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08.12.16   |   Insights

Court Refuses To Allow Local Communities To Curtail Oil And Gas Drilling

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Many communities in Ohio have recently proposed or passed local legislation attempting to impose restrictions on oil and gas production in the community beyond the requirements imposed by the Ohio Department of Natural Resources (“ODNR”).

Frequently, proponents of such legislation contend that the home rule provisions in the Ohio constitution allow for such local control. So far, the Courts have disagreed.

The most recent example is Mothers Against Drilling in our Neighborhood v. State, in which the Eighth District Court of Appeals struck down a “Community Bill of Rights” passed by the City of Broadview Heights. The Court held that the ODNR has the sole and exclusive authority to regulate oil and gas drilling in Ohio, and that this exclusive authority prevents local government interference with such development. The decision should also give mineral owners and producers confidence that oil and gas development throughout Ohio will continue with comprehensive and equal rules.

In 2012, Broadview Heights passed an amendment to their City Charter that made it unlawful for any person to drill any new oil and gas wells within the city’s limits. Broadview Heights argued that this City Charter was a valid exercise of the municipality’s, and the local community’s inherent right of local self-government. However, the Ohio Supreme Court in Morrison v. Beck Energy, Inc., 143 Ohio St.3d 271 (2015), previously struck down a similar local city ordinance that interfered with oil and gas development. In Morrison, the court applied a three part test for determining whether a local law conflicted with state law: 1) whether the local ordinance was an exercise of a police power; 2) whether the state statute at issue was a general law; and 3) whether the local ordinance is in direct conflict with the state statute. When the local law meets this three part test in direct conflict with the state law, then the local law must be preempted by the state’s law.

The Broadview Heights law was found to meet all three tests by the Eighth District, and therefore, the law was struck down. The court found that the ban on oil and gas drilling was a clear exercise of the City’s police power, because the law attempted to protect the public health and general welfare of the City. Secondly, the court found, as did the Supreme Court in Morrison, that Ohio law covering oil and gas development is a general law that clearly grants all authority to regulate oil and gas drilling to the ODNR. Lastly, the Eight District ruled that the ban on new oil and gas drilling within Broadview Heights was a direct conflict with the Ohio Department of Natural Resources statutory authority to grant drilling permits pursuant to state law. Therefore, the Eighth District struck down the Broadview Heights law as an invalid exercise of home rule authority, being in direct conflict with the state’s exclusive authority over oil and gas development and regulation.

Landowners, mineral owners and producers who support oil and gas development need to pay careful attention to creative arguments and laws that local activists or local governments may use to impede oil and gas development. As the recent cases show, obtaining effective legal counsel is key to protecting the right to oil and gas development in Ohio.

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