OH Gov. Kasich Signs New Drilling Law – Now, Back to Taxes
Yesterday Ohio Gov. John Kasich signed new oil and gas legislation into law that will impact shale gas drilling in his state. For a summary of what’s in the new law, see this previous MDN story. Kasich said during the signing ceremony: "We were not going to develop shale gas at the expense of the environment…we have contained in this bill the most aggressive, clearest, fairest and strongest fracking regulations that you can find anywhere in the country." He later claimed that Ohio’s new law is, “the toughest law on fracking fluid in America.”
What happens next? Kasich has promised to return to pushing his plan to tax the shale drilling industry and pass along the proceeds as a small income tax cut to Ohioans:
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Speculation has run rampant about why Ohio’s official state geologist, Larry Wickstrom, chief of the ODNR’s Division of Geological Survey, was fired in May. Much of that speculation revolves around a PowerPoint presentation he created in March which essentially redrew the lines of where the best/most likely areas in the state would be to drill for oil and natural gas. A copy of Wickstrom’s full presentation, which has a lot of interesting maps and details, is embedded below.
MDN started seeing references yesterday to a story that Chesapeake Energy has put some of its Ohio Utica Shale acreage on the auction block. First came stories that Chesapeake says the value of each acre it controls in the Utica Shale is worth between $13,000 and $17,000:
An update on Chesapeake Energy’s Ohio drilling program: They just received approval for two more Utica Shale horizontal wells at sites in eastern Stark County, brining their total to 10 permits for Stark.
Ohio legislators have been working to craft new shale oil and gas drilling rules that will do more to protect the environment, and at the same time, help protect the fledgling shale drilling industry in the state. New legislation passed in committee yesterday that will now go to the full House includes a provision to help prevent frivolous lawsuits brought by deep-pocketed anti-drilling groups, like the Ohio Environmental Council and the Sierra Club. These groups, who are opposed to expanded use of fossil fuels, use the legal system to tie up shale drillers in court and force them to spend huge sums of money as a tactic to reduce fossil fuel mining and use.
Last week Chesapeake transferred 90 percent ownership of their 9,000 Utica Shale leases in Columbiana County, Ohio to their French partner Total in return for $2.03 billion. Back in December Chesapeake did an initial deal with Total for a 25 percent ownership stake in Chesapeake’s Ohio Utica Shale leases for 10 Ohio counties. This latest deal does not grant Total 90 percent in all 10 counties, so the question is, why Columbiana in particular? In two words: headache relief.
An unnamed driller in Ohio has asked Canadian company GASFRAC to use its waterless fracking technology to drill two trial wells in the Utica Shale. You may recall that a group of Tioga County, NY landowners with a collective 135,000 Marcellus Shale acres were set to use GASFRAC’s LPG (liquefied petroleum gas) technology to jump start drilling in New York, but the lease and royalty deal with the driller, eCORP, fell through (no fault of GASFRAC,