Ohio law leaves citizens, landowners, air and water vulnerable to inattention, exploitation, and contamination.
Contending that Ohioans are not adequately protected from the risks of horizontal, hydrological fracturing - or "fracking" -for oil and gas, the Ohio Environmental Council today proposed a sweeping upgrade to state oil and gas laws.
The eco group's proposal, dubbed the SAFER GAS Act (Safeguarding Appalachian Families with Environmental Regulation of Gas And Shale) calls for:
- stronger safeguards against air and water pollution from oil and gas drilling;
- stepped up enforcement and transparency by the Ohio DNR and Ohio EPA;
- greater industry and government accountability, including permit appeal rights for affected citizens; and
- stronger consumer protections for landowners who lease their land for drilling.
"The oil and gas industry is poised to cash in the claims it's staked in eastern Ohio," said OEC staff attorney Trent Dougherty.
"Meanwhile, Ohio law continues to leave its citizens, landowners, and air and water vulnerable to government inattention, industry exploitation, and environmental contamination. The law should protect the wellbeing of ordinary citizens, first, and the oil and gas industry and its investors, second."
The OEC points to multiple gaps in Ohio law that need shored up to balance the interests of the public and property owners, including existing state laws and regulations that:
- Fail to limit air emissions at drilling sites during all phases of production, including the completion or fracking phase when dangerous benzene gas, a cancer-causing agent, rushes above ground and when intensive clusters of heavy diesel equipment operate at a well site.
- Deny affected citizens the right to challenge the terms and conditions that state regulators often place on drilling permits, an unfair advantage for drillers that no other industry enjoys under Ohio law.
- Allow persons with financial ties to the oil and gas industry to rule on appeals of state regulators' findings and orders. As a member of Ohio Oil and Gas Commission, Robert Chase of Marietta voted whether to uphold or overturn regulators until he left, following a finding by the Ohio Ethics Commission that he had a serious conflict and could not vote on appeals involving any of the multiple oil and gas companies for which he had consulted. Chase was the public's official representative to the commission.
- Let contractors who induce landowners to lease their property for drilling with hard-to-understand contracts (that often give oil and gas companies nearly unlimited access to landowners' property) to prowl the state with no oversight or need for a state license.
To implement and enforce existing laws, as well as the SAFER GAS Act, the OEC is calling for a 5 percent tax rate in the state severance tax on oil and gas, with 100% of revenue dedicated to increased inspection and enforcement, capping old orphan wells, and addressing local impacts.
"New laws, of course, will do little to help if they are not vigorously enforced. Both the Ohio DNR and EPA will need to step up their efforts to protect Ohio from the excesses of this industry," said Dougherty.
To make its point, the OEC points to a comprehensive review of oil and gas industry enforcement by six states, including Ohio.
Conducted by the environmental group Earthworks, the review found that each state failed to adequately enforce existing regulations.
The 2012 report is based on a detailed review of each state’s laws and recent enforcement activity, as supplied by each state’s regulatory agency. The report found:
- Every year, tens of thousands of oil and gas wells go uninspected. In 2010, Ohio failed to inspect 58,000 - 91% - of its active wells.
- When inspections do uncover rule violations, the violations often are not formally recorded. Violations had been on the decline in Ohio, but increased in 2011. To ODNR’s credit, when the number of inspections increased, more violations were found.
- When violations are recorded, they typically result in no penalty. Ohio undertakes very few enforcement actions each year, according to state records.
- When penalties are assessed, they provide little incentive for companies to not offend again. Ohio collected less than $20,000 in penalties in 2010.
"To its credit, the Kasich administration is hiring more oil and gas inspectors. It's doubled ODNR’s oil and gas regulatory budget. But much more needs to be done to shore up our laws and regulations," said Dougherty.
The OEC released its proposal a day before the one-year anniversary of law changes that Ohio Gov. John Kasich championed and lawmakers passed last year (SB 315) take effect. Like Gov. Ted Strickland before him, Gov. Kasich secured the law changes in the wake of impacts from a high profile incident.
The Strickland reforms came after methane from a faulty production well caused a house to explode and fouled more than 20 neighborhood wells in Geauga County in 2007.
Kasich's changes to the law followed a series of small earthquakes that shook the Youngstown area in 2012, linked by regulators and scientists to a nearby high-pressure oil and gas waste disposal well that had been improperly installed.
State regulators have yet to propose any rule changes to implement the 2012 law changes.
While industry cheerleaders gush about a possible shale gas boom in Ohio, the number of wells drilled here is small relative to larger producing states. The industry has drilled more than 500 horizontal wells in Ohio; in neighboring Pennsylvania, the number exceeds 7,000.
In an unusual move, the OEC released the proposal even before it has asked a lawmaker to introduce it. The eco group is inviting comment and suggestions from the public and landowners, as well as lawmakers and regulators - even the oil and gas industry.
"Everyone has a stake in the adequate and responsible oversight of this intensive industry. We invite all persons of good will to help us improve and pass this proposal into law," concluded Dougherty.
SAFER GAS Act
The SAFER GAS Act shores up more than 30 gaps in Ohio law:
1. Environmental Protection
- Require Ohio EPA to establish air emission controls on all phases of production
- Require methane capture
- Establish clean diesel standards
- Require more extensive testing of well and stream water near the drilling site
- Establish a Groundwater Protection Performance Standard
- Increase minimum distance setbacks from drilling activity
- Require oversight of fracking wastewater "Centralized Treatment Facilities"
- Require oversight of water withdrawal
- Require pre-permit disclosure of chemicals to be used in the production operation
- Define radioactive material
- Establish designation of Lands Unsuitable for Drilling
- Establish protections for cultural resources
2. Enforcement & Transparency
- Impose “Scarlet Letter Law” on flagrant, repeat, and criminal offenders
- Increase penalties to exceed the economic benefit of a violation
- Increased inspectors and inspections
- Increase public notification & provide more public participation in permitting
- Require a public hearing on drilling on public property
- Make granting a permit an appealable action
- Establish authority to shut down a well if there is an imminent threat to public or worker health/safety
- Broaden Emergency Response reporting
- Establish more accountable Trade Secret Protection for fracking chemicals
- Require more transparent and publicly accessible website database
3. Industry & Government Accountability
- Modernize Ohio’s Oil & Gas Severance Tax
- Revise composition of the Oil and Gas Commission
- Impose strict liability for injuries caused by fracking
- Establish Citizen Initiated Rulemaking
- Provide tools to State Emergency Personnel
4. Property Owner Protection
- Require registration and oversight of "landmen," the contractors who solicit drilling leases from property owners
- Revise Statute of Limitations for lease disputes
- Establish modern lease requirements
- Require affirmation of compliance with leases
- Require drillers to provide landowners with monthly reports of production
- Establish right for landowners to audit driller’s records
- Control the use of unitization
The complete draft language is available at here.
The mission of the Ohio Environmental Council (OEC) is to secure healthy air, land, and water for all who call Ohio home. The OEC is Ohio’s leading advocate for fresh air, clean water, and sustainable land use. The OEC has a 40-year history of innovation, pragmatism, and success. Using legislative initiatives, legal action, scientific principles, and statewide partnerships, the OEC secures a healthier environment for Ohio’s families and communities. For more information, visit www.theOEC.org.