Ohio undergoes major revision of rules; incorporates hydraulic fracturing

SB 165, Ohio Department of Natural Resources, Division of Mineral Resources Management, Oil and Gas, June 30, 2010. On March 31, 2010, Governor Ted Strickland signed Substitute SB 165, the most major revision to Ohio oil and gas law in 25 years. Many significant changes were implemented as a result of passage of this new legislation, which went into effect on June 30, 2010.

Development of the statute carefully took the process of hydraulic fracturing into consideration and offered many opportunities for public comment in the form of public meetings and legislative hearings, where any interested party was allowed to testify before the Ohio Legislature. In general, industry notification requirements to the Department of Natural Resources (DNR) have been greatly expanded.

Rulemaking, which began in September 2010, is anticipated to be completed over the course of 6 to 12 months.

Highlights from AN ACT To amend sections 1509.01, 1509.02, 1509.03, 1509.04, 1509.05, 1509.06, 1509.07, 1509.071, 1509.072, 1509.10, 1509.11, 1509.12, 1509.13, 1509.14, 1509.17, 1509.18, 1509.20, 1509.21, 1509.22, 1509.221, 1509.222, 1509.225, 1509.226, 1509.23, 1509.24, 1509.27, 1509.31, 1509.35, 1509.36, 1565.07, 1565.13, 1571.05, 5703.052, 5703.21, 5749.01, 5749.03, 5749.06, 5749.07, 5749.08, 5749.10, 5749.12, 5749.13, 5749.14, 5749.15, and 5749.17 and to enact sections 1509.021, 1509.041, 1509.062, 1509.073, 1509.181, 1509.19, 1509.34, 1509.50, 1509.60, 1509.61, 1571.18, and 4929.041 of the Revised Code to revise the Oil and Gas Law include:

Section 1509.01 modified definitions to more clearly include well stimulation, including fracturing.

Section 1509.04 significantly expanded the DNR’s regulatory authority to allow more protection of public health and safety and the environment.

Section 1509.071 authorizes the DNR to expend agency monies to initiate corrective actions where necessary; allows the agency to cause a company to reimburse for monies expended.

Section 1509.10 requires companies to submit wireline electric logs and well completion records, including those associated with hydraulic fracturing; includes reporting of type and volume of materials used; the methods used to contain such fluids; and data (such as pumping pressures and return volumes). It also requires submission of MSDS sheets; and rulemaking may require the inclusion of CAS (chemical abstract service) information.

Section 1509.12 expands the agency’s authority to require the plugging of wells with defective casing or well construction.

Section 1509.17 expanded well construction requirements expressly for the protection of underground sources of drinking water. It authorizes the agency to require remedial testing to assure construction requirements have been met and mandates plugging of wells that are irreparably damaged.

Section 1509.17 addresses well stimulation, agency notification, and well integrity testing. Section 1509.22 clarifies the definition of contamination to include those activities that may be associated with hydraulic fracturing. In the state of Ohio, Underground Injection Control (UIC) primacy allows the surface application of oilfield brine in restricted circumstances; Section 1509.226 prohibits surface application of fluids associated with well stimulation.

Section 1509.23 authorizes the agency to promulgate rules to further enhance these statutory changes.

Download the full text of SB165 below.

OH_128_SB_165_EN_N.pdf479.53 KB
OH_SB165_Analysis.pdf453.46 KB