Implementing the Great Lakes Compact Part I: Protecting Citizens’ Rights to Appeal

The first in our Three-Part Series on HB473 – Great Lakes Compact Implementation

(Posted by Grant Maki, Law Fellow at the Ohio Environmental Council)

The Great Lakes Compact is an agreement between the region’s states to manage water consumption in order to protect the integrity and health of the Lakes ecosystem.

The Compact recognizes that the waters of the Great Lakes “are precious public natural resources shared and held in trust by the States.”   It places on each party state “a shared duty to protect, conserve, restore, improve and manage the renewable but finite Waters of the Basin for the use, benefit and enjoyment of all their citizens, including generations yet to come.”

Specifically, each state must work to maintain the Great Lakes’ water levels and ecological health by establishing a permitting system to limit water consumption. 

The Compact requires each state that is a party to the agreement to pass state legislation to implement the terms of the agreement.  Representative Lynn Wachtmann (R-75^th District) recently proposed legislation to implement the Compact in Ohio.   This is a much better bill than the one introduced by Representative Watchmann and passed by the General Assembly in June, and ultimately vetoed by the Governor this past Summer due to blatant violations of the Compact.  That bill, HB231, was wrought with violations of both the Compact Agreement between the states and good science.

Unfortunately, there are still three big problems with Ohio’s proposed implementation in HB473;

1. Limitations on the right of appeal,
2. Inadequate protections for upstream tributaries, and
3. Loophole for “experimental” water use permits and averaging of impacts.

Each of these important issues merits its own post.  The focus for today is the limitations on the right to appeal.

 How the proposal limits Ohioans’ rights

 The proposed legislation limits the right to appeal decisions made under the Compact to only those people who have can show “a direct economic or property interest that is or will be adversely affected.”  Under this proposal, if DNR approved of massive water withdrawals that lowered the water levels in a river enough to kill all of the fish, Ohioans fisherman would not be able to appeal.

Likewise, if a permit allowed a power plant to suck up enough water to cause an increased occurrence of harmful algal blooms, Ohioans who enjoy swimming at an affected beach would not be able to appeal that decision.

This restriction is inconsistent with the Compact agreement that we as a state signed onto.  As we said above, the Compact specifically recognizes the states’ obligation to manage the waters of the Great Lakes for the use, benefit, and enjoyment of all citizens.   Thus the Compact is intended to protect a range of interests that go beyond just dollars and cents.

Not only would the proposed restriction on the right to appeal violate the Compact,  it would be unprecedented in the history of state law.

 Unprecedented in Ohio Administrative Law

 Ohio’s Administrative Procedures Act sets the default rule for review of agency decisions throughout the state.   This law says that “any person adversely affected” may bring a claim to protect their legitimate interests, allowing allows appeals to vindicate more than just economic and property interests.

The proposed legislation would single out water usage as the one area in all of Ohio administrative law where a person whose legitimate non-monetary interest is harmed by an administrative order can’t have their day in court.

 Contrary to Ohio’s Public Trust Doctrine

 What’s more, Lake Erie and the waters of the state have long been shared and held in trust for use and benefit of all Ohioans under the public trust doctrine.  This ancient legal doctrine has its roots in the English Common Law, was recognized by the Ohio Supreme Court in 1878, and was codified in Ohio law in 1917.  Ohio Revised Code Section 1506.01(B) specifically recognizes that our state’s management of the Lake Erie coast must “give attention to natural, cultural, historic, and aesthetic values.”

Fishing, swimming, and boating are an integral part of many Ohioans’ lives.  To prevent courts from being able to review a specific permitting action that concretely harmed those interests would be a truly unprecedented erosion of the ancient responsibility of the state to manage Lake Erie’s waters for the use, enjoyment, and benefit of all.

 An Easy Problem to Solve

The proposed legislation restricts the rights of Ohio citizens to appeal administrative decisions in a way that has never been seen before.   The fix is simple: just replace the words “direct economic or property interest” with “concrete and personal interest”.  We will be watching the bill as it moves through the General Assembly in the coming weeks, and post updates on whether our legislators decide to reverse course on this proposal to our basic rights as Ohio citizens to protect our interests in court.

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Governor’s Plan will ‘Share the Wealth’ of Shale Drillers

(Posted by Trent A. Dougherty, Director of Legal Affairs, Ohio Environmental Council, Director of Ohio Environmental Law Center)

On Wednesday Governor Kasich unveiled his plan to cut Ohio income tax, across the board, with proceeds from a severance tax on Governor Kasich’s fact sheet on his Mid-Biennium Review Income Tax Cut contains an intriguing and provocative sentiment that “new revenue from Ohio’s Shale oil and gas production should go to Ohio taxpayers, and not government.”  If the Governor’s sentiment was based on the belief that prehistoric natural resources under Ohio, in part, belong to Ohioans, I agree wholeheartedly.  If that is the case, then we have a modern-day Huey Long in the Buckeye State.

