An update on lawmaker action and other activities at the Ohio Statehouse related to horizontal

An update on lawmaker action and other activities at the Ohio Statehouse related to horizontal hydraulic fracturing:

No permits: A Youngstown company appeared before a state board to appeal a decision to revoke its licenses to operate injection wells after investigators caught an affiliated company dumping oil-field waste down a storm sewer. In a 26-page ruling, issued in June, the Ohio Oil and Gas Commission denied D&L Energy’s request to have its permits permanently reinstated — essentially terminating its business in Ohio’s waste-disposal industry.

The ruling can be appealed in Franklin County Common Pleas Court.

Legal counsel for D&L Energy argued before the Ohio Oil and Gas Commission that Ben Lupo, the former owner of D&L, was acting in his capacity as owner of a separate company and that D&L should not be penalized for his actions.

But legal counsel for the environmental enforcement section of Attorney General Mike DeWine’s office countered that Lupo was intertwined with D&L Energy, Hardrock Excavating and other businesses.

The commission agreed and found that Lupo had responsibility for those affiliated companies.

Don’t do it: The Ohio Sierra Club urged the Ohio Oil and Gas Commission to deny D&L’s request. Manager Jed Thorp said in a released statement, “D&L dumped hundreds of thousands of gallons of dangerous oil and gas waste into the Mahoning River, which provides drinking water to thousands of Ohioans. Ohio needs to send a message to the industry that if you pollute and ignore the rules, you’re not welcome here.”

Legal opinion: Ohio Attorney General Mike DeWine issued a legal opinion to Harrison County officials, informing them that a board of county commissioners can sell water from county facilities to a company using the resulting supply in oil- and gas-drilling activities. However, counties cannot ink contracts with for-profit companies that want to broker water sales between counties and oil and gas interests.

Natural-gas liquids: During a conference in Columbus, industry groups said they expected eastern Ohio’s shale oil fields to be among the most prolific in the world in terms of natural-gas liquids.

“This is one of the most ethane-rich plays I’ve ever seen in the world,” said Greg Davis, vice president of marketing at Range Resources Corp., which has been active in the Pennsylvania Marcellus region. “Some of our wells are up to 18, 20 percent ethane out of the ground. ... We’re talking about 500,000 barrels a day, including ethane, out of this play by 2018. That’s an enormous number.”

But questions remain about the boundaries of the best-producing areas, the ability to process and transport the resulting natural-gas liquids to market and ways to reduce production costs to boost profits.

Agreement: Two groups that normally have opposing views on energy policy were on the same page during a forum on fracking issues near the Statehouse.

Both Tom Stewart, executive vice president of the Ohio Oil and Gas Association, and Jack Shaner, deputy director of the Ohio Environmental Council, said companies caught illegally dumping brine should lose their operational permits.

“We have been very outspoken in saying that if laws were broken and this person purposely polluted and avoided his obligations under the law, then that person should suffer the full consequences of the law,” Stewart said.

Shaner took it a step further, calling for the implementation of a “corporate death penalty,” meaning the guilty parties should be blocked from doing business.

Still no frack-tax hike: The Ohio Senate passed its version of the biennial state budget but refrained from including Gov. John Kasich’s proposed increase in oil and gas produced via horizontal hydraulic fracturing.

Sen. President Keith Faber said in June that he did not expect a severance tax increase to be added to the $61 billion-plus, two-year spending plan during conference committee deliberations.

“The House pretty much took the severance tax issue off the table,” Faber said. “If they’re steadfast against putting it back on the table, I don’t know that’s something we’re going to fall on our sword on.”

Behind-the-scenes talk: Early in the month, the Kasich administration was floating a revamped severance-tax plan that would designate a portion of increased collections to counties in eastern Ohio.

Kasich remains confident that a severance-tax increase will happen.

“I just don’t have any doubt about it; it’s just a matter of what year,” the governor told reporters. “Maybe it will be this year; maybe it will be another year — but it’s going to happen.”

Brine fees: Rep. Ronald Gerberry of Austintown announced the reintroduction of legislation that would allow local governments to levy extra fees on facilities that recycle oil-field waste.

“Brine recycling facilities can be hard on local infrastructure,” he said in a released statement. “Townships and counties don’t have the resources to deal with additional costs like worn-out roads resulting from increased traffic. This bill will assist them in generating needed revenue to cover these increased expenses.”

No concurrence: The Ohio House declined to concur on Senate amendments to the biennial budget bill. The session gave Rep. Bob Hagan of Youngstown an opportunity to reiterate his support for increased taxes on oil and gas drilling, with the proceeds directed to communities.

“There’s an opportunity for us to invest in Ohio,” Hagan said. “Why would we ignore that opportunity? ... We’ve lost dollars for police and fire, social services. Agencies are collapsing. We have school issues that are under-funded.”

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