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Oklahoma Governor Signs Bill Limiting Local Control of Oil/Gas Activities

Oklahoma Gov. Mary Fallin signed a bill reaffirming the primacy of the Corporation Commission (OCC) in regulating the oil and gas industry, becoming the second state to effectively prevent localities from enacting their own regulations on energy development, including attempts to restrict or ban hydraulic fracturing (fracking) and injection wells.

According to Fallin's office, the Republican governor signed SB 809 on Friday. The bill "prohibits municipalities from issuing moratoriums or bans on drilling while preserving their ability to adopt reasonable ordinances, rules and regulations concerning traffic issues, noise, fencing requirements and placing of drilling rigs."

Fallin said the OCC is "aggressively but fairly regulating Oklahoma's energy industry," adding that the commission was analyzing data from the Oklahoma Geological Survey over the increase in seismic activity in the state, which scientists attribute to injections at disposal wells (see Shale DailyApril 22). The governor said the OCC was increasing its scrutiny of hundreds of injection wells linked to increased seismic activity.

"As more information and science become available, the OCC will use it to responsibly regulate or even put a stop to some drilling activity that could cause earthquakes or damage to the environment," Fallin said.

Texas enacted similar legislation last month after Gov. Greg Abbott signed a bill into law (see Shale DailyMay 18). HB 40, which reaffirms that the Railroad Commission of Texas (RRC) has exclusive jurisdiction over energy development in the state, was drawn up in response to a fracking ban enacted last year by the City of Denton, which is in the Barnett Shale (see Shale DailyNov. 5, 2014).

Although no localities in Oklahoma have enacted bans on fracking, the City of Stillwater held a public hearing on April 20 to discuss a proposed ordinance to establish setbacks for oil and gas wells and ban disposal wells within the city limits (see Shale DailyApril 23).

Under SB 809, localities would be allowed to "establish reasonable setbacks and fencing requirements for oil and gas well site locations...but [localities] may not effectively prohibit or ban any oil and gas operations, including oil and gas exploration, drilling, fracture stimulation, completion, production, maintenance, plugging and abandonment, produced water disposal, secondary recovery operations, flow and gathering lines or pipeline infrastructure. All other regulation of oil and gas operations shall be subject to the exclusive jurisdiction of the OCC."

SB 809 also stipulates that any local law that effectively interferes with access to, or takes control of, mineral rights would be considered a taking under state law.

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