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Ohio Utica Shale

Ohio budget bill includes $25,000-per-well impact fee

By Bob Downing Published: February 26, 2013

From the Marcellus Drilling News:

If you ever (logically) thought a piece of legislation that’s meant to be a budget would only deal with money issues, you would be wrong. Budget laws for decades have been used to slip in all sorts of non-money-related measures. This year’s Ohio budget is no different. Tucked away in the proposed budget law from Gov. John Kasich are a number of non-budget items that directly affect Utica Shale drilling in Ohio. The measures include a ban on using brine as a de-icer on public roads, moving from yearly to quarterly production reports, lease transfer 30-day notifications, a $25,000 impact fee on each well drilled (surprise!), and testing of shale cuttings for radioactivity. And you thought budgets were just boring numbers.

Here’s the low-down on the non-budget items in the budget bill that will impact Utica drilling in a big way:

 

Brine from horizontal hydraulic fracturing activities could not be spread on roads for dust or ice control, under language included in Gov. John Kasich’s biennial budget proposal.

The provision is one of several related to fracking in eastern Ohio’s growing oilfields included in the $63 billion-plus, two-year spending plan.

A comparison document compiled recently by the state’s legislative service commission (online at www.lsc.state.oh.us) outlines fracking law changes at several state agencies.

The brine application language is part of proposals affecting the Ohio Department of Natural Resources. According to spokeswoman Bethany McCorkle, local governments could still allow road applications of brine from conventional vertical wells, as allowed under legislation passed more than a dozen years ago.

Other fracking-related provisions in the budget include:

• Production Reports: The budget, as written, would require horizontal well owners to file reports with ODNR on the volume of oil and gas produced during a quarter. Annual reports are currently required under state law.

Additionally, the bill “requires the owner of a horizontal well that has no reported production for eight consecutive reporting periods, rather than two consecutive reporting periods as under current law, to plug the well, obtain temporary inactive well status for the well, or perform another activity regarding the well that is approved by” the state agency.

• Lease Transfers: The legislation would require notifications within 30 days of oil and gas leases or interests being transferred to new owners.

“This provides better notification for the landowner,” McCorkle said in an electronic statement. “If a company leases mineral rights and decides to transfer the rights to another company, which happens often, then the company would be required to notify the landowner when the transfer was made and to whom.”

• Impact Fee: The budget proposes a $25,000 horizontal well impact fee, to be paid by owners for each well drilled. The payments would be deposited by counties into local oil and gas escrow accounts, with the proceeds used to cover infrastructure and other costs resulting from the well.

Drillers, however, would recoup the impact fees over time, via reductions in their tax obligations.

• Radioactive: The legislation would create testing requirements and limits on the disposal of earthen material from oil and gas drilling that includes “technologically enhanced naturally occurring radioactive material,” known by the acronym TENORM.

According to a summary statement from ODNR, “While it is anticipated that TENORM will not be produced at levels that would present a risk to public health, the state is strengthening its regulations to help ensure that these materials are properly characterized and safely managed in Ohio’s solid waste landfills since it is anticipated more of this material will need to be disposed of due to increased oil and gas drilling in the state.”*

*Cambridge (OH) The Daily Jeffersonian (Feb 24, 2013) – Fracking provisions in state budget

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Utica and Marcellus shale web sites

Ohio Department of Natural Resources' Division of Oil and Gas Resources Management State agency Web site.

ODNR Division of Oil and Gas Resources Management. State drilling permits. List is updated weekly.

ODNR Division of Geological Survey.

Ohio Environmental Protection Agency.

Ohio State University Extension.

Ohio Farm Bureau.

Ohio Oil and Gas Association, a Granville-based group that represents 1,500 Ohio energy-related companies.

Ohio Oil & Gas Energy Education Program.

Energy In Depth, a trade group.

Marcellus and Utica Shale Resource Center by Ohio law firm Bricker & Eckler.

Utica Shale, a compilation of Utica shale activities.

Landman Report Card, a site that looks at companies involved in gas and oil leases.FracFocus, a compilation of chemicals used in fracking individual wells as reported voluntarily by some drillers.

Chesapeake Energy Corp,the Oklahoma-based firm is the No. 1 driller in Ohio.

Rig Count Interactive Map by Baker Hughes, an energy services company.

Shale Sheet Fracking, a Youngstown Vindicator blog.

National Geographic's The Great Shale Rush.

The Ohio Environmental Council, a statewide eco-group based in Columbus.

Buckeye Forest Council.

Earthjustice, a national eco-group.

Stop Fracking Ohio.

People's Oil and Gas Collaborative-Ohio, a grass-roots group in Northeast Ohio.

Concerned Citizens of Medina County, a grass-roots group.

No Frack Ohio, a Columbus-based grass-roots group.

Fracking: Gas Drilling's Environmental Threat by ProPublica, an online journalism site.

Penn State Marcellus Center.

Pipeline, blog from Pittsburgh Post-Gazette on Marcellus shale drilling.

Allegheny Front, environmental public radio for Western Pennsylvania.