06/15/2009 Meeting Minutes - Laserfiche WebLink

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Regular Council Meeting Minutes 6-15-09 Page 25 which he has negotiated with the Ohio Department of Natural Resources and representatives of the Oil and Gas Drilling Association, this is what they are proposing. They want to have better notification. They are willing to pass some sort of noise ordinance, noise standards, although they haven't decided what those will be. They are willing to have the local communities be more front-end involved in the well-site identification. To that end, they are going to extend the approval time for ODNR to approve a permit and designate a point of contact with each local municipality for input prior to ODNR making their approval and decision. Last year, ODNR had 1400 oil and gas well applications. They did not approve 12 of them, which is a little less than 1% by his count. There is some issue here about the approval process. They want to increase the insurance on the oil and gas operators to $3,000,000.00. They want to have additional fees. One of the problems is that there are 11 inspectors for oil and gas wells in the State of Ohio. Remember what Senator Grendell just said about 1400 permits? They issued 1388 of those last year and they had 11 inspectors. That is a major problem. Senator Grendell was of the impression that they inspected the whole time the well was being drilled. Senator Grendell then found out they inspect when they show up to inspect. One of the problems is there is somethirig called the water test. When they did the annulus, when they pour the concrete in the annulus, they run a test, they pour pressured water and measure it down one side and it is supposed to measure when it comes up the other side and it is supposed to be the same amount of water. If you are getting different water amount, then that means something is fractured and water is disappearing somewhere below the surface. That well in Bainbridge flunked the water test, but there was no inspector there at the time. For whatever reason, the driller ignored that flunk and kept on going and cracked the well and it caused the problem. So, they want additional fees so that they can add inspectors. Last but not least, there is something called mandatory pooling. In Ohio, and Mayor Rinker is a great real estate lawyer, Senator Grendell knows he understands this, before property can be taken being the municipality, we go through this whole process of public necessity. You go to a jury and decide how much is going to be paid. You go through this whole thing. That does not work that way for your subterranean oil and gas rights. You need 20 acres for a standard well to be able to pool in Ohio. If you get 15 acres, you need 5 more. If the owner of the 5 does not want to give you an oil and gas lease for their 5, there's a statute in Ohio that allows the driller to go to the Director of the Division of Mining of ODNR and ask him for what's called a mandatory pooling order and he, a bureaucrat of the State, not a judge and not a jury, can direct that you give up your 5 acres of subterranean rights to that driller to be included in his 20 acres for that well. They can't put the well or the tank on your 5 acres, but your underlying 5 acres are included in the well pool. The compensation is you get your percentage interest, 1/8th on the interest, for example, you get 1/4th of 1/8th. They take your subterranean rights involuntarily. You get what you get. For Senator Grendell, he has a real constitutional problem with that because you don't want to do it. Why do we give some bureaucrat in Columbus the power to take away your subterranean mineral rights just because?