SALEM, Ohio — Oil and gas drillers are lining up behind a recently approved Ohio law, which they say will provide regulatory clarity and keep the state’s oil and gas companies competitive.
Environmentalists, on the other hand, call the law a giveaway to the fossil fuel industry and contend that Ohio lawmakers missed an opportunity to address the thousands of abandoned oil and gas wells in the Buckeye State.
Ohio Senate Bill 219, which was signed into law on June 25, is intended to streamline drilling regulations and protect a fund to plug those orphaned wells, among other things. It goes into effect Sept. 23.
While the trade associations that supported the measure call it an example of government working together with private industry, opponents contend that the legislators who wrote the law were too close to the industry they regulate.
The state’s oil and gas laws, last updated in 2012, needed modernization, the bill’s primary sponsor Al Landis, a Republican who represents Tuscarawas, Wayne and Muskingum counties and parts of Stark and Guernsey counties, said during an Ohio Senate debate.
Expedited permitting
Under Senate Bill 219, the chief of the Division of Oil and Gas Resources Management at the Ohio Department of Natural Resources can no longer reject requests for expedited reviews for drilling permits. It also limits well owners to 10 expedited permits per year.
Ohio Oil and Gas Association President Rob Brundrett said drillers need to move quickly, and the law speeds up the permitting process.
“Ohio has always allowed for expedited permits, but they weren’t actually doing expedited permits,” he said in an interview. “The state couldn’t keep up with those kinds of requests and oftentimes you need to have expedited permits.”
The law also changed the timeline around bids and leases for drilling on state-owned land. The Oil and Gas Land Management Commission has 90 days to decide to nominate public lands for leasing and oil and gas exploration; currently, they have two calendar quarters, or about 180 days.
The commission must advertise and select the highest bid within 60 days of a nomination’s approval; currently, the commission advertises bids the next calendar quarter, and there is no deadline on when a bid must be approved.
The new law will require the state agency that manages the land to execute a lease within 30 days; currently there is no time limit. These leases are more complex than a standard lease due to safeguards needed to protect our public lands.
Environmentalists are especially concerned about a provision requiring permits to drill on public lands to be approved within 30 days.
“One of the critical things people need to understand is that it will greatly speed up the process of fracking in Ohio state parks and public lands,” Save Ohio Parks board president Cathy Cowan Becker said, using a term for hydraulic fracturing. “That’s a complicated process, and to do it in 30 days, we argue that’s not enough time.”
Brundrett noted that the permitting period was only shortened by about 15 days.
The bill also shortens the time period in which landowners can challenge the renewal of expired leases.
“Already it’s very challenging for Ohioans to engage in decision-making when it comes to oil and gas development, and shortening the timeline for approving oil and gas leases leaves even less room for public engagement and environmental review,” Ohio Environmental Council southeast Ohio regional director Molly Jo Stanley said in an interview.
Supporters of the fossil fuel industry see the sped-up timeline as a net positive. The truncated procedure will “hopefully result in additional gas produced in Ohio,” Ohio Gas Association President Jimmy Stewart said in an interview.
Putting more locally-produced natural gas in the market would ultimately lower the price and lead to smaller utility bills, he said.
Plugging wells
The law states that the Ohio and Gas Well Fund can no longer be used for anything other than plugging abandoned wells, thus protecting it from executive branch raids. This measure was celebrated by the American Petroleum Institute Ohio. In a statement, API Ohio Associate Director Claire Linkhart called Senate Bill 219 a “win for both energy development and environmental stewardship.”
“Both energy and environmental groups have been aligned on the importance of plugging orphaned and abandoned wells in Ohio and have remained focused on preserving the dedicated fund for well-plugging,” Linkhart said.
Ohio has between 36,000 and 66,000 abandoned wells, a 2022 ODNR audit estimated. The department told the Ohio Capitol Journal last year that it had plugged roughly 2,300 of those. A department spokesperson did not respond to a request for updated figures.
There was no permitting or tracking process for oil and gas wells in the first half of the 20th century, and Ohioans constantly find abandoned wells from that time period, Muskingum Watershed Conservancy District Executive Director Craig Butler said in an interview. Butler testified in support of the bill.
“It happens pretty regularly,” he said. “Sometimes when we let several feet of water go in the fall getting ready for spring rains, we will find them along the shoreline.
“They’re a source of potential contamination to groundwater,” he added. “They’re a direct conduit for any number of potential surface contaminants and once they’re [in the drinking water] it’s very difficult to treat them and get them out.”
Brundrett noted that the oil and gas well fund draws from severance taxes and has more than $200 million, meaning money isn’t the issue.
“The fund continues to get replenished; it’s more of an issue of how fast you can plug wells,” he said.
Other changes. The law also prioritizes plugging orphan wells around active injection wells; redirects injection well royalty fees from the Oil and Gas Well Fund to the counties where the wells are located; and eliminates the ability for well owners to submit sworn financial statements in lieu of filing a surety bond to plug a well.
