Ohio recently passed fracking legislation that will go into effect in September 2012. Ohio is home to both the Marcellus and Utica shales and has experienced a natural-gas boom in recent years thanks to fracking. The legislation, which is contained in Senate Bill 315, seeks to modernize existing law by addressing the unique concerns of fracking.
To improve transparency, the legislation requires the disclosure of all chemicals used in fracking operations, with an exception for trade secrets. The disclosure must occur within 60 days after the completion of drilling operations, either on a well-completion report submitted to the Ohio Department of Natural Resources (DNR) or on the chemical-disclosure registry maintained by the groundwater protection council and the interstate oil and gas compact commission (i.e., fracfocus.org). Well owners, however, are not required to report chemicals that occur incidentally or in trace amounts, and may also withhold from disclosure information that is a trade secret.
A trade-secret designation may be challenged by a property owner, adjacent property owner, or any person or state agency with an interest that may be adversely affected by filing a civil action in the Court of Common Pleas of Franklin County. In such an action, the court shall conduct an in camera review to determine whether the claimed information is a trade secret. A trade secret is nevertheless still required to be disclosed to: (1) the DNR, if necessary to respond to a spill, release, or investigation; or (2) a medical professional, if necessary to assist in the diagnosis or treatment of an individual who is affected by an incident associated with fracking operations. In such a case, the DNR or medical professional must otherwise maintain the confidentiality of the trade secret.
The legislation also seeks to protect water quality and minimize the effects on local roads. Well operators are required to conduct pre-drilling testing of water wells within 1,500 feet of a proposed fracking operation, and disclose the results in the permit application. This applies to wells in both urban and rural areas. The permit application must identify the proposed source of groundwater and surface water that will be used, state whether the water will be withdrawn from either the Lake Erie watershed or the Ohio River watershed, provide an estimate of the volume of recycled water to be used, and provide an estimate of the rate and volume of water withdrawal. The permit application must also contain either a copy of an agreement for maintenance and safe use of the roads and highways that will be used for access to and egress from the well site entered into on reasonable terms with the applicable local government, or an affidavit stating that the operator attempted in good faith to enter into such a road-use-management agreement but that no agreement could be reached.
During the life of the well, the well owner must maintain liability insurance for fracking operations of at least $5 million for bodily injury and property damage, and a “reasonable” level of coverage for environmental damage.
Violators of these provisions may be fined as much as $20,000 per day.
Senate Bill 315, which was passed by the Ohio legislature in May 2012, was signed into law by Gov. Kasich on June 11, 2012, and is set to become effective 90 days later.