Yet, if that is the case, why are we proposing severance taxes that are drastically less than our neighboring states?  The fact sheet shows that the proposed 1% tax on Natural Gas pales in comparison to West Virginia and Michigan’s 5%.  Don’t we owe ourselves to drive a better bargain to get a bigger piece of the pie?  I would at least have started off with a number that would have allowed room to negotiate during the legislative process.

Admittedly, I am not a tax attorney, so I will leave further discussion of tax structures to others.  However, the statement that the revenues should not go to the government, I believe, is only partially true.  A portion, and I proffer, a large portion, should go directly to the local governments who have an unfunded mandate to protect their citizens from any issues related to drilling, even though they have no authority to regulate the practice. The severance tax should, to a degree, act as a local impact fee to cover the costs of Are we expecting landowners to take their portion of the tax cut to purchase their own water replacement if a gas well fouls their water?  Use the tax refund to find shelter if an injection well causes more quakes?  Perhaps, in the deliberations over this plan a portion of this estimated $1 billion can be set aside as a ‘rainy day fund” for local first responders and infrastructure improvements in Ohio’s Gaslands.

Another interesting note in the Governor’s shale tax plan is who does not get taxed.  For over a year, the ODNR and the Oil and Gas industry have worked hard to convince us that there is no difference between a shale well and a “conventional” well – we have been drilling wells for over a century in Ohio, and fracking since before the Cold War, they say.  Why now are they saying that these shale wells are somehow un-conventional?  And the conventional wells should not be taxed at all?

He giveth, then he taketh away

On the same day the Governor rolls out his income tax cut plan he also unveils his Capital Budget which all but eliminates the Clean Ohio Fund.  Other than $6M in new funding for trails, there does not appear to be any other appropriation for the Clean Ohio Fund.

Ohio plans to make most of Ohio’s pastoral eastern half of the state into shale industrial parks, passing some of the revenue onto you. Yet, Ohio is refusing to spend the money Ohioans authorized by a resounding YES vote approving the availability of funding, and etched in the Ohio Constitution, to keep the few remaining green spaces green.  The constitutional amendment that voters approved in 2008 extended the original Clean Ohio program created in 2000.

Out of a potential of $100M for green projects, the Office of Budget & Management (OBM) chose to include only 6% of that in new funding.  In his testimony, OBM Director Tim Keen noted that current state debt is still way below the debt ceiling, which is calculated as 5% of state revenues.

Nevertheless, there is ample room to appropriate the additional bonding for Clean Ohio — one of the most successful Public Works programs around, in my humble opinion.   I hope the Legislature does its due diligence to make sure the funding finds its way back.  Investment in trails, farmland preservation, parks, and greenspace is one of the best uses of our resources that the Administration can make in the quality of life of our state.

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ODNR Confirms Earthquakes due to Fracking Waste Injection Wells & Introduces New Regs

(Posted by Grant Maki, Law Fellow at the Ohio Environmental Council)

Confirmed: the 12 earthquakes that rocked Youngstown last year were caused by injection wells that were used as disposal sites for waste fluids produced by deep shale drilling. So says a preliminary report released today by the Ohio Department of Natural Resources.

One day after State Representative Jay Goyal (D-Mansfield) introduces legislation to update Ohio’s Oil and Gas Drilling waste Injection Wells (See previous Post), the Ohio Department of Natural Resources.released its report on the Youngstown earthquakes and announced changes to Ohio’s injection well rules.

The report has a lot to recommend it. ODNR deserves credit for utilizing outside experts and making positive recommendations, such as limiting injection well pressure and depth,  that would help keep this from happening again, and require that waste haulers install electronic transponders to ensure “cradle to grave” monitoring of all shipments.

But it is important to put these “get tough” proposals into context. The context is this: instead of preventative maintenance, Ohio seems to prefer to wait for things to break and then scramble to fix them.

These earthquakes are just one example.  Although it is a very rare thing for an injection well to cause an earthquake, there have been other confirmed earthquakes caused by deep injection wells in other states over the past few years. During that time, Ohio kept on drilling these wells at a faster and faster pace.  If you continually play with fire, you will, eventually, get burnt.

We commend ODNR for taking this necessary action.  However, we should have done these studies before injecting millions of gallons of high-pressure fluid into the ‘basement rock.’

