Can Ohio Regulations Handle the Coming Shale Gas Boom?

The question of whether or not Ohio is ready for a drilling boom in the Utica Shale may be moot, since the boom has already started. But an official from the Ohio Department of Natural Resources (ODNR) says with new laws passed last year, and more laws set to be passed this year, Ohio is more than ready to handle a rapid expansion of Utica and Marcellus Shale drilling in the state.

Carlo LoParo, spokesman for the Ohio Department of Natural Resources, which regulates most aspects of oil and natural gas extraction in the state, said the state has strong rules in place thanks to legislation passed in 2010 and they’re learning from the experiences of other states to ensure the environment is protected as the economic promise of shale exploration is realized.

"We’re confident that those reforms, plus others we’re looking at, will make Ohio one of the most carefully monitored and regulated states in the nation regarding well-construction and natural gas extraction," he said.

Passed in 2010, Ohio’s Senate Bill 165 lays out guidelines for the locations of wells, tank batteries and other surface facilities; the application process for drilling a well; various fees associated with drilling production wells and injection disposal wells; and more.

Under regulations established that year, companies drilling in Ohio are required to notify ODNR’s Division of Mineral Resources Management at three points in the process: well construction, to ensure the casing is properly placed according to the permit; well control, the testing of blow-out prevention devices; and fluid control, to monitor the company’s handling of the fluid. According to the ODNR website, "division inspectors place a high priority on witnessing these critical phases."*

Many of the regulations are implemented through the rule-making process by the chief of ODNR’s Division of Mineral Resources Management—so drilling regulations in Ohio are evolving over time.

LoParo said the rules in place for permitting are being reviewed by the governor’s Common Sense Initiative and still must go to a legislative rule-making body for final approval.

He noted funding and staffing for regulatory efforts are tied to production in the oil and gas industry, so the agency can keep up with the expanding activity.

"We’re going to triple the number of regulators that we have in the field this year," he said.

Gov. John Kasich also recently proposed "impact fees" to fund repairs to property and the environment needed as a result of extraction operations.*

An ongoing bone of contention in Pennsylvania, where there is drilling, and New York, where is not yet drilling, is the issue of local municipal regulation or zoning that controls where, and if, drilling can happen. Both PA and NY have laws on the books that stipulate state regulations override local regulations with respect to drilling, an issue now working its way through the court system in NY, and with PA towns threatening to sue as well.

In Ohio, they have a similar provision that state rules govern drilling, not local zoning:

A 2004 law removed from Ohio’s roughly 1,300 townships of their authority to regulate such operations. The Ohio Environmental Protection Agency handles some permitting with regard to air and water impacts, but otherwise, SB 165 says the only exception to the Division of Mineral Resource Management’s authority is the use of local roads by trucks carrying heavy equipment and fracking byproducts.

[State Rep. Andy] Thompson said he thinks municipalities, townships and counties can address their concerns through ODNR or with the companies themselves.

"Nobody wants unhappy residents or customers," he said.*

*Parkersburg (WV) News and Sentinel (Mar 4, 2012) – Are fracking regulations in place?