Where things stand at the Statehouse

Marc Kovac / Dix Newspaper Capital Bureau Published:

COLUMBUS — An update on lawmaker action and other activities at the Ohio Statehouse related to horizontal hydraulic fracturing:

• Local Control: Rep. Bob Hagan, a Democrat from Youngstown who has been outspoken in his criticism of how the state has handled oil and gas production activities connected to horizontal hydraulic fracturing, or fracking, offered sponsor testimony on Nov. 27 on legislation that would empower local governments to regulate the locations of oil and gas wells and enforce health and safety standards.

House Bill 537 would restore local control rather than rely on statewide standards and regulations under the Ohio Department of Natural Resources. The switch in state law to the latter was made about eight years ago.

“Numerous localities across the state have requested local control be restored due to the increasingly in appropriate placement of drill sites — many in highly populated areas,” Hagan told the House’s agriculture committee. “... This legislation will provide freedom to communities, not unelected bureaucrats, to decide what is best for them and their families.”

• Not Supporting: On Nov. 30, the Ohio Farm Bureau Federation announced it was not supporting Gov. John Kasich’s plan to increase taxes on oil and gas production and using the resulting proceeds to implement an income tax cut.

Members said any plan to increase the severance tax solely for the purpose of instituting an income tax cut. Instead, the group said any increase in the severance tax should be used to address local government funding, pay for infrastructure needs and economic development and mitigate negative impacts of oil and gas drilling on communities and the environment.

The stance came a day after Kasich appeared before the group urging support for the plan.

• Out-of-state Workers: The governor voiced “deep concern” on Dec. 5 that energy companies were hiring out-of-state workers for jobs in the state’s emerging production fields that should be going to Ohioans.

“We are currently looking at the possibility that these energy companies that have come into Ohio to extract our very valuable assets may not be hiring Ohioans,” the governor said. “That is a very serious matter.”

But the head of one industry group called Kasich’s comments off base.

“If we could quit trying to find ways to confiscate return on investment and instead try to put investment in the state of Ohio to work and try to figure out ways to quit punishing producers who are actually trying to expand ... here in the state of Ohio, perhaps we could move this state forward and expand the opportunity for everybody,” said Tom Stewart, executive vice president of the Ohio Oil and Gas Association.

• Amendment Fails: Hagan failed in his attempt to amend legislation on Dec. 11 that would have required natural gas companies to hire at least 60 percent of their work forces from Ohio.

Later in the week, Hagan and other Democrats held a press conference urging support for comparable legislation, saying oilfield jobs should be going to Ohioans.

“We have noticed an unbelievable amount of people coming in from Texas and Oklahoma and other states ... roughnecks that have been doing it for a long time... ,” Hagan said. “They stake their claim, do the drilling and then they take off. Ohioans are left with a promise of jobs that are not kept. It’s very disturbing.”

• Poll Backs Plan: A majority of Ohio voters questioned as part of a new Quinnipiac University poll said they supported Kasich’s severance tax plan. A total of 62 percent of 1,165 registered voters would support the severance tax hike if an income tax cut is part of the plan. Without an accompanying income tax cut, support dropped to 52 percent, with 38 percent opposing.

• Frack Jobs: On Dec. 19, the Ohio Petroleum Council touted a study that placed Ohio among the Top 10 state for the number of jobs gained by fracking-related activities.

The council noted that Ohio had more than 38,000 directly related to “unconventional gas and oil activity, a number expected to increase to 143,595 in 2020 and to 266,624 by 2035.”

Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.

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