A bipartisan pair of senators argued for increased penalties on oil and gas operators who illegally dump drilling waste Wednesday, as House Democrats called for hiking the severance tax substantially to help fund for education, local governments, and conservation. While the Senate legislation appears to have at least some interest from majority Republicans, neither bill is likely to move any time soon.
Sen. Frank LaRose and Sen. Joe Schiavoni told the Senate Energy & Natural Resources Committee their proposal to allow the state to revoke and deny drilling permits for those who violate waste disposal laws (SB 46) was a response to recent incidents.
Sen. Schiavoni recalled that earlier this year, the owner of D&L Energy was accused of illegally dumping as much as 20,000 gallons of drilling waste into a storm sewer feeding directly into the Mahoning River. "As you can imagine, many Mahoning Valley residents were outraged and disheartened by this incident," he said, noting that D&L has a history of at least 120 violations in Ohio and Pennsylvania. More recently, another incident of illegal dumping occurred on a Belmont County farm, he said. "Furthermore, the reality is that history has shown that those who choose to act improperly within this sector tend to repeatedly violate." The legislation would punish violators, but still allow the state's "new and exciting oil and gas industry" to flourish, he said. Ohio's shale drilling boom has the potential to reverse decades of decline and stagnation in Youngstown, Sen. Schiavoni added.
Sen. LaRose said the vast majority of oil and gas operators comply with proper disposal requirements and argued the proposal would help preserve the industry's good reputation with Ohioans. He said the bill would increase penalties for knowingly dumping oil and gas waste to a felony with up to three years imprisonment and fines between $10,000 and $50,000 for the first offense. Subsequent offenses would be punishable by fines between $20,000 and $100,000 or six years in prison, he added, noting the penalties matched those in the federal Clean Water Act. Sen. LaRose said other provisions would: authorize the chief of the Division of Oil and Gas to deny a new permit to an applicant who failed to fix a substantial violation and prevents them from securing a permit by applying under a different name or business; allow the chief to suspend activities of anyone, rather than only the owner and imposes a timeframe for problems to be remedied; and allow courts to impose a sentence requiring violators reimburse states and political subdivisions.
Responding to a question from Sen. Cliff Hite, Sen. LaRose said the owner of D&L Energy was being prosecuted under federal law because authorities found the state version was inadequate. "We don't want to have to rely on that, on the federal statute." Sen. Hite asked if a company employs "one bad actor," would the owner also be implicated in a violation. Sen. Schiavoni said he didn't think so because the legislation would require the individual "knowingly" violate the law.
Sen. Kris Jordan asked how the bill would affect other people that don't violate the law. "It seems like every time something bad happens it's the tendency of government to sort of steal freedom for the rest of the people." Sen. LaRose said the joint sponsors worked to "minimize red tape." He noted permit applicants would have to submit more information, such as the names of key employees and any past violations to ensure the state could prevent them from operating in the future if they are caught dumping illegally. The bill would impose no additional costs on the industry, he told Sen. Jordan. Rather it would ensure that the state could recoup the costs of remedying contamination, which would save taxpayers money, he added. "The only freedom that we're taking away here is the freedom of the wrongdoer," Sen. Schiavoni said.
Chairman Sen. Troy Balderson said he didn't plan to hold any more hearings on the bill at least until after the summer recess. "We're going to study this a little bit more, reach out in the districts, get with the locals, and meet with ODNR. There's really been no interested party meetings or anything," he said in an interview. "That gives us time to reach out to people and start having conversations. That's why we wanted to get this process started." (Senator Balderson represents Guernsey County and Ohio Senate District 20) His website, where you can find contact information, can be found here:
http://www.ohiosenate.gov/senate/balderson
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