Advocacy/Issues
› How A Bill Becomes Law in Ohio
› Writing to a Legislator
Pressing State Issues
Access to the resource base is the number one priority issue confronting the domestic oil and gas exploration and production industry. Ohio reflects the nation. Today, the focus of this issue in Ohio is unlocking the oil and gas potential under state lands. There are a variety of state parks, wildlife areas and forest lands that lie within areas of known oil and gas development. Currently, the ODNR owns and manages more than 590,000 acres of land in 74 state parks, 20 state forests, 127 nature preserves and 120 wildlife areas
A recent petroleum engineering review of Salt Fork Park suggests that a tremendous natural gas potential exists. Salt Fork is totally surrounded by natural gas wells that have existed in the Guernsey County region for decades.
This General Assembly has a new opportunity to benefit state resource management and revenues while expanding the native natural gas resource base. The needs are threefold:
- Encourage those land-management agencies that have authority to lease for oil and gas to do so,
- Support legislation providing statutory authority to lease for those agencies who lack it, and
- Mandate an orderly and regular lease sale process.
The H.B. 278 experience shows us that technologies, such as directional drilling, smaller and much safer automated drilling rigs, advances in well site production equipment and storage tank construction, have led to much safer drilling and production activities.
As a result, current restrictions on access to new sources of natural gas supply must be reevaluated in light of technological improvements that have made natural gas exploration and production more environmentally and socially sensitive.
Previous Issues
House Bill 278 — Urban Drilling Law - 125th General Assembly
On September 16, 2004, House Bill 278 became the effective law of Ohio which recognizes that the Ohio Division of Mineral Resources Management (DMRM) has the sole and exclusive authority to regulate the permitting, locating and spacing of oil and gas wells. Additionally, H.B. 278 declares that Ohio's oil and gas law and the rules adopted under it constitute a comprehensive plan with respect to all aspects of the siting, drilling and operations of oil and gas wells. The result is the effective elimination of duplicative regulations that have disrupted orderly oil and gas development.
Since this time, local governments have unsuccessfully made court claims stating that such a law infringes upon their "home rule" authority. In these cases, the courts have agreed that House Bill 278 is constitutional and is a "valid enactment of state statute".
Urban Drilling Rules (via the Ohio Department of Natural Resources, Division of Mineral Resources Management)
House Bill 278 — As Enrolled
Heat Content Agreement
On November 20, 2007, the Ohio Oil and Gas Association (OOGA) and Dominion East Ohio (East Ohio) announced a new agreement to enhance the value and improve the delivery of Ohio-produced natural gas flowing into the East Ohio system. The new "Heat Content Agreement" (HCA) will have an eight year primary term that begins in 2008 and extends to April 30, 2016, with provisions that could stretch the agreement beyond 2016. The new HCA replaces a similar production enhancement agreement that has been in place since May 2003. Producers responsible for 99 percent of Ohio-produced natural gas throughput into the East Ohio system have approved the agreement and the HCA will go into effect on January 2008.
Under the new HCA, East Ohio commits to provide "first priority" access to Ohio-produced natural gas connected to the East Ohio system by developing solutions to address constraints on the East Ohio low-pressure system and by building the necessary infrastructure to provide for Ohio-produced natural gas first priority access to East Ohio's high-pressure transmission system, where it can be delivered into East Ohio's storage system or to large on and off-system markets.
Read more about this Heat Content Agreement.
OOGA Testimony
Testimony on House Bill 357 and State Lands Leasing before the Alternative Energy Committee, Ohio House of Representatives - November 14, 2007
Testimony before the Alternative Energy Committee, Ohio House of Representatives - June 20, 2007
Pressing Federal Issues
Pipeline Safety
On March 15th, 2007, the Federal Department of Transportation published in the Federal Register a final rule defining a gathering lines and how some onshore gathering lines should be regulated. The rule becomes, effective April 14th, 2006.
Important to producers is that the rule adopts by reference API Recommended Practice 80 — an industry-wide consensus standard that defines gathering lines. RP-80 provides a clear definition of a production facility so that it easily understood the point where production ends and gathering begins. All facilities used to transfer natural gas during production operations are not subject to federal pipeline safety regulation.
This issue started back in 1974, when DOT tried to revise the definition of a gathering line. In doing so, latent ambiguities were discovered with several of the key terms and phrases. This was a problem even in 1986, when the National Association of Pipeline Safety Representatives (NAPSR) surveyed their members and claimed lingering disagreements with operators over gathering lines. Spurred by this survey, the DOT in 1991 once again tried to define a gathering line. When these definitions were released, public comments were relatively negative and the rule was "delayed to gather further information".
The following year, Congress directed the DOT to come up with a definition of a gathering line for the purposes of safety regulation. As such, the DOT was told to consider functional and operational characteristics, along with other factors such as location, length, operating pressure, throughput and gas composition in deciding which lines would be regulated.
This directive led to a 1999 public discussion on the still undecided 1991 rule. The comments in this discussion were based upon API RP 80. During this process, several comments were filed, most claiming the best way to regulate is to adopt the API RP 80 definitions. In the end, the DOT agreed with this claim but added five small exceptions.
The DOT explained that by adopting RP-80, it is not intended to move the beginning of gathering any further upstream from the production-operation-endpoint determination reached through an RP-80 analysis. Thus, the new rule would mean that all facilities usually considered production facilities are excluded from DOT regulation and most independent producers will not have any DOT regulation of their natural gas production systems.
The gathering line regulatory program only applies to facilities that first are defined as gathering facilities in RP-80. The final rule defines two types of regulated onshore gathering lines. Type A lines are more strictly regulated, applying largely the rules that apply to gas transmission lines. However, there is an exception for the rules governing the passage of smart pigs and integrity management. Type B lines must only comply with certain construction, corrosion control, damage prevention, public education, and line marking requirements. Type B lines must also establish a maximum allowable operating pressure if metallic. These definitions are based upon the public risk factors surrounding these lines.
On the state level, the Ohio Revised Code had been amended in 1993 to assure that should a federal definition on gathering lines be created, it would be accepted as such by Ohio. Oil and gas producers and regulators, authorized to oversee federal regulation in Ohio but limited to the federal definitions, differed on a definition due to the ambiguity of what constitutes a gathering line. The issue was resolved when rules were created accepting the federal definition of a gathering line per the federal registry rules.
Additional files on this topic: