Ohio Amends the Oil and Gas Law

Ohio Amends the Oil and Gas Law

On June 11, 2012, Ohio Governor John Kasich signed Senate Bill 315 (S.B. 315), found at http://www.legislature.state.oh.us/bills.cfm?ID=129_SB_315, into law, making significant amendments to various aspects of Ohio's Oil and Gas law, R.C. 1509. The amendments impose additional permitting requirements for drilling permits, including what the Ohio Department of Natural Resources (ODNR) has described as the nation's first "cradle-to-grave" chemical reporting requirements, increase liability insurance requirements, and provide ODNR with greater enforcement authority and oversight of Ohio's injection disposal wells. The amendments become effective on September 9, 2012.

Under S.B. 315, applicants for permits to drill a horizontal well must comply with several new requirements, including the submission of a Road Maintenance Agreement with the proper municipal authority where the well is to be drilled, water sampling of all water wells within 1,500 feet of the proposed wellhead, and the submission of a water management plan. Current law only requires water well sampling in urbanized areas within 300 feet of the gas well. The water management plan must: 1) identify each proposed source of groundwater and surface water that will be used in production; 2) identify each proposed source of water that will be withdrawn from the Lake Erie and Ohio River watersheds; and 3) provide an estimated rate and volume of the water withdrawn and, if applicable, recycled water that will be used for production operations. After an application for a permit to drill has been submitted, S.B 315 requires ODNR to conduct a site review prior to the issuance of the permit to identify and evaluate any site-specific terms and conditions that may be attached to the permit. The bill also requires a permittee to provide at least 24-hour notice to ODNR, and for ODNR to conduct a site review, prior to commencement of well pad construction. (R.C. 1509.06). It should also be noted that S.B 315 exempts ODNR orders to issue, deny or modify a permit to drill a well from the Administrative Procedure Act.

Another significant amendment to Ohio's Oil and Gas law is the requirement to include, in the well completion report, information on all fluids used in drilling and stimulation of the well. (R.C. 1509.10). The bill requires the report to include the trade name and total amount of all products, fluids and substances, the supplier of each product, fluid or substance, and the identification and maximum concentration of all chemicals intentionally added to facilitate the drilling and stimulation of each well. Owners must also provide ODNR with a copy of the material safety data sheet for each substance that is required to be included in the well completion report. In addition to the well completion report, which must be submitted within 60 days after completion of drilling operations, well owners must submit a similar report after each reworking, refracturing, restimulation or new completion, until the well is plugged. The bill, however, also includes a provision authorizing a well owner to withhold from disclosure information that it designates as a trade secret.

In addition to the changes to rules governing oil and gas production and exploration wells, S.B 315 amends the rules governing injection wells (R.C. 1509.22). These rules include additional record keeping and reporting requirements by the injection well owner and brine transporters, and provides ODNR with the authority to adopt rules for the protection of public health and safety.

If you have questions about these new rules or other issues related to natural gas exploration and production in Ohio, please contact David E. Northrop at 412-394-6590 or dnorthrop@babstcalland.com, Robert W. Thomson at 412-394-5656 or rthomson@babstcalland.com, Michael H. Winek at 412-394-6538 or mwinek@babstcalland.com, or Ryan D. Elliott at 412-394-5432 or relliott@babstcalland.com.

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Comments

Anonymous
Anonymous
  • 06-20-2012

This is good start to those who are planning this type of business wherein they will know that there's already an ammend law for this. This is an assurance to their business.