On Thursday, March 22, state Sen. Shannon Jones introduced Senate Bill 315 (SB 315), which mirrors many of the well regulation proposals advanced by the administration of Gov. John Kasich. SB 315 contains numerous provisions concerning the parameters that the Ohio Department of Natural Resources (ODNR) would need to evaluate in order to issue permits for new oil & gas wells or the expansion of existing wells. The bill would give ODNR some latitude to craft regulations addressing both industry and public concerns as to the construction and operation of these wells. However, SB 315 also seeks to mandate that ODNR well permit applications contain various new types of information, such as:
- The geologic formation into which the well will be drilled
- For injection wells, the geologic zone to be injected and the liquids to be injected
- A plan for restoration of the land surface to be disturbed by drilling operations
- Identification of the area roads to be used for site access
- For horizontal wells, a copy of an agreement with the proper local government body concerning maintenance of the roads to be used for access (a model Road Use Maintenance Agreement has been developed by the Ohio Dept. of Transportation, with input from other agencies and various stakeholders)
- Identification of groundwater and surface water sources to be used in the well’s production operations
- Baseline testing results of local water supplies within 300 to 1500 feet of drilling locations, depending on the type of well
- Evidence that well owners will maintain insurance coverage or other financial assurances in varying amounts to cover potential liabilities.
Additionally, for proposed horizontal wells, SB 315 would require ODNR to conduct site reviews as part of the permitting process to identify additional site-specific permit conditions, such as fencing, screening, and landscaping requirements for surface facilities.
SB 315 also includes disclosure requirements for the fluids used to drill, stimulate, and operate wells. For fractured wells, well owners must disclose to ODNR after completing drilling operations the identity of the chemicals to be used in the fracturing process (except proprietary formulas, for which the chemical class will suffice). ODNR will then disclose publicly on its website a list of the chemicals used in the servicing, operating, and plugging of an individual well.
Finally, SB 315 directs ODNR to promulgate regulations governing the disposal of brine, and would increase state fees charged on out-of-state shale wastewater injected into Ohio disposal wells from $0.20 per barrel to $1.00 per barrel. ODNR still is drafting its upcoming regulations that will govern brine disposal in class II injection wells.
The Senate Energy and Public Utilities Committee will begin hearing on the bill tomorrow (March 27) at 9:00 a.m. We will continue to monitor legislative developments as to SB 315 and the Kasich administration’s proposals for well regulation.