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The Ohio Supreme Court rules that regulating oil and gas drilling is up to the state, not local authorities

In a 4-3 decision with three written dissents, the Ohio Supreme Court has decided that certain local zoning laws aimed at limiting hydraulic fracturing cannot be used to circumvent state’s authority over oil and gas drilling. The court said that the home rule clause of Ohio’s constitution does not allow a municipality to block drilling activities otherwise permitted by the state.

A 2004 law gave “sole and exclusive authority” to the state to regulate permitting for oil and gas drilling operations, reports Court News Ohio. In 2011, Beck Energy obtained a state permit to drill an oil and gas well on private property in Munroe Falls. Once drilling began, the city asked the county court to permanently stop the work, alleging that the company was violating several local laws that gave the local government the power to interfere by means of zone construction or excavation, mandate a waiting period, impose a fee and a bond deposit and provide for public hearing, among other provisions.

The Ohio Supreme Court decided that the Ohio Constitution gives municipalities the power of local self-government as long as their ordinances do not conflict with general state laws. By trying to restrict drilling that the state had previously permitted, the court decided that the local government overstepped its authority.

According to lead opinion, written by Justice Judith L. French, the state “to the exclusion of local governments, [has] the right to regulate ‘all aspects’ of the location, drilling, and operation of oil and gas wells, including ‘permitting relating to those activities.’”

Justice Terrence O’Donnell opted to concur on the opinion in judgment only, leaving the reasoning behind the decision at a 3-1-3 vote. Tom Houlihan, a Munroe Falls attorney, said this leaves the legal precedent open to interpretation in the future. “None of the reasons got a majority of votes, which could be carefully read by future courts that there’s still a role for local zoning in the oil and gas field,” he said.

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Important disclosures: The information provided herein is believed to be reliable; however, EnerCom, Inc. makes no representation or warranty as to its completeness or accuracy. EnerCom’s conclusions are based upon information gathered from sources deemed to be reliable. This note is not intended as an offer or solicitation for the purchase or sale of any security or financial instrument of any company mentioned in this note. This note was prepared for general circulation and does not provide investment recommendations specific to individual investors. All readers of the note must make their own investment decisions based upon their specific investment objectives and financial situation utilizing their own financial advisors as they deem necessary. Investors should consider a company’s entire financial and operational structure in making any investment decisions. Past performance of any company discussed in this note should not be taken as an indication or guarantee of future results. EnerCom is a multi-disciplined management consulting services firm that regularly intends to seek business, or currently may be undertaking business, with companies covered on Oil & Gas 360®, and thereby seeks to receive compensation from these companies for its services. In addition, EnerCom, or its principals or employees, may have an economic interest in any of these companies. As a result, readers of EnerCom’s Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this note. EnerCom, or its principals or employees, may have an economic interest in any of the companies covered in this report or on Oil & Gas 360®. As a result, readers of EnerCom’s reports or Oil & Gas 360® should be aware that the firm may have a conflict of interest that could affect the objectivity of this report.