In the same way—why, for example, are we not monitoring water quality around these injection wells? It’s true that the wells have never been proven to be unsafe or prone to leaks. Then again, we haven’t really been monitoring them that closely. It would be fairly cheap to put in a few water quality monitoring wells up front to make sure everything’s going smoothly, and to catch any leaks in the early stages. It would not be fairly cheap to deal with millions of gallons waste fluids leaking into our drinking water.

And yet Ohio DNR seems to feel comfortable resting on the assumption the wells are 100% leak-proof, just as they previously assumed that the wells would never cause an earthquake.

ODNR is missing the fundamental point – reduce the chance of environmental problems by reduce the amount of waste to be injected.  The technology to recycle and reuse most of this waste exists.  Less waste means less need for injection wells, and fewer earthquakes.

These earthquakes also raise concerns about local control. The public and local governments should be involved in deciding where these injection wells should go. If the well might cause an earthquake, we at OEC think that is a matter of public concern that should go before local decision makers.

Representative Jay Goyal (D-Mansfield) has introduced a bill to the General Assembly that would do all of these things. We urge the General Assembly to pass the bill as quickly as possible, to get these laws on the books. Because,here’s the big picture. ODNR’s proposals are a nice first step. But there is still no indication that the State of Ohio is willing to take a step back and think about the big picture of laying down pro-active, protective regulations that will prevent bad things from happening in the first place. And Rep. Goyal’s bill would be a first step towards that change of philosophy that might result in adequate protections for our health and our environment.

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OEC Applauds Overhaul of Fracking Waste Injection Law

(Posted by Trent A. Dougherty, Director of Legal Affairs, Ohio Environmental Council, Director of Ohio Environmental Law Center)

Today, State Representative Jay Goyal (D- Mansfield) introduced the first sweeping update of Ohio’s fracking waste disposal since the shale boom began, and the first reforms in reaction to the nearly dozen injection well induced earthquakes in Youngstown throughout 2011.

Ohio Environmental Council was honored to play a role in the crafting of the legislation, and the reforms in the bill echo many of the recommendations OEC made before the Youngstown City Council in January.

Here are some of the highlights of the legislation:

•  Increase public notice and commenting requirements
• Allows local entities (e.g. city councils, county commissioners, etc) to deny injection well permits
• Require injection well owners to conduct chemical tests to determine what chemicals will be injected into the disposal well
• Require injection well owners to conduct ground water monitoring
• Require seismic testing

• Requires background checks on operators;
• Requires recycling of waste fluid FIRST, Disposal SECOND.

As horizontal drilling and fracking rip across much of Ohio, the need for safe disposal methods for the millions of gallons of waste fluid must be a top priority for Ohio.

Thank you, Representative Goyal for the foresight to introduce legislation to not only protect Ohioan’s right to be protected against the risks of fracking waste disposal, but give back citizens and local governments their voice.

For years Ohio has been the low rent, high risk dumping ground for out of state waste fluid.  This legislation will give Ohio the tools to protect our communities from health and safety risks of disposing this waste.

Beyond the much needed environmental and human health protections in this bill, Rep. Goyal’s proposal will provide the public with more and better notification of these and the ability for communities to say NO if their Sometimes whole communities do not know that an injection well until it’s drilled, or unfortunately, in rare occasions, the moving earth lets them know.

This bill will give the power to the people to be adequately notified, and for local citizens and governments be full participants in the permitting process.

Read Rep. Goyal’s Press release on the legislation.

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Kasich’s Energy Plan on its Way, and Changes to Fracking Coming with it

(Posted by Trent A. Dougherty, Director of Legal Affairs, Ohio Environmental Council, Director of Ohio Environmental Law Center)

Ohioans are six months removed from Governor Kasich’s 2-day Energy Summit, and everyone has been waiting with baited breath for his energy plan to hit the General Assembly. Rumors are bounding the halls of Capitol Square that the Energy Bill will be introduced with in the next couple weeks, with the rush put on to pass the bill by June 30.

The Governor previewed the plan to the Greater Cleveland Partnership last week.  As expected the 10-Pillar Plan has a little bit for everyone – increasing utilization of Waste Heat Recovery, renewable energy and energy efficiency, coal research, streamline energy related permitting, and alternative fuel vehicles.  But of course, the first pillar in Kasich’s plan (which also resonates throughout the ten pillars) is Shale Gas Extraction.  We are sure to have a few words to say about the other nine pillars once the bill is officially introduced, but the focus on shale needs special attention by OEC.

The Gov’s shale provisions in the energy plan will combine new taxes, fees and regulations on shale drillers. His plan will “modernize” ODNR and Ohio EPA rules on drilling impacts.   The translation: increasing the quantity and quality of the regulations, but also making permitting quicker and simpler — frackers will have to do less to get permits, but will have to meet a few additional regulatory protections.

