MS. MORIARTY: No, thank you. No worries. As 18 an initial matter my testimony today is not meant to be 19 a word for word articulation of the written comments, I 20 know you all know how to read, but rather we'd like to 21 address some general concerns and perhaps highlight 22 issues most pressing to our members. And as you will 23 note a consistent theme in my testimony today 24 reiterates some of the points that Mr. Kanady mentioned 25 and that is we do feel there is a need for some 15 1 additional dialogue between the Commission and the 2 operators because we believe many of the issues that 3 we've identified could potentially be addressed by 4 simply garnering a better understanding of what your 5 intentions are in changing some of the proposed 6 regulations. In other words it's sometimes difficult 7 for AOGA to have substantial comments to certain 8 portions of the proposed regulation changes given the 9 fact we don't understand what the intent is behind some 10 of the proposed language. I think that a hallmark of 11 this Commission frankly has been, of all the agencies 12 that we work with and some of my member companies are 13 regulated by upwards of over 20 some regulatory 14 agencies, this has been an agency that has offered some 15 manner of consistency and predictability that frankly 16 is lacking in other state or federal agencies. And our 17 ultimate goal today is to provide a path forward which 18 allows for the Commission to achieve its goals while 19 continuing to provide that regulatory certainty and 20 predictability that is necessary to foster and 21 encourage the oil and gas industry here in Alaska. And 22 so to efficiently and effectively achieve our goals, 23 similar to what Mr. Kanady asked for, we would also 24 encourage some type of public forum or dialogue that 25 allows for an exchange of ideas. You will see that the 16 1 majority of our proposed comments and the proposed 2 changes may not necessarily be particularly problematic 3 in the grand scheme of oil and gas operations in 4 Alaska, but with a better understanding it is likely 5 that many of these issues could be resoled quickly and 6 in a manner satisfactory to all involved. 7 So with that being said I would like the 8 opportunity highlight three of the most pressing issues 9 of the proposed regulations to our members which I 10 think also as you mentioned, Commissioner Foerster, are 11 three that would add additional cost to industry as 12 well. 13 The first one is under 20 AAC 25.030(d)(5), 14 where the Commissioner is proposing to add among other 15 things a vertical qualifier to the cement casing 16 mandate. We are interested to understand why the 17 Commission is modifying the requirement from measured 18 depth to specify true vertical depth. And depending on 19 the trajectory of the well such a modification could 20 potentially result in a dramatic increase in cost given 21 the increase in cement value necessary to ensure 22 compliance. Additionally we think the modification 23 could also result in an increase in technical risk 24 associated with the integrity of certain wells. So it 25 may be more prudent to adopt a case by case approach on 17 1 some of these wells where the trajectory could create 2 unaccepted increases in technical and safety risk. 3 The second one that we'd like to point out is 4 the Commission purports to dramatically expand the type 5 of logs subject to filings by including the phrase all 6 other logs run under AAC 25.071(b)(7)(b). It is not 7 difficult to envision that an operator could read that 8 phrase as all encompassing which would invariably 9 include information that is proprietary and outside the 10 scope and intent potentially of the proposed 11 regulations. In addition to the breadth of this 12 provision AOGA is concerned that it could lead to 13 duplicative and redundant submittals. So perhaps the 14 Commission could be more specific regarding what 15 information it considers relevant and therefore subject 16 to the filing requirements. Again garnering a better 17 understanding of the list of logs AOGCC considers 18 relevant to this section would allow AOGA and our 19 member companies to provide more meaningful input. 20 Absent clarification and limiting language the proposed 21 regulations will result if it is meant entirely for all 22 logs in the submission of exponentially more logs and 23 information that is proprietary. Operators invest 24 resources in these proprietary, sometimes interpretive 25 logs because they lead to greater oil recovery and an IV 1 unintended consequence of the Commission's approach if 2 it does mean every single log, could be that operators 3 will choose not to invest in the completion of 4 interpretive work out of concern that the information 5 will be made public due to the AOGCC's submission 6 process. 7 So we would suggest that the Commission 8 consider providing some degree of protection by 9 extending confidentially protections for interpretive 10 logs that are submitted so you would see the data, but 11 the proprietary information would be protected which 12 would then allow operators to continue to make those 13 investments so that they could decide for their 14 company's benefit whether they want -- how they want to 15 continue drilling which then, you know, protects their 16 business. 17 Lastly the last thing I -- we would like to 18 point out is the modifications to 20 AAC 25.556. And 19 first and foremost we are hoping to get some 20 clarification whether the change in conservation orders 21 every five years is -- does that apply to conservation 22 orders that already exist or just new orders or how are 23 they -- how would it be applied. We also question 24 whether these revisions are necessary particularly 25 given the potential adverse impacts they could cause. IN 1 The sunset provisions will only serve to create greater 2 uncertainties. And this is the one where we have the 3 concern about the certainty and predictablilty which we 4 think could discourage future investment. The 5 Commission currently proposes the auth -- possesses, 6 you possess the authority to alter the orders already 7 if you find something that needs to be addressed. And 8 by adopting such a broad and all encompassing approach 9 the Commission is placing a larger burden and cost on 10 industry that appears unnecessary given your already 11 existing authority. And causing regulatory uncertainty 12 by automatically requiring new conservation orders 13 every five years could impact investment and ultimate 14 maximum recovery of the resource. 15 Again, you know, this is sort of a recurring 16 theme and this is the last time I'll say it, but if we 17 had an understanding of what you were trying to achieve 18 with an automatic five year sunset perhaps there are 19 alternatives that could be available that could satisfy 20 the Commission's needs without comprising the 21 certainty, predictability and ultimately the maximum 22 potential recovery of the resource in Alaska. 23 So with that, Commissioners, we conclude our 24 oral comments and we're happy to entertain -- Josh is 25 happy to entertain any questions that you may have. Aff 1 CHAIR FOERSTER: Commissioner Seamount, do you 2 have any questions? 3 COMMISSIONER SEAMOUNT: Yes. Ms. Moriarty and 4 Mr. Kindred, first question is you talk about a 5 dramatic increase in costs due to the change in the 6 cement volume, do you have an order of magnitude 7 estimate of what it would cost? 8 JOSH KINDRED 9 previously sworn, called as a witness on behalf of 10 AOGA, stated as follows on: 11 DIRECT EXAMINATION 12 MR. KINDRED: Commissioner, I don't at this 13 time. I think our discussions have been somewhat 14 theoretical as we've tried to figure out exactly what 15 sort of externalities are going to be associated with 16 this change. I think what has been reiterated to me 17 time and time again is that it will be case by case 18 specific. Some wells won't result in much of an 19 increase in cost, but there are those wells where not 20 only will there be I think a fairly dramatic increase 21 in cost, but we -- Ms. Moriarty also talked about that 22 increase in technical risk. So I don't have exact 23 figures, I think if there were some sort of forum by 24 which we can have a more meaningful discourse somebody 25 could probably provide those figures to you. At this 21 1 time I don't have an exact. 2 MS. MORIARTY: And to add to that, Commissioner 3 Seamount, I think once we have a better understanding 4 of what the requirements would be then we could go back 5 and do a better inventory and then assess costs to give 6 you a better estimate, but at this point it was too 7 subjective for the member companies to come up with a 8 -- an accurate estimate of increased cost. We just 9 know that if you're going from 500 to 1,500 feet that's 10 another 1,000 feet of cement that, you know, it's just 11 going to be more expensive. So we -- until we have 12 better clarification of exactly how that would apply to 13 the different wells then we'll be able to give a better 14 estimate. We just -- we just know the way it's 15 currently read it will be more expensive. 16 COMMISSIONER SEAMOUNT: Yeah, I was just 17 wondering because I've been dealing with cement lately, 18 a lot of cement, but it doesn't really -- that's not a 19 very big part of the cost of the projects that I -- my 20 personal projects. So I was just interested. 21 You talked about confidentiality on logs 22 because they may be proprietary. Does that include 23 development wells? 24 MR. KINDRED: Yes. I mean, I think the 25 discussion that we -- anecdotally I guess when we 22 1 discussed this it reminded me of the discussion we had 2 on Frac Focus, this idea that ultimately one of the 3 unintended consequences is if you -- if you don't allow 4 for some amount of confidentiality what will happen is 5 these companies will stop investing in what we want 6 them to invest in which is getting these interpretive 7 data, these interpretive logs, by which they can 8 hopefully get maximum recovery from these wells. Now 9 whether it's exploratory or development I think the 10 problem is the same. So, yes, I mean, to answer your 11 question briefly, it's yes, but it's not that these 12 operators don't want to invest in these logs and it's 13 not necessarily that they're not willing to submit 14 them, but I think what would help is if there were some 15 degree of confidentiality and we're talking from an 16 temporal standpoint, whether it's two years or five 17 years, I think you would see that the industry would be 18 more willing to acquiesce to this demand under that 19 scenario. 20 COMMISSIONER SEAMOUNT: Okay. So you have a 21 company like Schlumberger gets you the raw data, 22 correct? 23 MR. KINDRED: Yes. 24 COMMISSIONER SEAMOUNT: And then internally the 25 operator will apply his own interpretation, his own 23 1 algorithms to the logs and that's what you're talking 2 about, right? 3 MR. KINDRED: That and I do think there's a 4 scenario where it could be an outside subcontractor 5 that provides some of that interpretative formulation 6 or project so it's not necessarily just operator 7 specific, but of course the operator would be paying 8 for that service. 9 COMMISSIONER SEAMOUNT: Okay. So you would 10 provide estimates of or you would provide the numbers 11 to this outside contractor to generate special logs, 12 right..... 13 MR. KINDRED: You're right, it is. 14 COMMISSIONER SEAMOUNT: .....that's what you're 15 talking about? 16 MR. KINDRED: Yes. 17 COMMISSIONER SEAMOUNT: Okay. 18 MS. MORIARTY: And our concern, Commissioner, 19 is that if the language says all logs then that would 20 mean every log and some of those interpretive logs are 21 what determines or helps the company determine, you 22 know, continued drilling in that well or other wells 23 which could be considered proprietary. 24 COMMISSIONER SEAMOUNT: Okay. Okay. I got a 25 good idea then. Okay. That's all I have. Thank you 24 2 CHAIR FOERSTER: Commissioner French, do you 3 have any questions? 4 COMMISSIONER FRENCH: I do about the cementing. 5 It's 030(d)(5) et cetera. Up until now we've just said 6 you have to cement 500 feet above all significant 7 hydrocarbon zones and the regulation change just makes 8 it clear that it's 500 vertical feet above that zone. 9 What's the concern, I guess I'm -- I understand it has 10 to do with long laterals, but maybe you can just walk 11 me through where the huge expense would come in? 12 MR. KINDRED: Well, this is where I will 13 illustrate my limit of expertise, but in the 14 conversations I've had with the members the suggestion 15 is that when you have -- depending on the trajectory of 16 the well sort of as you've alluded to, there will 17 become some technical risk where you've gone from 18 having 500 feet of cement to potentially, you know, 19 over 1,000. And again depending on any number of 20 variables that could lead to an increase in technical 21 risk. Now again I can only speak so intelligently 22 about this issue and it further sort of highlights why 23 maybe having a sit down between the experts at the 24 Commission and the experts within our respective 25 companies may be able to establish a little more 25 1 technical understanding of this. 2 CHAIR FOERSTER: You could always have someone 3 who could answer the question answer the question. 4 MR. KINDRED: Yes. Yes. 5 CHAIR FOERSTER: In the hearing. 6 MR. KINDRED: Yeah. Well, you know, I -- well, 7 but I think it's difficult because it is going to be on 8 a case by case basis, not every single -- it's not just 9 the fact of trajectory, it also has to do with any 10 other number of variables. So I don't think we can sit 11 there and say well, if we do it this way we're fine and 12 that's why AOGA suggested perhaps a case by case 13 approach. There could be scenarios where there's -- 14 there are no complications and the only remaining issue 15 is cost. And as Commissioner Seamount pointed out 16 perhaps that is not as compelling a complaint to the 17 Commission, but I do think that increase to technical 18 risk is going to demonstrate itself in certain cases 19 and I think it would be valuable for the Commission to 20 afford some flexibility and malleability to the 21 approach for operators. 22 COMMISSIONER FRENCH: I sympathize with you 23 because it is complicated and in Conoco's comments 24 Conoco spends several pages on some of the technical 25 details of the difficulties you can have with too much 26 I cements in particular formations, in particular 2 structures of wells and we're going to review those, 3 I'm going to review them carefully and go over those 4 issues with our staff to get a better feel for, you 5 know, exactly where there may be some risk. 6 MS. MORIARTY: And, Commissioner French, we can 7 also follow-up with our task group to better clarify 8 your question, well, if it's just 500 feet vertical how 9 is that difficult from just 500 feet the way it's 10 currently..... 11 COMMISSIONER FRENCH: Above, right. 12 MS. MORIARTY: Yeah. But the way it's 13 currently written and there is a very good technical 14 answer and you have now maxed both Mr. Kindred and my 15 engineering capabilities, so but we have..... 16 COMMISSIONER FRENCH: Well, I think we're all 17 -- I think we're all three on the same..... 18 MS. MORIARTY: Yeah. 19 COMMISSIONER FRENCH: .....on the same level of 20 understanding, let's just put it that way. 21 MS. MORIARTY: So -- yeah. So but, you know, 22 we could -- you could have somebody come up and answer 23 that question or we can just provide the follow-up to 24 you after the hearing is over. 25 COMMISSIONER FRENCH: And maybe Mr. Kanady's 27 I willing to come back up and help us understand this 2 while we're here. 3 MR. KANADY: I'll try it. 4 COMMISSIONER FRENCH: Sure, let's do that. 5 CHAIR FOERSTER: Ms. Moriarty and..... 6 COMMISSIONER FRENCH: Oh, were you finished, I 7 don't mean to interrupt you, but..... 8 MS. MORIARTY: Oh, no, that's fine. I don't 9 have..... 10 CHAIR FOERSTER: You -- we can do it in this 11 order, but you guys remain under oath and we -- and 12 you'll likely to be called back up to -- for additional 13 questions. So that's fine. 14 Mr. Kanady, I don't care what you told anybody 15 in the back of the room, but now you're back and still 16 under oath. 17 MR. KANADY: Big fish. Big fish. 18 CHAIR FOERSTER: Big fish. 19 MR. KANADY: Okay. So I would like to be 20 recognized as an expert witness. 21 CHAIR FOERSTER: And your area of expertise is? 22 MR. KANADY: Drilling and wells. And I have a 23 bachelor's degree in -- bachelor's of science in 24 petroleum engineering from Montana College of Mineral 25 Science and Technology and a master's of science and W] 1 environmental engineering from the University of 2 Alaska. I'm a registered petroleum engineer with the 3 state of Alaska and I have over 25 years of experience 4 working in the Alaska oil and gas industry. And I've 5 worked in the Cook Inlet, Alpine, Kuparuk and Prudhoe 6 Bay fields. My job responsibilities have included 7 production engineering, development engineering, HSE 8 and recently drilling engineering. And my current job 9 as staff drilling engineer is to manage compliance and 10 regulatory issues for the drilling and wells group at 11 ConocoPhillips. 12 CHAIR FOERSTER: Okay. Commissioner Seamount, 13 do you have any questions or concerns? 14 COMMISSIONER SEAMOUNT: I have no questions, no 15 objections and I would recommend Mr. Kanady be defined 16 as an expert in drilling and wells. 17 CHAIR FOERSTER: Defined? 18 COMMISSIONER SEAMOUNT: Defined. 19 CHAIR FOERSTER: Defined. Okay. That's a -- 20 are you okay with being defined? 21 COMMISSIONER SEAMOUNT: As an expert. 22 MR. KANADY: Yes. I am. 23 CHAIR FOERSTER: Okay. Commissioner French, do 24 you have..... 25 COMMISSIONER FRENCH: I concur. 29 1 CHAIR FOERSTER: Yeah. You -- Mr. Kanady, 2 you've been before this agency many times and we're all 3 familiar with your qualifications and I have no 4 objections. So please proceed. 5 MR. KANADY: Okay. When you're pumping a 6 cement job your equivalent circulating density is a 7 critical factor in -- when you're performing that job 8 and maintaining circulation to surface. And we provide 9 in our written testimony an example of how your 10 equivalent circulating densities increase when you try 11 to increase the height of cement from 500 feet measured 12 depth to 500 feet true vertical depth on typical 13 extended reach wells that are currently being drilled 14 on the North Slope. And so I didn't bring a thumb 15 drive, but I will reference our written documents that 16 we recently submitted today. So well CD503 is a good 17 example of a typical well drilled on the North Slope 18 and it illustrates the effect of equivalent circulating 19 density in increasing the cement height to 500 feet 20 vertical depth -- true vertical depth above the casing 21 shoe. I guess it's kind of difficult, but figure 22 one..... 23 COMMISSIONER FRENCH: We can..... 24 MR. KANADY: .....illustrates the wells that 25 are currently being drilled at CD5 and CD503 is 30 I highlighted on that -- on that figure one. 2 CHAIR FOERSTER: Figure two? 3 MR. KANADY: Figure two is a section view of 4 CD5 and it demonstrates or it shows that the 5 intermediate casing is set at a depth of 14,340 feet 6 measured depth. There's a sail angle of 60 degrees to 7 get to that and that's what that cross-section shows. 8 Figure three is a blowup of what the -- of the 9 casing shoe and the confining zones above the casing 10 shoe. It illustrates where the actual cement top was 11 pumped at 13,351 feet. The proposed cement top at 500 12 feet true vertical depth would extend it up to 12,890 13 feet. That would increase it -- that would almost 14 double the amount of cement above the casing shoe from 15 945 feet measured depth to 1,678 feet, almost doubling 16 the volume of cement. 17 The critical factor that figure four shows is 18 the effects on your equivalent circulating density, 19 recognizing that equivalent density is affected by hole 20 size, density of fluid and pump rate. This is just one 21 example of what we ran by trying to -- or running 500 22 feet true vertical depth with class G cement which is 23 typically what we use. Our contention is that the 500 24 feet measured depth that has been used for most of the 25 wells on the North Slope has provided good zonal 31 1 isolation for both fracking, EOR and waterflood 2 opportunities or operations. And we haven't -- yeah, 3 we don't know of a case where that hasn't been 4 sufficient, 500 feet above the hydrocarbon bearing 5 zone. 6 Essentially if you go back to figure three that 7 would be well up into the Kalubik or actually it would 8 be above the top of the Kalubik and finding shale 9 there. So but what happens is if you set your casing 10 shoe into the Alpine A, that has the lowest fracture 11 gradient of the zones that are there, the A sand -- 12 Alpine A sand has a fracture gradient of approximately 13 12 pounds per gallon, recognizing that there's 14 variability, it's not a homogenous sandstone and so 15 there's variability in the strength of that sandstone 16 as well as the shales, but the typical shales above 17 that have a fracture gradient in the 17/16 pound per 18 gallon equivalent circulating density. 19 And so what our example shows here in figure 20 four is that for the job that we design our ECDs would 21 be -- would be maintained at below the fracture 22 gradient of the Alpine A sand at 11.9 pounds per 23 gallon. The example that we ran with pumping to 500 24 feet true vertical depth of cement shows that our 25 equivalent circulating density would get up to a 12.5 32 1 pounds per gallon and you -- at that point you -- it 2 would be a risk and we manage risk every day, it's just 3 one of the many risks that we manage, but it would be a 4 risk that you could lose circulation of the cement to 5 surface. And at that point you would potentially 6 compromise getting cement above and into your confining 7 zone because the Alpine A sand has fractured and all 8 your cement is going into the lower zone. That -- we 9 consider that to be a major risk in this new proposed 10 regulation and that's why ConocoPhillips is 11 recommending that we -- that we use 500 feet measured 12 depth for the -- 500 feet measured depth above they 13 hydrocarbon zone as a requirement and that's clearly 14 stated in our written comments. 15 CHAIR FOERSTER: Okay. Thank you, Mr. Kanady. 16 Commissioner Seamount, do you have any questions? 17 COMMISSIONER SEAMOUNT: I have just one. Mr. 18 Kanady, is there a possibility of using a lower density 19 cement? 20 MR. KANADY: Yes, there is, Commissioner 21 Seamount. The trouble with not -- well, the lighter 22 grade cement is they use little glass balls to reduce 23 their density and what happens is those balls -- those 24 cylinders -- those spheres get crushed at a certain 25 pressure and I think at the pressures that we're 33 I talking about here you would run the risk of that. And 2 so that's another risk that you would have to manage in 3 your cement design as opposed to using the class G 4 cement. Certainly we pump lighter cements on our 5 surface casings, but that's all the way to surface and 6 that's why we use the lighter cement. And it's not 7 subject on your surface casings the equivalent 8 circulating density isn't quite as high because we're 9 only dealing with, you know, the measured depths of, 10 you know, 2,500 to 3,000 to 4,000 feet. 11 COMMISSIONER SEAMOUNT: Okay. Thank you. 12 That's all I have 13 CHAIR FOERSTER: Commissioner French, have you 14 got any questions? 15 COMMISSIONER FRENCH: No. No other questions, 16 thank you. 17 CHAIR FOERSTER: Okay. I've got questions, but 18 I'm going to save them for a little bit later. 19 MR. KANADY: Okay. 20 CHAIR FOERSTER: So why don't we let the AOGA 21 representatives come back up and finish because I know 22 -- I think Commissioner French may have additional 23 questions for them and I have some questions for them 24 as well. And thank you, Mr. Kanady, you can go back to 25 telling your fish stories. 34 1 Commissioner French, do you have additional 2 questions? 3 COMMISSIONER FRENCH: No. 4 CHAIR FOERSTER: Okay. I -- I'm going to save 5 my other questions for after a recess, but I have a 6 couple right now. Could you give me examples of 7 specific logs that, you know, would fall under this, 8 they have confidential stuff that we don't want to 9 share and we need -- you know, because without, you 10 know, knowing what you're talking about it -- I'm not 11 coming up with any examples in my head? 12 MR. KINDRED: Well, and again I think on a 13 fundamental level the issue is that there seems to be 14 an easy, bright line between what is data and what's 15 interpretation. And I think if the Commission just 16 adopted that sort of -- that sort of standard it would 17 be much easier for operators to comply, they would know 18 immediately this falls under the AOGCC purview, this 19 doesn't. Now I think within the interpretative logs 20 perhaps reasonable people could disagree as to what 21 would be proprietary and what wouldn't, but at the end 22 of the day what you're asking now is for operators to 23 try to manage that, try to figure out well, is this 24 something that we think we can make a reasonable 25 argument for proprietary information, is the Commission 35 1 going to disagree, are we going to have to hash that 2 out in some manner whether it's a fine or a hearing. 