Ohio Passes Fracking Rules That Opponents Criticize as Lax

Amid a “gold rush” to tap oil and natural-gas reserves, Ohio lawmakers approved drilling rules that environmentalists say were watered down to let companies keep secret some of the toxic chemicals they use.

The Republican-dominated House of Representatives voted 73-19 today to approve the bill sought by Republican Governor John Kasich that governs hydraulic fracturing, or fracking.

It would require that companies test water within 1,500 feet of proposed wells, report the fluids and chemicals used in drilling and track wastewater injected into disposal wells. The Senate passed the bill May 15 and must now approve House changes before sending it to Kasich to sign.

“It’s our goal through this legislation to make sure we address this expansion in an appropriate and responsible manner,” Representative Peter Stautberg, the Republican chairman of the Public Utilities Committee, said during debate before today’s vote in Columbus.

Kasich, 60, has said the rules will help Ohio profit from a boom in fracking -- which involves injecting chemicals, water and sand underground to free gas reserves -- while protecting water and the environment. States including Ohio, Pennsylvania and North Dakota are confronting how to regulate fracking, which the industry says is safe and allows increased production and which environmentalists say can lead to contamination.

Hunting Gold

With a study projecting that drilling can add $4.9 billion to the state’s economic output by 2014, Kasich has said “there’s gold in them thar hills.”

“A modern-day gold rush is on in Ohio,” Thom Cmar, a lawyer for the Natural Resources Defense Council in Chicago, said in a blog posting.

Democrats who opposed the bill and environmental groups including the Natural Resources Defense Council said while Kasich deserves credit for seeking the regulations, they do not go far enough.

“We need the transparency on the part of oil and gas companies so we know exactly what is going into and coming out of the drilling rigs near our homes,” Representative Robert Hagan, a Democrat from Youngstown, said during today’s debate.

Kasich and the Ohio Petroleum Council have said the bill provides the most stringent disclosure of any U.S. state by requiring reporting of chemicals used in fracking as well as fluids used in well construction and initial drilling.

Proving Harm

Environmental groups said lawmakers allowed frackers to avoid reporting chemicals and fluids used during certain periods of drilling.

The bill also lets companies decide which chemicals are proprietary trade secrets. The House Public Utilities Committee added an amendment yesterday that says a property owner, neighbor, or any person or state agency “having an interest that is or may be adversely affected” by a chemical may sue over whether a company is entitled to trade-secret protection.

The provision actually limits the ability to sue by requiring a plaintiff to demonstrate harm from a chemical, said Richard Sahli, a Columbus attorney working with the National Resources Defense Council and a former chief counsel for the Ohio Environmental Protection Agency. In an interview, Sahli called it “a loophole within a loophole.”

Can’t Please ’Em

The bill takes the best of fracking regulations in other states while avoiding their pitfalls, said James Zehringer, director of the Ohio Natural Resources Department.

“I don’t think we’ll ever make the environmental community completely happy,” Zehringer said in a telephone interview. “We’re doing things that I think are in the right direction to keep the community safe and the environment safe and the people safe.”

Environmentalists just want to ensure the law regulating fracking is adequate, said Jack Shaner, deputy director of the Ohio Environmental Council.

“Is it enough protection?” Shaner said. “We’re about to have a grand experiment and find out.”

To contact the reporter on this story: Mark Niquette in Columbus at mniquette@bloomberg.net

To contact the editor responsible for this story: Stephen Merelman at smerelman@bloomberg.net

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