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Munroe Falls, State of Ohio Fight in State Supreme Court Over Power to Regulate Drilling Locations

Thursday, February 27, 2014 at 6:33 PM

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Consol Energy drilling site in Mahoning County. (ideastream file photo by Michelle Kanu)

The battle between a city and an oil and gas company has made it all the way to the state’s top court. As Statehouse correspondent Andy Chow reports, the ruling could have a major impact on how the industry is regulated in Ohio.

It’s up to the Ohio Supreme Court to decide whether a local government can have a say into the location of an oil and gas well, or if state law overpowers a city ordinance.

The conflict started in 2011 when some residents in Munroe Falls near Akron entered into a lease with Beck Energy Corporation. The city says zoning law forbids wells in that area.

According to Munroe Falls Mayor Frank Larson, Beck Energy claimed they didn’t need the permits because state law says the Ohio Department of Natural Resources has “sole and exclusive” authority to regulate oil and gas drilling.

“They took the stance that they could just come into the community and do whatever they wanted because they had a permit from ODNR,” Larson said. “And as long as ODNR said you can put a well there, nobody has any control over them or any other kind of aspect.”

At that point Larson stepped in to also invoke statute, the home rule provision found in Ohio’s constitution. This gives municipalities the power to govern on local issues. He says the Supreme Court’s decision could have major future implications.

“If the city does not prevail in this case, then every city, every municipality in Ohio, should be fearful that when the state decides that they have something that they consider a statewide issue, the municipalities home rule is going to be trampled,” he said. “All the decisions will be made on the state level.”

David Beck is vice president of Beck Energy. He said drilling for natural resources is a complicated system that can’t always abide by local ordinances. That’s why, he says, a uniform standard must be created statewide.

“If we take a step back, if we go back to where every little community can decide this, we’re not going to have wells drilled,” Beck said.

He added that, along with state law, his company and ODNR also uses common sense when selecting well sites.

“It’s not my intent to go into someone’s subdivision and put the well in the middle of a neighborhood like that,” he said.

The state joined Beck Energy in the case against home rule. During oral arguments at the Ohio Supreme Court, Justice Paul Pfeifer asked John Keller, Beck’s legal counsel, about the right for a community to fight the approval of a well permit.

“Because the General Assembly in 2004 to give the state the ‘sole and exclusive authority,’” Keller said.

“To be God in this case, right?” Pfeifer interrupted.

“Pardon?” Keller said.

“To be God,” Pfeifer replied. “The director of natural resources is God in this.”

Pfeifer also asked if communities should just rely on the “good graces” of ODNR. The state’s counsel said the department is committed to the health and safety of local residents.

ODNR did not want to be interviewed for this story but offered a statement to echo the fact that it enforces permitting authority through General Assembly mandates.

Jonathan Entin is a professor of law at Case Western Reserve University. He said the implications of the Supreme Court’s decision depend on the extent of its ruling.

“If it’s a broad ruling that says that the state law preempts local regulation,: Entin said, “then there really isn’t going to be much for the communities to do as a legal matter.”

Entin said the ruling could spark a rallying cry for communities to push for change through new legislation.

As far as national implications? While the Supreme Court’s decision wouldn’t have any legal impact in other state courts, Entin believes it could take on a symbolic significance around the country.

“If the Ohio Supreme Court came down fully on the side of Beck Energy and the state, saying ‘no room for local regulation,’ that would probably encourage folks in the energy industry to press forward for more aggressive regulation at the state level trying to displace local regulation, even in other states,” he said.

A ruling from the Supreme Court is expected in the next couple of months.

Tags

Courts/Crime - Fire/Law Enforcement, Energy, Shale, Government/Politics

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