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Kasich signs Ohio’s new gas drilling rules in Akron

By Bob Downing
Beacon Journal staff writer

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Ohio Governor John R. Kasich signs into law comprehensive energy Senate Bill 315 at the Echogen Power System LLC company on Monday in Akron, Ohio. (Paul Tople/Akron Beacon Journal)

Gov. John Kasich came to Akron on Monday to sign Senate Bill 315, sweeping energy legislation that includes tough rules on drilling for natural gas and oil in Ohio.

The bill-signing ceremony attracted about 110 people to Echogen Power Systems LLC, an Akron company working to generate electricity from waste heat that otherwise is lost up smokestacks.

The legislation marks “a really and truly historic moment,” Kasich said. “It accomplishes something real for the state of Ohio.”

Kasich said the legislation creates an independent energy policy for Ohio that will be a model for other states.

“This is really exciting stuff,” he said in touting the promise of lower-cost energy, which will improve Ohio’s economy.

The bill covers such topics as shale-gas drilling, smart electric grids, energy efficiency, renewable energy, clean-coal technology and waste-heat recovery. It covers energy conservation at state buildings, an alternative fuel transportation program and pipeline safety. It modifies Ohio’s Alternative Energy Portfolio Standard on renewable energy. It promotes the use of natural gas and streamlines state permitting.

Provisions in the bill will “last for 100 years,” Kasich said. “There’s no doubt in my mind.”

Kasich said the shale-drilling rules were developed to protect the environment as energy companies begin drilling in the Utica formation deep underground in eastern Ohio.

The new rules are “the most aggressive, clearest, fairest and strongest fracking standards you can find anywhere in the country,” the governor said. He called Ohio’s fracking rules the “toughest law in America.”

The new rules cover well construction, disclosure of chemicals and water-usage reporting.

The bill encourages well operators to negotiate road agreements with local communities, allows appeals to the Ohio Oil and Gas Commission for certain drilling operations and calls for daily fines of up to $20,000 for violations.

Drillers must test neighbors’ drinking-water wells within 1,500 feet of a natural gas well. Previously, only wells within 500 feet had to be tested before drilling could begin.

Drillers must also reveal where they are getting the fresh water for hydraulic fracturing, something not previously required.

The new law also requires listing most chemicals and additives in drilling solutions.

Some environmental groups are unhappy, however, with provisions of the bill that allow some chemicals to remain trade secrets and prohibit medical personnel from publicly disclosing any chemical-exposure issues.

There are also new rules on injection wells used to pump drilling wastes into underground rock formations.

The new rules in the bill are “a good start,” said state Rep. Sean O’Brien, D-Brookfield, who was involved in the bill’s bipartisan development. “We only have one chance, and we had to get it right.”

Industry supports law

The Columbus-based Ohio Petroleum Council welcomed Senate Bill 315.

“The legislation was vetted through a thorough process and included compromises by both the industry and legislators,” Executive Director Terry Fleming said.

“Throughout the process, the oil and natural gas industry stated its support for strong regulations that, in addition to promoting safe operations, create certainty within Ohio’s regulatory structure for continued shale exploration and development in the Utica shale.

“It is also our hope that these new regulations, which passed with industry support, give Ohioans peace of mind regarding the exploration and development of the shale resources in the state.”

Daniel Alfaro, of the pro-drilling industry group Energy in Depth-Ohio said: “As Ohio continues to emerge as a leader in domestic energy production with the development of the Utica shale, it is also setting the standard in its regulatory system for developing states across the U.S.

“The passage of this bill gives our state the most robust, transparent and comprehensive oil and gas regulations in the country, and allows the industry to continue development in the Utica and continue putting Ohio back to work. This is something Ohioans across the board should be proud of.”

Kasich said he told President Barack Obama at an NCAA basketball game that Ohio is satisfied with Ohio Department of Natural Resources oversight of drilling and doesn’t need new federal rules on the practice. He said the bill is unlikely to end debate about hydraulic fracturing, commonly called fracking, in Ohio.

The governor said he still intends to push for an increased severance tax on drillers, a revenue source he hopes to turn into an income tax reduction for Ohio taxpayers.

The drilling industry strongly opposes such a tax, saying it would impede development in Ohio.

Bob Downing can be reached at 330-996-3745 or bdowning@thebeaconjournal.com.