Featured Resource: ODNR--An Overview

As an attorney, I've come to appreciate over the years how our state government in Ohio is quite helpful when it comes to putting resources on the Internet. You just need to know where to look for it. Since this blog is about Ohio real estate law, I wanted to provide an overview of the legal/regulatory or generally helpful information you can access through the Ohio Department of Natural Resources (ODNR), just by selecting the 'Regulation' tab on their web site navigation bar and viewing the pages for the following 4 ODNR divisions:

ODNR Division of Oil and Gas Resources

This division regulates Ohio's oil and gas drilling operations, oil and gas production operations, brine disposal operations, solution mining operations and underground injection operations. Its staff inspects the drilling, restoration, and plugging of all oil and gas wells in the state.

In additional to having access to the various laws, regulations and permitting requirements, this division’s web pages provide searchable databases for well locations, other well data such as information on completion, permitting and production of the wells, and shale activity in the state.

ODNR Division of Mineral Resources

This division oversees the development and restoration of mineral and fossil fuel extraction sites. It operates various programs to address the environmental and safety aspects of the coal and mineral mining industries. The division also restores abandoned mine land, enforces mining safety laws, and ensures the protection of citizens, land and water resources.

Program and support services include permitting, bonding, inspection, enforcement, mine safety rescue support and training, hydrology, soils, blasting, archaeology, engineering, design, information technology and administrative support.

The division's stated purposes include the following:

"The Permitting, Hydrology and Bonding section reviews all permit applications to mine industrial minerals and coal; it verifies all bonding and surety requirements; and manages permit records, databases, and permit related information.

The Field Inspection and Enforcement program enforces the laws regulating active mining activities to ensure the protection of citizens and conservation of environmental resources; and oversees land reclamation requirements to assure operators restore mine lands and waters to productive uses.

The Abandoned Mine Land program eliminates health and safety hazards and cleans up lands and waters damaged by coal mining that occurred prior to today’s stricter reclamation laws; including reclamation of underground mine openings, dangerous highwalls, dangerous mine subsidence, and cleanup of hazardous and/or polluted water impoundments, acid mine drainage, burning coal refuse, and others.

The Mine Safety program promotes safe mining practices for the protection of miners through services that include inspections at surface and underground mines, focused on accident prevention; examination and certification testing; mine rescue support; and safety training."

You can also find on their web page a Mine Locator that provides an interactive map of underground and surface coal and mineral mines in Ohio

ODNR Division of Geological Survey

The ODNR Division of Geological Survey is the state's oldest natural resources agency, established by the state legislature in 1837 as the Geological Survey of Ohio.

Its mission is to "To provide geologic information and services needed for responsible management of Ohio's natural resources."

Topics include, to name just a few, an abandoned underground mine map, astrogeology (including a meteorite find map), Ohio seismic information, Lake Erie geology, and..... who knew ̶ Fossil Hunting in Ohio.

ODNR Division of Soil and Water Resources

The Division of Soil and Water Resources was statutorily created in July 2010 through the merger of the Division of Soil and Water Conservation and the Division of Water. Its mission includes, among other things:

• Providing administrative guidance, training, program development support and financial to Ohio's SWCDs, their board members and staff;
• Regulating construction and repair of dams and levees; 
• Implementing agricultural and non-point source water pollution control programs;  
• Maintaining and distributing data on all water resources including ground water levels, stream flow, and precipitation;  
• Supporting and assisting fund local development of watershed management and protection action plans;  
• Implementing a comprehensive statewide soils information program; and
• Maintaining standards for sediment control and stormwater management.

The web page for this division contains numerous mapping options including: a groundwater resources map, access to well water logs and technical assistance such as pipeline construction standards.
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Ohio Dept of Natural Resources: Recent Regulatory Notices, Rule Announcements and Updates

ODNR regulatory news:

NOTICE TO WELL OWNERS re: tubular goods (3/31/2015)—

The requirements of R.C. 1509.16 became effective March 31, 2015. The statute was enacted by Am. Sub. H.B. 59 of the 130th General Assembly. Well owners are required to file a disclosure form with the Division of Oil and Gas Resources Management that specifies the country of manufacture for tubular goods initially used in a production operation on or after March 31, 2015 unless that country cannot be determined. Tubular goods are defined as seamless or welded steel pipe used in drilling for oil and gas and include casing, tubing, drill pipe, couplings, and drill collars.

The division, in consultation with members of the oil and gas and steel industries, developed Form 15 that is to be used to report the total length of each tubular good used in wells drilled on and after March 31, 2015. Beginning in calendar year 2016, well owners must file the form with the division on or before March 31. On the form, the well owner must report the length of all casing, tubing, drill pipe and drill collars used in wells drilled in the previous calendar year and the country in which each of those goods was manufactured.

Copies of Form 15 can be found on the division's website at: http://oilandgas.ohiodnr.gov/industry/electronic-forms

Electronic submittal can be sent to: O&G.Tubulars@dnr.state.oh.us

Fax submittal can be sent to: 614-265-6910

Submittal by mail can be sent to:
Ohio Division of Oil and Gas Resources Management
2045 Morse Road-Building F-2
Columbus, OH 43229-6693

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HORIZONTAL WELL SITE CONSTRUCTION RULE ANNOUNCEMENT (3/24/2015)—

ODNR's Division of Oil and Gas Resources Management is proposing new rules that address the design and construction of horizontal well sites. There will be a public hearing at the Ohio Department of Natural Resources, Building E-1 Assembly Center at 2045 Morse Road in Columbus, Ohio 43229 on April 23, 2015 starting at 10:00 a.m. At the hearing, any person affected by the proposed rule may present their comments orally or in writing. For more information about the proposed rule, or to view the proposed rule, click here. To sign up for future notifications about rule progress and opportunities for input, click here.

