Articles, Alerts & Perspectives

Administrative Watch

On January 30, 2013, the Ohio Supreme Court ruled that the issuance of a permit to drill a new well, deepen a well, reopen, convert or plug a well is not considered to be an “order of the chief” of the Ohio Department of Natural Resources’ Division of Oil and Gas Resources Management (DOGRM), Chesapeake Exploration, LLC, v. Oil & Gas Comm., 2013-Ohio-224 (January 30, 2013). As such, the Court held that the Ohio Oil and Gas Commission has no jurisdiction to hear an appeal of such permit under Ohio’s oil and gas law.

The case was brought before the Court by a drilling company seeking a writ of prohibition to prevent the Oil and Gas Commission from exercising jurisdiction in a landowner’s appeal of a permit to drill issued by DOGRM. In determining the Commission’s jurisdiction, the Court was asked to reconcile one provision of Ohio’s oil and gas law authorizing the Commission to hear appeals of any “order of the chief” of DOGRM (R.C. § 1509.36) with another, recently amended, provision of the statute stating that the issuance of a permit to drill “shall not be considered an order of the chief” (R.C. § 1509.06(F)). The Court concluded that R.C. 1509.06(F) manifestly divests the commission of appellate jurisdiction over the chief’s decisions to issue permits for oil and gas wells. An issue not addressed by the Court is whether a permit to drill may be appealed to state court under Ohio’s administrative procedure law.

If you would like to discuss this decision or other issues related to natural gas exploration and production in Ohio, please contact David E. Northrop at 412-394-6590 or dnorthrop@babstcalland.com, Robert W. Thomson at 412-394-5656 or rthomson@ babstcalland.com, Michael H. …

Administrative Watch

On March 27, 2012, EPA Administrator Lisa Jackson signed a Proposed Rule to establish New Source Performance Standards for emissions of Carbon Dioxide (CO2) from new affected fossil fuel-fired electric generating units (EGUs). The Proposed Rule is due, in part, to the U.S. Supreme Court’s 2007 opinion in Massachusetts et al. v. Environmental Protection Agency and the EPA’s subsequent 2009 “endangerment” finding.

The Proposed Rule would apply to EGUs that commence construction after publication of the Proposed Rule in the Federal Register. More specifically, the Proposed Rule would require “new fossil fuel-fired EGUs greater than 25 megawatt electric (MWe) to meet an output-based standard of 1,000 pounds of CO2 per megawatt-hour (lb CO2/MWh) . . . .” EPA reports that this standard is “based on the performance of widely used natural gas combined cycle (NGCC) technology.” EPA opines that, even without the Proposed Rule, no new coal-fired EGUs will be constructed through 2030 without “Carbon Capture and Storage” (CCS) technology.

EPA states that new coal-fired or pet coke-fired units could meet the standard by either employing CCS to approximately 50 percent of the CO2 in the emissions at startup, or through later application of CCS to meet the standard over a 30-year period. The Proposed Rule would not apply to existing EGUs whose CO2 emissions increase as a result of installation of pollution controls for conventional pollutants, or to proposed EGUs that have acquired a complete preconstruction permit by the publication date of the Proposed Rule and commence construction within 12 months of the publication.

Comments on the Proposed Rule will be due 60 days after publication in the Federal Register. The pre-publication copy of the Proposed Rule is available online at http://epa.gov/carbonpollutionstandard/pdfs/20120327proposal.pdf. …