High Court Upholds Ohio's Power To Regulate Oil And Gas

The Ohio Supreme Court has ruled that cities can’t enforce local laws banning fracking if the state has issued a permit to a driller. The case was argued last February, with the city of Munroe Falls saying it had the authority to pass local zoning ordinances and other laws affecting oil and gas drillers, including Beck Energy, which had permission from the owner of some residential property and a permit from the Ohio Department of Natural Resources. Thomas Houlihan represented told the justices, including Terrence O’Donnell, that the constitution gives communities power that state law might not. “If a driller wants to drill in a particular location, they have two things to do. Number one, 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.” O’Donnell: “And that’s by a state statute that says that has to be done that way?” Houlihan: “No. The state statute doesn’t say anything about local zoning. The home rule amendment gives cities the power to regulate local zoning.” Deputy state solicitor Peter Glenn-Applegate told Justice Paul Pfeifer that Houlihan was correct – in part. “We think that local zoning ordinances trying to restrict oil and gas drilling to particular zones would conflict with the state law.," Glenn-Applegate said. Pfeifer: “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 well drilling in this state?” Glenn-Applegate: “Yes, your honor.” Glenn-Applegate went on to say that state law set up ODNR as the sole and exclusive authority on location of oil and gas wells, and that communities and opponents could go to court to force a denial of the permit issued by ODNR or to impose additional conditions on it. A sharply divided court sided with the state and the driller, saying Munroe Falls couldn’t block Beck Energy from drilling on that residential property. Four justices ruled that because state law didn’t specifically allow for zoning or other ordinances on fracking, it effectively bans local communities from passing ordinances specifically aimed at obstructing drilling activities. And the justices said home rule doesn’t cover local ordinances in conflict with state law. In the majority opinion, Justice Judi French wrote: “We have consistently held that a municipal-licensing ordinance conflicts with a state-licensing scheme if the ‘local ordinance restricts an activity which a state license permits.’” Before the arguments last February, Beck Energy vice president David Beck said drilling for natural resources is a complicated system that can’t always abide by local ordinances, so the state must enforce a uniform standard. “If we take a step back. If we go back to where every little community can decide this, we’re not going to have wells drilled," Beck said. And Beck added that drillers don’t intend to ask ODNR to go into densely populated areas or into neighborhoods to put up wells. But Munroe Falls mayor Frank Larson said last year he was worried about what will happen in communities around the state if his lost in court. “If the city does not prevail in this case then every city—every municipality in Ohio—should be fearful that when the state decides that when they have something that they consider a statewide issue the municipalities home rule is going to be trompled.” Justices Pfeifer, Judith Lanzinger and William O’Neill disagreed. In his dissent, O’Neill blasted the state law and state lawmakers, saying – quote - “What the drilling industry has bought and paid for in campaign contributions they shall receive.”