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Ohio Drilling Bill Nears Passage

Legislation that would open leasing on all property owned by the state government -- including state parks -- to oil and gas companies is advancing through the Ohio General Assembly and is expected to pass.

The chief piece of legislation is HB 133, introduced March 1 by State Rep. John Adams (R-Sidney). Kara Joseph, an aide to Rep. Adams, told NGI's Shale Daily on Thursday that the House Agriculture and Natural Resources Committee is scheduled to consider amendments to HB 133 on Tuesday and could give its final vote on the measure.

"It's expected to pass," Joseph said. "There shouldn't be any issues. All of the Republicans support the bill and a lot of the Democrats like the changes that have been made. We're hoping to get a few Democrats to vote for it."

According to the Ohio Legislative Service Commission, 15 pages of changes have been made to the bill. The changes primarily focus on the classification of state-owned property, temporary leasing authority for state agencies, land parcel nomination rules, bid advertising and the disbursement of royalty funds. There would also be no appeals for denied lease permits, or any leases or permits to remove minerals from Lake Erie.

In addition to openning state lands to leasing, HB 133 would create a five-member Oil and Gas Leasing Commission. Each member would serve a five-year term. The governor would appoint four members, two of whom would be recommended by the oil and gas industry. One member would have a background in finance or real estate, and another member would be recommended by environmentalists. The final board member would be the head of the Ohio Department of Natural Resources (ODNR) Division of Geological Survey.

An aide to state Sen. Kris Jordan (R-Powell) told NGI's Shale Daily on Thursday that a similar bill sponsored by Jordan, SB 108, is not scheduled for a vote in the Senate Agriculture, Environment and Natural Resources Committee. He said if HB 133 were to pass the House it would come up for a vote in the Senate before being sent to Republican Gov. John Kasich.

Kasich reportedly supports HB 133 and said it would help Ohio handle an $8 billion budget deficit. The state budget bill, HB 153, also calls for allowing oil and gas drilling on state-owned land. HB 153 passed a third consideration vote in the House on May 5.

Despite the changes, environmental groups remain opposed to the bill.

"The changes didn't make the bill any better; they made it more confusing," Trent Dougherty, an attorney for the Ohio Environmental Council (OEC), told NGI's Shale Daily on Thursday. "We were given assurances drilling wouldn't be allowed in some of the sensitive parks and preserve areas in the state; however, this class system they set up actually puts some of those areas in play. We were also given assurances that this would be done through an open and transparent process, but there still hasn't been any public participation."

Ohio law currently allows some oil and gas drilling in forests and wildlife areas owned by the ODNR. The department controls more than 590,000 acres in the state, which includes parks, forests and wildlife areas. Drilling rights are already owned on roughly 25,000 acres, most in state forests. Mineral rights were severed on another 70,000 acres when the ODNR took ownership (see Shale Daily, March 8).

"The state can reap the benefits under the state lands that are already open to drilling today," Dougherty said. "If there have been issues with getting leases on other land then that's between the oil and gas developers and whoever owns those parcels of land. But we will continue to oppose the impacts to our parks, and this bill doesn't help the situation."

Dougherty conceded that passage of HB 133 was likely. He said the OEC would "work with the General Assembly and the agencies to make sure that specific terms and conditions are put on leases in sensitive areas.

"We're hopeful that this vote on Tuesday won't be the last on the issue."

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