Ohio’s Common Sense Initiative released its 2012 Mid-Year Report tracking progress in creating a regulatory framework that promotes economic development, is transparent and responsive to regulated businesses, makes compliance as easy as possible, and provides predictability for businesses. The report provides statistics related to the first six months reviewing state rules that impact businesses, including the fact that 55% fewer rules were proposed compared with similar periods in previous years. View 2012 Mid-Year Report on Activities (report)
General Commentary
“Shale Works for US” campaign unveiled by th U.S. Chamber of Commerce and the Ohio Chamber of Commerce
On July 17th the U.S. Chamber of Commerce and the Ohio Chamber of Commerce jointly held a press conference in downtown Columbus to launch their national Shale Works marketing campaign that will support drilling in the underground shale formations in Ohio. The “Shale Works for US” campaign was unveiled Tuesday in Columbus. The Campaign will be run by the Chamber’s Institute for 21st Century Energy. Shale Works for US will focus their television, radio, print and promotional efforts, as well as work with the local Chambers and businesses to inform the public on the economic benefits to the U.S. businesses and industries that are already being seen with the production of natural gas and oil from shale formations. The Chamber hopes to show how tapping the energy resources here in Ohio, Pennsylvania and West Virginia will boost our economy, create jobs and secure America’s energy future. In Ohio, Shale Works will promote the fact that tapping the Marcellus Shale has the potential to create more than 65,000 jobs and pump nearly $5 billion into the state’s economy. The campaign will focus on the direct jobs that can be created by shale drilling and on the indirect impact it can have on other industries, such as petrochemicals and manufacturing, as well as many different ancillary industries, like the construction, hospitality, steel, chemical and polymers sectors. Across a broad supply chain — steel making, trucking, industrial controls, drilling supplies and wastewater treatment — gas development is stimulating growth after decades of plant closings in Ohio. Over the last year, the Chamber has listened to the concerns being voiced by some in the public regarding fracking, the technique of injecting water, sand and chemicals underground at high pressure to create fissures in tight rock formations and allow gas and oil to flow freely to the surface. The Institute for 21st Century Energy which is the energy policy arm of the U.S. Chamber of Commerce will use Shale Works for US to also unify policymakers, regulators, businesses and the public behind a “common sense energy strategy to help keep America secure, prosperous, and clean.”
Public hearing on Emergency Drilling rules set for Wednesday, August 15
A public hearing on the ODNR’s Emergency rules will take place on Wednesday, August 15, 2012. As the result of Governor Kasich two executive orders, the ODNR Rules were filed as emergency rules and will remain in effect for 90 days, during which time the department will go through the regular rule-filing procedure to adopt permanent rule. The hearing will begin at 9:00 a.m. at the Ohio Department of Commerce, East Building; 6606 Tussing Road; Training Room No. 3; Reynoldsburg, Ohio 43068. Emergency Rules 1501:9-3-06 and Emergency Rule OAC 1501:9-3-07
ODNR Oil & Gas – Gov. Kasich signs Executive Order 2012-09K – Emergency Rules
Today Gov. John R. Kasich signed Executive Order 2012-09K which authorizes the Chief of the Division of Oil and Gas Resources Management within the Ohio Department of Natural Resources to require additional testing and safeguards as part of the permitting process for an injection well. The Executive Order is effective immediately.
The Emergency Amendment of Rules 1501:9-3-06 and 1501:9-3-07 of the Ohio Administrative Code by the Ohio Department of Natural Resources. Division of Oil and Gas Resources Management
WHEREAS, the increase in oil and gas exploration and production operations will inevitably lead to an increase in underground injection control activity in this state.
WHEREAS, an increase in underground injection control activity requires that the regulations governing the program be updated to provide the greatest degree of citizen protection possible without causing irreparable harm to an industry important to the economy.
WHEREAS, the Division of Oil and Gas Resources Management, within the Department of Natural Resources, has responsibility for overseeing the regulatory process for all underground injection control facilities.
WHEREAS, Section 1509.22 of the Revised Code gives the Chief of the Division authority to promulgate rules regarding the injection into wells of brine and other waste substances obtained from or produced in connection with oil and gas drilling, exploration or production, including tests to evaluate whether fluids may be injected in a reservoir and to determine the maximum allowable injection pressure.
