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Ohio House Overrides Governor Veto of Oil and Gas Leasing Commission Appointments

Posted By Brian Hickman, Director of Government Affairs, Operations Managing Director, Monday, July 10, 2017

On July 6th, the Ohio House of Representatives overrode a total of 11 line-item vetoes pertaining to House Bill 49, the state budget bill. One of those veto overrides dealt with the Oil and Gas Leasing Commission, the state body that was created to review state properties for potential oil and gas leasing. Let’s take a look at current law and what the language included in the state budget bill actually does.

House Bill 133 (sponsored by State Representative John Adams) was passed and enacted by the state legislature in June, 2011. It was signed into law by Governor John Kasich on June 30, 2011 and became effective law on September 30, 2011. The bill created the Oil and Gas Leasing Commission, which was charged with overseeing and facilitating the leasing of land owned or controlled by state agencies and universities. These properties were classified into four distinct tiers. However, it is important to note that state nature preserves were excluded from these tiers and, therefore, cannot be leased.

It is also important to point out that the State of Ohio included the following statement of policy when it comes to state-owned oil and natural gas resources (included in Ohio Revised Code Section 1509.71 (A)):

“It is the policy of the state to provide access to and support the exploration for, development of, and production of oil and natural gas resources owned or controlled by the state in an effort to use the state's natural resources responsibly.”

The Commission itself would be chaired by the Chief of the Division of Geological Survey. The other four appointees would come from the oil and gas industry (2 appointees), real estate industry (1), and environmental interests (1). Per Ohio Revised Code Section 1509.71 (C), Governor Kasich had until October 30, 2011 to appoint these four members to the Commission. He has not, and that is where the budget language comes into play.

The language included in House Bill 49 did not delve into any of the policy matters passed during the debate in 2011. The language simply allowed the Speaker of the Ohio House of Representatives to appoint two members of the commission and the Ohio Senate to appoint two members. That’s it. That is the extent of changes to the state’s oil and gas leasing program in the state budget bill.

Procedurally, once these appointments happen, several other procedural dominoes must fall before the Commission begins its work. Namely, the state must assess and determine which tiers their properties fall under and the Ohio Department of Natural Resources (ODNR) must establish rules for the Commission. So, when other interests claim that the language would “fast-track fracking in state parks and forests”, that’s simply not the case. The language would start the process to hold a rational, thoughtful process where the state could utilize its oil and gas resources in an effort to gain additional state resources, resources that would be beneficial to state parks and forests.

If the Ohio Senate also overrides the Governor’s line-item veto, then these appointments would happen within 30 days of the effective date of this amendment. Doing so would end the almost 6 years of inaction and begin the process in Ohio of discussing the benefits of utilizing state properties for oil and gas exploration.   

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