In recent weeks, the Ohio General Assembly has been working to further strengthen and improve what’s already considered one of the most stringent oil and gas regulatory regimes in the country. The current rules, updated in 2010 and signed into law by a Democratic governor, have already been hailed as “meeting its program objectives” and “well managed” by an EPA-supported independent panel of regulators and environmentalists called STRONGER.  Now, building on that reputation, Ohio is poised again to raise the bar even higher.

Of course, a lot of the talk in the Buckeye State these days is centered on the Utica Shale, a 450-million year-old rock formation that underlies much of the eastern part of the state. To date, 74 Utica wells have been developed in Ohio — without a single environmental incident recorded. In fact, not a single violation has been issued despite more than 250 separate inspections by the Ohio Department of Natural Resources, which shows operators are following the existing rules closely. The companies developing Ohio’s natural gas wells are also voluntarily disclosing information on the fluids they use through a the website called FracFocus.org.  It may be early days for shale here in Ohio, but at least in terms of safety and transparency, the Utica is already a success story.

Unfortunately, this good news was overlooked by a small number of groups, highlighted in recent articles reporting on lawmakers’ efforts to update the state’s oil and gas rules. These organizations seem focused not on fact, but sensationalist claims aimed at deterring an industry with a demonstrated record of safe, responsible development of Ohio’s natural resources.  As it turns out, the claims being made by these groups are directly at odds with what the legislation proposes. Had a little more research been done, these  stories would have turned out differently.  So let’s set the record straight:

Claim: From the Cleveland Plain Dealer (Sat. May 19, 2012), “this trade-secret provision ‘is a loophole that will swallow the rule (emphasis added),’ said Richard C. Sahli, a consultant with the Natural Resources Defense Council.

Fact:  The legislation would require the disclosure of every single additive used in the fracturing process. It goes beyond the requirements in Colorado, a state whose oil and gas regulations have been praised by environmental organizations like Earthjustice (emphasis added).  From the legislation:

• “(10)(b) If applicable, the trade name and the total volume of all products, fluids, and substances, and the supplier of each product, fluid, or substance used to stimulate the well. The owner shall identify each additive used, provide a brief description of the purpose for which the additive is used, and include the maximum concentration of the additive used. In addition, the owner shall include a list of all chemicals, not including any information that is designated as a trade secret pursuant to division (I)(1) of this section, intentionally added to all products, fluids, or substances and include each chemical’s corresponding chemical abstracts service number and the maximum concentration of each chemical. ” (page 62)

• “The chief shall post on the division’s web site each material safety data sheet obtained under division (E) of this section. In addition, the chief shall make available through the division’s web site the chemical information that is required by divisions (A)(9) and (10) and (B)(3) of this section.” (page 65)

Under the legislation, all additives used in stimulating an oil or natural gas well will be disclosed – either to agencies of the state, via the FracFocus website, or directly to the public. The bill includes the same language you’ll find in the federal Community Right-to-Know Act of 1986, and even the same trade protection provisions found in the “FRAC Act,” a bill in Congress supported even by anti-shale activists like Gasland’s Josh Fox.

Claim: From the Cleveland Plain Dealer (Wed. May 23, 2012), “As now written, the legislation slightly loosens the gag on doctors treating patients injured by these chemicals who have obtained the proprietary chemical formula of the substances.”

Fact:  There is no gag order to be found anywhere in this regulatory package. In fact, the legislation makes it abundantly clear that in the event of an emergency, and for the purposes of diagnosing a patient, that medical professionals will have complete access to all constituents used at a natural gas site.  From the legislation:

• (H)(1) If a medical professional, in order to assist in the diagnosis or treatment of an individual who was affected by an incident associated with the production operations of a well, requests the exact chemical composition of each product, fluid, or substance and of each chemical component in a product, fluid, or substance that is designated as a trade secret pursuant to division (I) of this section, the person claiming the trade secret protection pursuant to that division shall provide to the medical professional the exact chemical composition of the product, fluid, or substance and of the chemical component in a product, fluid, or substance that is requested (emphasis added). (page 65)

• (2) A medical professional who receives information pursuant to division (H)(1) of this section shall keep the information confidential and shall not disclose the information for any purpose that is not related to the diagnosis or treatment of an individual who was affected by an incident associated with the production operations of a well. Nothing in division (H)(2) of this section precludes a medical professional from making any report required by law or professional ethical standards. (emphasis added). (page 65)

Did you catch the part about a gag order? We didn’t either. Why? Because the law doesn’t prohibit any medical professional from sharing this information with their patients or other health care practitioners.

