Spring ‘18: Environmental Law
The Future of Fracking in Ohio by FRANK J. Reed, Jr. Hydraulic Fracturing, commonly known as fracking, is the process of drilling a well and then forcing high pressure fluid, consisting of water, sand and various chemicals, into the ground causing fractures in the underground layer of rock in order to extract crude oil and natural gas. Fracking was first discovered and used in 1947, but it wasn’t until 1998 that the modern fracturing technique, known as “horizontal fracking” was first developed. Here in Ohio, “horizontal fracking” first gained popularity in 2011 after the recession of 2008, and the price for gasoline reached an all-time high. Environmental concerns include potential contamination to the groundwater, potential risks to air quality and, more recently, earthquakes. There have been several small-scale earthquakes in the vicinity of fracking operations. The first such quake occurred in December 2011 in Youngstown, Ohio and most recently on April 2, 2017, near Marietta, Ohio. Shortly after the first incident, the Ohio Department of Natural Resources and Ohio Environmental Protection Agency adopted regulations restricting fracking or the disposal of used fracking fluid into
underground well injection within a certain distance of known fault lines. And although the creation of new frack wells has decreased in the last five years since the price of gasoline returned to more normal levels, the oil and gas industry continues to discover new opportunities for exploration. For example, in December 2016, the United States Bureau of Land Management held an online auction that allowed private companies to submit bids in order to lease federal lands for the extraction of oil and gas. The federal government made available more than 1,600 acres of land located within the Wayne National Forest in southeast Ohio for lease. Minimum bids were $2 per acre for a 10-year lease, plus a promise to pay the federal government 12 percent royalties on the value of any oil or gas removed.
52 | Columbus Bar L aw yers Quarterly Spring 2018
In 2011, the Ohio General Assembly passed H.B. 133, which authorized the lease of lands owned or controlled by the State Ohio to private companies for the purposes of the extraction of oil and gas. The Oil and Gas Leasing Commission was created pursuant to R.C. 1509.71 in order to develop standards for this activity and promulgate Ohio Administrative Codes. However, because the Ohio General Assembly refused the Governor’s request to raise the oil and gas severance tax to 4.5 percent, the Governor refused to appoint any members to the Oil and Gas Leasing Commission, effectively putting on hold any oil and gas extraction activities on state-owned land. Last Spring, in the state’s most recent biennium budget, the General Assembly sought to change Ohio law so that the General Assembly would have the power to appoint