Last fall, the U.S. Fish & Wildlife Service (USFWS) proposed listing the northern long-eared bat as an endangered species under the Endangered Species Act (ESA). Though a decision on the ESA listing was expected this fall, the USFWS recently delayed its deadline for a decision until April 2, 2015. The USFWS also reopened the comment period on the proposed ESA listing until Aug. 29, 2014, citing “substantial disagreement regarding the sufficiency and accuracy of the available data relevant to our determination regarding the proposed listing.”

The northern long-eared bat would be the second native Ohio bat, after the Indiana bat, to be classified as an endangered species. Both bat species have suffered population declines in recent years as a result of a naturally occurring condition called white-nose syndrome, which affects the bats. If listed, Ohio oil and gas operators and pipeline companies would have to assess the impact of their activities on the northern long-eared bat, as is already required for the Indiana bat, and local and/or seasonal restrictions on certain kinds of construction or clearing activities are also likely.
Continue Reading USFWS reopens comment period on proposed listing of northern long-eared bat as endangered until Aug. 29, 2014

In February 2013, we reported that the Ohio Environmental Protection Agency (Ohio EPA) had issued proposed revisions to its Model General Permit for oil and gas well-site production operations. On April 4, Ohio EPA announced that it had finalized those revisions. The revisions bring the Model General Permits up-to-date with changes in the law since Ohio EPA originally issued the permits and make other changes to respond to industry comments. The revisions also include revised leak detection and repair requirements, which have been the subject of much recent discussion.

Ohio law generally requires each new source of air pollution to obtain a pre-construction permit from Ohio EPA’s Division of Air Pollution Control before “begin[ning] actual construction, erect[ing], locat[ing] or affix[ing] [the] air contaminant source.” Ohio law also requires sources of air pollution to obtain operating permits. Larger sources typically obtain permits-to-install (PTIs) and “Title V” operating permits; smaller sources typically obtain combined permits-to-install and operate (PTIOs). Ohio EPA may also develop Model General Permits — model PTIs and PTIOs — for categories of sources. Sources may choose to apply for regular PTIs or PTIOs if they like, but Model General Permits can be obtained more quickly, because, as Ohio EPA has explained, “all the terms and conditions of the permit have been developed in advance.”
Continue Reading Ohio EPA issues revised Model General Permits for oil and gas wells

In our first post about Section 16 lands, we provided background on such public lands here in Ohio. We summarized that in 1785, a Federal land ordinance granted one square mile — usually Section 16 — out of every six square mile township to be held in trust by the state and to be dedicated to support public education pursuant to federal law. The Ohio Legislature then began leasing the land, and in 1827 it authorized sale of the land with proceeds going to the “Common School Fund.” Interest from the fund was to be paid to the schools within the townships. See, Dr. George W. Knepper, The Auditor of State, The Official Ohio Lands Book, 2002. (“Knepper”).

In regard to the funds collected from the sale of all school lands, the Ohio Constitution provided:

“The principal of all funds, arising from the sale, or other disposition of lands, or other property, granted or entrusted to this state for educational and religious purposes, shall forever be preserved inviolate, and undiminished; and, the income arising therefrom, shall be faithfully applied to the specific objects of the original grants, or appropriations.” Ohio Constitution, Article VI, Section 1 1


Continue Reading Part 2: Who owns the minerals under Ohio Township Section 16?

Whether oil and gas drilling poses a legitimate risk for exposure to radiation has been a hot topic of recent debate. Though we occasionally hear anecdotal evidence reported in the newspapers about radioactive drilling waste being rejected by landfills, there seems to be scant evidence that radiation is a common or serious oil and gas industry problem in Ohio. Nonetheless, the Ohio Legislature and Gov. Kasich recently passed new law that all horizontal well operators should understand.

On June 30, 2013, Gov. Kasich signed H.B. 59, the budget bill, into law. The bill created a new section of the Ohio Revised Code — R.C. 1509.074 — which imposes requirements for testing, transporting and disposing “material that results from the construction, operation or plugging of a horizontal well” that might contain unusual levels of radioactivity.

The new law generally requires operators to sample and test such material for Radium-226 and Radium-228, and to dispose of radioactive material “in accordance with all applicable laws.” However, the new law has several important exceptions. An operator of an oil and gas well is not required to perform sampling and testing if:
Continue Reading Ohio H.B. 59 — The Final Report: No New Severance Taxes But Operators May Have to Test for Radiation

With the Obama administration’s recent surprise delay regarding the enforcement of the employer mandate under the Affordable Care Act, our colleagues at Employee Benefits Law Report have posted a summary. Given the impact to many businesses, regardless of industry, we wanted to take a moment and share the post with you.   

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We previously blogged about securities regulation of interests in oil and gas exploration and development. Industry participants, state and federal securities regulators have recently cautioned investors regarding investing in oil and gas ventures.

At the federal level, the U.S. Securities and Exchange Commission (SEC) issued an investor alert aimed at private oil and gas offerings. In addition to the usual cautions to investors to do their homework on these deals, the SEC encouraged investors to verify that the person offering the investment is licensed as a broker-dealer. The SEC recently stepped up its efforts to pursue “finders” and other unlicensed persons compensated by issuers to assist in finding investors. Companies raising investment funds need to understand that persons who they engage to assist in selling investments are required to have a securities license. Failure to do so exposes the issuer to civil liability, including rescission claims by investors, and potential criminal liability in cases where material misstatements or omissions are made in the private placement memorandum or other offering material, or other fraudulent activity is present. The investor alert cites several examples of recent enforcement actions where such illegal activity was involved.
Continue Reading SEC Issues Investor Alert for Private Oil and Gas Offerings

Understanding rights and obligations associated with oil and gas leases can be challenging. Imprecise lease language, implied legal duties, formulaic statutes and evolving case law all affect oil and gas leases in different ways. We’ve written several articles on these topics during the past several months and have compiled them into an eBook to help