WHEREAS, the Division desires to immediately amend the Ohio Administrative Code, specifically Rules 1501:9-2-06 and 1501:9-3-07, in order to (1) outline the tests that an applicant must satisfy in order to obtain a permit to drill and operate an underground injection control well, (2) state clearly that the chief may withhold authority to inject fluids if the results of required tests are negative, (3) allow the chief to set a graduated maximum allowable injection pressure based upon data obtained throughout the permitting process, (4) allow the chief to require the installation of an automatic shut-off device if the permitted maximum allowable injection pressure is exceeded, and (5) require continuous monitoring of the annulus between the casing and tubing in a well.
WHEREAS, Section 1509.03 of the Revised Code authorizes the Division to promulgate rules in accordance with Chapter 119 of the Revised Code.
WHEREAS, the Division has requested a determination whether an emergency exists that requires the immediate amendment to Rules 1501:9-3-06 and 1501:9-3-07 of the Ohio Administrative Code in order for the Division, pursuant to Sections 1509.22 and 1509.03 of the Ohio Revised Code, to immediately amend those rules to grant the chief authority to require certain testing, and to mandate certain procedures as part of the process of reviewing and issuing a permit for the underground injection of wastes obtained from or produced by oil and gas wells.
NOW THEREFORE, 1, John R. Kasich, Governor of the State of Ohio, have determined, upon the request of the Division of Oil and Gas Resources Management, that an emergency exists requiring the immediate amendment of Rules 150 1:9-3-06 and 1501:9-3-07 of the Ohio Administrative Code by the Division. Further, I hereby order that the procedures prescribed by Section 119.03 of the Ohio Revised Code with respect to the amendment of the specified rules be suspended and the Division he permitted to amend these rules immediately by electronically filing them with the Secretary of State, the Director of the Legislative Services Commission, and the Joint Committee on Agency Rules Review.
Further, I hereby order that this Executive Order be filed in electronic form with the Division, the Secretary of State, the Director of the Legislative Service Commission, and the Joint Committee on Agency Rule Review. I signed this Executive Order on July 10, 2012, in Columbus and it will expire at the end of the ninetieth day it is in effect.
Ohio Senate & House Legislative Session Dates Announced for Remainder of 2012
Senate President Tom Niehaus and Speaker of the House Bill Batchelder announced schedules for the second half of 2012. Unless otherwise notified, Senate sessions start at 1:30 p.m. on Tuesdays and Wednesdays and 11 a.m. on Thursdays while the House meets at 11 a.m. on Tuesdays; 1:30 p.m. on Wednesdays; and 1 p.m. on Thursdays. Dates are subject to change.
July
Tuesday, July 31 – Sessions (if needed)
August
Wednesday, August 1 – Sessions (if needed)
Thursday, August 2 – Sessions (if needed)
September
Tuesday, September 11 – Sessions (if needed)
Wednesday, September 12 – Sessions (if needed)
November
Tuesday, November 6 – Election Day
Monday, November 12 – Veterans’ Day observed (StateOffices closed)
Wednesday, November 14 – Sessions
Thursday, November 15 – Sessions
Thursday, November 22 – Thanksgiving (State Offices closed)
Tuesday, November 27 – Sessions
Wednesday, November 28 – Sessions
Thursday, November 29 – Sessions
December
Tuesday, December 4 – Sessions
Wednesday, December 5 – Sessions
Tuesday, December 11 – Sessions
Wednesday, December 12 – Sessions
Thursday, December 13 – Sessions (if needed)
Tuesday, December 18 – Sessions (if needed)
Wednesday, December 19 – Sessions (if needed)
Tuesday, December 25 – Christmas (State Offices closed)
ODOT on Roadways and Shale Activities in Ohio
Ohio Department of Transportation/Director Jerry Wray – As the exploration of natural gas and shale in Ohio continues, local governments and communities will need ways to deal with the influx of truck traffic on their roadways. Last summer, officials from ODOT and ODNR began meeting with county and township leaders and members of the oil and gas industry to develop a standard Road Use Maintenance Agreement (RUMA) (CLICK for RUMA sample) to protect and preserve local road and bridge systems. The agreement was completed last December and is part of recently enacted S. B. 315 which will become effective in September 2012. Aside from local roadways, the ODOT has heard from railroad with concerns that one major issue with shale development is that grade crossings are not being considered when towns are signing agreements with the shale companies when it comes to maintenance of their roadways. Additionally, aside from grade crossing, in Pennsylvania what were once Class I under-utilized rail yards are now becoming very important facilities and has caused a lot of projects based on maintenance and repair of similar facilities. ODOT Director Jerry Wray, and Director of the Governor’s Office of Appalachia and representatives from ODNR have been traveling across eastern Ohio, telling stakeholders and the media about the RUMA and fielding their questions and concerns. Many of the local County Engineers, County Commissioners, Mayors and Trustees are participating in these meetings around the state. Key comments have centered around agreements with the industry and partnering with private industry for roadway improvements.
