Ohio Senate Passes Bill Allowing O&G Drilling in State-Owned Lands

- Ohio Senate Passes Bill Allowing O&G Drilling in State-Owned Lands

Thursday, June 16, 2011
The Blade, Toledo, Ohio
by Jim Provance

A bill allowing drilling for oil and natural gas in parks, forests, and other state-owned lands passed the Ohio Senate Wednesday after the chamber again rejected an attempt to place Lake Erie off limits.

In separate action, the Senate voted 25-7 to forward to Gov. John Kasich a bill that would allow the carrying of concealed handguns into bars, night clubs, and alcohol-serving restaurants.

The drilling bill, however, must return to the House for approval of changes made in the upper chamber.

"There's close to half a billion dollars -- half a billion dollars -- in unmet capital needs in our state parks...,'' said Sen. Keith Faber (R., Celina). "The reality is that around almost all of the state parks where oil and gas drilling is contemplated, there is already drilling, and some of that drilling is taking the gas that is under our state parks.

"Frankly, I'm not opposed to the profit motive, but I would rather have those revenues used to help pay for the unmet capital needs for state parks,'' he said.

The chamber voted 22-10 in favor of House Bill 133 with one Democrat joining Republicans in support. One Republican joined the remaining Democrats in opposition.

Three Republicans, however, joined all 10 Democrats in support of an amendment that would have exempted Lake Erie from the bill. That amendment failed 19-13. The majority argued that the amendment was unnecessary because Lake Erie is already protected by a federal ban.

"However, those federal regulations can be removed at any time.'' said Rep. Mike Skindell (D., Lakewood). "... It would be an incredible ecological disaster should there be a leakage similar to what we saw in the Gulf of Mexico in Lake Erie.''

Among northwest Ohio lawmakers, Sen. Mark Wagoner (R., Ottawa Hills) was among the three Republicans to support exempting Lake Erie. But he joined his fellow Republicans, including Sens. Cliff Hite (R., Findlay) and Karen Gillmor (R., Tiffin), in support of the drilling bill once the Lake Erie amendment failed.

Sen. Edna Brown (D., Toledo) opposed the bill.

Later, the Senate rubber-stamped Senate Bill 17, the bill easing some restrictions on the carrying of concealed firearms and storing of guns in cars, and sent it to the governor. A short time earlier, the House had voted 56-39 in favor of the bill. In both cases, support crossed party lines.

"We do indeed have the right to defend ourselves and our families anywhere we go. Anywhere we go,'' said Rep. Terry Johnson (R., McDermott), one of the sponsors of a House variation of the same bill.

"If that happens to be a restaurant, so be it,'' he said. "Going to guns in bars, well guess what? There's already guns in bars, and the criminals have them.''

The bill retains current law allowing restaurant, bar, and other private property owners to post signs declaring themselves to be off-limits to guns.

The chamber rejected a proposed amendment from Rep. Ted Celeste (D., Columbus), that would have imposed a mandatory one-year prison sentence on any concealed-carry permit-holder caught violating the bill's prohibition on carrying while drinking or under the influence of alcohol.

"You say you're not going to drink, but what do you go to a bar for?'' he asked. "It's OK now, but when something happens in your community, it's going to be something different.''

Voting for the bill from northwest Ohio were Reps. Randy Gardner (R., Bowling Green), Barbara Sears (R., Monclova Township), Robert Sprague (R., Findlay), Rex Damschroder (R., Fremont), Lynn Wachtmann (R., Napoleon), and Bruce Goodwin (R., Defiance).

Voting "no'' were Reps. Matt Szollosi (D., Oregon), Teresa Fedor (D., Toledo), and Dennis Murray (D., Sandusky). Rep. Michael Ashford (D., Toledo) was absent.

Copyright (c) 2011, The Blade, Toledo, Ohio

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State Senate Proposes Impact Fee on Gas Drillin

State Senate Proposes Impact Fee on Gas Drillin

Friday, April 29, 2011
Knight Ridder/Tribune Business News
by Brad Bumsted and Andrew Conte, The Pittsburgh Trib

The ranking Republican in the state Senate today proposed an impact fee on Marcellus shale gas drilling, of which an estimated 60 percent would go to counties and municipalities with deep wells as well as townships and boroughs neighboring drilling production sites.

The fee would be used to help cover damage to roads and bridges, maintenance and improvement costs for water and sewage systems and emergency responder costs, said Senate President Pro Tempore Joe Scarnati, R-Jefferson County.

The other 40 percent would be split between conservation districts statewide and environmental funds for clean up and infrastructure, Scarnati said.

The exact breakdown of revenue from the fee is still subject to negotiation in a bill that Scarnati hopes will be ready for a vote in early June. The bill could be introduced as soon as next week.

The baseline fee is $10,000 per well, but it would be adjusted based on gas volume and the price of gas. The average fee per well would be about $25,000 in 2011, according to Scarnati's office.

The fee would be retroactive for 2010 and raise $45 million for last year. It will bring in $76 million this year and will rise to at least $150 million by 2014, Scarnati said.

The legislation was much anticipated because of Scarnati's stature in legislative leadership and because Republican Gov. Tom Corbett has said flatly he will not consider a tax that brings money into the General Fund.

"I have to believe this is in the sweet spot of where I believe most legislators will be," Scarnati said.

Moreover, he said it would be difficult to pass a state budget without some sort of levy on the burgeoning industry.

"I can't see how we get a state budget done without bringing some dollars in from this industry," he said.

The fees will not be used to balance the budget, which is $4.2 billion in the red. But the political dynamic of lawmakers voting for cuts requires a fee on the industry, he said.

Statewide polls show widespread support for a tax on shale drilling -- 69-22 percent in favor in a recent Quinnipiac University poll.

Scarnati said it is a fee and not a tax because the money does not go to the General Fund. There also are no exemptions as typically exist with shale extraction taxes, he said.

"What's the difference between a fee and tax? Governor Corbett's pen," Scarnati said. "That will be the ultimate test."

He said he had lunch with Corbett on Monday.

"At this point, I have a caution light," Scarnati said today in a phone conference with reporters. "I don't have a red light. I don't have a green light."

Marcellus drillers are open to an impact fee that provides money for local communities as long as it's "clear, straightforward and competitive," Kathryn Klaber, president of the Marcellus Shale Coalition trade group, said in a statement.

"Our industry understands that, while there are tremendous financial opportunities in Marcellus Shale development, there also can be impacts felt by our host communities," Klaber said.

"We support the concept of a fee with portions for local government and conservation and most importantly strong but consistent local regulations as part of this approach," said Matt Pitzarella, a spokesman for Range Resources.

"The devil is and will always be in the details and we eagerly look forward to seeing and reviewing those particulars, but we remain supportive of the concept."