Of course, accusations of “gag orders” are not new. A similar discussion was advanced by activists in Pennsylvania after that state provided access to proprietary information.  The conversation that pursued was so misleading that the Pennsylvania Environmental Council felt the need to release a statement on the matter.  From the statement:

Now, however, concerns have been raised about the chemical disclosure language some are calling a “gag order” on medical professionals.  Our understanding of the language is this:

The language provides a mechanism to ensure that medical professionals can quickly get direct access to chemical information for which trade secret protections have been claimed in cases where it’s needed for diagnosis or treatment of a patient.  As part of the process, companies can require a confidentiality agreement when circumstances permit, but the law ensures that medical professionals can get the information first.

… This language replicates the same process that is in place for the same purpose in other states and that has existed for decades in the federal Occupational Health and Safety Act (OSHA) and the federal Emergency Planning and Community Right-to-Know Act (EPCRA).

Claim: Trent Dougherty, director of legal affairs for the Ohio Environmental Council, declared to the Hudson Hub Times (May 23, 2012): “Ultimately, the question for us is … whether these laws are protective of Ohio … and especially these communities in Ohio that do not have a say in whether these … industrial operations occur in their communities. They don’t have proper notice. They don’t have the ability to comment on permits. They don’t have the ability to appeal permits (emphasis added).”

Fact: Dougherty’s claims couldn’t be farther from the truth.  Current law specifically mandates advance notice to leaseholders, local governments and other stakeholders when a permit application is filed. Dougherty also fails to mention the opportunity to challenge these permits still exists in the courts and the legislation would make such a challenge easier as it requires ample notification.

From current law:

• (9) For an application for a permit to drill a new well within an urbanized area, a sworn statement that the applicant has provided notice by regular mail of the application to the owner of each parcel of real property that is located within five hundred feet of the surface location of the well and to the executive authority of the municipal corporation or the board of township trustees of the township, as applicable, in which the well is to be located. In addition, the notice shall contain a statement that informs an owner of real property who is required to receive the notice under division (A)(9) of this section that within five days of receipt of the notice, the owner is required to provide notice under section 1509.60 of the Revised Code to each residence in an occupied dwelling that is located on the owner’s parcel of real property. The notice shall contain a statement that an application has been filed with the division of oil and gas resources management, identify the name of the applicant and the proposed well location, include the name and address of the division, and contain a statement that comments regarding the application may be sent to the division. The notice may be provided by hand delivery or regular mail.” (Ohio Revised Code Section 1509.06)

Claim:  From the Cleveland Plain Dealer (Wed. May 19, 2012), “A provision allowing drilling companies to wait until after they drill and fracture the well to report to the Department of Natural Resources the chemicals they used. Worried citizens want to know beforehand in order to test their wells for those chemicals before construction begins and several environmental groups want that restored.”

Fact:  The legislation would require baseline water testing of all homeowners water wells within 1,500 feet of well pad for a shale well – a test designed to gain a clear picture of the area’s water resources prior to development.

Unfortunately, some folks argue that fracturing disclosures should be made in Ohio before the fracturing of a well even takes place, even though no other state in the country has suggested a similar regime. And there’s a reason why they haven’t: with national and international demand for fracturing services at record highs today, operators don’t have the luxury of knowing several months out whether they’ll have the right crew available – let alone the specific composition of the fluid solutions that that crew might be using.

A few other provisions of note.  ODNR officials can suspend development operations at any time if it finds operators out of compliance or in violation of the rules.  Also, water utilized for well development is required to be tracked from its source to final disposal.  These are just a few examples of the strength of this industry leading regulatory package.  To learn more about the rules click here.

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