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State Updates Water Well Sealing Document (4/7/2015) —

The State Coordinating Committee on Ground Water has updated the technical guidance document for sealing unused water wells.

• Download Regulations and Technical Guidance for Sealing Unused Water Wells and Boreholes

In 2013, a workgroup was formed to re-write/edit the original document. This document is the product of the workgroup. The workgroup consisted of representatives from the drilling industry, the major grout manufacturers, and state agencies dealing with ground water. Monthly meetings were held for 13 months to revise the original 1996 technical guidance document. Some of the key changes include:

• A table (Table 1) that lists different types of wells, the regulatory agency, if regulated, and the applicable regulation or guidance (page 2).
• An appendix that contains associated links to the OAC or ORC (Appendix 2).
• An emphasis on hiring or at least consulting a contractor before sealing a well. (Any well owner can seal their own well.)
• The Preparation for Sealing section (pages 13-19) was expanded to include a table of possible concerns and the corresponding state or federal agency that may have information. A new Procedure Planning sub-section (pages 18-19) was created that lists all the items that should be in the plan before the well is sealed.
• The cement-based grouts section (pages 20-26) was expanded to include a discussion on situations where bentonite grouts are not effective due to water quality conditions in the well to be sealed.
• The General Sealing Procedures section (page 31) was expanded and the steps were numbered.
• The specific well sealing procedures for dug wells and bucket auger wells were separated because ODH has different sealing procedures for these types of wells.

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Ohio Supreme Court Decides in Favor of Beck Energy; Local Drilling Ordinances Not a Valid Exercise of Home Rule

The Ohio Supreme Court decided a critical case in February affecting the state’s oil and gas drilling industry when it issued its decision in State ex rel. Morrison v. Beck Energy Corp (Slip Opinion No. 2015-Ohio-485) on February 17, 2015.

 

Beck Energy Corporation (“Beck Energy”) obtained a state permit to drill an oil and gas well on private property in the city of Munroe Falls (the “City”), located in Summit County.  The City attempted to block Beck Energy from drilling the well despite its state permit based on its own ordinances. The permit  was issued to Beck Energy by the Ohio Department of Natural Resources (“ODNR”) under O.R.C. 1509.02.  It contained 67 separate conditions, including many that addressed issues related to site preparation, pit construction and waste disposal, along with many others that govern “Urbanized Areas,” such as noise mitigation, erosion control, tree trimming and parking. Beck Energy, as an applicant for a drilling permit, was also required to provide notices to each owner within 500 feet of the well’s surface location, as well as to the municipality where the well was to be drilled.

 

The City issued a stop-work order and sought an injunction against Beck Energy alleging that the company was violating the City’s ordinances. The appeal to the Ohio Supreme Court involved 5 of these ordinances; including a general zoning ordinance and 4 ordinances that specifically relate to oil and gas drilling. Violations of these drilling ordinances constitute misdemeanors and could result in jail time and fines, with each day of the violation being a separate offense.

 

Beck Energy opposed the City’s injunction request which was granted by the trial court but overturned by the court of appeals.  The City appeals to the Ohio Supreme Court who addressed the question as to whether the City’s ordinances represented a valid exercise of its home-rule power.

 

The home rule amendment to Ohio’s constitution gives municipalities the “broadest possible powers of self-government in connection with all matters which are strictly local and do not impinge upon matters which are of a state-wide nature or interest.” (State ex rel. Hackley v. Edmonds, 150 Ohio St. 203, 212, 80 N.E.2d 769 (1948))  However, a municipality is not allowed to exercise its police powers in a manner that conflicts with general laws. In those instances, it must yield to the state’s law.

 

In reaching its decision that the City’s ordinances must yield to O.R.C. 1509.02, the Ohio Supreme Court followed a 3 step analysis: (1) is the ordinance an exercise of the police power rather than of local self-government, (2) the statute is a general law, and (3) the ordinance is in conflict with the statute.

 

In this case, the City did not dispute that its ordinance involved the exercise of police power rather than local self-government. The court then found that O.R.C. 1509.02 is a general law as it (1) is part of a statewide comprehensive legislative enactment, (2) applies to all parts of the state alike and operates uniformly throughout the state, (3) sets forth policy, sanitary or similar regulations, and (4) prescribes a rule of conduct upon citizens generally. The court noted that just because a state statute will have more impact in one geographic section of the state over others does not prevent it from being a ‘general law’.

 

Finally, the court found that the City’s ordinances conflict with the state’s statute. An ordinance conflicts with a state statute when it permits or licenses that which the statute forbids and prohibits, and vice versa. In this case, the City’s ordinances prohibited a permit that was lawfully issued by the state under O.R.C. 1509.02 and attempts to provide for double licensing which is not permitted under the state statute.

 

Finding a balance between home-rule authority and state regulatory authority is difficult, even without the added controversy of fracking. Under the circumstances, it comes as no surprise that the Ohio Supreme Court’s decision in favor of Beck Energy was issued by a divided (4-3) court. It will be interesting to see what transpires in the future on this subject.

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