A report released today suggests Ohio taxpayers could be on the hook for costs if something goes wrong at an oil and gas drilling operation.
The report from advocacy group Environment Ohio looks at the costs related to “fracking,” an extraction technique that involves pumping millions of gallons of water underground to unlock oil and gas reserves.
Recent technological advancements have spurred a boom in fracking, leading to hundreds of new wells in Ohio and thousands more around the nation.
When oil and gas companies obtain a permit to build a fracking well, they typically have to provide some financial assurance to the state in case something goes wrong. In Ohio, that assurance comes through bonds and specific insurance requirements.
If a well operation is completed without a problem, the cost of the bonds is returned to the operator. If something goes wrong, the company has to fix the mess before it gets its money back.
But Environment Ohio finds companies in Ohio only have to secure $5,000 in upfront bonds per well. That’s not enough for a company to fear the financial consequences of a disaster, which means it could act recklessly with little disincentive, according to the report.
The report says that could pose a huge cost to taxpayers: Simply reclaiming a well and its property can cost hundreds of thousands of dollars. Actually paying for damages, such as contaminated groundwater and ruined roads, can cost millions.
Under normal circumstances, private and public entities could sue for the damages, but that’s unrealistic if a well operator goes bankrupt or is otherwise unwilling or incapable of paying.
Another potential problem: The bond payments are only held by the state until a well is plugged and the site is reclaimed to the satisfaction of state operators. That doesn’t account for health and environmental damages that can surface after a drilling operation ends, according to the report.
The issues are further compounded by loopholes, which allow companies to avoid bonding requirements altogether if they prove they hold a certain amount of in-state assets. Environment Ohio calls it “an exceedingly easy test to meet.”
In what it calls “common sense” reforms, Environment Ohio says the state should impose more assurances for longer periods of time. The organization favorably cites other states that require $250,000 in upfront bonds — much higher than Ohio’s $5,000. For companies, that would mean a much higher financial hurdle when taking on a fracking project, but the high cost could provide a powerful incentive to avoid dangerous risks.
The report also finds that insurance requirements in the state are weak, with operators required to fulfill a $5 million liability cap regardless of whether they’re running one well or 100.
The organization recommends Ohio work to build stricter financial and regulatory safeguards.
“At a minimum, Ohio needs an adequate severance tax to fund impacts on communities and provide a cushion for long-term risk management,” said Wendy Patton, director at left-leaning think tank Policy Matters Ohio, in a statement released by Environment Ohio.
An oil and gas severance tax was suggested by Republican
Gov. John Kasich to pay for income tax cuts, but Republican legislators
rejected the proposal.
The report’s findings were not exclusive to Ohio. It also found issues and suggested solutions for other states and the federal government, including a similar call for stronger bonding requirements on federal lands.
CityBeat covered the fracking boom and its effects on Ohio in further detail here.
It may become more expensive for the city to issue debt after Moody’s downgraded the city’s bond rating. The credit rating agency pinned the blame on the city’s exposure to local and state retirement systems, as well as the city’s reliance since 2001 on one-time sources to balance the operating budget. Still, Moody’s does give the city some credit for its economically diverse population and recently stabilized earnings tax, despite docking the city for bad socioeconomic indicators, particularly resident income levels and historical unemployment rates.
The Greater Cincinnati Port Authority’s CEO Laura Brunner is apologizing to the public and council members
following the exposure of an email that implied she was trying to keep a
critical parking memo away from public sight. Brunner says she was just trying
to buy time so she could directly show the memo to the Port Authority’s
board before it was reported by news outlets, but she acknowledges that
her email was ill-conceived and came off as an attempt to stifle
transparency. The memo suggests Cincinnati is getting a bad deal from its parking lease agreement with the Port Authority and several private operators, but the Port Authority and city officials argue the memo is outdated and full of technical errors.
The Cincinnati Enquirer has a report detailing political contributions from oil and gas companies that may have helped bring down a state “fracking tax,” which was supposed to raise state revenue from Ohio’s ongoing oil and gas boom. Apparently, many of the Republican legislators who staunchly opposed the oil and gas severance tax also took in a lot of money from the same companies who would have to pay up. The tax proposal was effectively dead on arrival, even with the hyperbolic support of Republican Gov. John Kasich. Fracking is an extraction technique that pumps millions of gallons of water underground to free up oil and gas. CityBeat covered its effects on Ohio in further detail here.
