Ohio lawmakers passed a bill meant to accelerate oil and gas drilling in state parks and on other state-owned land.
The original bill focused on food processing rules when it was passed by the Ohio House of Representatives last spring, but when Ohio Senators took it up this month, they added amendments, one of which would change the language around leasing state lands for oil and gas drilling. The Ohio House passed the bill with the new amendments on Tuesday, and it is headed to Governor Mike DeWine.
LISTEN to Julie Grant discuss the bill with The Allegheny Front’s Kara Holsopple
Since 2011, state agencies have been authorized to lease Ohio’s public lands for oil and gas drilling, including parks, forests, nature preserves and universities. The language of that law said agencies “may” lease state lands for oil and gas production.
“The key part of the amendments goes from ‘may’ to ‘shall,’” said Senator Tim Schaffer, a Republican who represents parts of central and southeastern Ohio and sponsored the amendment.
“It’s designed to encourage the state agencies to see that the state legislature, that the General Assembly in Ohio, really intends for them to negotiate in good faith with these oil and gas producers,” he said.
According to Schaffer, even though state agencies have been allowed to lease state lands for drilling, including fracking, they haven’t been doing it. “I don’t know if it just wasn’t a high priority or what, but some of these deals have dragged on for years and years,” he said.
Schaffer said lawmakers added the amendment to this unrelated bill in response to requests by the oil and gas industry.
“Some of the companies are complaining that, ‘Look, we want to help the state make money, we want to help provide product to the marketplace,’ which, of course, helps us all by lowering the price. That’s just basic Economics 101. But [companies say] ‘we can’t get anybody to negotiate or finalize,’” he explained.
What environmentalists think
Environmentalists are concerned this will damage the state’s parks and other natural areas.
“Most people in Ohio don’t want to see oil and gas rigs, don’t want to smell air pollution, don’t want to worry about water quality in their state parks or in the other public lands that they’re out hiking in with their families,” said Nathan Johnson, public lands director for the Ohio Environmental Council Action Fund.
Pennsylvania currently has a moratorium on new oil and gas leasing on state forest and park lands. Johnson believes Ohio also needs to consider if these leases are a good idea.
“There’s a big question, policy-wise, whether or not the best use of those public lands is to lease them to oil and gas development, to fracking, whether that’s on economic grounds, ecological grounds, outdoor recreation grounds in particular,” he said.
Under this bill, the state is taking away its own authority to decide these leases, Johnson said. He worries that if the bill becomes law, state agencies will be required to approve oil and gas leases on state lands.
“An oil and gas company could knock on the state’s door and say, ‘Hey, we want to drill in this park,’ and the state legally would have no real ability to say no,” he explained. “So that’s dramatically going to change the process.”
Johnson points out that the state does not currently have rules for drilling on state lands.
New Efforts to Create Rules for Drilling on State Lands in Ohio
The Ohio Oil and Gas Land Management Commission is working on rules for state leases on public lands. Member Jim McGregor said the commission is in its infancy; they’ve met only three times.
The commission recently issued a draft of a standard lease agreement.
“We’re creating an application and a process for companies to access oil and gas under public lands. So it’s a new process. It doesn’t currently exist,” McGregor said. He said the commission is likely two to three months away from accepting applications.
The commission does not have or want authority over surface rights, according to McGregor. Surface rights can be owned or managed by state universities or agencies like the Ohio Department of Transportation. The commission is only considering underground activity. To frack for gas, companies drill wells vertically, from the surface down into the earth, and then turn horizontally, moving laterally up to a mile underground.
“For instance, if somebody wanted to drill a public property from the surface, they would have to talk to the individual department of the state of Ohio, not us,” he explained. “If they’re drilling adjacent to public property and the cone of oil or gas is being drawn from under that public property, then that would fall under us.”
Under the draft lease agreement, oil and gas producers would not have the right to drill wells, locate well pads, or set up any surface equipment like pipelines or pump stations. That would need to be decided in a separate agreement with the state agency or a private landowner that holds the surface property rights.
“Herding all the cats in the same direction is pretty difficult when your job is to drill and harvest and send product to market,” said Senator Schaffer, which is why he sponsored the bill amendment to spur state agencies to negotiate with oil and gas developers.
Even though he’s encouraging fracking in state parks and elsewhere, Schaffer believes those assets won’t be harmed by underground drilling.
“You’re not going to see a well pad right in the middle of Old Man’s Cave or anything like that. That is not going to happen,” Schaffer said, speaking about one of Ohio’s most well-known hiking areas in Hocking Hills State Park.
“We want to protect our state parks. We want to protect our state universities, all of our state properties,” he said.
The commission is accepting public comment on the draft lease agreement until January 13.
Defining Natural Gas As Green Energy
Another amendment to this bill would classify natural gas as “green energy.” It specifically excludes natural gas from receiving renewable energy credits that utilities need to comply with Ohio’s renewable energy portfolio standard, which requires that a certain percentage of energy sold be generated from clean energy sources.
“The intent was strictly to help us with ESG compliance and standards in our state,” said Senator Schaffer.
ESG refers to environmental, social and corporate governance practices. Many mutual funds, brokerage firms and others now offer investment products based on ESG principles. For example, environmental criteria might consider how a company’s policies address climate change.
Shaffer said classifying natural gas as green energy makes sense because it’s cleaner burning than coal and has greatly reduced Ohio’s greenhouse gas emissions.
Environmental groups counter that calling natural gas a green energy is insincere because it is still a fossil fuel that is contributing to climate change.
The next stop is Governor DeWine’s office. Once it is received, the governor has about 10 days to either sign, veto or do nothing — which would result in the bill passing.
