The Ohio shale boom started slowly when a few small companies quietly began acquiring mineral leases for as little as $25 per acre. This soon gave way to a full blown land rush in the fall of 2010. But as lease prices skyrocketed through the Fall of 2011, disillusioned lessors who signed before the peak of the market were the ones rushing – to the courthouse to file lawsuits to cancel their leases.
In order to gain leverage and legitimize their lawsuit, lessors frequently allege that their lease is “unconscionable” or they were fraudulently induced to sign it. “Exhibit A” to these lawsuits is often a technical error in the lease signing or a “fraudulent” statement made by a landman. There are exceptions, but many of these kinds of lawsuits have no legal basis.…
In response to questions posed by the Richland County Prosecuting Attorney, the Ohio Attorney General recently provided guidance to public authorities about entering into Road Use Maintenance Agreements (“RUMA’s”) with oil and gas operators. This is a distillation of the 20-page Attorney General Opinion No. 2012-029, which addressed three primary questions.
I. May a county enter into an agreement with a private oil and gas drilling company to have the company improve and repair the county roads it uses at no cost to the county?…
This week the Ohio legislature takes on a busy legislative schedule after the holiday break. Among the many pieces of legislation getting attention are five bills pertaining to the oil and gas industry. These bills, all of them Democrat-sponsored, are up for hearing before the House Agriculture and Natural Resources Committee this week. While no further action is expected before the end of the year, these bills propose significant changes to existing oil and gas regulations and threaten to undermine the regulatory framework in Ohio.
Here are brief summaries of the bills:
HB 537: Local Government Authority To Regulate Oil and Gas Industry
HB 537 would bring the largest changes to the regulatory landscape. This bill seeks to give political subdivisions (i.e. local governments) authority to enact their own regulations on oil and gas operations.
The existing law, R.C. 1509.02, gives “sole authority” for oil and gas regulation to the Ohio Department of Natural Resources (“ODNR”), which prevents local governments from creating their own regulations.
This bill removes the language from the statute that establishes the ODNR as the “sole authority” and authorizes political subdivisions to write their own oil and gas regulations. The bill preserves state regulations as a “floor” and allows political subdivisions to further restrict oil and gas operations.
This bill would fundamentally alter the regulatory landscape in Ohio. In one of our September posts we already discussed state preemption of local oil and gas regulation through R.C. 1509.02. This bill upsets the current balance of power …