The Ohio Supreme Court ruled on Wednesday that the state Oil and Gas Commission does not have jurisdiction to hear an appeal of oil or gas well permits issued by the chief of the Division of Mineral Resources, a branch of the Ohio Department of Natural Resources (ODNR).
The case involved landowner Summitcrest Inc., which filed with the commission, appealing a permit that was issued in March 2012 to Chesapeake Energy Corp. Chesapeake and the ODNR challenged the filing on the grounds that the commission lacked the jurisdiction to consider the appeal. In August the commission denied Summitcrest’s appeal, but the issue of its jurisdiction remained unresolved and was argued before the state Supreme Court.
The decision hinged on whether the issuance of a permit from the chief of the Division of Mineral Resources constitutes an “order” because Ohio law states that “any person affected by an order” can “appeal to the oil and gas commission for an order vacating or modifying the order.”
In September Ohio lawmakers passed an amendment stating “the issuance of [an oil or gas well permit] shall not be considered an order of the chief,” which meant that the commission “patently and unambiguously lacks jurisdiction over the appeal,” in the words of the majority opinion.
“For oil and gas wells, however, a permit to drill a new well, drill an existing well deeper, reopen a well, convert a well to any use other than its original purpose, or plug back a well to a different source of supply, including association production operations, is not considered to be an order of the chief of the division,” the majority wrote.
Permits issued by the chief to conduct secondary or additional mining operations, to inject brine or other waste substances into an underground formation, or for a mandatory pooling order are to be considered orders and are appealable by the commission.
“The court is without the authority to create jurisdiction when the statutory language does not. That power resides in the general assembly,” the majority ruled.
The ruling was made in a 5-2 decision. The dissenting judges argued that the amendment was not law at the time of the August ruling by the commission. But the majority said the decision was valid regardless of the amendment. It also cited precedent in support of taking the amendment into account in the ruling.
The ruling makes it unclear how to appeal a well permit issued by the chief of the Division of Oil and Gas Resources, said Linda Osterman, executive director of the Oil and Gas Commission. The attorney said she would recommend going to a county common pleas court. “I don’t know how that would be received, but that is where I think they [appellants] would go at this point.”
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