Bob Downing

Who will control gas and oil drilling in Ohio was the central question Wednesday as the Ohio Supreme Court heard arguments in a Summit County case that could have major ramifications across the state.

The arguments were short, and heavy questioning from the justices dominated the 49-minute hearing in the case that pits the city of Munroe Falls against Beck Energy Corp. of Ravenna.

Several justices appeared troubled that local communities have no say on drilling and that no appeal of state permitting decisions is possible.

Justice William O’Neill asked whether Ohio’s regulatory structure violates communities’ constitutional home-rule protections, while Justice Paul Pfeifer said an inability for cities to challenge state-issued drilling permits gives the Ohio Department of Natural Resources god-like power.

A decision in the case is not expected for several months.

The key issue is whether zoning rules that communities enact under home rule are superseded by Ohio law that gives the state exclusive rights to regulate gas and oil drilling.

State rules and local zoning could both apply to drilling in Ohio, said Thomas R. Houlihan, an attorney from the law firm Amer Cunningham who was representing Munroe Falls.

Municipalities have the right to impose zoning restrictions as they plan their communities, and that zoning should work with state drilling rules, he said.

Ohio Deputy Solicitor Peter K. Glenn-Applegate, who represented the state in supporting Beck Energy, said that in 2004, Ohio gave “sole and exclusive” authority to regulate drilling to the ODNR and that supersedes all local zoning regulations.

Supporting Beck Energy with “friends of the court” briefs were the state of Ohio, the powerful American Petroleum Institute, many of the oil-gas exploration companies working in eastern Ohio, the Ohio Oil and Gas Association, the Ohio Chamber of Commerce, the Ohio Contractors Association, the Canton Regional Chamber of Commerce, the International Union of Operating Engineers, the Ohio Aggregates & Industrial Minerals Association, the Ohio Contractors Association and the Youngstown-Warren Chamber of Commerce.

Supporting Munroe Falls were the cities of Broadview Heights, Euclid, North Royalton, Mansfield, Heath, the village of Amesville, the Mustard Seed Market and an array of local environmental and activist groups across Ohio plus small Ohio stores and individuals.

Shared authority sought

Beck received permission from the ODNR to drill a well on private property in Munroe Falls in 2011. The city sued, saying the company sidestepped local ordinances.

According to Houlihan, local zoning ordinances should operate in parallel with state law and allow the city to be certain that wells are located in appropriate areas.

Wells would be permitted in two areas of Munroe Falls zoned for industrial use but not in the medium-density residential area where Beck wants to drill, he said.

Local rules would not significantly hamper drilling operations, Houlihan said.

“If the state seeks to pre-empt local zoning, it can attempt to do so, but it must do so with express language,” he said.

Houlihan said shared authority is in place in a number of other drilling states, including California, Oklahoma and Texas.

In New York, where fracking isn’t legal and many communities have instituted pre-emptive bans, and in Pennsylvania, where fracking is widespread, similar cases have been decided in favor of shared regulation, with municipalities overseeing such things as land use and aesthetics and the state overseeing safety and construction.

Columbus-based attorney John K. Keller of Vorys Sater Seymour & Pease, who represented Beck Energy, said Ohio has a uniform regulatory approach to drilling by giving all authority to ODNR and avoiding localized rules.

In its court filings, the company said that Ohio’s 2004 law was intended “to end the confusion, inefficiency and delays under the earlier patchwork of local ordinances, and to ensure that Ohio’s oil and gas resources are developed on a uniform statewide basis.”

Rulings differ

The case was triggered when Joseph Willingham of Munroe Falls leased his mineral rights off Munroe Falls Avenue to Beck Energy. The company applied to the state for a permit to drill a vertical-only well. The state approved the permit, with several conditions, in February 2011.

Munroe Falls filed a lawsuit in Summit County Common Pleas Court to stop the drilling, saying that Beck Energy was violating local zoning laws.

In May 2011, Judge Mary Margaret Rowlands found in favor of Munroe Falls. Beck Energy appealed to the 9th District Court of Appeals.

The appellate court found that Beck Energy had to comply with Munroe Falls’ ordinances governing local roadways but it held that other local laws — zoning ordinance and four drilling provisions — conflicted with the state statute.

Munroe Falls then appealed the case to the Ohio Supreme Court.

The case is not about hydraulic fracturing or the drilling of wells, it is about home rule, Munroe Falls Mayor Frank Larson said in an interview prior to the Supreme Court hearing.

“We’re just trying to enforce our zoning ordinances,” he said. “It’s about home rule. Do we have the right to regulate oil and gas?”

Communities should have the right to have a say in where wells are drilled, Larson said.

Spills from the Beck site, he said, would pose a threat to drinking water in Munroe Falls and Cuyahoga Falls.

Larson said he was “not surprised at all” at how the attention surrounding the case has grown, calling it “an issue with far-reaching ramifications.”

Munroe Falls is optimistic that the Supreme Court will “give us the right to regulate where things go in our community. That’s what we’re seeking,” Larson said.

Shawn Bennett of Energy in Depth-Ohio, a pro-drilling trade group, said he was convinced by the arguments Keller and Glenn-Applegate advanced and is confident Beck will prevail.

“It’s clear that the ODNR as the sole authority over drilling in Ohio ... will remain,” he said.

The decision in the case probably will end ballot initiatives by local communities to block drilling in eastern Ohio and provide more certainty for drillers, Bennett said.

The Associated Press contributed to this report. Bob Downing can be reached at 330-996-3745 or bdowning@thebeaconjournal.com.