American Oil and Gas Reporter - August 2016 - 31

Ohio Governor Signs Unitization Bill
COLUMBUS, OH.-Ohio Governor
John Kasich signed HB 390 in July, a
bill containing language clarifying the
status of pending unitization applications
for mineral rights that belong to the Ohio
Department of Transportation. According
to the Ohio Oil & Gas Association, ODOT
must issue unit orders within 90 days
after the legislation's signing.
OOGA Executive Vice President
Shawn Bennett indicates the bill is a
product of the work that went into HB 8,
an OOGA-backed bill that has languished
in the Senate since passing the House
earlier in the session. "The crux of the
argument was a number of unitization
requests were being held at the Division
of Natural Resources because they included ODOT lands," he describes. "HB
8 was to implement a timeline to force
DNR to decide-up or down-whether (the
agency) should process unitization orders
that involved ODOT lands."
Bennett says the language began to
gain traction in late spring, thanks to
some conversations with members of the
legislature and of Kasich's administration.
"They started to understand our concern
about the severity of some of the processes," Bennett relates. "Now all unitization
orders that have had a hearing in the past
couple years will get an up or down vote.
Those companies then will have 24 months
to drill those units."
He estimates 15 unitization orders
with ODOT lands that had hearings were
awaiting authorization, but suggests that
number does not reflect the true amount
of stymied projects. "As the process continued to bottleneck, a lot of unitization
permits were not submitted," Bennett relates. "Why would anyone submit the
$10,000 application fee without the expectation of getting a permit?"
He goes on to say that the new law
not only takes care of a select few unitization orders, it also creates a path for all
future unitization orders that include
ODOT acreage. "Ohio has a lot of state
roads and ODOT owns a lot of easements,"
he observes. "Unitizing ODOT acreage
is going to be very important to Ohio's
orderly development of horizontal oil and

gas drilling."
Ultimately, Bennett suggests HB 390's
success shows that Kasich's administration
recognizes that holding up unitization orders does not benefit the state. "This issue
is bigger than only the oil and gas industry,
and is about the citizenry," he characterizes.
"You have to make sure people are able
to monetize their minerals."
Finally, Bennett concludes, OOGA
will continue to push for other pieces of
HB 8. "The unitization laws still need

some tweaks," he describes. "This is a
Band-Aid to get us through, a good faith
effort to show we need to work together
better and get these unitization orders
out. HB 8 is a great piece of legislation
that addresses not only that ODOT language, but several other significant issues
in regard to what goes into an application,
as well as timelines. There are several issues within HB 8 that still need to be addressed. What passed in June and was
signed in July is a good first step."
❒

Coming In September
Part III of the Horizontal & Innovative Drilling series explores how
advanced bits and motors are allowing operators to drill long-lateral horizontal shale wells in a single run.
AUGUST 2016 31

American Oil and Gas Reporter - August 2016

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