(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.
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
- Prohibit open pits and the burial of hazardous waste and use of known toxic chemicals at drilling sites;
- Require monitoring of hydrogen sulfide gas and other air emissions; and
- Require monitoring and first alert warning technology to detect spills, leaks, or explosions that jeopardize human health.
- Prohibit drilling in 100-year floodplain, and prohibit tank battery to be located with in the 100-year floodplain;
- 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.
- Revise composition of the Oil and Gas Commission and the Technical Advisory Council to include more true public representation to balance industry representatives.
- 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.
- 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.
- Make granting (or denying) a permit an appealable action. Currently, adversely affected landowners cannot appeal.
- Any drilling unit pool with public property in it would have to have a public hearing in that jurisdiction.
- Increase public notification and participation of drilling operations, increase notification to, and consultation with, local jurisdictions
- 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.
- 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.
- 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.
- Require operators to recycle waste water or otherwise treat wastewater from drilling operations.
- Increase oversight of landfilling drill cuttings or other materials that may contain Radioactive material in landfills;
- Increase testing of wastewater injected into Ohio’s Class II injection wells; require chain of custody
- Increase public notification and participation of injection well operations, increase notification to, and consultation with, local jurisdictions
- Require seismic activity studies before permitting injection wells, and require monitors for seismic testing at well sites
- Increase budget and staffing of ODNR DIVISION OF GEOLOGICAL SURVEY
- Repeal current Ohio law that restricts ODNR from adopting any standard more stringent than federal standards for Class II injection wells
- Encourage alternative/beneficial uses of wastewater