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Ohio House Committee Amends Bill That Would Have Allowed Drilling on State-Owned Land

The Ohio House of Representatives' Agriculture and Natural Resources Committee has backtracked on a bill that would have opened some state-owned land to oil and gas drilling.

The committee unveiled substitute HB 490 last week, adding language to legislation first introduced in March to revise state laws governing agriculture, natural resources and environmental protection.

The legislation would have authorized the Ohio Department of Natural Resources (ODNR) to allow unitization of some state-owned lands, including forests, wildlife areas and universities, to facilitate oil and gas drilling.

But during a hearing to discuss the bill on Monday, the committee revised its language, cutting the provision that would have allowed operators to unitize those lands and amended the legislation to include only land owned by the Ohio Department of Transportation (ODOT), said Nathan Johnson, an attorney for the Ohio Environmental Council, which came out against the bill last week.

“There’s been an omnibus amendment and the bill has been totally restructured,” he said. “They’ve cut out all public lands except those owned by the Ohio Department of Transportation. This pretty well resolves our concerns in a favorable way.”

Republican Rep. David Hall, who also serves as chairman of the Agriculture and Natural Resources Committee, co-sponsored the bill. He told NGI’s Shale Daily that ODOT-owned land, such as roads and highways, has been a major problem for Utica Shale development in eastern Ohio.

“What we’ve done with this bill is it now allows [ODNR’s] oil and gas director to move forward and allow the leasing of all the right-of-ways owned by [ODOT],” Hall said. “That was becoming a huge hurdle and this allows those roads to become part of the pooling system and they can be unitized under this legislation.”

Comparable to forced pooling, Ohio's unitization law was passed in 1965 and requires that at least 65% of landowners in a given unit area agree to drilling. If that condition is met, the law allows an operator to gather landowners -- even those who do not consent -- into a unit in which they share royalties and production costs.

Prior to the state's shale boom, ODNR had only received two requests for unit operations, but applications have been on the rise since Chesapeake Energy Corp. first filed for a unit order in 2011 (see Shale Daily, March 20, 2013). The law has proved controversial, with proponents claiming it stops a small minority of landowners from preventing a majority of those who wish to capitalize on their mineral rights.Opponents, such as the OEC, have argued that it gives oil and gas companies too much power over private property.

In 2011, Republican Gov. John Kasich signed legislation allowing oil and gas development on state-owned land. The law required him to appoint a leasing commission to decide what projects could go forward, but he never did so and state lands have remained closed to drilling since then. Last year, during a controversy in which it was realized that ODNR had briefly considered a plan to market state owned land for drilling under the 2011 legislation (see Shale Daily, March 4), Kasich shifted and indicated he was opposed to oil and gas development on public land. 

(Corrected) When asked, Kasich spokesman Rob Nichols did not say where the governor currently stands on the issue, saying only that the administration had been monitoring HB 490.

Hall said the committee could eventually revisit the 2011 legislation or consider a new bill to allow drilling on other state-owned land. For now, he said, lawmakers are focused on resolving ODOT property issues to help better facilitate oil and gas development in the state.

Lawmakers voted HB 490 out of the Agriculture and Natural Resources Committee on Monday by a vote of 15-3. Hall said he expects the bill to reach the House floor later this week, where it’s expected to pass a full vote with little resistance.

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