On August 1, 2012 rules will become effective regarding the Department of Natural Resources, Oil and Gas Resources Management Division
The Ohio Department of Natural Resources Division of Oil And Gas: Shale-Oil-Gas Drilling - On August 1, 2012 rules will become effective regarding the Department of Natural Resources, Division of Mineral Resources Management: Oil and Gas. Ohio Administrative Code rules 1501:9-1-01 and 1501:9-1-02 were amended and new rules promulgated regarding Well Construction and Industry Standards (OAC 1501:9-1-08 and 1501:9-12-01). Since the final filing of these rules on May 29, 2012, the Ohio House and Senate passed Senate Bill 315 Ohio’s Energy Policy. Governor Kasich signed S.B. 315 on June 11, 2012. S.B.315 sets forth the Ohio Revised Code provisions for implementing the much debated “state regulations” for the Ohio Shale-Vertical-Horizontal Oil and Gas Drilling framework Over the next few month, additional regulations will be developed to fully implement the guidelines provided in the legislation.
S.B. 315 in R.C. 1509.22 requires the Chief of the ODNR to adopt rules concerning the quarterly submission by the owner of an injection well to the ODNR concerning each shipment of brine or other waste substances received by the owner for injection into the well, and information concerning brine and other waste substance from a registered brine transporter prior to the injection of the transported brine or other waste substance. The ODNR is also authorized to adopt rules to establish the total depth of a well for which an oil and gas injection well permit has been applied for or issued, and establish requirements and procedures to protect public health and safety. These are just a few of the guidelines for regulations set forth by the Ohio General Assembly in S.B. 315. The General Assembly authorized the Chief to issue an order to the owner of an injection well that is already in existence on the ACT’s effective date to make changes in the operation of the injection well in order to correct problems or address safety concerns.
Other ODNR activities on the regulation side included a release earlier this spring in March regarding Wells/Water Sources Withdrawal. The ODNR released a fact sheet and forms to assist companies through the process since many of the new laws and regulations were still being discussed. ODNR stated that “in most cases, between two and six million gallons of water are needed to complete hydraulic fracturing on a Marcellus or Utica shale well.” To assist oil and gas drilling companies with understanding the regulations governing withdrawal and use of water in Ohio, the ODNR in late March released the ODNR Water Withdrawal Regulations for Oil and Gas Drilling Fact Sheet http://www.dnr.state.oh.us/Portals/7/pubs/pdfs/fctsht68.pdf In April, the ODNR released State of Ohio Water Withdrawal Facilities Registration Form http://www.dnr.state.oh.us/portals/7/pubs/forms/wwforms.pdf . Additionally, in April the ODNR released instructions for Temporary Water Withdrawal Facilities Registration For Construction Dewatering which relates only for construction dewatering operations lasting 90 days or less http://www.dnr.state.oh.us/portals/7/pubs/forms/wwtempfrm.pdf
Innovation, Efficiency Frees Up $400 Million for Future Transportation Projects
Improved department efficiency, workforce and vehicle fleet reductions, higher than projected gas tax receipts, the elimination of federal earmarks, and savings from a mild winter are allowing the Ohio Department of Transportation (ODOT) to dump $400 million into the budget for major new construction projects throughout the state. The announcement made at a meeting of the Transportation Review and Advisory Council (TRAC) and it means some construction projects will see future delays significantly reduced or eliminated.
ODOT Director Jerry Wray stated that “Our employees are working at a rapid pace to reduce our cost of doing business and improve service to the state’s motoring public. We’re innovating and approaching the delivery of services in a new way, and all of this is allowing us to save millions of dollars that we can put into our major construction budget.”
ODOT has saved a total of $400 million over the next five fiscal years (2013-2017) and added that money to the state’s capital budget: $200 million in fiscal year 2013 and $50 million for each of the four following fiscal years.
The $200 million for fiscal year 2013 includes:
- $20 million not used by ODOT’s district offices in 2012
- $90 million in workforce reductions and cost savings as a result of improved agency efficiency ($40 million in savings carried over from fiscal year 2012 and $50 million saved in 2013)
- $90 million in higher than projected gas tax receipts and the elimination of federal earmarks
ODOT Launches Program Aimed at Generating New Revenue
The Ohio Department of Transportation (ODOT) is launching a program that will permit advertising and sponsorship opportunities at interstate rest areas and welcome centers throughout Ohio. Beginning May 21st, the department is seeking competitive bids for the Sponsorship, Maintenance, and Advertising Revenue Tartgeted (SMART) program.
Money generated from the SMART program will help ODOT offset a portion of the $30 to $50 million the agency spends each year to maintain the state’s 101 rest areas. Annual rest area maintenance costs include paying gas, water, electric and sewage bills, as well as mowing grass, resurfacing parking lots, improving buildings and paying for janitorial and housekeeping services.
“This new program will help do two things: reduce the amount of money ODOT spends on rest area maintenance and generate new money we can use to pay for some of the major construction projects communities have told us they want,” said ODOT Director Jerry Wray. “Launching the SMART program demonstrates that ODOT is serious about thinking outside the box and seeking innovative and alternative funding sources to pay for road construction in Ohio.”
This is the first major initiative ODOT has announced since it launched the Division of Innovative Delivery earlier this year. The department is exploring options to unlock the revenue potential of the Ohio Turnpike and non-interstate rest areas, in addition to developing a program to generate millions of dollars for the sponsorship and naming rights of certain state-owned assets such as bridges, interchanges and sections of highway.
The division is also exploring public-private partnerships (P3′s) to expedite the construction of some of the state’s largest construction projects, including:
■The second Innerbelt Bridge in Cleveland
■The Brent Spence Bridge in Cincinnati
■The Portsmouth Bypass in Scioto County
■An interchange for U.S. Route 36 and SR 37 on I-71 in Delaware County
In January, ODOT announced a $1.6 billion budget hole that forced the department to push back by decades some of the state’s largest construction projects. Since then, the agency has initiated a complete review of all current and future transportation projects to identify those that could be excellent candidates for P3′s, and has sought to identify additional sources of revenue to aid in the funding of major transportation projects throughout the state. Details of the review are expected later this year.
State of Ohio is hosting Ohio Business Expo on Sept. 19
State of Ohio is hosting Ohio Business Expo on Sept. 19 - Columbus, Ohio – The State of Ohio looks to expand access to state contracts for minority, women-owned and small businesses. Toward this end, the state is hosting the 2012 Ohio Business Expo on Wednesday, Sept. 19 from 9 a.m. to 3 p.m. at the Rhodes Center at the Ohio Expo Center in Columbus.This free expo will allow Ohio business owners to network with purchasing professionals from state agencies regarding upcoming contracting and procurement opportunities.”The goal of the expo is for businesses to meet one-on-one with procurement officers and buyers from state agencies to discuss how to work together to provide the goods and services the State of Ohio requires,” said Director Robert Blair of the Ohio Department of Administrative Services, which is sponsoring the expo in partnership with the Ohio Department of Development.The state spent more than $250 million with certified Minority Business Enterprise (MBE) and Encouraging Diversity, rowth and Equity (EDGE) firms during fiscal year 2011. The MBE program is the state’s minority business set-aside program. EDGE is a business and economic development program for economically and socially disadvantaged businesses. The expo will include workshops about resources available to certified MBE and EDGE firms.”The Ohio Business Expo is a great networking opportunity, which connects Ohio businesses to state
agencies,” said Christiane Schmenk, director of the Ohio Department of Development. “The state needs reliable services and dependable products, and this expo provides the perfect platform to make valuable business connections.”