These regulatory changes are sorely needed, especially as it concerns disposal of waste product into underground injection wells.  So too, are necessary increases in the fees and taxes the industry pays that hopefully will help curb the unfunded mandate on local communities.

The industry has already cried foul, and stated that they already pay their share.  But with the projections of billions of dollars of resources under our feet, a few extra bucks to make sure that local first responders and local infrastructure can carry the burden of protecting the health and safety of Ohio’s Gaslands is a solid investment.

A few ‘Green’ recommendations for Team Kasich’s Energy Bill

While OEC continues to call for a slowdown on permitting until proper regulations and environmental/safety protections are put in place, we are feverishly working on our own recommendations for the Shale Pillar of the energy bill.

OEC supported SB 165 (the much needed update and modernization of ODNR’s Oil and Gas Drilling laws in 2010) as a tremendous step forward in regulating drilling.  However, much of the focus was on fixing the problems with traditional vertical drilling, and more specifically with urban drilling in light of the Bainbridge Township explosion of December 2007.

OEC, among other groups, advocated for many changes to strengthen SB 165. Yet, only a few recommendations were incorporated into the final bill.

To supplement what SB 165 accomplished, especially in light of the huge influx of industrial scale, deep shale horizontal fracking, OEC believes that the regulations must increase regulations for safety, accountability, and liability.

Here is a snapshot of some concepts must be incorporated into Ohio law.

Public safety and environmental protection

1. Prohibit open pits and the burial of hazardous waste and use of known toxic chemicals at drilling sites;
2. Require monitoring of hydrogen sulfide gas and other air emissions; and
3. Require monitoring and first alert warning technology to detect spills, leaks, or explosions that jeopardize human health.
4. Prohibit drilling in 100-year floodplain, and prohibit tank battery to be located with in the 100-year floodplain;
5. Expand the present law to require more extensive testing of well and stream water near the drilling site before and after drilling occurs. In advance of drilling, the Operator is required to test water (using a comprehensive wide-spectrum analysis) in multiple water-well locations as well as in streams and ponds within ¼ mile of the drilling location, and to submit these samples to an independent laboratory. Within 14 days of the completion of the drilling, tests of stream and pond and well water will be repeated. The operator will pay for all tests, and the results shall be submitted to ODNR.

Accountability

1. Revise composition of the Oil and Gas Commission and the Technical Advisory Council to include more true public representation to balance industry representatives.
2. Require ODNR to maintain a website data base accessible to the public of all applications, proposed well locations, granted permits, and actual well locations with contact information for each applicant or permit holder. This allows residents to monitor leasing activity in their neighborhoods.
3. Require full disclosure of violations from drillers.  Post all the violations and fines. Requirement for landmen and/or operators to disclose all of their violations on the contracts with landowners.
4. Make granting (or denying) a permit an appealable action.  Currently, adversely affected landowners cannot appeal.
5. Any drilling unit pool with public property in it would have to have a public hearing in that jurisdiction.
6. Increase public notification and participation of drilling operations, increase notification to, and consultation with, local jurisdictions

Financial Liability

1. Increase penalties for violations of ORC Chapter 1509 as suggested by Attorney General Mike DeWine.  Also, allow for the fines to increase to double the economic benefit received by the operator for violating 1509.
2. SB 165 increases liability coverage to $3 million in urban areas and $1 million elsewhere.  In light of deepshale drilling and incidents of explosions, spills, and other risks, we feel that the liability should be increased substantially for these types of operations.   With the industrial scale drilling upon us, we support increased liability insurance requirements to $5 million bodily injury, $10 million property damage.  Further SB 165 only requires general liability insurance. General liability insurance usually EXCLUDES pollution / environmental insurance.
3. SB 165 allows for surety bond in an amount determined by the chief.  With the vast amount of land disturbance involved in deep shale drilling Ohio needs to require a full cost bond to cover entire cost of reclamation.  Lessons need to be learned from the coal regulatory program which uses less than a full cost bond, and the legacy of unreclaimed sites that continue to blight eastern Ohio.

Disposal

1.  Require operators to recycle waste water or otherwise treat wastewater from drilling operations.
2. Increase oversight of landfilling drill cuttings or other materials that may contain Radioactive material in landfills;
3. Increase testing of wastewater injected into Ohio’s Class II injection wells; require chain of custody
4. Increase public notification and participation of injection well operations, increase notification to, and consultation with, local jurisdictions
5. Require seismic activity studies before permitting injection wells, and require monitors for seismic testing at well sites
6. Increase budget and staffing of ODNR DIVISION OF GEOLOGICAL SURVEY
7. Repeal current Ohio law that restricts ODNR from adopting any standard more stringent than federal standards for Class II injection wells
8. Encourage alternative/beneficial uses of wastewater

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