Appalachian Basin

Ohio Mineral Owners Score a Win in Efforts to End De facto Fracking Moratorium on State Lands

It appears Ohio mineral owners have had just about enough of the federal and state government interfering with their right to develop minerals located under their private property.

At the urging of the National Association of Royalty Owners (NARO) Appalachia and Landowners for Energy Access and Safe Exploration (LEASE), Ohio Republican lawmakers this week added a provision into the state budget to remove the authority granted to Gov. John Kasich to establish the Oil and Gas Leasing Commission and instead shift that authority to the legislature. The action could be a significant step toward ending what has essentially been a six-year fracking moratorium on state lands and parks, and is just the latest win for mineral owners who also emerged victorious following a two-year fight with the Bureau of Land Management (BLM) to gain access to leasing of federal minerals in the state.

Similar to the Wayne National Forest (WNF) saga, bureaucratic inaction has led to private landowners adjacent to state lands and parks finding themselves in a positon where their minerals are not able to be fully realized and less desirable to develop. Ohio’s General Assembly actually approved fracking on state lands six year ago, but development has yet to take place. At the time, the legislation essentially laid out a plan toward leasing and development on various state lands using a tiered system where some state-owned lands could be developed with surface disturbance, while other areas would not be accessible. To get the ball rolling, the legislation included a provision to create an Oil and Gas  Leasing Commission to govern the process, which required appointments by Gov. Kasich. The Commission establishment and rules were supposed to be in place by June 2012, but that never happened, resulting in what can best be described as a de facto moratorium on state land shale development.

In response, mineral owners have taken their private property rights fight to Columbus, where they’ve been working hard to educate legislators in Columbus of their concerns. And as a result of those efforts, the Ohio House Republicans, led by Rep. Andy Thompson, added this week’s provision to the state budget. The measure would essentially turn the clock back six years to when the state initially determined it would allow exploration on state lands.

Becky Clutter, a member of the board of directors for NARO Appalachia, explained in a recent statement to EID:

“This is very similar to the Wayne National Forest issue where Federal parcels prevented citizens from producing their privately held assets.  In this case, it is the State of Ohio that is doing the blocking, and not just near Monroe Lake.  It was found that private mineral rights were being held hostage in every County with State owned lands within the shale play.  It is also important to note that it is not clear whether the State of Ohio owns all of the minerals under the surface of the State lands.  In the case of the WNF, the Forest only owned approximately 41 percent of the mineral rights underlying the surface, the rest were privately held.  A 2015 Audit of several of the ODNR lands noted that the State does not own all of the properties in fee simple, meaning that the State does not own all of the minerals under their surface.”

This latest grassroots effort by mineral owns highlights a movement afoot in Ohio where private mineral owners have clearly had enough of anti-fracking groups and political red tape impeding their right to develop private minerals. Fringe environmental activists consistently try to paint these debates as “big oil” fracking public lands for profit, but that’s simply not the case. As we continue to see play out in the Buckeye State, this is actually a property rights matter led by concerned citizens who are standing up for their right to develop their land and minerals.

And as EID recently highlighted, leasing federal and state lands can be a major boost to tax revenues and royalties for Ohio. In fact, if we assume the 41,697 acres owned by Ohio Department of Transportation and the Ohio Department of Natural Resources were developed, that acreage alone could mean up to $160 million in bonus payments for the state. This income would surely help add revenue to Ohio’s budget needs.

Clutter explained in her statement that due to the generational transfer of property rights, this issue impacts mineral rights owners across the state, including “people who live in non-producing areas like Columbus, Cincinnati, Toledo and Cleveland.” And as Clutter also describes, the evidence of the benefits of development are already clear:

 “In areas where development has not been impeded, the impact to local governments and citizens is staggering.  People are being pulled out of poverty, new businesses are being created, local governments are upgrading their infrastructure and databases, and jobs are coming back to the area.

Watershed Districts, which are controlled by boards of directors are able to lease those lands and have done so with great benefit.  The income generated in those areas has done quite a lot to improve visitor centers, beaches, wildlife areas, hiking trails, and on site building improvements.  Sadly, the same is not being allowed around the State owned lands areas.”

And as we have already seen through the great example of the Muskinghum Watershed Conservancy District, it’s clear that oil and gas development can be harvested responsibly and in an environmental sound way on public lands, a win-win for the Buckeye State, considering the obvious financial benefits.

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