Urban Drilling/House Bill 278

Originally published on 6/17/04

On September 16, 2004, House Bill 278 (125th General Assembly) became the effective law of Ohio which recognizes that the Ohio Department of Natural Resources (ODNR) Division of Mineral Resources Management (DMRM) (now called the Division of Oil and Gas Resources Management) has the sole and exclusive authority to regulate the permitting, locating and spacing of oil and gas wells. Additionally, H.B. 278 declares that Ohio’s oil and gas law and the rules adopted under it constitute a comprehensive plan with respect to all aspects of the siting, drilling and operations of oil and gas wells. The result is the effective elimination of duplicative regulations that have disrupted orderly oil and gas development.

Since this time, local governments have unsuccessfully made court claims stating that such a law infringes upon their “home rule” authority. In these cases, the courts have agreed that House Bill 278 is constitutional and is a “valid enactment of state statute”.

The H.B. 278 experience shows us that technologies, such as directional drilling, smaller and much safer automated drilling rigs, advances in well site production equipment and storage tank construction, have led to much safer drilling and production activities.

As a result, current restrictions on access to new sources of natural gas supply must be reevaluated in light of technological improvements that have made natural gas exploration and production more environmentally and socially sensitive.