3 So I think on a fundamental academic level it just is 4 more prudent to adopt the bright line distinction 5 between data and interpretation. 6 Now as far as what the operators use and as far 7 as interpretative example, you know, again I think 8 that's going to differ from operator to operator as to 9 where they want to draw that line between well, these 10 interpretations we're fine submitting them, these 11 interpretations we're not, we're worried about the 12 proprietary information. And where that line is again 13 is going to differ from operator to operator, but this 14 is -- I think just reenforces the idea that having a 15 more meaningful discourse and understanding, you know, 16 where would the Commission draw that line, are you 17 going to be -- if an operator said we think this is 18 proprietary, we're not going to submit it, is that all 19 that's going to be necessary for the Commission to sit 20 back and say, okay, we don't need that log. And I 21 imagine that that probably would not carry the day and 22 that wouldn't be enough and you'd want greater 23 justification. And I don't know what the proper forum 24 for that argument is, but again I think this is akin to 25 Frac Focus. I think we want to say there's probably 0 1 some common ground here if there's information that you 2 want that we can provide and either protect our 3 proprietary interests or at least disguise them in a 4 way that we're not losing value, that would be 5 acceptable. But I think in -- again maybe this is just 6 anecdotal, but in speaking with my members they have 7 said that, you know, recently that line that they have 8 understood full and well has been blurred to the point 9 where they no longer know what needs to be submitted. 10 And the all other log inclusion in the proposed 11 revisions seem to suggest that there are no limitations 12 to what logs must be submitted. 13 So I understand that your question is valid, 14 what would be proprietary, but I think it misses our 15 point which is we're going to have to submit anything 16 anyhow so how do we figure out where that line is and 17 if we do think something's proprietary how do we 18 articulate that to the Commission. 19 CHAIR FOERSTER: You remind me of why I'm an 20 engineer and not an attorney. So I'm going to ask my 21 question again and give you the opportunity to answer 22 it. Could you give me one example of a log that any of 23 your representative companies considers to be in 24 jeopardy by this regulation? 25 MS. MORIARTY: Commissioner Foerster, when we 37 1 were talking about it as the trade association, they 2 did not give a specific example, they just said there 3 are interpretative logs that we consider proprietary 4 because they have competitors in the room. So that may 5 have been the reason why they didn't give us a specific 6 example of this is the type of interpretative log that 7 we consider proprietary, they just said look, some of 8 these logs we consider have proprietary information. 9 I'm not trying to hide the ball from you, they just did 10 not give us an example, they just said they exist. So 11 we can come back and give you an example, but we didn't 12 talk about a specific example within our committee 13 meeting when we were putting our comments together. 14 CHAIR FOERSTER: Back to my deficiencies as an 15 engineer, it's so much easier for me to get my head 16 around something if I know what it is. 17 MS. MORIARTY: Sure. And we can follow up and 18 see if we can provide a very clear, specific example, 19 it just was not discussed during our committee meeting. 20 CHAIR FOERSTER: Okay. Well, I'd appreciate 21 the example. Let's see, I think I'm going to save my 22 remaining questions for after a recess. I'd like to 23 make sure that my technical staff can make my question 24 sound more intelligent so I'll do that. 25 So before we -- does either one of you have any 38 1 additional questions? 2 COMMISSIONER SEAMOUNT: No. 3 COMMISSIONER FRENCH: No. 4 CHAIR FOERSTER: Do you have any additional 5 comments you want to make before you conclude? 6 MS. MORIARTY: No, thank you. 7 CHAIR FOERSTER: All right. So, Mr. Shavelson, 8 you're down as a maybe. Is that maybe -- has that 9 maybe turned into a yes or a no? 10 MR. SHAVELSON: Yes. 11 CHAIR FOERSTER: Okay. Please come up. And I 12 remind you that your testimony must be relevant to 13 today's proceedings or we'll limit you to two minutes. 14 You can -- you have two minutes to say anything you 15 want, but if it doesn't relate to the regulations we're 16 discussing today you're done. 17 MR. SHAVELSON: You've made that clear. 18 CHAIR FOERSTER: Good. 19 BOB SHAVELSON 20 called as a witness on behalf of Cook Inlet Keeper, 21 stated as follows on: 22 DIRECT EXAMINATION 23 MR. SHAVELSON: My name's Bob Shavelson, I'm 24 the executive director of Cook Inlet Keeper. And first 25 I'll just make a quick comment and I'll endorse the 39 I comments submitted by the Environmental Defense Fund 2 and specifically their comments at 25.030(d)(8) and 3 looking for isolation of not only the hydrocarbon 4 bearing zones, but also other zones of concern 5 including freshwater. I think that would be a smart 6 move. 7 And teeing off of that and the discussion 8 before, I really appreciate you scheduling a hearing on 9 December 15th. I think we want to go back and make 10 sure that we're absolutely clear on what we're asking 11 the Commission to do. So we'll be in communication on 12 that. 13 But as you know, the..... 14 CHAIR FOERSTER: Mr. Shavelson, let me clarify 15 that we can't keep massaging this until December 14th, 16 we have to submit a public notice of exactly what's 17 going to happen and so -- and we've got a little time 18 between now and December 15, but we have to have at 19 least 30 days before that notice is granted. You know, 20 because -- put the shoe on the other foot, if you had 21 showed up today and we said surprise, somebody asked us 22 to talk about whatever and it was something that was 23 personal or whatever to you, you'd probably get your 24 panties in a wad. And so we don't want any -- that 25 happen to anyone. So please provide the courtesy that .A 1 you would expect provided to you and give us your 2 specific request with sufficient time for us to notice 3 it, to provide 30 days or more for everyone to 4 participate on December 15th. Is that -- do you 5 understand that? 6 MR. SHAVELSON: Absolutely clear. 7 CHAIR FOERSTER: Great. Okay. Please proceed. 8 MR. SHAVELSON: And that's what I was about to 9 say, within a week we'll have more specific language 10 and we'll talk to the Commission so you have a public 11 notice that's imminently clear and everyone knows what 12 we're talking about. So I'll get that back in touch 13 with you. 14 But, you know, as you know you came down to the 15 fracking panel in Homer and you saw some of the concern 16 that was expressed there and my office has gotten an 17 overwhelming amount of calls and requests for 18 information around the issue. So I think it behooves 19 the Commission to address these issues and I don't 20 think it would put too much of a burden on the 21 Commission or the staff to address those. So we'll be 22 talking about that more at a future date I guess. 23 CHAIR FOERSTER: Thank you. 24 MR. SHAVELSON: Thank you. 25 CHAIR FOERSTER: Commissioner Seamount, do you 41 1 have any questions? 2 COMMISSIONER SEAMOUNT: Not at this time. 3 CHAIR FOERSTER: Commissioner French. 4 COMMISSIONER FRENCH: No. 5 CHAIR FOERSTER: Okay. Thank you, Mr. 6 Shavelson. 7 MR. SHAVELSON: Thank you. 8 CHAIR FOERSTER: All right. So is there anyone 9 else in the audience wishing to testify? 10 (No comments) 11 CHAIR FOERSTER: All right. I'm not seeing 12 anyone. So it's five minutes until 10:00. We're going 13 to take a 15 minute recess and come back at 10:10 so we 14 are recessed. 15 (Off record) 16 (On record) 17 CHAIR FOERSTER: We'll come out of recess at 18 10:07. Sorry for coming back early, but give you a few 19 minutes back in your morning. 20 Commissioner Seamount, do you have any 21 questions? 22 COMMISSIONER SEAMOUNT: I have none at this 23 time. 24 CHAIR FOERSTER: Commissioner French. 25 COMMISSIONER FRENCH: No. 42 1 CHAIR FOERSTER: Okay. I do. And I think this 2 -- both AOGA and Conoco may wish to answer this so 2'11 3 just -- and I think I'd like to hear from both so, Mr. 4 Kanady, why don't you come up and I'll ask you first. 5 And I think it's probably best since you were very 6 specific. In your explanation for your concerns with 7 changing from measured depth to true vertical depth you 8 gave a very specific example of a very high angle well 9 and are you familiar and I -- this is a rhetorical 10 question, to what extent have you used the AOGCC's 11 latitude of when you can provide an equal or better 12 protection you can request a waiver, are you familiar 13 with and have you used that provision? 14 MR. KANADY: Yes, we're very familiar with and 15 we use it where it's appropriate. 16 CHAIR FOERSTER: Okay. Have you also found 17 that in situations that are different that you can even 18 request a pool rule specific to your needs? 19 MR. KANADY: Yes. Absolutely. 20 CHAIR FOERSTER: Okay. So in -- you talk about 21 it being a costly endeavor if we adopted this rule, 22 what would be the cost of requesting a waiver or 23 suggesting a pool rule? 24 MR. KANADY: The additional cost wouldn't -- 25 would not be that substantial, no. I mean, we're 43 1 working to the existing process. 2 CHAIR FOERSTER: Okay. 3 MR. KANADY: Uh-huh. 4 CHAIR FOERSTER: All right. AOGA, would you 5 care to..... 6 MR. KANADY: Well, I guess I would like to add 7 a couple things to that. Our preference is to have an 8 effective technical -- technically based regulation 9 that we can look to as opposed to having something that 10 potentially we would have to request an exception on. 11 Our preference is to have a regulation that is -- we 12 can look to and work towards on a consistent basis. 13 CHAIR FOERSTER: So, Mr. Kanady, can you think 14 of cases where a 500 foot measured depth might not 15 provide an adequate..... 16 MR. KANADY: Well, it's 500 feet measured depth 17 from the casing shoe or above the hydrocarbon bearing 18 zone and that's -- I mean, typically we pump 40 percent 19 excess on our intermediate casing jobs and that's for 20 the condition of the hole, if it's not uniform. And 21 the 500 foot measured depth is primarily for zonal 22 isolation. And we -- I'm not aware of any instance 23 where that has been an issue with providing zonal..... 24 CHAIR FOERSTER: Okay. Well, my staff advises 25 me that there are instances where that's an issue. But 1 that's probably something that can be worked out in a 2 public workshop. Would -- do you have any other 3 comments you would like to make on that question? 4 MR. KANADY: No, I don't. 5 CHAIR FOERSTER: Okay. So does either AOGA -- 6 okay. I think the proposal of a public workshop to 7 improve the quality of the regulation changes is a good 8 idea. What I don't -- what I will not allow to happen 9 -- we will not allow to happen, is a public workshop to 10 turn into a six year stalemate which, you know, we can 11 all think back to safety valve system regulations 12 fondly and recall. So we will schedule and notice a 13 public workshop on November 1st, that's a date that 14 works for everyone here and also gives adequate time 15 for public notice of that workshop and for 16 modifications if any of those reqs to be firmed up and 17 noticed for a continuation of this hearing on January 18 10th. So I want you to guys to think quickly and let 19 me know if either of those days is unacceptable or 20 problematic. What I don't want to do -- the reason 21 that we are choosing these dates is that we're trying 22 to stay away from that black hole of Thanksgiving, 23 Christmas, New Year's when you never know who's going 24 to be here. 25 All right. If there's anyone in the audience 45 I who has a compelling reason that those dates don't work 2 I'd like to hear it now. 3 (No comments) 4 CHAIR FOERSTER: And I want to be very, very 5 clear that we will have a public workshop on this 6 matter and if my staff tells me that we need another 7 one we will, but I will be very reticent to turn this 6 into a miasma. 9 All right. So, Commissioner Seamount, do you 10 have anything else for the good of the order before we 11 -- wait. 12 Is there anyone else who needs to testify at 13 this time or wishes to testify at this time? 14 (No comments) 15 CHAIR FOERSTER: Okay. Commissioner Seamount, 16 do you have anything to add? 17 COMMISSIONER SEAMOUNT: No, I don't, Madam 18 Chairman. 19 CHAIR FOERSTER: Commissioner French. 20 COMMISSIONER FRENCH: No. 21 CHAIR FOERSTER: All right. Well, then we are 22 going to -- we're not going to adjourn, but we're going 23 to continue this hearing to January 10th and should -- 24 and we're going to have a public workshop on November 25 1st. Should the public workshop result in substantive M 1 changes to the regulations we will notice the 2 continuation for January 10th. If there are no 3 additional changes then we will not need to notice it, 4 we'll -- but be back here on January 10th. 5 (Whispered conversation) 6 CHAIR FOERSTER: The Commissioners will not be 7 in the public workshop. 8 All right. We're adjourned at 10:15. 9 (Adjourned - 10:15 a.m.) 10 (END OF PROCEEDINGS) 47 1 TRANSCRIBER'S CERTIFICATE 2 I, Salena A. Hile, hereby certify that the 3 foregoing pages numbered 02 through 48 are a true, 4 accurate, and complete transcript of proceedings in re: 5 Docket No.: R-16-001 public hearing, transcribed under 6 my direction from a copy of an electronic sound 7 recording to the best of our knowledge and ability. 8 9 Date Salena A. Hile, Transcriber 10 Oti�int L STATE OF ALASKA OIL AND GAS CONSERVATION COMMISSION Docket Number: R-16-001 September 27, 2016 NAME AFFILIATION Testify (yes or no) Ghn; [ Il A-0 G C C No :ck Aoc. cc t� t is-,v�✓ �� G�arzto D W MA ►'S+ 1�e1s-on .P0.11ele-tivA Nates Arm, NAME AFFILIATION Testify (yes or no) n '' - Vvt 0YI September 27, 2016 Alaska Oil and Gas Conservation Commission 333 West Seventh Avenue Anchorage, AK 99501 RE: Proposed Changes to 20 AAC 25.022 through 20 AAC 25.990 Dear Commissioners: Cook Inlet Region, Inc. ("CIRI"), an Alaska Native Corporation, appreciates the opportunity to provide comments on the proposed changes to the Alaska Oil and Gas Conservation Commission's ("AOGCC" or "Commission") regulations in Title 20, Chapter 25 of the Alaska Administrative Code. I. Introduction As a landowner in Cook Inlet and as an oil and gas lessor, CIRI is interested in ensuring AOGCC's regulations provide clear and fair direction for parties interested in oil and gas development and that those regulations are consistent with the AOGCC's statutory mandates to prevent waste, protect correlative rights, and enhance production. As such, the AOGCC's intent to update and clarify its regulatory requirements, improve understanding, and streamline the implementation of its regulations is laudable. Although the AOGCC is proposing many changes, CIRI has comments only on the three regulations discussed below. II. CIRI encourages AOGCC to reconsider and/or revise some of its proposed changes to the regulations. A. The AOGCC should not adopt the proposed changes to 20 AAC 25.055(a) that are contrary to the AOGCC's statutory obligations in AS 31.05.100(a), do not sufficiently protect correlative rights and prevent waste, and create an undue administrative burden. The proposed changes to 20 AAC 25.055 alter from mandatory to permissive the AOGCC's obligation to establish drilling units, and delete the existing rules for creating drilling units and well spacing in the absence of an AOGCC order regarding the same. CIRI objects to this proposed change for three reasons. First, the introductory sentence to 20 AAC 25.055(a) that changes the AOGCC's obligation to establish drilling units from mandatory to permissive by removing "will, in its P.O. Box 93330, Anchorage, AK 99509-3330 • P: 907-274-8638 • F: 907-279-8836 • www.ciri.com discretion"' and replacing it with "may" suggests that the AOGCC need not establish drilling units to govern well spacing or prescribe other spacing patterns for pools. Such a result would be contrary to AS 31-05. 1 00(a), which provides, in pertinent part, that "the commission shall, after a hearing, establish a drilling unit or units for each pool." (Emphasis added). The proposed change also would contravene the language in 20 AAC 25.520, which provides that the AOGCC "will," upon request or its own motion after the discovery of oil or gas in a field or pool, hold a hearing and "will" prescribe "rules to govern the proposed development and operation of the pool." Second, the proposed changes in 20 AAC 25.055(a)(3) and (4) that delete the existing rules establishing drilling units in the absence of an AOGCC order regarding the same should not be adopted because they are contrary to AOGCC obligations under AS 31.05. 1 00(a). Current rules set a governmental quarter section as the statewide drilling unit for oil wells and a governmental section for gas wells, which rules are clear and understandable for all stakeholders. The proposed regulations eliminate that clarity and do not address the drilling unit size if the AOGCC has not yet issued an order regarding that particular pool.' The minimum property -line - spacing distances do not fill this regulatory gap because they do not establish drilling units. Adopting these changes would result in the AOGCC disregarding its statutory mandate in AS 31.05.100(a) to establish drilling rules for "each pool," unless the AOGCC holds individual hearings for each well drilled after the discovery of oil or gas and sets individual pool rules.^ CIRI believes the requirement to hold an individual hearing for each discovered pool would strain the AOGCC's resources, those of oil and gas companies seeking to develop a pool, affected landowners, and other stakeholders. The proposed regulation would require an AOGCC hearing be held for the first development well to be drilled in a pool, even if the well was the only one within the drilling unit that would otherwise have been established by the AOGCC's statewide rules. Without the existing provisions which provide certainty and clarity, oil and gas companies and landowners would have to spend time and money to ensure that appropriate drilling unit sizes were established via the Commission's hearing process, even in cases where the statewide rules would have led to the same result. The AOGCC should reconsider its ' It is CIRI's understanding that the phrase "in its discretion" does not modify the verb "Will" given the AOGCC's enabling statutes, but instead reflects the AOGCC's discretion in determining the appropriate drilling unit and spacing pattern. 2 It is not clear whether the AOGCC intended to delete the statewide drilling and spacing unit provisions discussed here, as the substance of these changes were not reflected in the Commission's first or second public notice related to the proposal. ' To the extent the proposed changes to 20 AAC 25.556 are adopted, it appears that all of the AOGCC's prior orders establishing drilling unit and spacing rules that are more than five years old as of the regulation's effective date will have to be revisited. CIRI assumes the existing regulation satisfies the AOGCC's obligation under AS 31.05,100(a) if it was adopted after a hearing. See also AS 31.05.100, which provides that drilling units for each pool should be established "[fJor the prevention of waste, to protect and enforce the correlative rights of lessees in a pool, and to avoid the augmenting or accumulation of risks arising from the drilling of an excessive number of wells." proposal to eliminate the clear and useful rules setting drilling units in the absence of a commission order establishing specific pool rules. Third, CIRI objects to the proposed changes in 20 AAC 25.055(a)(3) and (4) that delete the existing rules establishing statewide well spacing requirements, including the spacing distances between wells,' as to adopt them would violate the AOGCC's statutory and policy duties to protect correlative rights, avoid waste, and ensure efficient recovery.6 It is well- established that "[a] typical oil and gas conservation statute consists of a series of provisions that seek to balance public interest and private rights. The most important of those provisions are well -spacing rules.... [A]n important step toward controlling the problem[s of over-drilling and protection from drainage] is to require that wells be located far enough from boundary lines and from one another so that excessive drainage will not occur."7 The current regulation satisfies these obligations by establishing statewide spacing rules that rationally develop pools while allowing each landowner to extract his share of the oil or gas .8 If those statewide rules are eliminated, spacing rules will have to be established for each pool. Spacing rules are necessary not only to protect correlative rights, but also to maximize recovery.9 For the same reasons described above in relation to establishing individual drilling units, having to set spacing rules for each discovered pool creates an undue administrative burden on the AOGCC, oil and gas companies, landowners, and other stakeholders.10 CIRI encourages AOGCC to consider the 5 It is not clear if the Commission intended to delete this rule, since its proposed language regarding applications for exceptions retain the 1000 feet and 3000 feet references to the statewide well spacing rules. 6 AS 31.05.095 ("The waste of oil and gas in the state is prohibited"); AS 31.05.030(b) ("the commission shall investigate if waste exists or is imminent"); AS 31.05.030(d)(9) (the AOGCC may require plans for a pool "to prevent waste, ensure a greater ultimate recovery of oil and gas, and protect the correlative rights of persons owning interests in the tracts of land affected"). 'See Lowe, John S., Oil and Gas Law in a Nutshell, 6th Edition, 23 (2014) (emphasis added). 8 Id. 9 Lowe at 23. The short-term overproduction that comes from wells being drilled too close together is likely to result in lower borehole pressure leading to inefficient and lower ultimate recovery from the reservoir. Lower ultimate recovery is a form of waste. See Lowe at 20. "[R]ational development prevents waste because it maximizes ultimate recovery." Drainage is a product of the rule of capture and greed, resulting in too many wells drilled too closely together. Lowe at 23. 10 Alaska Statute 31.05.100(b) provides that each well shall be drilled "in accordance with the spacing pattern as the commission prescribes for the pool." Without the statewide spacing pattern that currently exists, the AOGCC will have to hold a hearing for the first development well drilled in each pool. administrative inefficiency and burden created by the proposed revisions to 20 AAC 25.055 and instead reinstate the proposed deletions to 20 AAC 25.055(a)(3) and (4). CIRI agrees that the AOGCC's proposed changes to 20 AAC 25.055(a)(1) and (2) for new and recompleted wells, when different owners or landowners] I are on either side of the property line, should be adopted. The prior language allowed owners to begin drilling a well that could not be tested or produced without permission from the AOGCC. Addressing such issues, which directly impact correlative rights, before drilling rather than after it has been completed, is a sound decision. The AOGCC's proposed clarification that the rule is applicable if "any portion of the well" is within the specified area is a logical interpretation and provides the AOGCC with the best information to make decisions. It should be adopted, as should the AOGCC's proposed addition of having recompleted wells expressly subject to the same rule, as is proposed in (a)(3) and (a)(4). CIRI believes, however, that the language regarding recompleted wells should be moved to (a)(1) and (2), and the deleted language from (a)(3) and (a)(4) restored as discussed above. B. The proposed deletion of 20 AAC 25.055(b) and (c) is inconsistent with the AOGCC's statutory obligations to protect correlative rights. The language of 20 AAC 25.055(b) protects correlative rights by precluding production from wells unless the interests of all persons owning the drilling rights and rights to share in the production have been pooled. This provision is a safeguard and ensures that oil and gas development companies are acting in a prudent and responsible manner by coming to an agreement with those parties who should share the proceeds of production before that production begins. While the provision may benefit from clarification, it cannot be deleted if the AOGCC is to fulfill its obligations to land and royalty owners. The importance of this provision was recently demonstrated, as it and other AOGCC precedent were the basis of the relief the AOGCC granted which stopped Buccaneer Alaska LLC's illegal drainage from CIRI and State of Alaska lands in the Kenai Loop unit. In its Order directing Buccaneer to escrow proceeds from Kenai Loop production pending the parties' agreement on allocation, the AOGCC noted, "in order to protect correlative rights a production allocation agreement must be established[.]" Rather than delete subsection (b), CIRI suggests the Commission instead adopt the following modifications to 25.055(b). First rather than referring to the quarter section and section set forth in the statewide drilling unit provisions, these terms could be replaced by the term "drilling unit." That would clarify that the appropriate area is the proposed drilling unit, whether established in the statewide rules or in an AOGCC order. Second, in addition to a pooling agreement under AS 31.05.100, the acceptable agreements should be expanded to include a voluntary unit agreement with allocation provisions, an agreement under AS 31.05.110, an agreement specifying how production is to be allocated, or if the parties are unable to reach consensus, an agreement to escrow production proceeds subject to AOGCC approval. Similarly, subsection (c) should be reinstated and modified to require one of these forms of allocation 11 An "owner" is the person holding the right to drill and produce from a pool; a "landowner" is the person who holds title to the subsurface estate of the affected tract. AS 31.05.170(7), (10). 