Thu February 27, 2014
SUPCO Hears Natural Gas Drilling Case
Ohio Supreme Court justices yesterday vigorously challenged attorneys over the power of state oil and gas drilling regulations to supersede local zoning laws in a case brought by the Akron suburb of Munroe Falls against Beck Energy.
Beck got state permits to drill on private property in the city in 2011. The city sued, saying the company illegally sidestepped local ordinances. M.L. Schultze of member station WKSU in Kent reports.
The high court is deciding two key points in the case of City of Munroe Falls vs. Beck Energy. Both have to do with constitutionally protected home rule.
The first is whether zoning laws can coexist with state law on oil and gas drilling. The second is whether drillers can be required to provide cities with information so they can protect residents.
Beck Energy – and the state – say ‘no’ on both points. They maintain that state law gives the Ohio Department of Natural Resources domain over oil and gas drilling—anywhere in the state.
Peter Glenn-Applegate laid out the state’s case to a skeptical Justice Paul Pfeifer, as in this exchange:
“Your honor we think local zoning ordinances trying to restrict oil and gas drilling to particular zones would conflict with the state law.
“So the position of the state of Ohio through the attorney general is local zoning has no place in the regulation of oil and gas drilling in this state?”
“Yes, your honor, and if I could I’d like to make two brief points on that.”
The first point is that state law gives ODNR’s division of oil and gas “sole and exclusive authority to regulate location.” The second is that the law requires the state to be careful when it allows drilling in residential areas.
Pfeifer had reservations.
“We (citizens) should just trust the good graces of , … just rely on: There are going to be good people at Natural Resources, not to worry?
“ODNR is absolutely committed to the health and safety of its residents and so it’s not like…
“I believe it’s the only department that we’ve held in contempt in my tenure here.”
Glenn-Applegate noted that was another division and said this one is being very careful.
He acknowledged the Munroe Falls drilling would be in a residential area, but noted it is separated by a railroad track and river, and well away from other properties.
That’s when Justice William O’Neill jumped in.
“Let’s talk about Shaker Heights, Ohio, where people have a quarter of an acre. By this statute, as near as I can tell, if ODNR says we’re going to start drilling in a residential neighborhood of Shaker Heights, the municipality of Shaker Heights has nothing to say about that. Is that your position?”
“Yes your honor as a legal matter, but as a practical matter it would be unlikely for a well to go in there...”
“We’re in the Supreme Court of Ohio. I don’t care about practical matters. As a legal matter, you’re saying that this statue would permit a driller to go into Shaker Heights and if they convinced ODNR there was money in it for everybody, it would be full speed ahead.”
“I’m not sure it would be full speed ahead. There would still be several requirements the driller would need to satisfy.”
That would include setbacks and fencing. And in a case of a 4,000-foot well like this one, it would require getting property owners who together control at least 20 acres to say ‘OK.’”
Munroe Falls attorney Thomas Houlihan ran into his own challenges from the justices. Houlihan got off to a rocky start with Justice Terrence O’Donnell.
“Your argument is that the General Assembly has mandated that there be a local determination of sites, but the Department of Natural Resources has taken it upon itself to determine the location of the wells. Is that right? I’m trying to understand your argument. Is that your argument?
“No your honor, my argument is this: If a driller wants to drill in a particular location, they have two things to do. They have to go to the ODNR and get approval from the ODNR for that site location and it must be done in compliance with local zoning.”
“And that’s by a state statute that says that has to be done that way?”
“No, the state statute doesn’t say anything about local zoning. The home rule amendment gives the power to cities to regulate local zoning.”
Houlihan argued other Supreme Court decisions back that up.
Justice O’Neill wasn’t giving Houlihan a pass either, even after he cited a case in which drilling was allowed in a neighborhood in his home base of Geauga County and then blew up the property. He kept going back to the wording of the state law. Houlihan argued back.
Houlihan: “I would disagree with your assessment that the oil and gas statute … says anything about preempting local zoning. It’s silent on local zoning….
O’Neill: I’m using the two words in the English language: exclusive and location. If the state is given exclusive control over the location of a building, a structure or a well, isn’t zoning gone?
No your honor, because the language has to be read in context.
For its part, Beck Energy rested much of its argument on the state interest in uniform statewide regulation of an industry that is increasingly critical to Ohio – and says the state law clearly recognizes that.
Beck’s argument was joined by a long list of oil and gas interests. Munroe Falls has the backing of toher cities, including Broadview Heights and Euclid and local businesses ranging from Zen Small Business Solutions to Sticky Pete’s Maple Syrup.