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Statewide Oil and Gas Regulation Trumps Home Rule

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On February 17, 2015, in a much awaited decision, the Ohio Supreme Court issued its opinion in State ex rel. Morrison v. Beck Energy Corp., Slip Opinion No. 2015-Ohio-485.  In a four to three decision, the court held that the comprehensive oil and gas regulatory scheme found in Ohio Revised Code Chapter 1509 prohibits Munroe Falls from enforcing five ordinances regulating oil and gas well drilling.  The ordinances were found in the city’s zoning code and in another codified ordinance chapter specifically enacted to regulate and require permits for oil and gas well drilling within the city.

The majority found that the state legislature’s enactment of Chapter 1509 preempted the five specific city ordinances at issue.  In order to obtain the majority, however, the Court was constrained from declaring that all local regulation of oil and gas wells was preempted.  Interestingly, Justice O’Donnell, in a concurring opinion, left open the question of whether the General Assembly intended to totally preempt all local zoning ordinances. The concurrence also emphasized the limited scope of the decision, as it only related to the five Munroe Falls ordinances at issue in the case and the specific type of restrictions they imposed (which conflicted with the state statutes).

The dissent cited recent cases in other states where there was also a statewide regulatory scheme. In some of those decisions, the states’ legislatures expressly pronounced that the state regulations preempted all local ordinances on the same subject. However, the appellate courts there disagreed, finding that some local ordinances could survive if they did not conflict with the comprehensive statewide regulations.

One of the dissenters would have you believe the oil and gas industry has too much influence in Columbus and oil and gas wells will be drilled in upper income residential neighborhoods.  That has already occurred, for example, in Gates Mills, Ohio.

Thus, the door has not yet been closed on preemption of all local ordinances, which will be visited another day based on the concurring and dissenting opinions.

If you want to learn more about oil and gas well regulations, and the effect of local regulations that may still survive, contact Dale Markowitz at dmarkowitz@tddlaw.com.