0 agreements to be filed with the Commission before regular production begins. For these reasons, CIRI requests that the language in 20 AAC 25.055(b) and (c) either remain the same, or be modified as set forth above. C. The proposed additions to be codified at 20 AAC 25.055(b) should be adopted, with one change. CIRI agrees that the proposed changes to the information that must be submitted to the AOGCC to receive an exception to the rules set forth in 20 AAC 25.055 protect correlative rights by adding clarity and ensuring that applicants properly notify all stakeholders. CIRI does believe that a subsection should be added to ensure all stakeholders within the applicable drilling unit are also notified of the application and given a copy of it. This addition will further protect correlative rights and ensure all impacted stakeholders have been properly notified. D. The additions to 20 AAC 25.110 that protect landowner rights when an operator proposes to suspend a well or seeks to renew a suspension approval should be adopted. CIRI agrees that the AOGCC's proposed changes to 20 AAC 25.110 should be implemented. By requiring the operator to prove that its leases are valid and that it properly obtained drilling rights related to that land, the AOGCC is protecting correlative rights. These changes also give the AOGCC valuable information regarding the landowners who are directly impacted by the AOGCC's decision whether to suspend a well, renew a suspension, complete the well, or require the operator to plug and abandon the well. The requirements of landowner information for all portions of the well and notice to the AOGCC when the lease status changes, eliminate ambiguity and provide clear information for the AOGCC in its efforts to protect correlative rights. CIRI encourages AOGCC to adopt the proposed changes to 20 AAC 25.110. E. The AOGCC should consider modifying its proposed changes to 20 AAC 25.556 to reduce the administrative burden on the Commission, oil and gas companies, and other interested stakeholders. The proposed changes to 20 AAC 25.556 would cause certain AOGCC orders to expire after a particular time has passed or after a designated event. With respect to the provisions automatically terminating certain orders five years after they were issued, the regulation is not, on its face, limited to orders issued after the regulation's effective date. If the AOGCC intends for the regulation to apply to all of its conservation, enhanced recovery, area, storage, and disposal orders, this would cause all such orders that were issued more than five years before the regulation's effective date to automatically expire. This result would cause a tremendous administrative burden for the AOGCC and also would create uncertainty for operators, landowners, and other stakeholders. Indeed, the expiration of all prior orders that were more than five years old as of the regulation's effective date would cause many operators to be in immediate violation of AOGCC's existing statutes and regulations, as well as the proposed new regulation at 20 AAC 25.556(d) that applications for reauthorization of orders "must be timely filed" to allow a hearing under 20 AAC 25.540, if necessary, and an AOGCC decision before the order expires.."" If this was not the AOGCC's intent, it should consider revising the proposed regulation to clarify that 20 AAC 25.556(b) and (c) will only apply to orders adopted after the regulation's effective date, provide a reasonable period of time after the effective date to allow operators to comply, or reauthorize all such orders the day the regulation becomes effective. Regardless of the AOGCC's intent, it appears that the automatic expiration of a conservation, enhanced recovery, area, storage, and disposal order five years after the order is issued will create an unnecessary administrative burden for the AOGCC, oil and gas companies and other stakeholders. As an alternative to the five year rule, and in addition to the proposed rule requiring review when the operator changes, CIRI respectfully suggests that the AOGCC consider re- evaluating orders when a unit contracts, expands or terminates, or when production terminates. This would allow the Commission to evaluate whether changes to prior orders are necessary and also terminate any outdated orders that should no longer be in effect. This would also diminish the risk that a conservation order impacting correlative rights or otherwise restricting an operator's actions might be allowed to expire rather than be renewed since, as drafted, the operator is the only person who can file such an application. 13 Thank you for the opportunity to comment. If you have any questions or I can provide additional information, please contact me at eschutt6Wri.com or 907-274-8638. Sincerely, COOK INLET REGION, INC. Ethan G. Schutt Senior Vice President, Land and Energy Development "See proposed 20 AAC 25.556(d). 13 The AOGCC may also do so on its own motion, but no other person is authorized to do so. Thus, the AOGCC may want to consider allowing applications for reauthorization to be filed by parties other than the operator. 0 t ConocoPhillips p September 27, 2016 Alaska Oil and Gas Conservation Commission 333 W. 7th Ave #100 Anchorage, Alaska, 99501-3539 RE: Comments on Proposed Regulation Changes Dear Commissioners: Erik Keskula Manager, North Slope Development North Slope Operations and Development ConocoPhillips Alaska, Inc. ATO -1220 700 G Street Anchorage, AK 99501 Phone 907.263.4822 ConocoPhillips Alaska, Inc., ("ConocoPhillips") respectfully submits the attached comments in response to the Notice of Proposed Changes in Regulations of the Alaska Oil and Gas Conservation Commission dated July 20, 2016 ("Notice"). In the Notice, the Commission invited the submission of questions about the proposed regulation changes, and ConocoPhillips submitted a written list of questions on September 15. Having answers to those questions would help us better understand the objective of some of the proposals, which in turn would help us comment on how the objective might be achieved without unnecessary costs, burdens, or adverse consequences. ConocoPhillips sees merit in many of the proposed changes, and we support the goal of updating and clarifying the regulations. Several of the proposed regulation changes, however, could have material adverse impacts to oil and gas producers. ConocoPhillips submits the attached comments to help improve the proposals, and we would welcome further constructive interaction with the AOGCC after the initial hearing and to help ensure the best final result. We think it is important that the AOGCC hold a public workshop or a second hearing before adopting the final rules in this regulatory package. Thank you for the opportunity to comment on the proposed regulation changes. Regards, Erik Keskula Manager, North Slope Development Page 1 ConocoPhillips Alaska, Inc. Comments on AOGCC Proposed Regulation Changes September 27, 2016 25.022 Notice of Ownership. Our only comment on this proposed change is that because the proposal relates to information about an operator rather than an owner, it seems Section 25.020, which applies to operators, would be a better place to codify the new language, promoting organizational clarity. Proposed Regulation 20 AAC 25.030 Casing and Cementing: Paragraph (d)(5). The proposed changes in paragraph (d)(5) would modify the current requirement for cementing so that it applies to 500 vertical feet. The current regulation refers to 500 feet without specifying vertical feet or measured feet. Historically, AOGCC has approved cementing with 500' measured depth (MD) of cement above hydrocarbon zones and the production casing shoe. This has historically proven to provide zonal isolation for hydrocarbon zones, hydraulic fracturing fluids and EOR / waterflood fluids thus demonstrating, in our view, that current practices under the existing regulations have been working adequately. The proposed change to specify vertical feet is unnecessary and could create additional risk in achieving zonal isolation. This is particularly pertinent for the type of well typically drilled on the North Slope. Wells currently being drilled at Alpine and Kuparuk are directionally drilled horizontal wells from a multi -well pad. These types of wells usually require a long geometrically complicated intermediate casing run. By increasing the cement height, there is a significant risk in breaking down a weak interval and losing returns as spider plot and the example below will illustrate. Equivalent Circulating Density (ECD) is the effective density of the circulating fluid in the wellbore, which is the sum of the hydrostatic pressure imposed by the static fluid column and the friction pressure. A critical factor when cementing casing is ensuring this ECD does not increase to a point where a weak zone can fracture. This can lead to lost circulation and increase the risk to successful zonal isolation. Increasing the cement height to 500' True Vertical Depth (TVD) above hydrocarbon zones leads to an increase in ECD when pumping cement and the increased risk to zonal isolation. Well CD5-03 is a good example of a typical well drilled on the North Slope and it illustrates the effect on ECD of increasing cement height to 500' TVD above the casing shoe. Page 2 Figure 1 is a spider plot of the CD5 pad illustrating the long directional wells on CD -5 and highlights the CD5-03 well path. 0:01. SWMW 23 "1 Emling (5500 usWm1 Cmtmg pi USM.) Figure 1 — �0)BWC I])0>.W 10)pg0 u9:'A 110'.000 100))b I]pC•p) 14'3'" 14S 0. 1400)•A �'At4C I]N� tOC)gp IMM 1$1Y IGI].y0 I CDSII CD i I I S i I cos 2 CD5 SPIOM t-- --- g ' n — --- --- �— - --- — -- g CD5 Alpine West P d � ( I I I •'l., I g 3 I CO 31- f CD5-06I I S ! _ _ I DS-315 p gI I III1 5- }. 3P81 --C `CDS 13 I --- -�- �— CDS 15 s Ib5:50 Ib01."0 10`I:]C I�f14] 11707M 147 C I43:A Ib]gq' 140))'A 1040% 1."m 1bOC4 1400100 I!m]pC I]CVYC 10%SO IBN)OC I]13.ON I]IiW Cmtmg pi USM.) Figure 1 Page 3 Figures 2-3 are section views of the of CD5-03 well bore showing the key geologic markers, actual Top of Cement (TOC) and 500' TVD of cement above the Alpine A -Sand: CD5-03 Section View -2000- 2000 0- 020"x47" 2 0"x,12" ,000 500TVD C ernent Reqmt ibove top A -s nd (12809'M:)) 2000 00 08 ° Top of HRZ ( 1 3299' MD, 7C 40' SSTVD) `✓ 10 3/4" x 13-1/2" , o o Actual -cal 9ted TOC (13 51' MD, 7 SSTV ) t a 4000 ,00 o° o Top,of Ke , ON (13517 t to. 7128' SS D) TopofA-san (14269l%lD.7323' STV o° °o r` 6000-- ° o, o , , g __._._.._ _.__ "_._.__.._ __.... ............__ ..y.. �S� .j.. •......_ _.__................. _ _ __ 8000 9` 7-518" x 9-718' by 11' (14340' kiD, 7399' TVD) 4.112' x 6-1/2' n cin b w 10000 0 2000 4000 6000 8000 10000 12000 14000 16000 Vertical Section at 331.00° (2000 usftlin) Figure 2 Page 4 CD5-03 Section View 6000 6400 c 06800 v e 7200 i d F- 7600 8000 7600 8000 8400 8800 9200 9600 10000 10400 10800 Vertical Section at 331.00' (400 usftlin) SOON Cement Req t above top sand (12809' MD, 6892' ) Top of H (13299' kIC. 7110' ND) . " AGual-talc laled TOC (1 351' MID, 713 ' ND) Top of Kalu k (13517 KID 7198' ND) - Top of A-sa id (74269' R1 .7393 -TVD) O' t0 • O� O Ci 7-518"x Figure 3 9-7/8' by 71" (14340' RID, 7399' ND) `r 0 w Figure 3 7 5/8" Intermediate Casing Shoe 7399' SSTVD / 14340' MD A Sand Frac Gradient: 12.0 ppg 500' MD Cement Requirement ECD 11.9 PPG Frac Gradient Actual TOC 7062' SSTVD / 13395' MD Relative TOC 337' TVD / 945' MD Alpine A 7323' SSTVD / 14269' MD 7 5/8" Casing Shoe 7399';SSTVD / 14340' MD Figure 4 Page 5 500' TVD Cement Requirement ECD 12.5 PPG sPR Exceeds Frac Gradient Increase TOC to 500' TVD Actual TOC 6822' SSTVD / 12670' MD Relative TOC 500' TVD / 1678' MD As Figure 4 shows, increasing the TOC on CD5-03 to 500' TVD above the Alpine A Sand would almost double the length of the cement column. This would result in an increase in ECD at the 7-5/8" shoe from 11.9 PPG to 12.5 PPG, which likely would cause a breakdown of and lost circulation in the Alpine A Sand. In this illustration, the result of trying to cement to 500' TVD to comply with the proposed regulation would be a step backward, undermining the objective of zonal isolation rather than improving it. ConocoPhillips has reviewed the Texas Railroad Commission regulations on casing cementing, found in Texas Administrative Code Title 16 Part 1 Chapter 3.13 Casing, Cementing, Drilling, Well Control, and Completion Requirements. In Section 3.13(a)(4), on casing and cementing, Texas requires from 100' MD to 600' MD of cement above the permitted zone, depending on the type of log that is run to qualify the cement. The Texas Administrative Code Title 16 Part 1 Chapter 3.13 are provided as Exhibit 1 to these Page 6 comments. We are not aware of any requirement in Texas or any other another jurisdiction requiring cementing to 500' TVD. ConocoPhillips sees no improvement to zonal isolation that would result from increasing the amount of cement pumped to 500' TVD above the intermediate casing shoe. As demonstrated in the example provided, increasing the amount of cement pumped on intermediate casing to 500' TVD above the casing shoe or hydrocarbon zone increases the ECUs at the casing shoe and increases the risk of losing circulation while pumping the cement. Therefore, ConocoPhillips recommends continuing with the current AOGCC practice for cementing of the intermediate casing of 500'MD above a hydrocarbon zone or casing shoe. Proposed Regulation 20 AAC 25.030 Casing and Cementing: Paragraph (d)(8). The proposed language for a new paragraph (d)(8) appears to be entirely redundant of the regulations in 20 AAC 25.283. ConocoPhillips opposes repetition and redundancy in the regulations when it is not required to serve a specific purpose, and we see no purpose for it here. Over time, redundancy tends to lead to divergent interpretations, complexity and confusion rather than simplicity and clarity. The existing regulatory requirements for permitting hydraulic fracturing operations are adequately clear as stated in section 283. We recommend rejection of the proposed subsection (d)(8). Proposed Regulation 20 AAC 25.030 Casing and Cementing: Subsection (e). The Commission has proposed a change in this section to add a casing pressure test limit based on casing internal yield pressure. ConocoPhillips believes there is a better way to address the underlying issue, and our proposal would avoid the problems that would be caused by the Commission's proposal. In our view, the Commission's apparent objective could better be accomplished by changing the required casing test pressure to the Maximum Potential Surface Pressure (MPSP). MPSP is described in 20 AAC 25.005(c)(4)(A) as the maximum downhole pressure that may be encountered with a pressure gradient to surface of 0.1 psi per foot of true vertical depth. Testing to the maximum potential pressure would be a sufficiently protective and conservative requirement. As AOGCC is proposing, changing the casing test pressure to 50% of the casing internal yield could unnecessarily increase the testing requirement above the maximum potential pressure, and even exceed the rating of the BOPE. This change could also increase the wear and tear on the BOPE and lead to lower reliability in this critical safety system. ConocoPhillips sees no technical benefit by changing the casing test pressure to 50% of the casing internal yield pressure when doing so would require testing above the MPSP. We believe testing to MPSP is more reasonable, and therefore we recommend testing the casing to MPSP instead of casing internal yield pressure. Proposed Regulation 20 AAC 25.071 Logs and Geologic Data. The proposed changes in this section update the requirements in part based on contemporary practice, but retain a requirement for paper copies, which is burdensome, expensive, and unnecessary. Page 7 ConocoPhillips recommends removing the requirement for a reproduced copy, and adopting the language proposed in paragraph (b)(8) for all prior paragraphs. This would reduce the level of QC/QA required, because the data can be delivered electronically more expeditiously and the accuracy can be validated in one QC pass. Operators work with digital electronic formats. Paper copies are seldom available, and are costly to obtain, handle and store. We are not aware of any practical requirement for the retention of paper copies. 25.556 Orders Expiration. The AOGCC has proposed short-term, automatic expirations for conservation, area injection, and other types of orders. ConocoPhillips strongly opposes this proposal and urges the AOGCC to refrain from adopting such an onerous rule without greater consultation with affected operators, including potentially a public workshop to discuss the objective the Commission seeks to achieve with the proposal and less burdensome alternatives to the current proposal. Durability of governing rules is very important, in part because field development plans with investments in capital, staffing and training are based on the rules. Operators and the Commission both put a lot of time and effort into adopting rules that are suitable to last, but also have flexibility to accommodate reasonably anticipated changes over time. In our view, this system is working adequately. The purpose of keeping abreast of potentially significant changes is also served by regular reporting under regulations and orders, and by the fact that operators commonly seek adjustments to existing orders, which provides an opportunity for the Commission to seek information or raise issues of potential concern under existing orders. We recognize that in some cases rules may need to be changed either to improve the rule or to adjust to changed circumstances. We believe both the Commission and affected stakeholders have options for rule changes under existing regulations, including 20 AAC 25.460, .520 and .540. The existing regulations at 20 AAC 25.520(c), for example, provide that the "commission will, in its discretion, amend pool orders in accordance with the procedures set forth in 20 AAC 25.540." The operator and any affected owner, or other interested party has the right to request amendment of an area injection order or conservation order at any time through existing AOGCC processes. In case of automatic expiration, which we oppose, we see a high risk of new and unnecessary problems. If for any reason a conservation order is not renewed before expiration, for example, the pool would presumably cease to exist as a regulatory matter, putting the operator in a position of possibly having to cease drilling operations, injection, and possibly even production to the detriment of the State as a whole. Given the sheer number of existing orders, and the significant additional burden this rule would impose on the Commission's staff, the possibility of missing deadlines is not remote. This level of uncertainty and potential instability will not reduce waste, protect correlative rights or maximize ultimate recovery, or serve any identifiable regulatory purpose. Instead, automatic expiration and the additional administrative process of required renewal will drive up costs, and could potentially affect project economics. Even if no deadline for renewal were ever missed, the proposal would impose a very significant increase in burden and cost on operators of existing fields. Preparing an application to the AOGCC for an order is a very substantial undertaking in terms of operator staff time and resources. Having to undertake a similar effort not just on initial orders and occasional modifications, but on every order no less than every five years, would have the effect of a highly burdensome increase in regulatory compliance costs, with not correlative public benefit. We see no basis for a one -size -fits -all prescription for rules to expire in five years. We also see no adequate justification for imposing unilaterally on operators a burden of proving to the Commission on such a short time frame that existing orders ought to remain in effect. We believe a more sensible approach is to retain the existing system in which orders are crafted to be durable, but remain subject to modification at the Commissions discretion. In some cases, an early review might be appropriate; in others, a requirement to regularly renew an order would be a waste of effort that could be put to better use. If the Commission is firm in its belief that some change in this area is necessary — which is not clear to ConocoPhillips — we seek an opportunity to work with the Commission on ideas for a more flexible, less burdensome approach. ConocoPhillips Proposal for new 20 AAC 25.015(c). Although the Commission has not proposed change to this regulation, ConocoPhillips would like to take this opportunity to recommend a regulatory change that we think would be an improvement to the rules governing a change in a drilling program. Our recommendation is to add a new subsection (c) to 20 AAC 25.015, to read as follows: "Notwithstanding (a) and (b) of this section, Commission approval is not required if the only change to a through -tubing drilling operation is a change in the kick-off point with no vertical change in objective formation greater than 500 feet." Page 9 ®® LexisNexis I of 1 DOCUMENT Exhibit 1 TEXAS ADMINISTRATIVE CODE *** This document reflects all regulations in effect as of August 31, 2016 *** TITLE 16. ECONOMIC REGULATION PART 1. RAILROAD COMMISSION OF TEXAS CHAPTER 3. OIL AND GAS DIVISION Go to the Texas Administrative Code Archive Directory 16 TAC,¢ 3.13 (2016) § 3.13. Casing, Cementing, Drilling, Well Control, and Completion Requirements (a) General. Operators shall comply with this section for any wells that will be spudded on or after January 1, 2014. (1) Intent. The operator is responsible for compliance with this section during all operations at the well. It is the intent of all provisions of this section that casing be securely anchored in the hole in order to effectively control the well at all times, all usable -quality water zones be isolated and sealed off to effectively prevent contamination or harm, and all productive zones, potential flow zones, and zones with corrosive formation fluids be isolated and sealed off to prevent vertical migration of fluids, including gases, behind the casing. When the section does not detail specific methods to achieve these objectives, the responsible party shall make every effort to follow the intent of the section, using good engineering practices and the best currently available technology. In accordance with § 3.17 of this title (relating to Pressure on Bradenhead), operators must notify the Commission of bradenhead pressure. The Commission will evaluate notices of bradenhead pressure on a case-by-case basis to determine further action and will provide guidance to assist operators in wellbore evaluation. (2) Definitions. The following words and terms, when used in this section, shall have the following meanings, unless the context clearly indicates otherwise. (A) Stand under pressure --To leave the hydrostatic column pressure in the well acting as the natural force without adding any external pump pressure. The provisions are complied with if a float collar and/or float shoe is used and found to be holding at the completion of the cement job. (B) Zone of critical cement-- (i) For surface casing strings, the bottom 20% of the casing string, but no more than 1,000 feet nor less than 300 feet. The zone of critical cement extends to the land