New Rules for 'Urban' Oil and Gas Drilling in Ohio

The state approved new rules for oil and gas drilling Tuesday that aim to ensure health and human safety, protection of the environment, and scientific management of oil and gas reserves.

GRANVILLE, Ohio, — The state approved new rules for oil and gas drilling Tuesday that aim to ensure health and human safety, protection of the environment, and scientific management of oil and gas reserves. The result should be long-term benefits for the state's economy and for energy consumers.

Ohio oil and gas producers supply 20 percent of the natural gas consumed by Dominion East Ohio Gas customers. Their contribution to Ohio's natural gas supply helps to protect Ohio consumers from volatility in market prices.

The new rules apply to terms and conditions specific to "urban" wells - wells located in municipalities or townships with a population exceeding 5,000. The rules are the result of Ohio House Bill 278, which delegates exclusive authority for the regulation of oil and gas wells to the Ohio Department of Natural Resources, Division of Mineral Resources Management. Rules for drilling in rural areas remain largely unchanged.

"The rules are based on sound regulatory principles. They back safety, the environment and the economy. It makes good sense that a single state agency, with the greatest body of technical and scientific expertise, would regulate the location, spacing and safe operation of oil and gas wells," said Thomas E. Stewart, executive vice president of the Ohio Oil and Gas Association.

The rules were developed by an advisory council of several stakeholders, including the Ohio Municipal League, the Ohio Township Association, the County Commissioners Association, the Ohio Environmental Council, and oil and gas producers. They reflect findings from a series of public hearings and written submissions from a broad base of interested parties.

The rules were subject to extensive review by the Division of Mineral Resources Management and were formally adopted Tuesday by the Joint Committee on Agency Rule Review. The basic areas covered in the rules are:

--Safety concerning the drilling or operation of a well;--Protection of the public and private water supply;--Location of surface facilities of a well;--Fencing and screening of surface facilities of a well;--Containment and disposal of drilling and production wastes; and--Construction of access roads for purposes of the drilling and operation of a well.

Since the passage of H.B. 278 in September 2004, the rules have been applied to more than 170 permits, most of which have been drilled in urban areas. "The environmental and safety track record for these wells is sterling," Stewart said.

H.B. 278 centralizes regulatory authority in the Division of Mineral Resources Management, a policy that is consistent with other oil and gas producing states, such as New York, West Virginia, and Michigan. The bill repeals the statutory authority previously asserted by local governments to regulate oil and gas drilling.

"The concerns of local governments continue to be represented, but now they appear in the new rules as a consistent code developed by hydrologists and other scientific experts, which is appropriate for a technically complex and increasingly sophisticated extraction industry," Stewart explained.

The new rules are consistent with past regulatory practices exercised by the state but introduce additional provisions for urban drilling. The ODNR has consistently regulated Ohio oil and gas producing since 1965. More than 62,000 wells are currently in production.

Drilling can only take place when a property owner consents. Generally, in Ohio, a minimum of 20 acres is required, and the well must be at least 300 feet from the property boundary. The size of the parcel and well's distance from the property boundary depend on the depth of the well.

New sections to the rules require oil and gas producers to go above and beyond the existing safety practices, as regularly applied in less populated areas. In "urban" areas, the rules insist on technologies that introduce extra precautions, such as water protection. They also require fencing and landscaping.

In addition, the new rules hold the industry to a higher standard as concerns communication with neighboring property owners and local government officials, who must register with the state if they wish to be notified about drilling in their area.

"We understand that there may be some apprehension among Ohio residents about drilling in urban or suburban settings," Stewart said.

"However, the new rules are meant to provide Ohio residents with the very highest standard of safety and protection. The Ohio oil and gas industry has a long track record of safe and environmentally responsible drilling near homes, hospitals, schools and shopping centers.

"Most people would not even know if they were parked next to a gas well. In most cases, they are small and inconspicuous," Stewart said.

The Ohio Oil and Gas Association is a statewide trade association with over 1,300 members who are actively involved in the exploration, development and production of crude oil and national gas within the state of Ohio. The Association's mission is to protect, promote, foster and advance the common interests of those engaged in all aspects of the crude oil and natural gas producing industry.

Source: PRNewswire, Ohio Oil and Gas Association