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Ohio AG Calls for Higher Penalties, Full Frack Fluid Disclosure

Ohio Attorney General Mike DeWine is urging state lawmakers to enact tougher regulations on the oil and gas industry, including higher penalties for violations and requiring operators to not only disclose what chemicals are used for hydraulic fracturing (fracking) but also their precise formulations.

In an interview with the Associated Press on Wednesday, DeWine said violations should be increased to $10,000 per day, up from the current maximum of $20,000 per incident. He said the higher fines would bring Ohio up to par with other states that have significant oil and gas resources.

"The attorney general's environmental enforcement section reviewed Ohio's laws versus laws in other states," Dan Tierney, a spokesman for DeWine, told NGI's Shale Daily on Thursday. "He's done the review, and he basically had some recommendations to bring Ohio's laws more consistent with other states."

Those other states reportedly include Colorado and Texas, as well as neighboring Michigan and Pennsylvania.

"Ohio's laws simply are not adequate today," DeWine said. "If something happens six months from now, three months from now, and we look up and say, 'Gee, our penalties aren't adequate,' it's going to be too late."

DeWine, a former Republican U.S. Senator from Ohio, said he is advocating for the full disclosure of fracking chemicals and their formulations because he is concerned for the environment and the safety of emergency first responders. He also said he wants his office or another state agency empowered to help landowners involved in leasing disputes.

Trent Dougherty, an attorney for the Ohio Environmental Council (OEC), said full disclosure and higher penalties were long overdue.

"Disclosure has been an issue all around the country, not just to be transparent but for a really substantive reason, to protect first responders," Dougherty told NGI's Shale Daily on Thursday. He added that "strong penalties that don't give 'bad actors' an incentive to violate the law are better for the environment and the industry."

Tom Stewart, executive vice president of the Ohio Oil and Gas Association (OOGA), could not be reached for comment Thursday.

Tierney said DeWine's recommendations would need to come from members of the Ohio General Assembly. Dougherty said he wasn't aware of any legislators currently working on such a bill.

"It's a breath of fresh air that this is coming from a Republican AG and that the Republican majority [in the General Assembly] can hear from one of their colleagues and someone who is respected as the former [U.S.] Senator," Dougherty said. "We think that that's going to hold a lot of weight."

Tierney said an investigation by the state Bureau of Criminal Investigation (BCI) into the "lost landman's handbook" was inconclusive (see Shale Daily, April 26, 2011). The probe centered on a five-page document, "Talking Points for Selling Oil and Gas Lease Rights," which lists deceptive practices for landmen to use when trying to persuade people to sign an oil or natural gas lease. It was allegedly found outside a home in Yellow Springs.

According to a prosecutor's summary of the BCI investigation, a landman of interest was interviewed and fingerprinted, but the probe ultimately "revealed no evidence to identify the 'origin' and/or author of the 'Talking Points' document. Also, no evidence was revealed during the investigation that would identify the unknown author's 'intent.'"

Although the investigation led to a dead end, DeWine called on state legislators to address concerns from the public that some landmen may be using deceptive practices. "[For] most people who are selling their mineral rights, this is a once-in-a-lifetime transaction," DeWine said. "The people who are buying, the landmen who are coming in, do it every day. So there's a little inequity there about knowledge."

DeWine also emphasized that despite his calls for tougher regulations and penalties, he still supports oil and gas development in the state's portion of the Marcellus and Utica shales.

"I'm for the fracking," DeWine said. "I think it's an opportunity for Ohio to really get a lot of jobs. But we have to do it right. We have to really take a deep breath, do it right, make sure the public is protected [and] make sure our land is protected."

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