surface for surface casing strings of 300 feet or less. (ii) For intermediate or production casing strings, the bottom 20% of the casing string or 300 vertical feet above the casing shoe or top of the highest proposed productive zone, whichever is less. (C) Protection depth --Depth to which usable -quality water must be protected, as determined by the Groundwater Advisory Unit of the Oil and Gas Division, which may include zones that contain brackish or saltwater if such zones are correlative and/or hydrologically connected to zones that contain usable -quality water. (D) Productive zone --Any stratum known to contain oil, gas, or geothermal resources in commercial quantities in the area. (E) Gas/oil contact zone --A zone in an oil well in which natural gas, commonly known as gas cap gas, overlies and is in contact with crude oil in a reservoir. (F) Bay well --Any well under the jurisdiction of the Commission as defined in § 3.78(a)(5) of this chapter. Page 10 16 TAC § 3.13 (G) Deputy director of Field Operations --The deputy director of Field Operations of the Oil and Gas Division or the deputy director's delegate. (H) Director --The director of the Oil and Gas Division of the Railroad Commission of Texas or the director's delegate. (1) District director --The Director of a Railroad Commission district office or the district director's delegate. (J) Hydraulic fracturing treatment --A completion process involving treatment of a well by the application of hydraulic fracturing fluid under pressure for the express purpose of initiating or propagating fractures in a target geologic formation to enhance production of oil and/or natural gas. The term does not include acid treatment, perforation, or other non -fracture treatment completion activities. (K) Land well --Any well subject to Commission jurisdiction as defined in § 3.78(a)(6) of this chapter. (L) Minimum separation well --A well in which hydraulic fracturing treatments will be conducted and for which: (i) the vertical distance between the base of usable quality water and the top of the formation to be stimulated is less than 1,000 vertical feet; (ii) the director has determined contains inadequate separation between the base of usable quality water and the top of the formation in which hydraulic fracturing treatments will be conducted; or (iii) the director has determined is in a structurally complex geologic setting. (M) Offshore well --Any well subject to Commission jurisdiction as defined by § 3.78(a)(7). (N) Potential flow zone --A zone designated by the director or identified by the operator using available data that needs to be isolated to prevent sustained pressurization of the surface casing/intermediate casing or production casing annulus sufficient to cause damage to casing and/or cement in a well such that it presents a threat to subsurface water or oil, gas, or geothermal resources. The Commission will maintain a list of known zones by district and county that are considered potential flow zones and make this information available to all operators. The Commission will revise this list as necessary based on information provided, or otherwise made available, to the Commission. (0) Zone with corrosive formation fluids --Any zone designated by the director or identified by the operator using available data containing formation fluids that are capable of negatively impacting the integrity of casing and/or cement or have a demonstrated trend of failure for similar casing and cement design in the field. The Commission will maintain a list of known zones by district and county that are considered zones with corrosive formation fluids, and make this information available to all operators. The Commission will revise this list as necessary based on information provided, or otherwise made available, to the Commission. (P) Usable quality water --Water as defined in § 3.30(e)(7)(B)(i) of this title (relating to Memorandum of Understanding between the Railroad Commission of Texas (RRC) and the Texas Commission on Environmental Quality (TCEQ)). (3) Wellbore diameters. (A) The diameter of the wellbore in which surface casing will be set and cemented shall be at least one and one-half (1.50) inches greater than the nominal outside diameter of casing to be installed, unless otherwise approved by the district director. (B) For subsequent casing strings, the diameter of each section of the wellbore for which casing will be set and cemented shall be at least one (1) inch greater than the nominal outside diameter of the casing to be installed, unless otherwise approved by the district director. The district director may grant such approvals on an area basis. (C) The casing diameter requirements in subparagraphs (A) and (B) of this paragraph do not apply to reentries, liners, and expandable casing. (D) All float equipment, centralizers, packers, cement baskets, and all other equipment run into the wellbore on casing shall be consistent with the manufacturer's recommendations. (4) Casing and cementing. (A) All casing cemented in any well shall be steel casing that has been hydrostatically pressure tested with an applied pressure at least equal to the maximum pressure to which the pipe will be subjected in the well. For new pipe, the mill test pressure may be used to fulfill this requirement. As an alternative to hydrostatic testing, a casing evaluation Page 1 I 16 TAC § 3.13 tool may be employed. Casing meeting the performance standards set forth in API Specification SCT: Specification for Casing and Tubing (or a Commission -approved equivalent standard) shall be used through the protection depth. (B) The base cement shall meet the standards set forth in AN Specification I OA: Specification for Cement and Material for Well Cementing or the American Society for Testing and Materials (ASTM) Specification CI501CI50M, Standard Specification for Portland Cement (or a Commission -approved equivalent standard). (C) Casing shall be cemented across and above all formations permitted for injection under § 3.9 of this title (relating to Disposal Wells) at the time the well is completed, or cemented immediately above all formations permitted for injection under § 3.46 of this title (relating to Fluid Injection into Productive Reservoirs) at the time the well is completed, in a well within one-quarter mile of the proposed well location, as follows: (i) if the top of cement is determined through calculation, at least 600 feet (measured depth) above the permitted formations; (ii) if the top of cement is determined through the performance of a temperature survey conducted immediately after cementing, 250 feet (measured depth) above the permitted formations; (iii) if the top of cement is determined through the performance of a cement evaluation log, 100 feet (measured depth) above the permitted formations; (iv) at least 200 feet into the previous casing shoe (or to surface if the shoe is less than 200 feet from the surface); or (v) as otherwise approved by the district director. (D) Casing shall be cemented across and above all productive zones, potential flow zones, and/or zones with corrosive formation fluids, as follows: (i) if the top of cement is determined through calculation, across and extending at least 600 feet (measured depth) above the zones; (ii) if the top of cement is determined through the performance of a temperature survey, across and extending 250 feet (measured depth) above the zones; (iii) if the top of cement is determined through the performance of a cement evaluation log, across and extending 100 feet (measured depth) above the zones; (iv) across and extending at least 200 feet into the previous casing shoe (or to the surface if the shoe is less than 200 feet from the surface); or (v) as otherwise approved by the district director. (E) Where necessary, the cement slurry shall be designed to control annular gas migration consistent with, or equivalent to, the standards in API Standard 65 -Part 2: Isolating Potential Flow Zones During Well Construction. (5) Casing testing before drillout. For surface and intermediate strings of casing, before drilling the cement plug, the operator shall test the casing at a pump pressure in pounds per square inch (psi) calculated by multiplying the length of the true vertical depth in feet of the casing string by a factor of 0.5 psi per foot. The maximum test pressure required, however, unless otherwise ordered by the Commission, need not exceed 1,500 psi. If, at the end of 30 minutes, the pressure shows a drop of 10% or more from the original test pressure, the casing shall be condemned until the leak is corrected. A pressure test demonstrating less than a 10% pressure drop after 30 minutes constitutes confirmation that the condition has been corrected. The operator shall notify the district director of a failed test. In the event of a pressure test failure, completion operations may not re -commence until the district director approves a remediation plan, the operator successfully implements the plan, and the operator conducts a successful pressure test. (6) Well control. (A) Wellhead assemblies. After setting the conductor pipe on offshore wells or surface casing on land or bay wells, wellhead assemblies shall be used on wells to maintain surface control of the well at all times. Each component of the wellhead shall have a pressure rating equal to or greater than the anticipated pressure to which that particular component might be exposed during the course of drilling, testing, or producing the well. (B) Well control equipment. (i) An operator shall install a blowout preventer system or control head and other connections to keep the well under control at all times as soon as surface casing is set. When conductor casing is set and/or shallow gas is anticipated to be encountered, operators shall install a diverter system on the conductor casing. For bay and offshore wells, at a minimum, such systems shall include a double ram blowout preventer, including pipe and blind rams, an annular -type blowout preventer or other equivalent control system, and a shear ram. tt For wells in areas with hydrogen sulfide, the operator shall comply with § 3.36 of this title (relating to Oil, Gas, or Geothermal Resource Operation in Hydrogen Sulfide Areas). (iii) Ram type blowout prevention equipment shall have a rated working pressure that equals or exceeds the maximum anticipated surface pressure of the well. Blowout preventer rams shall be of a proper size for the drill pipe being used or production casing being run in the well or shall be variable -type rams that are in the appropriate size range. Alternatively, an annular preventer may be used in lieu of casing/pipe rams or variable bore rams when running production casing provided the expected shut-in surface pressures would not exceed the tested pressure rating of the annular preventer. (iv) Operators shall install a drill pipe safety valve to prevent backflow of water, oil, gas, or other formation fluids into the drill string. (v) Operators shall install a choke line of Page 12 16 TAC § 3.13 sufficient size and working pressure. (vi) When using a Kelly rig during drilling, the well shall be fitted with an upper Kelly cock in proper working order to close in the drill string below hose and swivel, when necessary for well control. A lower Kelly safety valve shall be installed so that it can be run through the blowout preventer. When needed for well control, the operator shall maintain at all times on the rig floor safety valves to include: (I) full -opening safety valve; and (11) inside blowout preventer valve with wrenches, handling tools, and necessary subs for all drilling pipe sizes in use. (vii) All control equipment shall be consistent with API Standard 53: Recommended Practices for Blowout Prevention Equipment Systems for Drilling Wells. Control equipment shall be certified in accordance with API Standard 53 as operable under the product manufacturer's minimum operational specifications. Certification shall include the proper operation of the closing unit valving, the pressure gauges, and the manufacturer's recommended accumulator fluids. Certification shall be obtained through an independent company that tests blowout preventers, stacks and casings. Certification shall be performed every five (5) years and the proof of certification shall be made available upon request of the Commission. (viii) All well control equipment shall be in good working condition at all times. All outlets, fittings, and connections on the casing, blowout preventers, choke manifold, and auxiliary wellhead equipment that may be subjected to wellhead pressure shall be of a material and construction to withstand or exceed the anticipated pressure. The lines from outlets on or below the blowout preventers shall be securely installed, anchored, and protected from damage. (ix) In addition to the primary closing system, including an accumulator system, the blowout preventers shall have a secondary location for closure. (x) Testing of blowout prevention equipment. (I) Ram type blowout prevention equipment shall be tested to at least the maximum anticipated surface pressure of the well, but not less than 1,500 psi, before drilling the plug on the surface casing. (11) Blowout prevention equipment shall be tested upon installation, after the disconnection or repair of any pressure containment seal in the blowout preventer stack, choke line, or choke manifold, limited to the affected component, with testing to occur at least every 21 days. When requested, the district director shall be notified before the commencement of a test. (111) A record of each test, including test pressures, times, failures, and each mechanical test of the casings, blowout preventers, surface connections, surface fittings, and auxiliary wellhead equipment shall be entered in the logbook, signed by the person responsible for the test, and made available for inspection by the Commission upon request. (C) Drilling fluid program. (i) The characteristics, use, and testing of drilling fluid and conduct of related drilling procedures shall be designed to prevent the blowout of any well. Adequate supplies of drilling fluid of sufficient weight and other acceptable characteristics shall be maintained. Drilling fluid tests shall be performed as needed to ensure well control. Adequate drilling fluid testing equipment shall be kept on the drilling location at all times. Sufficient drilling fluid shall be pumped and maintained to ensure well control at all times, including when pulling drill pipe. Mud pit levels shall be visually or mechanically monitored during the drilling process. Mud -gas separation equipment shall be installed and operated as needed when abnormally pressured gas -bearing formations may be encountered. The Commission shall have access to the drilling fluid records and shall be allowed to conduct any essential tests on the drilling fluid used in the drilling or recompletion of a well. When the conditions and tests indicate a need for a change in the drilling fluid program in order to insure control of the well, the operator shall use due diligence in modifying the program. (ii) Wells drilled with air shall maintain well control using blowout preventer systems and/or diverter systems. (iii) All hole intervals drilled prior to reaching the base of protected water shall be drilled with air, fresh water or a fresh water based drilling fluid. No oil-based drilling fluid may be used until casing has been set and cemented to the protection depth. (D) Diverter systems for bay and offshore wells. Any bay or offshore well that is drilled to and/or through formations where the expected reservoir pressure exceeds the hydrostatic pressure of the drilling fluid column shall be equipped to divert any wellbore fluids away from the rig floor. When the diverter system is installed, the diverter components including the sealing element, diverter valves, control systems, stations and vent lines shall be function and pressure tested. For drilling operations with a surface wellhead configuration, the system shall be function tested at least once every 24-hour period after the initial test. After all connections have been made on the surface casing or conductor casing, the diverter sealing element and diverter valves shall be pressure tested to a minimum of 200 psig. Subsequent pressure tests shall be conducted within seven days after the previous test. All diverter systems shall be maintained in working condition. No operator shall continue drilling operations if a test or other information indicates that the diverter system is unable to function or operate as designed. Page 13 16 TAC § 3.13 (E) Casinghead. (i) Requirements. All land and bay wells shall be equipped with casingheads of sufficient rated working pressure, with adequate connections and valves accessible at the surface, to allow pumping of fluid between any two strings of casing at the surface. (ii) Casinghead test procedure. Any well showing sustained pressure on the casinghead, or leaking gas or oil between the surface casing and the next casing string, shall be tested in the following manner. The well shall be killed with water or mud and pump pressure applied. The casing shall be condemned if the pressure gauge on the casinghead reflects the applied pressure. After completing corrective measures, the casing shall be tested in the same manner. This method shall be used when the origin of the pressure cannot otherwise be determined. (F) Christmas tree. (i) All completed non -pumping wells shall be equipped with Christmas tree fittings and wellhead connections with a rated working pressure equal to, or greater than, the surface shut-in pressure of the well. The tubing shall be equipped with a master valve, but two master valves shall be used on all wells with surface pressures in excess of 5,000 psi. All wellhead connections shall be assembled and tested prior to installation by a fluid pressure equal to the test pressure of the fitting employed. (ii) The Christmas tree for completed bay and offshore wells shall be equipped with either two master valves, one master valve and one wing valve, or two wing valves. All bay and offshore wells shall have at least five feet of spacing between the bottom of the Christmas tree and the surface of the water at high tide, where applicable. Any newly completed bay and offshore well or existing well on which the Christmas tree is being replaced shall be equipped with a back pressure valve wellhead profile at the flange where the tubing hangs on the Christmas tree. (G) Storm choke and safety valve. (i) Bay and offshore wells shall be equipped with a storm choke and/or safety valve installed in the tubing. (ii) An operator may request approval to use a surface safety valve in lieu of a subsurface safety valve by filing with the appropriate district director a written request for such approval providing all pertinent information to support the exception. (iii) The depth and type of the safety valve shall be reported in the "remarks" section of the appropriate completion report form required by § 3.16 of this title (relating to Log and Completion or Plugging Report), after the well is completed or recompleted. (7) Additional requirements for wells on which hydraulic fracturing treatments will be conducted. (A) All casing strings or fracture tubing installed in a well that will be subjected to hydraulic fracturing treatments shall have a minimum internal yield pressure rating of at least 1.10 times the maximum pressure to which the casing strings or fracture tubing maybe subjected. (B) The operator shall pressure test the casing (or fracture tubing) on which the pressure will be exerted during hydraulic fracturing treatments to at least the maximum pressure allowed by the completion method. Casing strings that include a pressure actuated valve or sleeve shall be tested to 80 percent of actuation pressure for a minimum time period of five (5) minutes. A surface pressure loss of greater than 10 percent of the initial test pressure is considered a failed test. The casing required to be pressure tested shall be from the wellhead to at least the depth of the top of cement behind the casing being tested. The district director shall be notified of a failed test within 24 hours of completion of the test. In the event of a pressure test failure, no hydraulic fracturing treatment may be conducted until the district director has approved a remediation plan, and the operator has implemented the approved remediation plan and successfully re- tested the casing (or fracture tubing). (C) During hydraulic fracturing treatment operations, the operator shall monitor all annuli. The operator shall immediately suspend hydraulic fracturing treatment operations if the pressures deviates above those anticipated increases caused by pressure or thermal transfer and shall notify the appropriate district director within 24 hours of such deviation. Further completion operations, including hydraulic fracturing treatment operations, may not recommence until the district director approves a remediation plan and the operator successfully implements the approved plan. (D) The following conditions also apply if the well is a minimum separation well, unless otherwise approved by the director: (i) Cementing of the production casing in a minimum separation well shall be by the pump and plug method. The production casing shall be cemented from the shoe up to a point at least 200 feet (measured depth) above the shoe of the next shallower casing string that was set and cemented in the well (or to surface if the shoe is less than 200 feet from the surface). (ii) The operator shall pressure test the casing string on which the pressure will be exerted during stimulation to the maximum pressure that will be exerted during hydraulic fracturing treatment. The operator shall notify the district director within 24 hours of a failed test. No hydraulic fracturing treatment may be conducted until the district director has approved a remediation plan, and the operator has implemented the approved remediation plan and successfully re -tested the casing (or fracture tubing). (iii) The production casing for any minimum separation well shall not be disturbed for a minimum of eight hours after cement is in place and casing is hung -off, and in no case shall the Page 14 16 TAC § 3.13 casing be disturbed until the cement has reached a minimum compressive strength of 500 psi. (iv) In addition to conducting an evaluation of cementing records and annular pressure monitm ing results, the operator of a minimum separation well shall run a cement evaluation tool to assess radial cement integrity and placement behind the production casing. If the cement evaluation indicates insufficient isolation, completion operations may not re -commence until the district director approves a remediation plan and the operator successfully implements the approved plan. (v) The operator of a minimum separation well may request from the appropriate district director approval of an exemption from the requirement to run a cement evaluation tool. Such request shall include information demonstrating that the operator has: (I) successfully set, cemented, and tested the casing for which the exemption is requested in at least five minimum separation wells by the same operator in the same operating field; (11) obtained cement evaluation tool logs that support the findings of cementing records, annular pressure monitoring results or other tests demonstrating that successful cement placement was achieved to isolate productive zones, potential flow zones, and/or zones with corrosive formation fluids; and (111) shown that the well for which the exemption is requested will be constructed and cemented using the same or similar techniques, methods, and cement formulation used in the five wells that have had successful cement jobs. (8) Pipeline shut-off valves for bay and offshore wells. All bay and offshore gathering pipelines designed to transport oil, gas, condensate, or other oil or geothermal resource field fluids from a well or platform shall be equipped with automatically controlled shut-off valves at critical points in the pipeline system. Other safety equipment shall be in full working order as a safeguard against spillage from pipeline ruptures. (9) Training for bay and offshore wells. All tool pushers, drilling superintendents, and operators' representatives (when the operator is in control of the drilling) shall be required to, upon request, furnish certification of satisfactory completion of an American Petroleum Institute (API) training program, an International Association of Drilling Contractors (IADC) training program, or other equivalent nationally recognized training program on well control equipment and procedures. The certification shall be renewed every two years by attending an API- or IADC-approved refresher course or a refresher course approved by the equivalent nationally recognized training program. (10) Bottom -hole pressure surveys. The Commission may require bottom -hole pressure surveys of the various fields at such