Ohio Supreme Court rules 4-3 that only the state can regulate oil and gas well locations

February 18, 2015 at 12:05a.m.

COLUMBUS

An Ohio Supreme Court decision that the state has “sole and exclusive authority” to regulate oil and gas well locations is for the best, Youngstown Mayor John A. McNally said.

“The Ohio Department of Natural Resources has the expertise and scientific background to manage this,” he said. “These are issues of statewide concern. The city doesn’t have the expertise; no city has the expertise.”

In a 4-3 decision Tuesday that pitted the city of Munroe Falls against ODNR and an energy company, justices noted that home-rule provisions in the state constitution do “not allow a municipality to discriminate against, unfairly impede or obstruct oil and gas activities and production operations that the state has permitted” under state law.

In the case, Beck Energy Corp. obtained permits from ODNR to drill in an area zoned for residential uses. Munroe Falls challenged the location, saying local zoning rules prohibited drilling in the area in question and instead should be focused in industrial areas.

In the majority decision, Justice Judith L. French wrote that ordinances enacted by Munroe Falls were in conflict with state law — that is, the city sought to prohibit drilling activities that are allowed statewide.

Chief Justice Maureen O’Connor, Sharon L. Kennedy and Terrence O’Donnell joined Justice French in the majority opinion.

While Youngstown hasn’t had much in the way of fracking, an organization put charter amendments to ban it four straight times — twice in 2013 and twice in 2014 — in front of voters. Each time, it was rejected. While the results weren’t close — an 8.3 percentage point defeat in May 2014 was the tightest race — it fared the worst the last time. It lost by 15.7 percentage points in the November 2014 election.

Susie Beiersdorfer, one of the organizers of the anti-fracking movement, said the last defeat resulted in the group’s choosing not to put the charter amendment proposal on the May primary ballot.

“With a lot of money spent against us and the lobbying, it’s challenging to get it passed,” she said.

It could be on the ballot for a fifth time in the November general election, however, Beiersdorfer said.

State law “not only gives ODNR ‘sole and exclusive authority to regulate the permitting, location and spacing of oil and gas wells and production operations’ within Ohio,” Justice French wrote, “it explicitly reserves for the state, to the exclusion of local governments, the right to regulate ‘all aspects’ of the location, drilling and operation of oil ad gas wells, including ‘permitting relating to those activities.’”

Justice O’Donnell concurred on the judgment only, writing separately the decision focuses on the five Munroe Falls ordinances in the case and not broader questions about local land-use ordinances.

Justices Paul Pfeifer, Judith Ann Lanzinger and Bill O’Neill dissented.

Justice Lanzinger wrote she wasn’t sure zoning ordinances in Munroe Falls conflicted with state law.

“There is no need for the state to act as the thousand-pound gorilla, gobbling up exclusive authority over the oil and gas industry, leaving not even a banana peel of home rule for municipalities,” she wrote.

Attorney Thomas G. Carey of the Harrington, Hoppe & Mitchell law firm, who gave two presentations a week ago in Warren to officials and citizens hoping to learn what impact they could have on gas and oil activities, said the decision doesn’t change things much.

The decision leaves the control in ODNR’s hands, but the swing vote by Justice O’Donnell leaves open the possibility some local control might still be possible.

Carey said an example might be the kind of limitations suggested by Johnston Township Trustee Dominic Marchese, who said it makes sense for local communities to have the ability to limit areas where gas and oil activities can take place, such as on industrially zoned land.

Attorney Alan D. Wenger, chairman of the oil and gas law group at Harrington, said a close review of concurring and dissenting opinions suggests that four judges lean toward allowing local zoning regulations to apply.

A community cannot pass its own laws that conflict with ODNR’s, but there may be a way for them to work together, Wenger said.

Contributors: Reporters Ed Runyan and Kalea Hall