Oil & Gas - Kentucky Energy and Environment Cabinet

Kentucky Energy and Environment Cabinet

Oil & Gas PermitsAn Application for Permit shall be filed with the Division of Oil and Gas before a well is drilled, deepened or re-opened for the production of natural gas, crude oil, water supply for enhanced recovery, or injection into a reservoir for the purpose of enhanced recovery.Underground Injection Control WellsThe Commonwealth of Kentucky, Department for Natural Resources - Division of Oil & Gas applied for Class II Primacy to administer the Underground Injection Control (UIC) program under section 1425 of the Safe Water Drinking Act; primacy on March 21, 2017.Bonds & TransfersBonds are posted to ensure the proper plugging and abandonment of wells and to ensure the filing of well records with the division. If an operator fails to correct a violation, the bond may be seized by the Commonwealth of Kentucky.Violations & ForfeituresThe Division of Oil and Gas inspectors have the authority to inspect any well site at any time. If a violation is observed, the operator will be notified by certified mail of the type of violations and the corresponding statute.Gathering LinesA successfully completed oil or gas well will be connected to flow lines and/or gathering lines and the lines are regulated by 805 KAR 1:190.State Bid Well ProgramThe Division of Oil and Gas plugs and abandons orphan wells identified by division inspection and prioritizes wells based on environmental and/or safety impact.Tax CreditsTax credits are available for both oil (KRS 137.132) and gas (KRS 143A.033) produced from recovered inactive wells. The tax credit is equal to 4.5 percent of the gross value of the hydrocarbon (oil or natural gas) produced from the recovered inactive well.