times as determined to be necessary. However, operators shall be required to take bottom -hole pressures only in those wells that are not likely to suffer damaging effects from the survey. Tubing and tubingheads shall be free from obstructions in wells used for bottom -hole pressure test purposes. (b) Casing and cementing requirements for land wells and bay wells. (1) Surface casing requirements for land wells and bay wells. (A) Any proposal to set surface casing to a depth of 3,500 feet or greater shall require prior approval of the appropriate district director. A request for such approval shall be in writing and shall specify how the operator plans to maintain well control during drilling, and ensure successful circulation and adequate bonding of cement, and, if necessary, prevent upward migration of deeper formation fluids into protected water. The district director may grant approvals on an area basis. (B) Amount required. (i) An operator shall set and cement sufficient surface casing to protect all usable -quality water strata, as defined by the Groundwater Advisory Unit of the Oil and Gas Division. Unless surface casing requirements are specified in field rules approved prior to the effective date of this rule, before drilling any well, an operator shall obtain a letter from the Groundwater Advisory Unit of the Oil and Gas Division stating the protection depth. In no case, however, is surface casing to be set deeper than 200 feet below the specified depth without prior approval from the district director. The district director may grant such approval on an area basis. (ii) Any well drilled to a total depth of 1,000 feet or less below the ground surface may be drilled without setting surface casing provided no shallow gas sands or abnormally high pressures are known to exist at depths shallower than 1,000 feet below the ground surface; and further, provided that production casing is cemented from the shoe to the ground surface by the pump and plug method. (C) Cementing. Cementing shall be by the pump and plug method. Sufficient cement shall be used to fill the annular space outside the casing from the shoe to the ground surface or to the bottom of the cellar. If cement does not circulate to ground surface or the bottom of the cellar, the operator or the operator's representative shall obtain the Page 15 16 TAC § 3.13 approval of the district director for the procedures to be used to perform additional cementing operations, if needed, to cement surface casing from the top of the cement to the ground surface. (D) Cement quality. (i) Surface casing strings must be allowed to stand under pressure until the cement has reached a compressive strength of at least 500 psi in the zone of critical cement before drilling plug or initiating a test. The cement mixture in the zone of critical cement shall have a 72 -hour compressive strength of at least 1,200 psi. (ii) An operator may use cement with volume extenders above the zone of critical cement to cement the casing from that point to the ground surface, but in no case shall the cement have a compressive strength of less than 100 psi at the time of drill out nor less than 250 psi 24 hours after being placed. (iii) In addition to the minimum compressive strength of the cement, the free water content shall be minimized to the greatest extent practicable in the cement slurry to be used in the zone of critical cement. In no event shall the free water separation average more than two milliliters per 250 milliliters of cement tested in accordance with the current API RP I OB -2: Recommended Practice for Testing Well Cements, inside the zone of critical cement, or more than six milliliters per 250 milliliters of cement tested outside the zone of critical cement. (iv) The Commission may require a better quality of cement mixture to be used in any well or any area if conditions indicate that a better quality of cement is necessary to prevent pollution, isolate productive zones, potential flow zones, or zones with corrosive formation fluids or prevent a safety issue in the well. (E) Compressive strength tests. Cement mixtures for which published performance data are not available must be tested by the operator or service company. Tests shall be made on representative samples of the basic mixture of cement and additives used, using distilled water or potable tap water for preparing the slurry. The tests must be conducted using the equipment and procedures in, or equipment and procedures equivalent to those in, API RP 1 OB -2, Recommended Practice for Testing Well Cements. Test data showing competency of a proposed cement mixture to meet the above requirements must be furnished to the Commission prior to the cementing operation. To determine that the minimum compressive strength has been obtained, operators shall use the typical performance data for the particular cement used in the well (containing all the additives, including any accelerators used in the slurry) at the following temperatures and at atmospheric pressure. (i) For the cement in the zone of critical cement, the test temperature shall be within 10 degrees Fahrenheit of the formation equilibrium temperature at the top of the zone of critical cement. (ii) For the filler cement, the test temperature shall be the temperature found 100 feet below the ground surface level, or 60 degrees Fahrenheit, whichever is greater. (F) Cementing report. Within 30 days of completion of the well, or within 90 days of cessation of drilling operations, whichever is earlier, a cementing report must be filed with the Commission furnishing complete data concerning the cementing of surface casing in the well as specified on a form furnished by the Commission. The operator of the well or the operator's duly authorized agent having personal knowledge of the facts, and representatives of the cementing company performing the cementing job, must sign the form attesting to compliance with the cementing requirements of the Commission. (G) Centralizers. Surface casing shall be centralized at the shoe, above and below a stage collar or diverting tool, if run, and through usable -quality water zones. In nondeviated holes, pipe centralization as follows is required: a centralizer shall be placed every fourth joint from the cement shoe to the ground surface or to the bottom of the cellar. All centralizers shall meet specifications in, or equivalent to, API spec IOD Specifications for Bow -Spring Casing Centralizers; API Spec 10 TR4, Technical Report on Considerations Regarding Selection of Centralizers for Primary Cementing Operations; and API RP I OD -2, Recommended Practice for Centralizer Placement and Stop Collar Testing. (H) Alternative surface casing programs. (i) An alternative method of fresh water protection may be approved upon written application to the appropriate district director. The operator shall state the reason for the alternative fresh water protection method and outline the alternate program for casing and cementing through the protection depth for strata containing usable -quality water. Alternative programs for setting more than specified amounts of surface casing for well control purposes may be requested on a field or area basis. Alternative programs for setting less than specified amounts of surface casing will be considered on an individual well basis only. The district director may approve, modify, or reject the proposed program. The district director shall deny the request if the operator has not demonstrated that the alternative casing plan will achieve the intent of this rule as described in subsection (a)(1) of this section. If the proposal is modified or rejected, the operator may request a review by the deputy director of field operations. If the proposal is not approved administratively, the operator may request a public hearing. An operator shall obtain approval of any alternative program before commencing operations. (ii) Any alternate casing program shall require the first string of casing set through the protection depth to be cemented in a manner that will effectively prevent the migration of any fluid to or from any stratum exposed to the wellbore outside this string of casing. The casing shall be cemented from the shoe to ground surface in a single stage, if feasible, or by a multi -stage process with the stage tool set at least Page 16 16 TAC § 3.13 100 feet below the protection depth. (iii) Any alternate casing program shall include pumping sufficient cement to fill the annular space from the shoe or multi -stage too] to the ground surface. If cement is not circulated to the ground surface or the bottom of the cellar, the operator shall run a temperature survey or cement bond log. The appropriate district office shall be notified prior to running the required temperature survey or bond log. After the top of cement outside the casing is determined, the operator or the operator's representative shall contact the appropriate district director and obtain approval for the procedures to be used to perform any required additional cementing operations. Upon completion of the well, a cementing report shall be filed with the Commission on the prescribed form. (iv) Before parallel (nonconcentric) strings of pipe are cemented in a well, surface or intermediate casing must be set and cemented through the protection depth. (1) Mechanical integrity test of surface casing after drillout. (i) If the surface casing is exposed to more than 360 rotating hours after reaching total depth or the depth of the next casing string, the operator shall verify the integrity of the surface casing by using a casing evaluation too] or conducting a mechanical integrity test or equivalent Commission - approved casing evaluation method, unless otherwise approved by the district director. (ii) If a mechanical integrity test is conducted, the appropriate district office shall be notified at least eight hours before the test is conducted to give the district office an opportunity to witness the test. The operator shall use a chart of acceptable range (20%- 80% of full scale) or an electronic equivalent approved by the district director, and the surface casing shall be tested at a pump pressure in pounds per square inch (psi) calculated by multiplying the length of the true vertical depth in feet of the casing string by a factor of 0.5 psi per foot up to a maximum of 1,500 psi for a minimum of 30 minutes. A pressure test demonstrating less than a 10% pressure drop after 30 minutes constitutes confirmation of an acceptable pressure test. The appropriate district office shall be notified within 24 hours after a failed test. Completion operations may not re- commence until the district director approves a remediation plan and the operator successfully implements the approved plan, and successfully re -tests the surface casing. (2) Intermediate casing requirements for land wells and bay wells. (A) Cementing method. Each intermediate string of casing shall be cemented from the shoe to a point at least 600 feet (measured depth) above the shoe. If any productive zone, potential flow zone, or zone with corrosive formation fluids is open to the wellbore above the casing shoe, the casing shall be cemented; (i) if the top of cement is determined through calculation, from the shoe up to a point at least 600 feet (measured depth) above the top of the shallowest productive zone, potential flow zone, or zone with corrosive formation fluids; (ii) if the top of cement is determined through performance of a temperature survey, from the shoe up to a point at least 250 feet (measured depth) above the top of the shallowest productive zone, potential flow zone, or zone with corrosive formation fluids; (iii) if the top of cement is determined through performance of a cement evaluation log, from the shoe up to a point at least 100 feet (measured depth) above the top of the shallowest productive zone, potential flow zone, or zone with corrosive formation fluid; or (iv) to a point at least 200 feet (measured depth) above the shoe of the next shallower casing string that was set and cemented in the well (or to surface if the shoe is less than 200 feet from the surface); or (v) as otherwise approved by the district director. (B) Top of cement. The calculated or measured top of cement shall be indicated on the appropriate completion form required by § 3.16 of this title (relating to Log and Completion or Plugging Report). (C) Alternate method. In the event the distance from the casing shoe to the top of the shallowest productive zone, potential flow zone, and/or zone with corrosive formation fluids make cementing, as specified above, impossible or impractical, the multi -stage process may be used to cement the casing in a manner that will effectively isolate and seal the zones to prevent fluid migration to or from such strata within the wellbore. (3) Production casing requirements for land wells and bay wells. (A) Centralizers. In deviated and horizontal holes, the operator shall provide centralization as necessary to ensure zonal isolation between the top of the interval to be completed and the shallower zones that require isolation. (B) Cementing method. The production string of casing shall be cemented by the pump and plug method, or another method approved by the Commission, with sufficient cement to fill the annular space back of the casing to the surface or to a point at least 600 feet above the shoe. If any productive zone, potential flow zone and/or zone with corrosive formation fluids is open to the wellbore above the casing shoe, the casing shall be cemented in a manner that effectively seals off all such zones by one of the methods specified for intermediate casing in paragraph (2) of this subsection. A float collar or other means to stop the cement plug shall be inserted in the casing string above the shoe. Cement shall be allowed to stand under pressure for a minimum of eight hours before drilling the plug or initiating Page 17 16 TAC § 3.13 casing pressure tests. In the event that the distance from the casing shoe to the top of the shallowest productive zone, potential flow zone and/or zone with corrosive formation fluids make cementing, as required above, impossible or impractical, the multi -stage process may be used to cement the casing in a manner that will effectively seal off all such zones, and prevent fluid migration to or from such zones within the wellbore. Uncemented casing is allowable within a producing reservoir provided the production casing is cemented in such a manner to effectively isolate and seal off that zone from all other productive zones in the wellbore as required by § 3.7 of this title (relating to Strata To Be Sealed Off). (C) Reporting of top of cement. Calculated or measured top of cement shall be indicated on the appropriate completion form required by § 3.16 of this title. (D) Isolation of gas/oil contact zones. The position of the gas -oil contact shall be determined by coring, electric log, or testing. The producing string shall be landed and cemented below the gas -oil contact, or set completely through and perforated in the oil -saturated portion of the reservoir below the gas -oil contact. (4) Tubing requirements for land wells and bay wells. (A) Tubing requirements for oil wells. All flowing oil wells shall be equipped with and produced through tubing. When tubing is run inside casing in any flowing oil well, the bottom of the tubing shall be at a point not higher than 100 feet (vertical depth) above the top of the producing interval nor more than 50 feet (vertical depth) above the top of the liner, if a liner is used, or 100 feet (vertical depth) above the kickoff point in a deviated or horizontal well. In a multiple zone structure, however, when an operator elects to equip a well in such a manner that small through -the -tubing type tools may be used to perforate, complete, plug back, or recomplete without the necessity of removing the installed tubing, the bottom of the tubing may be set at a distance up to, but not exceeding, 1,000 feet (vertical depth) above the top of the perforated or open -hole interval actually open for production into the wellbore. (B) Alternate tubing requirements. Alternate programs requesting a temporary exception pursuant to subsection (d) of this section to omit tubing from a flowing oil well may be authorized on an individual well basis by the appropriate district director. The district director shall deny the request if the operator has not demonstrated that the alternative tubing plan will achieve the intent as described in subsection (a)(1) of this section. If the proposal is rejected, the operator may request a review by the director of field operations. If the proposal is not approved administratively, the operator may request a hearing. An operator shall obtain approval of any alternative program before commencing operations. (c) Casing, cementing, drilling, and completion requirements for offshore wells. (1) Casing. An offshore well shall be cased with at least three strings of pipe, in addition to such drive pipe as the operator may desire, which shall be set in accordance with the following program. (A) Conductor casing. A string of new pipe, or reconditioned pipe with substantially the same characteristics as new pipe, shall be set and cemented at a depth of not less than 300 feet TVD (rue vertical depth) nor more than 800 feet TVD below the mud line. Sufficient cement shall be used to fill the annular space back of the pipe to the mud line; however, cement may be washed out or displaced to a maximum depth of 50 feet below the mud line to facilitate pipe removal on abandonment. Casing shall be set and cemented in all cases prior to penetration of known shallow oil and gas formations, or upon encountering such formations. (B) Surface casing. All surface casing shall be a string of new pipe with a mill test of at least 1,100 pounds per square inch (psi) or reconditioned pipe that has been tested to an equal pressure. Sufficient cement shall be used to fill the annular space behind the pipe to the mud line; however, cement may be washed out or displaced to a maximum depth of 50 feet below the mud line to facilitate pipe removal on abandonment. Surface casing shall be set and cemented in all cases prior to penetration of known shallow oil and gas formations, or upon encountering such formations. In all cases, surface casing shall be set prior to drilling below 3,500 feet TVD. Minimum depths for surface casing are as follows. (i) Surface Casing Depth Table. Display Image (ii) Surface Casing test. (1) Cement shall be allowed to stand under pressure for a minimum of eight hours before drilling plug or initiating tests. Casing shall be tested by pump pressure to at least 1,000 psi. If, at the end of 30 minutes, the pressure shows a drop of 100 psi or more, the casing shall be condemned until the leak is corrected. A pressure test demonstrating a drop of less than 100 psi after 30 minutes constitutes confirmation that the condition has been corrected. Page 18 16 TAC § 3.13 (Il) After drillout, if the surface casing is exposed to more than 360 rotating homy, the operator shall verify the integrity of the casing using a casing evaluation tool, a mechanical integrity test, or an equivalent Commission -approved alternate casing evaluation methodology, unless otherwise approved by the district director. (III) If a mechanical integrity test of the surface casing is conducted, the appropriate district office shall be notified a minimum of eight (8) hours before the test is conducted. The operator shall use a chart of acceptable range (20%- 80% of full scale) or an electronic equivalent approved by the district director, and the surface casing shall be tested at a minimum test pressure of 0.5 psi per foot multiplied by the true vertical depth of the surface casing up to a maximum of 1,500 psi for a minimum of 30 minutes. A pressure test demonstrating less than a 10% drop in pressure after 30 minutes constitutes confirmation of an acceptable pressure test. The operator shall notify the appropriate district office within 24 hours of a failed test. Operations may not re -commence until the district director approves a remediation plan and the operator implements the approved plan, and the operator successfully re -tests the surface casing. (C) Production casing or oil string. (i) The production casing or oil string shall be new or reconditioned pipe with a mill test of at least 2,000 psi that has been tested to an equal pressure. (ii) After cementing, the production casing shall be tested by pump pressure to at least 1,500 psi. If, at the end of 30 minutes, the pressure shows a drop of 150 psi or more, the casing shall be condemned. After corrective operations, the casing shall again be tested in the same manner. (iii) Cementing of the production casing shall be by the pump and plug method. Sufficient cement shall be used to fill the calculated annular space above the shoe to isolate any productive zones, potential flow zones, or zones with corrosive formation fluids and to a depth that isolates abnormal pressure from normal pressure (0.465 psi per vertical foot of gradient). A float collar or other means to stop the cement plug shall be inserted in the casing string above the shoe. Cement shall be allowed to stand under pressure for a minimum of eight hours before drilling the plug or initiating tests. (2) Operators shall comply with the well control requirements of subsection (a)(6) of this section. (d) Exceptions or alternate programs. The director may administratively grant an exception or approve an alternate casing/tubing program required by this section provided that the alternate casing/tubing program will achieve the intent of the rule as described in subsection (a)(1) of this section and the following requirements are met: (1) The request for an exception or alternate casing/tubing program shall be accompanied by the fee required by § 3.78(b)(5) of this title (relating to Fees and Financial Security Requirements). (2) An administrative exception for tubing shall not exceed a period of 180 days. A request for an exception for tubing beyond 180 days shall require a Commission order. SOURCE: The provisions of this § 3.13 adopted to be effective January 1, 1976; amended to be effective April 8, 1980, 5 TEXREG 1152; amended to be effective October 3, 1980, 5 TEXREG 3794; amended to be effective January 1, 1983, 7 TEXREG 3982; amended to be effective March 10, 1986, 11 TEXREG 901; amended to be effective January 11, 1991, 16 TEXREG 39; amended to be effective August 13, 1991, 16 TEXREG 4153; amended to be effective August 25, 2003, 28 TexReg 6816; amended to be effective January 1, 2014, 38 TexReg 3542 NOTES: CROSS-REFERENCES: This Section cited in 16 TAC § 3.9, (relating to Disposal Wells); 16 TAC § 3.15, (relating to Surface Casing To Be Left in Place); 16 TAC § 3.46, (relating to Fluid Injection into Productive Reservoirs); 16 TAC § 3.77, (relating to Brine Mining Injection Wells); 16 TAC § 3.96, (relating to Underground Storage of Gas in Productive or Depleted Reservoirs); 16 TAC § 3.81, (relating to Brine Mining Injection Wells). Alaska Oil and Gas Association S/�'�� 121 W. Fireweed Lane, Suite 207 Anchorage, Alaska 99503-2035 Phone: (907) 272-1481 Fax: (907) 279-8114 Email: kindred@aoga.org Joshua Kindred, Environmental Counsel September 27, 2016 Commissioner Cathy P. Foerster, Chair Alaska Oil & Gas Conservation Commission 333 W. 7th Avenue, Suite 100 Anchorage, AK 99501 Submitted by E -Mail to: iody.colombieOalaska,gov Re: Continents on Proposed Revisions to 20 AAC 25.022 - 20 AAC 25.990 Dear Commissioner Foerster: Thank you for the opportunity to provide the Alaska Oil and Gas Conservation Commission ("AOGCC" or "Commission") with comments and suggestions regarding proposed regulation revisions related to 20 AAC 25.022-20 AAC 25.990 ("proposed regulations"). The members of the Alaska Oil and Gas Association ("AOGA") account for the majority of oil and gas exploration, development, production, transportation, refining, and marketing activities in Alaska. In order to address the proposed regulations in an efficient and organized manner, AOGA's comments will address each proposed modification in turn, although AOGA may not have comments on each proposed change. The majority of AOGA's concerns relate to a desire for greater clarity or greater efficiency. With some modifications, AOGA believes the resulting regulation revisions can effectively balance the Commission's objectives and industry concerns. I. 20 AAC 25.022 – Notice of Ownership The AOGCC proposes to add subsection (b), to provide that: The operator shall notify the commission within 30 days in writing of any changes in office address, primary telephone number, email address, or principal contact(s). Although the proposed change appears to be relatively minor in scope, AOGA would request some clarification to avoid potential issues regarding operator compliance. AOGA Commissioner Cathy P. Foerster Alaska Oil & Gas Conservation Commission September 27, 2016 Page 2 of 6 encourages the Commission to clarify that the new notice obligation only applies to changes in operator contact information, not to changes in any other owner's contact information and that the "principal contact(s)" requirement be deleted to help minimize the frequency of required updates. Furthermore, AOGA would encourage the Commission to provide guidance regarding the mechanism by which operators should submit the requested information. Depending upon the Commission's objective, consideration might be given to modifying 20 AAC 25.020 rather than 20 AAC 25.022. II. 20 AAC 25.030 — Casing and Cementing The AOGCC is proposing several changes in 20 AAC 25.030 that relate to notification, log submittals, approval, and testing. Under 20 AAC 25.030(d)(5), the Commission is proposing to add a "vertical" qualifier to the cement casing mandate and requiring that: The operator shall notify the commission and obtain approval before drilling ahead; and provide (i) a cement quality log or other approved method to evaluate the adequacy of the cement to contain potential wellbore pressures and fluids; and (ii) a plan setting forth the remedial actions proposed to bring the well into compliance with the requirements of (a) of this section. AOGA is interested to determine why the Commission is modifying the requirement from measured depth to specify true vertical depth. Depending on the trajectory of the well, such a modification could potentially result in a dramatic increase in costs given the increase in cement volume necessary to ensure compliance. The modification could also result in an increase in technical risks associated with the integrity of certain wells. It might be more prudent to adopt a case-by-case approach on those wells where the trajectory could create unacceptable increases in technical risk. AOGA would also request clarification that the notification requirement is applicable only in situations where an operator fails to meet its cementing objectives. Finally, AOGA asks the Commission to provide guidance as to what might constitute an "other approved method". Under 20 AAC 25.030(d)(8) the AOGCC had added a requirement to submit a Sundry Application prior to hydraulic fracturing a well, under 20 AAC 25.030(e) the AOGCC has added requirements related to casing pressure tests, and under 20 AAC 25.030(g) the AOGCC has modified the process for obtaining a variance. AOGA has no comments on or clarifying questions related to these proposed changes to 20 AAC 25.030. Commissioner Cathy P. Foerster Page 3 of 6 Alaska Oil & Gas Conservation Commission September 27, 2016 111. 20 AAC 25.055 — Drilling Units and Well Spacing The AOGCC is proposing a variety of changes, the majority of which contemplate limiting drilling activities, by restricting the drilling or recompleting of an oil well any portion of which is within 500 feet of a property line and the drilling or recompleting of a gas well any portion of which is within 1500 feet of a property line. Understandably, these restrictions may result in significant ramifications for current or potential wells near lease boundaries. AOGA members have a variety of wells that could possibly be at variance to these requirements as proposed. To mitigate operators concerns and provide greater clarity, AOGA recommends that the Commission consider using external unit boundaries as opposed to lease boundaries as triggers for these restrictions. Focusing on unit boundaries as opposed to leases likely can address the Commission's endeavor, while also addressing industry concerns. The Commission could include an additional subsection under 20 AAC 25.055 that provides that property line and set back requirements apply to the boundary of the unit or participating area where the lease ownership is consistent across the unit as a whole or across the participating area. IV. 20 AAC 25.065 — Hydrogen Sulfide AOGA has no continents on or clarifying questions related to the AOGCC's proposed changes to 20 AAC 25.065. V. 20 AAC 25.071 — Geologic Data and Logs The most significant proposed changes to this section relate to an expansion of the types of logs subject to filing. For example, 20 AAC 25.071(b)(7)(B) would require, in relevant part: For cased -hole logs, an electronic image file in a format acceptable to the commission of all other logs run, including common derivative formats. AOGA is concerned given the reference to "all other logs run". It is not difficult to envision that an operator could read that phrase as all encompassing, which would invariably include information that is proprietary and outside the scope and intent of the proposed regulations. In addition to the breadth of this provision, AOGA is concerned that it might lead to duplicative and redundant submittals. Perhaps the Commission could be more specific regarding what information it considers relevant and therefore subject to the filing requirements. Pending the list of logs AOGCC considers relevant to this section, we may desire to have further discussion. Absent clarification and limiting language, the proposed regulations will result in the submission of exponentially more logs and information that is proprietary. An unintended consequence of the Commission's approach could be that operators will choose not to invest in the completion of interpretive work, out of concern Commissioner Cathy P. Foerster Alaska Oil & Gas Conservation Commission September 27, 2016 Page 4 of 6 that the information will be made public due to the AOGCC submission process. AOGA believes the Commission should recognize the value of operators investing resources that are likely to lead to greater oil recovery. AOGA would suggest the Commission consider providing some degree of protection by extending confidentially protection for all interpretive logs submitted. This would allow the AOGCC access to the information, while also affording the protection necessary for operators to continue to make such investments. The AOGCC also is considering adding the following requirement under 20 AAC 25.071(b)(6): The operator shall provide the commission the opportunity to examine open -hole logs for exploration or stratigraphic test wells within 72 hours of being run and prior to abandonment. AOGA proposes removing the timing element (within 72 hours of being run and prior to abandonment). This change will still provide the commission the ability to review the requested information without impacting ongoing operations. VI. 20 AAC 25.110 — Suspended Wells The AOGCC proposes under 20 AAC 25.110(a)(1)(F) that the operator demonstrate that the well: Is located on a valid lease or leases where the applicant has the right to drill for oil, gas, coal bed methane, gas hydrates, or shale gas, or to evaluate underground coal gasification or geothermal resources; AOGA recommends AOGCC clarify that if the suspended well is a unit well, a unit operator is considered to have a valid lease for all leases in a unit regardless of actual lease ownership. The AOGCC proposes under 20 AAC 25.110(b) that: The operator shall provide the commission with a list of the leases that the wellbore traverses, from surface location to bottom hole location, and the expiration date of each leases; and is required to notify the commission within 30 days, if the status of any lease changes. AOGA recommends the Commission consider unit boundaries as opposed to lease boundaries to minimize the administrative burden of providing lease and owner information where lease ownership for the affected leases is the same across the unit as a whole or the participating area. AOGA recommends the AOGCC include an additional Commissioner Cathy P. Foerster Alaska Oil & Gas Conservation Commission September 27, 2016 Page 5 of 6 subsection that provides the proposed requirements apply to the unit or participating area when appropriate. VII. 20 AAC 25.265 — Well Safety Valve Systems AOGA has no comments on or clarifying questions related to the AOGCC's proposed changes to 20 AAC 25.265, VIII. 20 AAC 25.270 — Initial Reservoir Properties The AOGCC proposes modifying 20 AAC 25.270(c) by adding a "laboratory analysis practices" requirement, and requiring that an operator submit an annual reservoir properties report by April I' of each year. As to the former, AOGA would request the Commission provide some clarification or explanation regarding the catalyst for including the "laboratory analysis" qualifier. AOGA is not necessarily objecting to the modification, but believes a better understanding of the Commission's intent would facilitate compliance with the Commissions regulations. As to the latter modification, AOGA's concerns relate to scope and timing. On scope, the AOGCC should clarify that requirement to file annual reservoir properties report does not impose any new or additional sampling and/or measurement requirements beyond current regulations. On timing, AOGA would encourage the AOGCC to allow some degree of staggered reporting. IX. 20 AAC 25.280 — Workover Operations AOGA has no comments on or clarifying questions related to the AOGCC's proposed changes to 20 AAC 25.280. X. 20 AAC 25.537 — Public and Confidential Information AOGA has no comments or clarifying questions related to the AOGCC's proposed changes to 20 AAC 25.537. XI. 20 AAC 25.556 — Orders AOGA has substantial concerns relating to the Commission's significant modifications to 20 AAC 25.556. As an initial matter, AOGCC should clarify whether these proposed revisions would only be applicable to new orders. AOGA also questions whether these revisions are necessary, particularly given the potential adverse impacts they could cause. The sunset provisions will only serve to create greater uncertainty, which could, in turn, discourage future investment. The Commission currently possesses the authority to alter orders if it believes an issue or issues need to be addressed. By adopting such a broad and all-encompassing approach, The Commission is placing a large administrative burden onto Commissioner Cathy P. Foerster Alaska Oil & Gas Conservation Commission September 27, 2016 Page 6 of operators that appears unnecessary given the AOGCC's already existing authority. At a minimum, AOGA recommends that the AOGCC provide that these new provisions are not applicable for unitized leases. AOGA believes such an exclusion is appropriate because: (1) unit operations require regulatory certainty for decision-making and planning purposes, which will be substantially undermined through the broad sunset provisions contemplated by the proposed regulations; (2) a limited term and automatic expiration of orders potentially could impact sales contracts and reserves accounting, even if unintentional; (3) such broad sunset provisions are unprecedented and inconsistent with conservation regulations in other jurisdictions; and (4) the sunset provisions are unnecessary given the AOGCC's authority to investigate and re-evaluate any Order and either issue an emergency suspension or undertake a full hearing. XII.20 AAC 25.990 — Definitions AOGA has no comments on or clarifying questions related to the AOGCC's proposed changes to 20 AAC 25.990. Sincerely, Joshua Kindred Alaska Oil & Gas Association Environmental Counsel Cc: Commissioner Hollis French Commissioner Dan Seamount EDF�ENVIRONMENTAL DEFENSE FUND Finding the ways that work September 26, 2016 Alaska Oil and Gas Conservation Commission 333 West 7th Avenue Anchorage, AK 99501 RE: September 2016 Rulemaking To Whom It May Concern, via E-mail Environmental Defense Fund (EDF) respectfully submits these written comments on the proposed rule revisions to the Alaska Administrative Code. EDF is a national organization representing over one million members nationwide and over 16,000 in Alaska, many of whom care deeply about the environmental impacts associated with oil and gas development, public health and clean water. EDF commends the Commission for its ongoing dedication to continuous improvement of its regulatory program. EDF believes the proposed rules are a strong step forward by the Commission in strengthening Chapter 25, and appreciates the opportunity to submit these comments. EDF's comments will focus on revisions to 20 AAC 25.030. 1) The proposed rulemaking specifies in 20 AAC 25.030(d)(5)(A) and (B) remediation procedures for cement for intermediate and production casing when there is evidence of improper cementation. The existing rule already specified remediation procedures for surface casing, and adding this requirement for deeper casings is good practice that should improve the quality of remediation and reduce the likelihood of well leakage over time. 2) The proposed rulemaking adds a provision in 20 AAC 25.030(d)(8) requiring the submission of a Sundry Application prior to hydraulic fracturing detailing casing and cementing information that includes an evaluation of the isolation of hydrocarbon zone(s) penetrated by the well. EDF supports this provision - 257 Parc Ave South T212 6161200 New York, NY / Austin, TX / Bentonville, AR / Boston, MA / Boulder, CO / Raleigh, NC 17' Floor F 212 505 2375 Sacramento, CA / San Francisco, CA / Washington, DC / Beijing, China / La Paz, Mexico New York, NY 10010 edf.org Totally chlorine tree I o pose-cuns,nner recycien paper it is good practice to have agency review of the well as built prior to hydraulic fracturing. In addition to an evaluation of the isolation of hydrocarbon zone(s), the AOGCC should also require a showing of isolation of other zones of concern to the Commission. This would include freshwater as specified in 20 AAC 25.030(a)(6), but might also include corrosive zones and "flow zones" capable of over -pressurizing the annulus. In Texas, for examples, these zones are required to be isolated by Texas Admin. Code Rule 3.13(a)(4)(D). Requiring a showing of isolation of these zones would reduce the risk of damage to the well, uncontrolled gas migration, and contamination of water resources. 3) The proposed rulemaking provides detailed guidance for casing pressure tests required under 20 AAC 25.030(e). The Commission is wise to provide pass/fail criteria, and the ten percent in thirty minute threshold proposed here is a standard practice. However, in order to ensure that the casing is tested to appropriate thresholds, EDF recommends adding a minimum testing pressure of 1,000 psi or at a pressure that will determine if the casing integrity is adequate to meet the well design and construction objectives. The operator should be required to test at whichever is greatest of those two options and the currently proposed requirement of 50 percent of casing internal yield pressure. 4) The proposed rulemaking revises in 20 ACC 25.030(g) the criteria that AOGCC will use to determine when to grant a variance. EDF commends the Commission on this revision, which provides more clear guidance to operators on how variances will be evaluated and tightens the relationship between variances and environmental protection. Other oil and gas agencies would do well to examine the criteria articulated in this proposal. Thank you for your time in considering these recommendations. EDF appreciates this opportunity to comment and looks forward to continuing work with the Commission on regulatory advances such as these. Respectfully submitted, Adam Peltz Environmental Defense Fund 257 Park Ave South New York, NY 10010 212-616-1212 apeltz(a)edf.org Page 2 of 2 ConocoPhilli s p September 15, 2016 Jody J. Colombie Via electronic transmittal to jody.colombie@alaska.gov Alaska Oil and Gas Conservation Commission 333 W. 7th Ave #100 Anchorage, Alaska, 99501-3539 Erik Keskula Manager, North Slope Development North Slope Operations and Development ConocoPhillips Alaska, Inc. ATO -1220 700 G Street Anchorage, AK 99501 phone 907.263.4822 RE: Questions Regarding AOGCC Proposed Regulation Changes Dear Ms. Colombie: ConocoPhillips Alaska, Inc. ("ConocoPhillips") respectfully submits the attached question list relating to the Notice of Proposed Changes in Regulations of the Alaska Oil and Gas Conservation Commission dated 7/20/16. We have sought to focus our questions on issues where the answers will inform our understanding of the Commission's goals. Our questions are also submitted with the intention to develop an understanding of the material impact of the proposed regulations. Better understanding the goals for and impact of the proposed changes will help us contribute constructive comments on how to achieve the goals while avoiding unnecessary burdens, costs, or complications and guide further engagement with the AOGCC. We may have further questions based on the AOGCC's response to the questions and the substance of the hearing scheduled for September 27. Thank you for considering our request and allowing us this opportunity to gain further understanding of the proposed regulations. Regards, Erik Keskula Manager, North Slope Development QuI,iig AO(;i;(t I'wu josFd Reyiilation ihanges, page 2 of 3 Question List: Regulation Questions 20.030 Cementing Under (d)(5): By increasing the amount of cement pumped from 500' MD to 500' TVD, is there a technical objective that 500' TVD of cement above significant hydrocarbon zones will address? Under (d)(8): What purpose would be served by restating this requirement from the requirements that are currently in the Hydraulic Fracturing regulations, 20 AAC 25.283? Under (e): Is there a technical objective for this new requirement? For context, if 50% of the casing burst exceeds the BOP rating, this new regulation would require a higher rated BOP which would add unnecessary operational challenges. This discourages the use of higher strength casing. Casing test pressures need to be tied to MASP and included in the PTD. 25.055 Well Why is the full wellbore path rather than the completed interval being Spacing and proposed as the criteria for a spacing exception? Notification In subsection (a), why does (3) differ from (1), (2) and (4) by restricting compliance to the 'interval' rather than the entire well path? 25.071 Logs and What is the purpose for continuing to provide a reproduced copy (hard Geologic Data copy) when companies and other agencies (BLM and DNR) are using electronic image files only? 25.270 Reservoir The Annual Reservoir Properties Report (Form 10-428) is listed in the Properties(e) proposed regulation changes. The attached form is listed as Form 10- 412. Should the attached form be changed to Form 10-428? 25.537(a)(3) Public Is there a purpose for this proposal other than clarification? Would this Information regulation change the Commission's existing practice? How is this new language fundamentally different than what is already in (6)? Questions Regarding AOGCC Proposed Regulation Changes, page 3 of 3 Question List (continued): Regulation Questions 25.556 Orders Is there a gap in AOGCC's existing authority (e.g., 20 AAC 25.520) to Expiration request a review of orders that necessitates this new regulation? What is the intended scope of this proposal? Would administrative orders, such as area injection order administrative approvals allowing conditional exceptions for individual wells, be included? What is AOGCC's plan for scheduling the 5 -year reviews in a way that avoids a backlog? Are conservation order and area injection order rules generally durable, or does the AOGCC foresee frequent significant changes in the future? What is the purpose for proposing a hard five-year expiry instead of less onerous alternatives for protecting existing orders from being outdated? Under (b): • Does the Commission foresee having orders with an explicit exception to this regulation? Under (d): • When would the commission reauthorize orders on its own motion? • Is there some criteria for determining if a review is warranted? • Describe a 'proper' application? • What is 'timely'? • What will happen if an order expires during the application review process? For example, would production from a pool need to stop? • What would necessitate a public hearing in this context? Would there need to be evidence of a change in circumstances in order to justify a public hearing on an existing order? Under (d)(1): • What level of detail would be required in the analysis? • Would existing rules need to be fully revisited and justified, or just with respect to changed circumstances? How is an operator to know what changes are material and require review and approval by the Commission? STATE OF ALASKA ADVERTISING ORDER NOTICE TO PUBLISHER SUBM T INVOICE SHOWING ADVERTISING ORDER NO., CERTIFIED AFFIDAVIT OF PUBLICATION WITH ATTACHED COPY OF ADVERTISMENT. ADVERTISING ORDER NUMBER AO-17-001 FROM: AGENCY CONTACT: Jodv Colombie/Samantha Carlisle Alaska Oil and Gas Conservation Commission DATE OF A.O. AGENCY PHONE: 333 West 7th Avenue 07/20/16 (907)279-1433 Anchorage, Alaska 99501 DATES ADVERTISEMENT REQUIRED: COMPANY CONTACT NAME: PHONE NUMBER: ASAP FAX NUMBER: (907)276-7542 TO PUBLISHER: Alaska Dispatch News SPECIAL INSTRUCTIONS: PO Box 149001 Anchorage, Alaska 99514 TYPE OF ADVERTISEMENT: -v LEGAL DISPLAY CLASSIFIED OTHER (Specify below( DESCRIPTION PRICE Proposed Regulation Changes Initials of who prepared AO: Alaska Non -Taxable 92-600185 BUB :EE SHOWA'GADYERtL41NG' iMII T:N.VO(- OeUERNO.; CERrIF1ED�AFFIDAVR�OR�:�'. ........ ..... ..... .. ... ........... eueLIUAnDN mTx:ATa;Ael�ncoex off: AW Department of Administration DIVISIDn of AOGCC 333 West 7th AvenueTotal e, Alaska 99501 =AI[PagesAnchors of $ REF Type Number Amount Date. Comments 1 PvN ADN84501 2 AD AO-17-001 3 4 FIN AMOUNT SY Appr Unit PGM LGR Object FY I DIST LIQ 1 17 021147717 3046 17 2 3 4 s P rc asi uit i ame: Titl Purchasing Authority's Signature Telephone Number 1. A. # and receiving agency name must appear m all invoices and documents relating to this purchase. 2. a state is registered for tax free tm resections undm Chapter 32, IRS code. Registration number 92-73-0006 K. Items are for the exclusive use of the state and not for resale. AISTiiJkUxIQN �Dlvision.IM1scall0rigiga1;:40 ::Copies PittiluheY (faxed)yDrvlsioitFiscal, Retelving Form: 02-901 Revised: 7/20/2016 The Alaska Oil and Gas Conservation Commission (AOGCC) proposes to adopt regulation changes in Title 20, Chapter 25 of the Alaska Administrative Code, dealing with Oil and Gas regulations: Specifically, AOGCC is making the modifications described below to the following regulations: l) 20 AAC 25.022: adding a 30 day notice requirement for any change in the contact information for the information contained in the Notice of Ownership; 2) 20 AAC 25.030: clarifying the required actions when there exist indications of improper or inadequate cementing; clarifying the casing and cementing information to be provided for hydraulic fracturing operations; clarifying the requirements for casing pressure tests when blowout prevention equipment is to be used; allowing for approval of extensions of deadlines, variances and waivers; 3) 20 AAC 25.055: to require spacing exceptions based on proximity to property lines where the owner and the landowner are not the same on both sides of the line and clarifying the notification requirements for an application for a spacing exception; 4) 20 AAC 25.065(c)(1): clarifying the requirements for hydrogen sulfide detection systems; 5) 20 AAC 25.071: clarifying the requirement for providing logging and geologic data, including the forms in which such information may be provided; 6) 20 AAC 25.110(a): adding a requirement that an operator demonstrate it has valid leases for all parts of any well for which suspended status is sought; 7) 20 AAC 25.110(h): adding a requirement that an application to renew an existing "suspended" status for a well include all leases the wellbore traverses and the expiration date for each; 8) 20 AAC 265(d)(4): adding an exemption from the well safety valve system requirements for onshore wells with a velocity string; 9) 20 AAC 25.270: adding a requirement that reservoir sampling and analyses be conducted in accordance with good laboratory analysis practices and setting an annual due date for an operator's Annual Reservoir Properties Report; 10) 20 AAC 25.280: providing for expiration of sundry approvals of workovers if the workover operations are not commenced within 12 months of the approval; 11) 20 AAC 25.537(a)(3): clarifying that all reports and information required to be filed for service and production wells are public information; 12) 20 AAC 25.537(d): clarifying that all reports and information required to be filed for exploratory and stratigraphic test wells are entitled to confidentiality for approximately two years after the filing period; 13) 20 AAC 25.556: providing for automatic expiration of orders absent reauthorization; 14) 20 AAC 25.990: adding a definition of the phrase "velocity survey." The proposed changes are in response to AOGCC's periodic regulation reviews. in general, the proposed modifications aim to update and clarify the requirements, improve understanding, and streamline the implementation of the regulations. You may comment on the proposed regulation changes, including the potential costs to private persons of complying with the proposed change, by submitting written comments to Alaska Oil and Gas Conservation Commission at 333 West 7"' Avenue, Anchorage, Alaska 99501. Additionally, the Alaska Oil and Gas Conservation Commission will accept comments by facsimile at (907) 276-7542 and by electronic mail atjody.colombie@alaska.gov. The comments must be received no later than 4:30 p.m. on September 27, 2016. Oral or written comments also may be submitted at a hearing to be held on September 27, 2016, at 333 West 7'" Avenue, Anchorage, Alaska 99501. The hearing will be held at 9:00 a.m. and might be extended to accommodate those present before 9:30 a.m. who did not have an opportunity to comment. You may submit written questions relevant to the proposed action to Jody J. Colombie, Alaska Oil and Gas Conservation Commission by email atjody.colombie@alaska.gov. The questions must be received at least 10 days before the end of the public comment period. The Alaska Oil and Gas Conservation Commission will aggregate its response to substantially similar questions and make the questions and responses available on the Alaska Online Public Notice System and agency website. If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombie at (907) 793-1221 no later than September 20, 2016 to ensure that any necessary accommodation can be provided. For a copy of the proposed regulation changes, contact Jody Colombie at (907) 793-1221 or go to www.aogcc.alaska.gov, A copy of material proposed for adoption by reference is available on the Alaska Online Public Notice System or though the electronic link to the complete text. A copy of material proposed for adoption by reference may be viewed at the agency's office at 333 West Seventh Avenue, Anchorage, AK 99501. After the public comment period ends, the Alaska Oil and Gas Conservation Commission will either adopt these or other provisions dealing with the same subject, without further notice, or decide to take no action on them. The language of any final regulation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authority: AS 3 ] .05.030 and AS 31.05.090 Statutes Being Implemented, Interpreted, or Made Specific: AS 31.05.090 Fiscal Information: The proposed regulation changes are not expected to require an increased appropriation. DATE: 7 - zo — JG271 a/ AA:f4-1111- Cathy oerster, Chair, Commissioner ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.190(g)) I . Adopting agency: Alaska Oil and Gas Conservation Commission 2. General subject of regulation: Batch regulation updates 3. Citation of regulation (may be grouped): 20 AAC 25.022 - 990 4. Department of Law file number, if any: 5. Reason for the proposed action: ( ) Compliance with federal law ( ) Compliance with new or changed state statute ( ) Compliance with court order ( ) Development of program standards (X) Other (identify): The imposed changes are in response to AOGCC's periodic regulation reviews In general the proposed modifications aim to update and clarify the requirements improve understanding and streamline the implementation of the regulations. 