Fracking legal action update

An update on lawmaker action and other activities at the Ohio Statehouse related to horizontal hydraulic fracturing:

Mixed signals: Republicans in the Ohio House began deliberations on a proposal to revamp tax rates on oil and gas produced via horizontal hydraulic fracturing.

House Bill 375 calls for lower taxes on conventional wells and increasing rates on those drilled horizontally, with excess proceeds devoted to plugging abandoned wells and potentially cutting income-tax rates.

Gov. John Kasich isn’t backing the legislation as-is, however, saying a higher rate is needed.

“I want to make sure as they deplete our resources that they pay for it, mostly out-of-state people, and that we use those resources to benefit every Ohioan by reducing the tax burden [for] every Ohioan,” he said. “I think it’s important we get that done.”

But industry groups support the House Republicans’ approach.

“HB 375 will provide much-needed clarity for oil and gas producers who have already heavily invested capital in this state and plan to invest billions more to explore the state’s Utica Shale reservoir,” said Thomas Stewart, executive vice president of the Ohio Oil and Gas Association.

More on HB 375: A liberal think tank isn’t supporting HB 375, saying Ohio’s oil and gas tax rates would remain below other states, and revenues would be used for tax breaks for affluent residents.

“Severance taxes pay for the loss of a valuable resource that can be removed only once,” Policy Matters Ohio’s Wendy Patton said in a released statement. “Communities deserve a share of that value to make up for costs of extraction, to diversify the economy after the resource is gone, and to meet critical needs.”

Appeal: The Athens County Fracking Network filed an appeal on a well permit issued by the Ohio Department of Natural Resources that would allow the disposal of 168,000 gallons of fracking waste daily.

Network member Nancy Pierce said in a released statement: “State oil and gas laws and regulations are so badly written and enforced that the only way we can protect ourselves is by challenging them though the courts. Local officials have no power, because the state Legislature has taken away all local control over oil and gas. Citizens have no power to protect themselves under an ODNR administration designed to protect the industry.”

Fracking update: Shale-oil drilling is increasingly focusing on eight counties in eastern Ohio, and those areas are seeing some of the biggest gains in sales-tax receipts. But those same counties aren’t seeing substantial increases in their workforce levels yet, as the industry awaits further exploration and infrastructure to accommodate oil and gas production.

Those are some of the conclusions reached in the latest “Ohio Utica Shale Gas Monitor,” a new study released by the Maxine Goodman Levin College of Urban Affairs at Cleveland State University.

“We’re still another year, 18 months out” from bigger economic impacts, said Ned Hill, dean of the college and one of the authors of the report. He added, “The south is clearly entering the production stage. The north, they’re very much in the science stage. ... Overall, I’m still optimistic, still hopeful, but it’s still building out.”

State funding: The state Controlling Board OK’d spending for two fracking- related projects.

A total of $100,000 was released for improvements to roads in Mahoning County to accommodate a natural-gas processing plant. Pennant Midstream is a joint effort of NiSource Midstream Services and Harvest Pipeline Co., and the new plant will require increased truck traffic in the area.

According to documents, the business “will separate dry natural gas from natural-gas liquids and will be capable of processing up to 200 million cubic feet per day, while the core gathering pipelines will support delivery of 600 million cubic feet per day. While there is only one processing facility under construction at the 90-acre site, the company is preparing the land for two additional plants to meet the growing need for midstream services in the area as the Utica Shale play is developed.”