§ 23-1101. Procedure for obtaining oil and gas production lease.\n 1. The department may make leases on behalf of this state, upon such\nterms and conditions including consideration as to the department seem\njust and proper for:\n a. The exploration, development and production of gas in state-owned\nlands, except state park lands, state forests, reforestation areas,\nwildlife management areas, unique areas, the marine and coastal district\nas defined in section 13-0103 of this chapter, and the lands under the\nwaters of Lake Ontario or along its shoreline; and\n b. The exploration, development and production of oil in state-owned\nlands, except state park lands, state forests, reforestation areas,\nwildlife management areas, unique areas, the marine and coastal district\nas defined in section 13-0103 of this chapter, and the lands under the\nwaters of Lake Erie and Lake Ontario or along their shorelines.\n 2. All oil and gas leases shall:\n a. Be limited in duration to a period not to exceed ten years and as\nlong thereafter as oil and gas is produced in commercially paying\nquantities;\n b. Provide for payment to the agency having jurisdiction over the\nleased lands of such consideration, royalties, rentals, bonuses and\nother compensation as shall, in the discretion of the department, be in\nthe best interests of the people of the state of New York;\n c. Provide for prompt exploration followed within a reasonable time by\noperations for the production of oil and gas, if such be found, and\nshall also contain provisions for the termination of such lease by\nreason of the lessee's failure to so explore or operate;\n d. Be invalid unless they shall have the prior approval of such state\ndepartment, division, bureau or agency thereof, or state agency having\njurisdiction over the land in question; and authority to give such\nconsent is hereby conferred upon the head of any such state department,\nor a division, bureau or agency thereof, or any state agency, and with\nrespect to lands under water held by the state in its sovereign\ncapacity, jurisdiction is deemed to be in the Commissioner of General\nServices; and\n e. Be inapplicable to any state park lands and to any lands the\nleasing of which is prohibited by the State Constitution.\n 3. In addition to the requirements contained in paragraphs a, c and e\nof subdivision two of this section, all gas leases with respect to the\nlands under the waters of Lake Erie shall:\n a. Provide for payment to the general fund of the state such\nconsideration, royalties, rentals, bonuses or other compensation as\nshall, in the discretion of the department, be in the best interests of\nthe people of the state of New York.\n b. Require that no well shall be permitted nearer than one-half mile\nfrom the shore, two miles from public water intake areas, and one\nthousand feet from any other structure or installation in or on Lake\nErie.\n c. Require that the following procedures be established if there is\nevidence suggesting that liquid hydrocarbons may exist in a stratum\npenetrated by the well bore:\n (i) Drilling or completion operations shall cease immediately.\n (ii) The department shall be notified of the evidence indicating the\npresence of liquid hydrocarbons, pursuant to such notification\narrangements as the department shall prescribe.\n (iii) A formation test shall be conducted in the presence of a\ndepartment representative.\n (iv) If the formation test indicates the presence of appreciable\nliquid hydrocarbons, the well bore shall be permanently plugged and\nabandoned from total depth to the lake bottom with cement.\n (v) If the formation test does not indicate the presence of\nappreciable liquid hydrocarbons, drilling may be resumed after an\nintermediate string of casing has been set, cemented and tested.\n (vi) If there is any further indication of liquid hydrocarbons the\nprocedures outlined in paragraphs one through five hereof shall be\nrepeated.\n d. Req
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