6. Appropriation/Allocation: Zero Cost of implementation to the state agency and available funding (in thousands of dollars): Initial Year Subsequent FY 2017 Years Operating Cost $ 0 $ 0 Capital Cost $ 0 $ 0 1002 Federal receipts $ 0 $ 0 1003 General fund match $ 0 $ 0 1004 General fund $ 0 $ 0 1005 General fund/ program $ 0 $ 0 Other (identify) $ 0 $ 0 8. The name of the contact person for the regulation: Name: Jody J.Colombie Title: Special Assistant to the Commission Address: 333 West 7th Avenue. Anchorage AK 99501 Telephone: (907) 793-1221 E-mail address: iody.colombie(a alaska.gov 9. The origin of the proposed action: X Staff of state agency Federal government General public Petition for regulation change Other (identify) 10. Date: July 20, 2016 Prepared by:. Name: Jody J. Colombie Title: Special Assistant. Telephone: (907) 793-1221 270227 0001389821 $776.90 AFFIDAVIT OF PUBLICATION STATE OF ALASKA THIRD JUDICIAL DISTRICT Emma Dunlap being first duly sworn on oath deposes and says that he/she is a representative of the Alaska Dispatch News, a daily newspaper. That said newspaper has been approved by the Third Judicial Court, Anchorage, Alaska, and it now and has been published in the English language continually as a daily newspaper in Anchorage, Alaska, and it is now and during all said time was printed in an office maintained at the aforesaid place of publication of said newspaper. That the annexed is a copy of an advertisement as it was published in regular issues (and not in supplemental form) of said newspaper on July 21, 2016 and that such newspaper was regularly distributed to its subscribers during all of said period. That the full amount of the fee charged for the foregoing publication is not in excess of the rate charged private individuals. Signed 111A QIIJI—C) Subscribed and sworn to before me this 25th day of July, 016 Notary Public in and for The State of Alaska. Third Division Anchorage, Alaska MY COMMISSION EXPIRES � s Natary Public R MPSON Ilis w My Commission Expires Feb 23, 2019 NOTICE OF PROPOSE® CHANGES IH THE REGULATIONS OF THE ALASKA OIL AND GAS CONSERVATION COMMISSION The Alaska Oil and Gas Conservation Commission (AOGCC) proposes to adopt regulation changes in Title 20 Chapter 25 off the Alaska Administrative Code, dealing with Oil and Gas regulations: Specifically, AOGCC is making the modifications described below to the following regulations: 2) 20 AAC 25.030: clarifying the required actions when there exist indications of improper or inadequate cementing; 3) 20 AAC 25.( Proximity to andowner E which suspE 7) 20 AAC 25.1 8) 20 AAC valvegs) stn 9) 20 AUC and ane laborau for an o 10) 20 AAC workov within 1 11) 20 AAC require( nforma 12) 20 AAC require( are end the fi in; 13) 20 AAC absent) 14) 20 AAC FiyljyaS are spacing exceptions oases on nes where the owner and the same on both sides of the line and m requirements for an application for a arifying the requirements for hydrogen ms; 1K the requirement for providing logging iding the forms in which such arequirement that an operator for all parts of any well for is is sought; ng a requirement that an application to Derided' status for a well include all verses and the expiration date for each; Ig an exemption from the well safety Dnts for onshore wells with a velocity a requirement that reservoir sampling cted in accordance with good :[ices and setting an annual due date 11 Reservoir Properties Report; 1g for expiration of sundry approvals of ver operations are not commenced appproval; in ing that all reports and information service and production wells are public yin that all reports and information exploratory and strati grapphic test wells tiality for approximately go years after 1g for automatic expiration of orders a definition of the phrase "velocity The proposed Chanes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, improve understanding, and streamline the implementation of the regulations. You may comment on the proposed regulation changes, including the potential costs to private persons of complying wl h the proposed change, by submitting written comments to Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Anchorage, Alaska 99501. Additionally, the Alaska Oil and Gas Conservation Commission will accept comments by facsimile at(907) 276-7542 and by electronic mail at.jody.colomble@alaska.gov. The comments must be received no later than 4:30 p.m. on September 27, 2016. or on to present nave an opportunity to comment. You me submit written questions relevant to the proposed action to Jody J. Colombie, Alaska Oil and Gas Conservation Commission by email at jody.colombie®alaska.gov. The questions must be received at least 10 days before the end of the public comment period. The' Alaska Oil and Gas Conservation Commission will aggregate its response to substantially similar questions and make the questions and responses available on the Alaska Online Public Notice System and agency website. a hearing to be If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombia at (907) 793-1221 no later than September 20, 2016 to ensure that any necessary accommodation can be provided. clarifying thi spacing exo 4) 20 AAC 25.( sulfide deter 5) 20 AAC 25.( and geologi( information 6) 20 AAC 25.1 demonstrate which suspE 7) 20 AAC 25.1 8) 20 AAC valvegs) stn 9) 20 AUC and ane laborau for an o 10) 20 AAC workov within 1 11) 20 AAC require( nforma 12) 20 AAC require( are end the fi in; 13) 20 AAC absent) 14) 20 AAC FiyljyaS are spacing exceptions oases on nes where the owner and the same on both sides of the line and m requirements for an application for a arifying the requirements for hydrogen ms; 1K the requirement for providing logging iding the forms in which such arequirement that an operator for all parts of any well for is is sought; ng a requirement that an application to Derided' status for a well include all verses and the expiration date for each; Ig an exemption from the well safety Dnts for onshore wells with a velocity a requirement that reservoir sampling cted in accordance with good :[ices and setting an annual due date 11 Reservoir Properties Report; 1g for expiration of sundry approvals of ver operations are not commenced appproval; in ing that all reports and information service and production wells are public yin that all reports and information exploratory and strati grapphic test wells tiality for approximately go years after 1g for automatic expiration of orders a definition of the phrase "velocity The proposed Chanes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, improve understanding, and streamline the implementation of the regulations. You may comment on the proposed regulation changes, including the potential costs to private persons of complying wl h the proposed change, by submitting written comments to Alaska Oil and Gas Conservation Commission at 333 West 7th Avenue, Anchorage, Alaska 99501. Additionally, the Alaska Oil and Gas Conservation Commission will accept comments by facsimile at(907) 276-7542 and by electronic mail at.jody.colomble@alaska.gov. The comments must be received no later than 4:30 p.m. on September 27, 2016. or on to present nave an opportunity to comment. You me submit written questions relevant to the proposed action to Jody J. Colombie, Alaska Oil and Gas Conservation Commission by email at jody.colombie®alaska.gov. The questions must be received at least 10 days before the end of the public comment period. The' Alaska Oil and Gas Conservation Commission will aggregate its response to substantially similar questions and make the questions and responses available on the Alaska Online Public Notice System and agency website. a hearing to be If you are a person with a disability who needs a special accommodation in order to participate in this process, please contact Jody Colombia at (907) 793-1221 no later than September 20, 2016 to ensure that any necessary accommodation can be provided. i For a copy of the proposed regulation changes, contact Jooy �olomole at (907) 793-1221 or go to WWVV.aogcc.a)aska.gov. A copy of material proposed for adoption by reference is available on the Alaska Online Public Notice5 stem or though the electronic link to the complete text.A copy Xrnaterial proposed for adoption by reference may be viewed at the agency's office at 333 West Seventh Avenue, Anchorage, AK 99501. After the public comment period ends, the Alaska Oil and Gas Conservation Commission will either adoppt these or other provisions dealing with the same subject, without furmer notice, or decide to take no acEon on them. The language of any final regulation may be different from the proposed regulation. You should comment during the time allowed if your interests could be affected. Statutory Authoriri: AS 31.05.030 and AS 31.05.090 Ste r' Being Implemented Interpreted, or Made Specific: AS 31.05.090 Fiscal Information: The proposed regulation changes are not expected to require an increased appropriation. DATE: July 20, 2016 s Cathy P. Foerster, Chair, Commissioner ADDITIONAL REGULATION NOTICE INFORMATION (AS 44.62.190(g)) adopting agency: Alaska Oil and Gas Conservation 2. General subject of regulation: Batch regulation updates 3. Citation of regulation (maybe grouped): 20 AAC 25.022-990 4. Department of law file number, if any: S. Reason for theproposed action: compliance with federal law Compliance with new or Changed state statute 3 Compliance with court order Development ofpProgram standards X ) Other (Identify):The proposed changes are in response to AOGCC's periodic regulation reviews. In general, the proposed modifications aim to update and clarify the requirements, improve understanding and streamline the implementatio of 6. Appropriation/Allocation: Zero 7. Cost of implementation to the state agency and available funding (in thousands of dollars): Initial Year Subsequent FY 2017 Years Operating Cost $ 0 ¢ 0 Capital Cost $ 0 $ 0 1002 Federal receipts $ 0 0 1003 General fund in h $ 0 0 1004 General fund $ 0 0 1005 General fund/ pprreg$o oOn $ (identify) a. The name of the contact person for the regulation: Name: Jori J. Colombia Title: �ecls al Assistant to the commission Address: 333�diesr Avenue. nC orage. AK 99501 Telephone: -1221 E-mail address: loov,colompievalasKagov 9. The origin of the proposed action: x Staff of state agency . _ federal government _ General public Petition for regulation change —_ Other (identity) 10. Date: July 20 2016 Prepared by: Name: loty 1. Colombia TRIe: Special Assistant Teleohone—i907fi�3-1I ' Published: July 21, 2016 ' Jack Hakkila Bernie Karl P.O. Box 190083 K&K Recycling Inc. Gordon Severson P.O. Box 58055 3201 Westmar Cir. Anchorage, AK 99519 Fairbanks, AK 99711 Anchorage, AK 99508-4336 Penny Vadia George Vaught, Jr. Darwin Waldsmith 399 W. Riverview Ave. P.O. Box 13557 P.O. Box 39309 Soldotna, AK 99669-7714 Denver, CO 80201-3557 Ninilchik, AK 99639 Richard Wagner P.O. Box 60868 Fairbanks, AK 99706 C�C)std. lZot 2oAce C C �� L2 d-; o v Angela K. Singh Colombie, Jody J (DOA) From: Colombie, Jody J (DOA) Sent: Wednesday, July 20, 2016 9:37 AM To: Varni, Pam (LAA); Resregs@akleg.gov, Fisher, Sheldon A (DOA); Weaver, Steven C (LAW); Pollard, Susan R (LAW); Ballantine, Tab A (LAW); Bender, Makana K (DOA); Bettis, Patricia K (DOA); Bixby, Brian D (DOA); Brooks, Phoebe L (DOA); Carlisle, Samantha J (DOA); Colombie, Jody J (DOA); Cook, Guy D (DOA); Davies, Stephen F (DOA); Eaton, Loraine E (DOA); Foerster, Catherine P (DOA); Frystacky, Michal (DOA); Grimaldi, Louis R (DOA); Guhl, Meredith D (DOA); Herrera, Matthew F (DOA); Hill, Johnnie W (DOA); Jones, Jeffery B (DOA); Kair, Michael N (DOA); Link, Liz M (DOA); Loepp, Victoria T (DOA); Mumm, Joseph (DOA sponsored); Noble, Robert C (DOA); Paladijczuk, Tracie L (DOA); Pasqual, Maria (DOA); Quick, Michael J (DOA); Regg, James B (DOA); Roby, David S (DOA); Scheve, Charles M (DOA); Schwartz, Guy L (DOA); Seamount, Dan T (DOA); Singh, Angela K (DOA); Wallace, Chris D (DOA); David Johnson; Elizabeth Rensch; Joseph Flack, Tiffany Stebbins; Bishop, Click (LAA); Chenault, Mike (LAA); Claman, Matt (LAA); Coghill, John (LAA); Colver, Jim (LAA); Costello, Mia C (LAA); Drummond, Harriet A (LAA); Dunleavy, Mike (LAA); Edgmon, Bryce E (LAA); Egan, Dennis W (LAA); Ellis, Johnny (LAA); Foster, Neal W (LAA); Gara, Les (LAA); Gardner, Berta (LAA); Gattis, Lynn A (LAA); Giessel, Cathy (LAA); Guttenberg, David (LAA); Hawker, Mike (LAA); Herron, Bob (LAA); Hoffman, Lyman F (LAA); Huggins, Charlie (LAA); Hughes, Shelley (LAA); Johnson, Craig W (LAA); Josephson, Andrew L (LAA); Kawasaki, Scott Jw (LAA); Keller, Wes (LAA); Kelly, Pete (LAA); Kito, Sam (LAA); Kreiss-Tomkins, Jonathan S (LAA); Ledoux, Gabrielle R (LAA); Lynn, Bob (LAA); MacKinnon, Anna (LAA); McGuire, Lesil L (LAA); Meyer, Kevin G (LAA); Micciche, Peter A (LAA); Millett, Charisse E D (LAA); Munoz, Cathy N (LAA); Nageak, Benjamin P (LAA); Neuman, Mark A (LAA); Olson, Donny (LAA); Olson, Kurt E (LAA); Ortiz, Dan (LAA); Pruitt, Lance (LAA); Reinbold, Lora (LAA); Saddler, Dan (LAA); Seaton, Paul (LAA); Spohnholz, Ivy A (LAA); Stedman, Bert K (LAA); Stevens, Gary L (LAA); Stoltze, Bill (LAA); Stutes, Louise B (LAA); Talerico, David M (LAA); Tarr, Geran L (LAA); Thompson, Steve (LAA); Tilton, Cathy (LAA); Tuck, Christopher (LAA); Vazquez, Liz (LAA); Wielechowski, Bill (LAA); Wilson, Tammie (LAA); Wool, Adam L (LAA); AKDCWeIIIntegrityCoordinator; Alan Bailey; Alex Demarban; Alexander Bridge; Allen Huckabay; Andrew VanderJack; Anna Raff; Barbara F Fullmer; bbritch; bbohrer@ap.org; Bill Bredar; Bob Shavelson; Brian Havelock; Bruce Webb; Burdick, John D (DNR); Caleb Conrad; Candi English; Colleen Miller, Crandall, Krissell; D Lawrence; Dale Hoffman; Dave Harbour; David Boelens; David Duffy; David House; David McCaleb; David Tetta; ddonkel@cfl.rr.com; Dean Gallegos; Delbridge, Rena E (LAS); DNROG Units (DNR sponsored); Donna Ambruz; Ed Jones; Elowe, Kristin; Evans, John R (LDZX); Frank Molli; Gary Oskolkosf, George Pollock; Gordon Pospisil; Greeley, Destin M (DOR); Gregg Nady; gspfoff, Hyun, James J (DNR); Jacki Rose; Jdarlington (arlington@gmail.com); Jeanne McPherren; Jerry Hodgden; Jerry McCutcheon; Jim Watt; Jim White; Joe Lastufka; Radio Kenai; Easton, John R (DNR); Jon Goltz; Juanita Lovett; Judy Stanek; Julie Little; Kari Moriarty; Kazeem Adegbola; Keith Torrance; Keith Wiles; Kelly Sperback; Gregersen, Laura S (DNR); Leslie Smith; Louisiana Cutler; Luke Keller, Marc Kovak; Dalton, Mark (DOT sponsored); Mark Hanley (mark.hanley@anadarko.com); Mark Landt; Mark Wedman; Kremer, Marguerite C (DNR); Mary Cocklan-Vendl; Mealear Tauch; Michael Calkins; Michael Moora; MJ Loveland; mkm7200; Morones, Mark P (DNR); Munisteri, Islin W M (DNR); knelson@petroleumnews.com; Nichole Saunders; Nikki Martin; NSK Problem Well Supv; Oliver Sternicki; Patty Alfaro; Paul Craig; Decker, Paul L (DNR); Paul Mazzolini; Pike, Kevin W (DNR); Randall Kanady; Randy L. Skillern; Renan Yanish; Richard Cool; Robert Brelsford; Ryan Tunseth; Sara Leverette; Scott Griffith; Shannon Donnelly; Sharmaine Copeland; Sharon Yarawsky; Shellenbaum, Diane P (DNR); Skutca, Joseph E To: (DNR); Smart Energy Universe; Smith, Kyle S (DNR); Stephanie Klemmer; Stephen Hennigan; Moothart, Steve R (DNR); Steve Quinn; Suzanne Gibson; sheffield@aoga.org; Ted Kramer, Davidson, Temple (DNR); Teresa Imm; Thor Cutler; Tim Mayers; Todd Durkee; trmjrl; Tyler Senden; Vicki Irvin; Vinnie Catalano; /o=SOA/ou=First Administrative Group/cn=Recipients/cn=kjking; Aaron Gluzman; Aaron Sorrell; Ajibola Adeyeye; Alan Dennis; Anne Hillman; Assmann, Aaron A; Bajsarowicz, Caroline J; Brian Gross; Bruce Williams; Bruno, Jeff 1 (DNR); Casey Sullivan; Don Shaw; Eric Lidji; Garrett Haag; Smith, Graham O (DNR); Dickenson, Hak K (DNR); Heusser, Heather A (DNR); Holly Pearen; Jason Bergerson; Jim Magill; Joe Longo; John Martineck; Josh Kindred; Laney Vazquez; Lois Epstein; Longan, Sara W (DNR); Marc Kuck; Marcia Hobson; Steele, Marie C (DNR); Matt Armstrong; Franger, James M (DNR); Morgan, Kirk A (DNR); Pat Galvin; Pete Dickinson; Peter Contreras; Richard Garrard; Richmond, Diane M; Robert Province; Ryan Daniel; Sandra Lemke; Pollard, Susan R (LAW); Talib Syed; Tina Grovier (tmgrovier@stoel.com); Tostevin, Breck C (LAW); Wayne Wooster; William Van Dyke Cc: Ballantine, Tab A (LAW) Subject: AOGCC Proposed Regulation Changes Attachments: AOGCC Proposed Regulations 07-20-16.pdf; Notice of Hearing-AOGCC Proposed Regulations.pdf The Alaska Oil and Gas Conservation Commission (AOGCC) proposes to adopt regulation changes in Title 20, Chapter 25 of the Alaska Administrative Code, dealing with Oil and Gas regulations: Specifically, AOGCC is making the modifications described below to the following regulations: 1) 20 AAC 25.022: adding a 30 day notice requirement for any change in the contact information for the information contained in the Notice of Ownership; 2) 20 AAC 25.030: clarifying the required actions when there exist indications of improper or inadequate cementing; clarifying the casing and cementing information to be provided for hydraulic fracturing operations; clarifying the requirements for casing pressure tests when blowout prevention equipment is to be used; allowing for approval of extensions of deadlines, variances and waivers; 3) 20 AAC 25.055: to require spacing exceptions based on proximity to property lines where the owner and the landowner are not the same on both sides of the line and clarifying the notification requirements for an application for a spacing exception; 4) 20 AAC 25.065(c)(1): clarifying the requirements for hydrogen sulfide detection systems; 5) 20 AAC 25.071: clarifying the requirement for providing logging and geologic data, including the forms in which such information may be provided; 6) 20 AAC 25.110(a): adding a requirement that an operator demonstrate it has valid leases for all parts of any well for which suspended status is sought; 7) 20 AAC 25.110(h): adding a requirement that an application to renew an existing "suspended" status for a well include all leases the wellbore traverses and the expiration date for each; 8) 20 AAC 265(d)(4): adding an exemption from the well safety valve system requirements for onshore wells with a velocity string; 9) 20 AAC 25.270: adding a requirement that reservoir sampling and analyses be conducted in accordance with good laboratory analysis practices and setting an annual due date for an operator's Annual Reservoir Properties Report; 10) 20 AAC 25.280: providing for expiration of sundry approvals of workovers if the workover operations are not commenced within 12 months of the approval; 11) 20 AAC 25.537(a)(3): clarifying that all reports and information required to be filed for service and production wells are public information; 12) 20 AAC 25.537(d): clarifying that all reports and information required to be filed for exploratory and stratigraphic test wells are entitled to confidentiality for approximately two years after the filing period; 13) 20 AAC 25.556: providing for automatic expiration of orders absent reauthorization; 14) 20 AAC 25.990: adding a definition of the phrase "velocity survey." Jody J. Co(ombie AOGCC Specia(Assistant ACaska OiCandGas Conservation Commission 333 West/' .Avenue .Anchorage, .Alaska 99501 Office: (907) 793-1221 Fax: (907) 276-7542 CONFIDENTIALITY NOTICE: This e-mail message, including any attachments, contains information from the Alaska Oil and Gas Conservation Commission (AOGCC), State of Alaska and is for the sole use of the intended recipient(s). It may contain confidential and/or privileged information. The unauthorized review, use or disclosure of such information may violate state or federal law. If you are an unintended recipient of this e-mail, please delete it, without first saving or forwarding it, and, so that the AOGCC is aware of the mistake in sending it to you, contact Jody Colombie at 907.793.1221 or iodv.colombie@alaska gQ. Colombie, Jody J (DOA) From: Chup, Junnie (LAW) Sent: Wednesday, July 27, 2016 10:37 AM To: Foerster, Catherine P (DOA) Cc: Ballantine, Tab A (LAW); Moore, Colleen 1 (LAW); Pollard, Susan R (LAW); Weaver, Steven C (LAW); Miller, Linda J (LAW); Meriwether, Scott C (GOV); Collie, Megan D (DOA); Colombie, Jody J (DOA) Subject: Regulation file opened: 20 AAC 20.025 - .990: Alaska Oil and Gas Conservation Commission: Update and Clarify Regulations: JU2016200655 To: Cathy Foerster, Chair Alaska Oil and Gas Conservation Commission Re: Regulation file opened: 20 AAC 20.025 -.990: Alaska Oil and Gas Conservation Commission: Update and Clarify Regulations: JU2016200655 Our office received a file opening request regarding the regulations project referenced above. We have opened and assigned the file to assistant attorney general Tab Ballantine, phone number (907) 269-5100. Susan R. Pollard I Chief Assistant Attorney General Legislation and Regulations Section I Department of Law I'1111 Sf:11 F, Alaska Oil and Gag "ALASKA Conservation Commission 333 West Seventh Avenue 15/ F.1• N 4 1: h l 1.1 'X,1 1.1" F 1: Anchorage, Alaska 99501-3572 Main: 907.279.1433 Fax: 907.276.7542 vvv✓vv.00gcc.o laska.gov Memorandum DATE: July 20, 2016 TO: Susan Pollard, Regulations Attorney Legislation and Regulations Section Department of Law FROM: Jody Colombie, Regulations Contac Department of Administration Alaska Oil and Gas Conservation Co ission SUBJECT: File -opening request for new regulation project regarding batch regulations updates (20 AAC 25.022. -.990) We are requesting that you open a new file for a regulation project regarding batch regulations updates for 20 AAC 25.022(a) Notice of ownership, 20 AAC 25.030 Casing and cementing, 20 AAC 25.055 Drilling units and well spacing, 20 AAC 25.065(c)(1) Hydrogen Sulfide, 20 AAC 25.071 Geologic data and logs, 20 AAC 25.110 Suspended wells, 20 AAC 25.265(d)(4) Well safety valve systems, 20 AAC 25.270 Initial reservoir properties, 20 AAC 25.280(g) Workover operations, 20 AAC 25.537(a)(3) Public and confidential information, 20 AAC 25.556 Orders, and 20 AAC 25.990 Definitions for the Alaska Oil and Gas Conservation Commission. Attached is a draft of the regulations and a public notice, for your review. Attached are copies of the regulation and the public notice. This department intends to make the regulations permanent. Please assign an assistant attorney general to this project. We have worked with Assistant Attorney General Thomas Ballantine on this topic. Our agency contact person for the project is Jody Colombie, jody.colombie@alaska.gov Register I _ 2017 MISCELLANEOUS BOARDS 20 AAC 25.020 is being amended to read. 20 AAC 25.020(a) Designation of Operator. fal If an owner of a property wishes to designate a new operator for the property, the owner shall submit to the commission for approval a Designation of Operator (Form 10-411). The commission will not approve the designation of a new operator without the signature of the newly designated operator on the same Designation of Operator form. By signing the Designation of Operator form, the newly designated operator agrees to accept the obligations of an operator. The newly designated operator shall furnish a bond and, if required, security as provided for in 20 AAC 25.025. The commission's acceptance of the designated operator's bond constitutes the release of the former operator's bonding obligation for the property indicated on the Designation of Operator form. (b) The operator shall notify the commission within 30 days in writing of any changes in office address primary telephone number, email address or principal contact(s). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152, Eff. —/—/. Register _.) Authority: AS 31.05.030 Register _ 2017 MISCELLANEOUS BOARDS 20 AAC 25.030 is being amended and new sections added to read: 20 AAC.25.030 Casing and cementing. (d) (5) intermediate and production casing must be cemented with sufficient cement to fill the annular space from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth, whichever is greater, above all significant hydrocarbon zones and abnormally geo-pressured strata or, if zonal coverage is not required under (a) of this section, from the casing shoe to a minimum of 500 feet measured depth or 250 feet true vertical depth whichever is greater, above the casing shoe; if indications of improper cementing exist, such as lost returns, or if the formation integrity test shows an inadequate cement job, [REMEDIAL ACTION MUST BE TAKEN;] (A) the operator shall notify the commission and obtain approval before drilling ahead: and (13) provide: (i) a cement quality log or other approved method to evaluate the adequacy of the cement to contain Potential wellbore pressures and fluids; and 00 a plan setting forth the remedial actions proposed to bring the well into compliance with the requirements of (a) of this section; (6) if the intermediate or production string is a liner, a minimum of 100 measured feet overlap between the outer and inner strings is required; the interval of overlap must be made pressure competent and must be pressure -tested in accordance with (e) of this section; O for intermediate or production casing in a service well used for injection, a cement quality log or other evaluation log approved by the commission must be run to demonstrate isolation of the injected fluids to the approved interval. (e) A casing pressure test must be performed if BOPE is to be installed on a casing. The casing must be tested to hold a minimum surface pressure equal to 50 percent of the casing internal yield pressure.fREQUIRED WORKING PRESSURE OF THE BOPE AS SPECIFIED IN THE PERMIT TO DRILL UNDER 20 AAC 25.035(E) (3) OR 20 AAC 25.036(C)(3).] The casing pressure test must be held a minimum of 30 minutes and not show a decline greater than 10 percent. The results of this test and any subsequent tests of the casing must be recorded as required by 20 AAC 25.070(1). (f) Except for through -tubing drilling, a formation integrity test must be performed if BOPE is installed on a casing. The test must be performed to a predetermined equivalent mud weight, Register 2017 MISCELLANEOUS BOARDS leak -off, or fracture pressure as specified in the application for the Permit to Drill. The test must be conducted after drilling out of the casing shoe into at least 20 feet but not more than 50 feet of new formation. The test results must demonstrate that the integrity of the casing shoe is sufficient to contain anticipated wellbore pressures identified in the application for the Permit to Drill. The test procedure followed and the data from the test and any subsequent tests of the formation must be recorded as required by 20 AAC 25.070(1). (g) (UPON REQUEST OF THE OPERATOR, THE COMMISSION WILL, IN ITS DISCRETION, APPROVE VARIANCES FROM THE REQUIREMENTS OF (B) - (F) OF THIS SECTION TO ALLOW FOR SPECIAL OR UNUSUAL CONDITIONS IF THE DESIGN REQUIREMENTS OF (A) OF THIS SECTION ARE SATISFIED.] Upon written request of the operator showing good cause the commission may modify a deadline in this section approve a variance from anv requirement of this section if the variance provides at least an cQually effective means of complying with the requirement or approve a waiver of a requirement of this section if the waiver will not promote waste is based on sound engineering and geoscience nrincinles will not jeopardize the ultimate recovery of hydrocarbons, will not jeopardize correlative rights and will not result in an increased risk to health, safety, or the environment including freshwater. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. _/ / , Register Authority: AS 31.05.030 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.055 is being amended to read: 20 AAC 25.055. Drilling units and well spacing. (a) The commission may [WILL, IN ITS DISCRETION,] establish drilling units to govern well spacing and prescribe a spacing pattern by pool rules adopted in accordance with 20 AAC 25.520. In the absence of an order by the commission establishing drilling units or prescribing a spacing pattern for a pool, the following statewide spacing requirements apply: (1) [FOR A WELL DRILLING FOR OIL, A WELLBURE MAY BE OPEN TO TEST OR REGULAR PRODUCTION WITHIN 500 FEET OF A PROPERTY LINE ONLY IF ]an oil well or service well may not be drilled if anv portion of the well will be within 500 feet of a property line unless the owner [IS THE SAME] and the landowner [IS]are the same on both sides of the line; (2) [FOR A WELL DRILLING FOR GAS, A WELLBuRE MAY BE OPEN TO TEST OR REGULAR PRODUCTION WITHIN 1500 FEET OF A PROPERTY LINE ONLY IF ]agas well may not be drilled if any portion of the well will be within 1500 feet of a Property line unless the owner [IS THE SAME] and the landowner [IS] are the same on both sides of the line; (3) [IF OIL HAS BEEN DISCOVERED, THE DRILLING UNIT FOR THE POOL IS A GOVERNMENTAL QUARTER SECTION; NOT MORE THAN ONE WELL MAY BE DRILLED TO AND COMPLETED IN THAT POOL ON ANY GOVERNMENTAL QUARTER SECTION; A WELL MAY NOT BE DRILLED OR COMPLETED CLOSER THAN 1,000 FEET TO ANY WELL DRILLING TO OR CAPABLE OF PRODUCING FRCivI THE SAME POOL;]no well may be recompleted in an oil pool or a disposal interval if any Portion of the well within that oil pool or disposal interval is within 500 feet of a property line unless the owner and the landowner are the same on both sides of the line: (4) [IF GAS HAS BEEN DISCOVERED, THE DRILLING UNIT FOR THE POOL IS A GOVERNMENTAL SECTION; NOT MORE THAN ONE WELL MAY BE DRILLED TO AND COMPLETED IN THAT POOL ON ANY GOVERNMENTAL SECTION; A WELL MAY NOT BE DRILLED OR COMPLETED CLOSER THAN 3,000 FEET TO ANY WELL DRILLING TO OR CAPABLE OF PRODUCING FROM THE SAME POOL]no well may be recompleted in a eas pool if any nortion of the well is within 1,500 feet of a property line unless the owner and the landowner are the same on both sides of the line, (b) [A WELL MAY NOT BEGIN REGULAR PRODUCTION OF OIL FROM A PROPERTY THAT IS SMALLER THAN THE GOVERNMENTAL QUARTER SECTION UPON WHICH THE WELL IS LOCATED OR BEGIN REGULAR PRODUCTION OF GAS FROM A PROPERTY THAT IS SMALLER THAN THE GOVERNMENTAL SECTION UPON WHICH THE WELL IS LOCATED, UNLESS THE INTERESTS OF THE PERSONS OWNING THE DRILLING RIGHTS IN AND THE RIGHT TO SHARE IN THE PRODUCTION FROM THE QUARTER SECTION OR SECTION, RESPECTIVELY, HAVE BEEN POOLED UNDER AS 31.05. 100 (C) A POOLING AGREEMENT UNDER AS 31.05. 100 MUST BE FILED WITH THE COMMISSION BEFORE REGULAR Register 2017 MISCELLANEOUS BOARDS PRODUCTION FROM THE AFFECTED PROPERTY BEGINS. (D) THE COMMISSION WILL REVIEW AN APPLICATION FOR AN EXCEPTION TO THE PROVISIONS OF THIS SECTION IN ACCORDANCE WITH 20 AAC 25.540. THE APPLICANT FOR AN EXCEPTION SHALL SEND NOTICE OF THE APPLICATION BY CERTIFIED MAIL TO THE OWNERS, LANDOWNERS, AND OPERATORS DESCRIBED IN (1) OF THIS SUBSECTION AND SHALL FURNISH THE COMMISSION WITH A COPY OF THE NOTICE, THE DATE OF MAILING, AND THE ADDRESSES TO WHICH THE NOTICE WAS SENT.]UPon application by the operator, the commission may approve an exception to the Provisions of this section Review of the application will be in accordance with the Provisions of 20 AAC 25.540. The applicant for an exception whether for an individual well or on a pool wide basis shall send notice of the apPlication by certified mail to the owners, landowners. and operators described in (1) of this subsection and shall furnish the was sent, and proof of certified mailing The application must (1) the names of all owners, landowners, and operators of all properties: A. within 1,000 feet of a well drilling for oil[OR], a well drilling for disposal purposes, or a well that is being recompleted in an oil Pool or disposal interval for which an exception is sought; B. within 1,000 feet of the proposed affected area of an oil Pool or disposal interval for which a blanket spacing exception is sought C. within 3,000 feet of a well drilling for gas or for a well that is being recompleted in a gas pool for which an exception is sought; or D. within 3,000 feet of the Proposed affected area of a gas pool or gas storage pool for which a blanket spacing exception is sought (2) a plat drawn to a scale of one inch equaling 2,640 feet or larger, showing: A. the location of the well for which the exception is sought[,]; B. State or Federal lease numbers or private landownership information: C. all other completed and drilling wells on the property[, AND]i D. all adjoining properties and wells; and (3) an affidavit by a person acquainted with the facts, verifying that: A. all facts are true; [AND THAT] B. the plat correctly portrays pertinent and required data[.11 C. the list of all the owners, landowners and operators identified in (1) is complete and accurate: and D. all such owners, landowners and operators have been Provided notice of this apPhcation. Register_ , _ 2017 MISCELLANEOUS BOARDS [EI(c) Upon application by the operator, the commission [WILL] may [ESTABLISH] approve a variance from the notice requirements [DIFFERENT FROM THOSE ]of [(D)] Lb) of this section if the operator demonstrates [TO THE COMMISSION'S SATISFACTION]that compliance with the notice requirements in [(D)]Ub,Z of this section is not feasible because of the complexity of ownership within the notice area. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. _/ / , Register_.) Authority: AS 31.05.030 AS 31.05. 100 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.065(c)(1) is being amended to read: 20 AAC 25.065(c)(1) Hydrogen Sulfide. In addition to the automatic hydrogen sulfide detection system required in 20 AAC 25.066, at least three manual detectors [WITH AN ADEQUATE SUPPLY OF EXTRA DETECTOR TUBES] must be available on the location; (Repealed 11/7/99. Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. _/ / Register _.) Authority: AS 31.05.030 Register 2017 MISCELLANEOUS BOARDS 20 AAC.25.071 is amended to read: 20 AAC 25.071. Logs and Geologic data[AND LOGS]. An operator shall log the [PORTION OF THE] well [BELOW] from total depth to the base of [THE] conductor pipe by either a complete electrical [LOG] or [A COMPLETE RADIO-ACTIVITY]gamma-ray log unless the commission specifies [WHICH]the type of log or logs[IS] to be run. (b) Within [30] 90 days after completion, suspension, or [ABANDONMENT]plugging of a well or wellbranch. [WHICHEVER OCCURS FIRST, AND WITHIN 30 DAYS AFTER COMPLETION OR PLUGGING OF A WELL BRANCH, IF OCCURRING AT A DIFFERENT TIME,]or within 90 days of the date of acquisition of the data whichever occurs first the operator shall file with the commission, unless previously filed[,]_ (1) [A SEPIA] effective January 1 2018 an electronic image file in formats acceptable to the commission [AND A REPRODUCED COPY] of a complete mud log or a lithology log consisting of a detailed record and description of the sequence of strata encountered, including the kind and character of the rock and all shows of hydrocarbons [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]; (2) a complete set of washed and dried, legibly identified samples of all drill cuttings, as caught by the operator in accordance with good geological practices, consisting of a minimum of one-quarter cup in volume or three ounces in weight of cuttings for each sample interval; (3) a lithologic description and, if available, photographs of each conventional and sidewall core; conventional core descriptions must include apparent textural, fluid, and lithologic variations, including rock type, porosity, fractures, bedding plane attitudes, sedimentary structure, grain size, and presence of hydrocarbons; (4) chips from each foot of recovered conventional core, except that chips need not be submitted until 30 days after the conventional core is analyzed; the chips must be representative of the one -foot interval, and must be approximately either one cubic inch in volume, or two ounces in weight; (5) a list of the geologic markers and formation tops encountered and the measured and true vertical depths of each marker and formation ton; (6) [A SEPIA] effective January 1.2018, an electronic image file in formats acceptable to the commission [AND A REPRODUCED COPY] of all open -hole logs and mud logs run, including common derivative formats such as tadpole plots of dipmeter data and borehole images produced from sonic or resistivity data, and including composite log formats; however, copies of velocity surveys and experimental logs need not be included; [AN ELECTRONIC IMAGE FILE IN A FORMAT ACCEPTABLE TO THE COMMISSION MAY BE SUBSTITUTED FOR THE SEPIA]. The operator shall provide the commission the Register 2017 MISCELLANF,OUS BOARDS opportunity to examine open -hole logs for exploration or stratigravhic test wells within 72 hours of being run and prior to abandonment; (7) effective January 1, 2018, an electronic image file in formats acceptable to the commission of all cased -hole formation evaluation logs and cement evaluation logs run including common derivative formats-, 21 [A TAPE, DISKETTE, OR OTHER ELECTRONIC MEDIUM ACCEPTABLE TO THE [COMMISSION] digital data and a verification listing [OF THE DIGITAL DATA] for all [LOGS RUN] oxen -hole logs, all mud logs and all cased -hole formation evaluation and cement evaluation logs run except velocity surveys and experimental logsk], stored on electronic media and using file formats that are acceptable to the commission [THE VERIFICATION LISTING MUST INCLUDE A WRITTEN DESCRIPTION OF THE LOGICAL AND PHYSICAL FORMAT OF THE DIGITAL DATA]; and [(8)] M the following items, or a written request proposing a date for submitting those items, subject to commission approval of that date for timeliness, if those items are unavailable within the [30] 90 -day filing period set out in this subsection: (A) [A COPY]co ies of all drill stem tests and production test data and charts; (B) a brief summary of production tests, drill stem tests, wireline formation tests, and other formation tests performed, including test date, time, depth, duration, method of operation, recovered fluid types, fluid amounts, gas -oil ratio, oil gravity, pressure, and choke size; (C) conventional and sidewall core analysis determinations, if any, of porosity, permeability, and fluid saturation; (D) geochemical and formation fluid analyses obtained, if any. (c) The commission[ WILL, IN ITS DISCRETION,] may waive or modify the requirements of this section [for a well]if those requirements would not significantly add to the geologic or engineering knowledge of the area in light of the information that is available from the well or other wells in the area. Eff. 4/2/86, Register 97; am 11/7/99, Register 152, Eff. _/_/ , Register _.) Authority: AS 31.05.030 AS 31.05.035 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.110(a) is being amended to read: 20 ACC 25.110 Suspended wells. (a) If allowed under 20 AAC 25.105, an operator may apply to the commission under this section to approve the suspension of a well or to renew the approval of the suspension of a well. The operator must state the reasons the well should be suspended, and not completed or abandoned, and must demonstrate to the commission's satisfaction that 1. the well (A) is mechanically sound; (B) will not allow the migration of fluids; (C) will not damage freshwater or producing or potentially producing formations; (D) will not impair the recovery of oil or gas; (E) is secure, safe, and not a threat to public health; [and] (F) is located on a valid lease or leases where the applicant has the right to drill for oil, gas coal bed methane gas hydrates or shale gas or to evaluate underground coal gasification or geothermal resources; and LGJ is in compliance with all provisions of AS 31.05, this chapter, and any order, stipulation, or permit issued by the commission; 2. the well (A) has future utility as an exploratory, development, or service well; (B) is a viable candidate for redrilling; or (C) is located On a pad Or platform with active producing or service wells[.]; b. If the well does not lie within a unitized area the operator (A) shall provide the commission with a list of the leases that the wellbore traverses from surface location to bottom hole location and the ea iration date of each lease* and (B) is required to notifv the commission within 30 days if the status of any lease changes. 20 AAC 25.110(h) is being amended to read: (h) Renewal of an existing suspension may be requested by the submission of an Application for Sundry Approvals (Form 10-403) meeting all requirements of (b) of this section. A renewal is not effective until approved by the commission. If a complete renewal application is submitted at least 60 days before the expiration of an existing suspension, the existing suspension will continue until the commission acts on the application. Within 24 months before the submission of a request for suspension renewal, a well -site inspection must be completed. If the well does not lie within a unitized area the application to renew an existing suspension must History: (Eff. Register ___ 2017 MISCELLANEOUS BOARDS Register 97; am 11/7/99, Register 152; Eff. 11/19/2008, Register 188; am 4/15/2010, Register 194; Eff. _/_/ , Register_.) Authority: AS 31.05.030 AS 31.05.095 AS 31.05.040 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.265(d)(4) Well safety valve systems is being amended to read: (4) an onshore well in a location described in (2) of this subsection and equipped with an electric submersible pump, velocity striae, or capillary string run within the tubing is not required to be equipped with a subsurface safety valve; or (Eff. 4/13/80, Register 74; am 4/27/86, Register 97; am 11/7/99, Register 152; Eff. Register _.) — - Authority: AS 31.05.030 Register _ 2017 MISCELLANEOUS BOARDS 20 AAC 25.270 is amended to read. 20 AAC 25.270 [INITIAL RESERVOIR] Reservoir properties. (a) The operator shall determine the initial reservoir pressure in each new pool before regular production. The results must be reported to the commission on a Reservoir Pressure Report (Form 10-412). (b) The operator shall obtain fluid samples from each new pool at the time of discovery or before regular production and determine (1) [THE]crude oil composition[ ASSAY]; (2) pressure, volume, and temperature properties of the crude oil; and (3) [THE]solution or non -associated gas composition[ASSAY]. (c) Sampling and analysis must be conducted and reported in accordance with good oil field engineering practices. Reports must be submitted to the commission within 45 days following the completion of the determinations required in (b) of this section. (d) The operator shall determine within three months after discovery of each new oil pool the original solution gas -oil ratio by a well test conducted in a manner approved by the commission. The operator shall report the results on the Well Status Report and Gas -Oil Ratio Tests (Form 10-409) within 45 days after the test. (e) By April I" of each year, the operator shall submit to the commission an Annual Reservoir Properties Renort (Form 10-428). (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; AM 11/7/99, Register 152; Eff. _/ /_ Register_.) Authority: AS 31.05.030 ALASKA OIL AND GAS -ONSERVATION COMMISSION ANNUAL RESERVOIR PROPERIES REPORT Ix Walls) lam) (m]) VheO OACInN 1nw NHQ YncoaWg Pramn 13.80lor 5 11.4 ORw Reser OrglMl SUurtllen (MR pqq pAyuA Rwsun Prtswrt (w) pgauq WD !m1 hmeEY eNllymm SU krtpoinp b We Utl dxleq to Ne beq MmY knowmpe. ByMNrt RM1X1] NUM Farm 10-.4 Rw, 01Y 17 iak D" INSTRUCTONS ON REVERSE SIDE Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.280(g) is being added to read: 20 AAC 25.280. Workover operations. (11) If workover operations are not commenced within 12 months after the CRlnn gnnrm.ue e.. A..�L__a.__ ils expires. (Eff. 4/2/86, Register 97; am 11/7/99, Register 152; am 12/28/2006, 180; 1/7/2015, Register 213; Eff. _/ /_ Register_.) Authority: AS 31.05.030 Register 2017 MISCELLANEOUS BOARDS 20 AAC 25.537(a)(3) is being amended to read: 20 AAC 25.537(a)(3) Public and confidential information. (a) The commission will routinely make available to the public, by means of records or reports, in its offices or elsewhere, or by means of regular publication, the following information: (1) surface and proposed bottom -hole locations of each well after approval of the Permit to Drill (Form 10-401); (2) total depth, bottom -hole location and well status after the Well Completion or Recompletion Report and Log (Form 10-407) is filed; service welts- 131 all reports and information required by this chapter for development and (4) regular production data and regular production reports, as required to be filed by the operator each month; month; and (5) injection data and injection reports, as required to be filed by the operator each (6) all data filed on a well as required by this chapter upon expiration of the confidential period described in (d) of this section. 20 AAC 25.537(d) is being amended to read: (d) Except as provided by (a) of this section, the reports and information required by this chapter to be filed by the operator for exploratory and stratimehic test wells will be kept confidential by the commission for 24 months following the 30 -day filing period after well completion, suspension, or abandonment unless the operator gives written and unrestricted permission to release all of the reports and information at an earlier date. Upon notification that the commissioner of the Department of Natural Resources has made a finding that the required reports and information from a well contain significant information relating to the valuation of unleased land in the same vicinity, the commission will hold the reports and information confidential beyond the 24 -month period and until notified by the commissioner of the Department of Natural Resources to release the reports and information. (Eff. 4/13/80, Register 74; am 4/2/86, Register 97; am 11/7/99, Register 152; Eff. —/-/. Register ) Authority: AS 31.05.030 AS 31.05.035 Register 2016 MISCELLANEOUS BOARDS 20 AAC 25.556 is being amended to read. 20 AAC 25.556. Orders. (a) Orders of the commission require approval of at least two commissioners. Unless otherwise indicated within the order all conservation orders issued by the commission shall e--Jre two ears after activities authorized by that order cease. (e) Unless otherwise indicated in the order all enhanced recovery, area storage, and disposal injection orders issued by the commission shall expire (1) two years after the date the order was adopted if injection operations have not commenced or (2) two years after injection operations authorized by that order concluded bearine are therw,oper to n..A tJ�on, or its own motion and unless notice and Public .uaumai A&AVo� Wa1Ve OT 8m� requirements of any order issued by the commission as lop as the chance does aot Promote waste or Jeopardize correlative rights is based on sound engineering and geoscience PrmcmleR_ and will ..s _......,. ._ _ freshwater aquifers (Eff. 11/7/99, Register 152•.Eff.J/ R- ----- rmove gi _ ) Authority: AS 31.05.011 AS 31.05.040 AS 31.05.030 Register 2017 20 AAC 25.990. Definitions. to contractor• and MISCELLANEOUS BOARDS Register 152; am 1/5/2006,. Register 177; am 9/30/2010 �is in p Registern195; am 11/3/20E13, Register 208; am 1/7/2015, Register 213; Eff, _/ / , Register — ) Authority: AS 31.05.030 AS 41.06.035 AS 41.06.005 AS 41.06.040
