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April 2013
 

Petition to U.S. EPA – Withdrawal of Ohio’s Class II UIC Program

By Ryan D. Elliott

Environmental groups are getting more creative in their efforts to obstruct development as investment in the Utica Shale continues to increase.  On March 14, 2013, the Center for Health, Environment, and Justice and several others, petitioned U.S. EPA to withdraw the Ohio Department of Natural Resources’ (“ODNR”) authority to regulate and enforce Ohio’s Class II Underground Injection Control (“UIC”) program until a full federal audit and investigation of that program has been completed (the “Petition”).

Ohio was granted, by rule, primary enforcement authority over the state’s UIC program in 1983, commonly referred to as “primacy”. Under that program, Class II injection wells are regulated by the Division of Oil and Gas Resources Management (“Division”).  As a practical matter, injection into a Class II well is the only authorized method for the disposal of brine and other wastewater from oil and gas production operations in Ohio.  That includes, for example, more than 12,000,000 barrels of fluid disposed of in Ohio’s Class II injection wells in 2011.  The oil and gas industry cannot, however, dispose of that wastewater carte blanche. Operators of Class II injection wells are required to obtain a permit before accepting any fluid for injection and must adhere to a variety of rules, including significant pressure limits and testing requirements – many of which are substantially more stringent than federal requirements.

Nonetheless, the Petition asserts that the Division has failed to effectively administer and enforce the UIC program, and requests that U.S. EPA withdraw “Ohio’s primacy over the permitting . . .  management and oversight of current Class II wells.”  This could have a significant impact not only on Ohio’s oil and gas industry, but on the industries in surrounding states like West Virginia and Pennsylvania that also use Ohio injection wells for disposal.

U.S. EPA has yet to act on the Petition.  Should it do so, U.S. EPA will likely initiate withdrawal proceedings by notifying Ohio that it has reason to believe that the state is not administering the UIC program in accordance with Safe Drinking Water Act (“SDWA”) requirements.  The adjudication of those proceedings is similar to a formal rulemaking. U.S. EPA is required to publish notice of the withdrawal proceedings and provide interested parties with an opportunity to be heard regarding the adequacy of the state’s UIC program.  We will continue to monitor the Petition’s status at U.S. EPA and report back to you on any developments.

Top News from the Energy & Environmental Blog

PA: New Water Study

The Proceedings of the National Academy of Sciences has published a recent study on the impacts of shale development on surface water quality in Pennsylvania. Of note: "The density of shale gas wells upstream in a monitor’s watershed has a statistically insignificant effect on Cl- concentration downstream ***." What does that mean? From a related Council on Foreign Relations article: "The team’s conclusions are fairly straightforward. They find enhanced chlorine concentrations downstream of waste water treatment facilities but not downstream of drilling sites. Chlorine is a good marker of contamination from well flowback. What the RFF analysis suggests is that leaks or spills aren’t statistically detectable, at least at the watershed level, but that impacts of poorly processed wastewater are."

EMLF Utica Shale Special Institute

The Energy & Mineral Law Foundation (EMLF) is holding a Special Institute on Title and Development Issues in the Utica Shale on April 14-16, 2013, at the Hilton Columbus at Easton. Among the topics to be addressed: mineral ownership issues and resolving ambiguities, critical lease terms for both landowners and operators, and resolving issues involving severed mineral estates - including the use of Ohio's dormant mineral act. Speakers include Professor David E. Pierce, from Washburn University School of Law, who will speak on implied lease covenants; and Professor Bruce M. Kramer, formerly of Texas Tech University School of Law, who will speak on the lease habendum clause and how to keep a lease alive. It promises to be an excellent program! See this link for more information. [Disclosure: Vorys attorneys will be presenting!]

Is Unitization Coming to Texas?

Maybe. StateImpact Texas is reporting on a recent hearing before the Texas House Energy Resources Committee debating that very question. Regarding proposed legislation, "It means that the Railroad Commission of Texas would be able to designate areas for drilling in which the holders of a majority of mineral rights in the area can extract oil and gas, even if a minority of the holders does not want to. That designation would be made at the request of property owners or companies that hold the leases to the mineral rights. *** In Taylor’s bill, the number is split 70/30. That means if holders of 70 percent of the mineral rights in an area agree, drillers can move forward with “operations intended to increase the ultimate recovery of oil, gas or oil and gas from a common source of supply,” according to the bill, even if the other 30 percent are opposed."

Ohio Activity

We thought you might be interested in these two articles from Columbus Business First:

New Pipeline: "Two pipeline companies from the Southwest have formed a joint venture to build a transportation system to move natural gas liquids from shale plays in Ohio, West Virginia and Pennsylvania to processing and storage facilities in Louisiana."

Youngstown Economic Comeback: "Youngstown is attracting manufacturers to service the Utica shale play. It has an emerging tech scene led by a downtown business incubator launching software companies, and steel-making is re-emerging."

Related News

The Columbus Dispatch - Utility Gas Rate Legislative Proposal

Canton RepositoryUtica May Extend Further West

The New York Times - Ohio’s Resurgent Natural Gas Industry Spends Millions to Set Up Shop

Crain's Cleveland Business - Shale Produces Less Wastewater

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Contacts

Gregory D. Russell
614.464.5468
gdrussell@vorys.com

Sheila Nolan Gartland
614.464.8225
sngartland@vorys.com


 

 

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This alert is for general information purposes and should not be regarded as legal advice. As always, please let us know if you want more information or have questions about how these developments apply to your situation.