Water utility leaders are meeting in Cincinnati this week to discuss sustainable business models. In Cincinnati, water usage has dropped while expenses to treat water and waste water have escalated, causing the Metropolitan Sewer District to take in less money. The conference will discuss models that can adjust around this trend while keeping rates low for customers.
The owners of The Hanke Exchange, a collection of buildings in Over-the-Rhine, say occupancy is going up as a result of the promise of the Cincinnati streetcar. The property is now at 84 percent occupancy rate, up from 28 percent three years ago.
Dayton and Cincinnati will hold rallies Saturday showing support for Trayvon Martin, the unarmed black 17-year-old who was killed by George Zimmerman last year. Zimmerman was acquitted of murder by a jury last Saturday.
Richard Cordray, the former Ohio attorney general, was confirmed to direct the federal Consumer Financial Protection Bureau, the top agency that will regulate the financial institutions that played a role in causing the Great Recession.
The Hamilton County Young Democrats are hosting a free event today to meet Democratic State Sen. Nina Turner, who’s also running for secretary of state next year against Republican incumbent Jon Husted.
If the sun suddenly went out, humanity could take a few weeks to die out and perhaps live in Iceland.
The Ohio Rights Group could be asking voters to legalize medical marijuana and industrial hemp statewide in 2013 or 2014. The Coalition for a Drug-Free Greater Cincinnati says drug approval should be up to the Food and Drug Administration (FDA), but that may not matter because polls so far shows medical marijuana getting widespread approval from Ohio voters. The Ohio Rights Group argues its amendment would help Ohioans by opening up better health treatments and boosting the economy. Whether that will be enough to land the issue on the ballot remains to be seen.
Mayor Mark Mallory revised the city manager’s budget plan
to carry out less layoffs but more cuts to outside spending and
recreation centers. Mallory's changes will restore 18 firefighter
positions, 17 police positions, three inspector positions at the Health
Department and two positions at the Law Department, reducing the total
layoffs to 161, with 49 of those being police positions and 53 being
firefighter positions. But it will come with more cuts to third-party
agencies, including the Greater Cincinnati Port Authority, the Center
for Closing the Health Gap and Cincinnati USA Regional Chamber of
Commerce, and two closed recreation centers. The plan will also use
about $500,000 in recently discovered revenue. Mallory said the layoffs and cuts have to be made in part because of multiple outside factors, including reduced state funding and courts holding up the city's parking plan.
The first hearing on the city's fiscal year 2014 budget proposals will be tonight at the Duke Energy Convention Center at 6:30 p.m. The public will be asked to give feedback on the budget plan put forward by the city manager and mayor, which would lay off 161 city employees, including cops and firefighters, to help balance the city's $35 million operating budget deficit.
CityBeat editorial: "Cincinnati's 1 Percent."
The Ohio Department of Transportation has raised its estimated price for the MLK/I-71 Interchange project by about $10 million to $30 million after meetings with business owners in Cincinnati's uptown area. It's so far unclear how the project's costs will be divided between the city, state and federal governments. Originally, Cincinnati was looking to pay for its share of the project through its plan to lease the city's parking assets, but that plan is being held up in court.
City Council approved a resolution yesterday supporting a statewide ban on injection wells used to dispose wastewater during the hydraulic fracturing — "fracking" — process, a drilling process that injects millions of gallons of water underground to unlock natural gas and oil reserves. The injection wells are a vital part of a fracking boom that has helped revitalize economies in Ohio and other states and could help combat climate change, but environmentalists and health advocates are concerned about the unintended consequences the wells could have on nearby water sources ("Boom, Bust or Both?" in issue of June 6, 2012).
The Ohio House approved changes to the state's third grade reading requirement that will relax standards teachers must meet to provide reading instruction and tutoring services for young students. The current law requires teachers to have taught reading for at least three years, but the bill approved by the Ohio House would eliminate that requirement.
The Hamilton County Board of Elections sent two more voter fraud cases to the prosecutor, but the question remains whether the dozens of people who filed provisional ballots and absentee ballots are actually in the wrong — an issue that will be ultimately decided by Ohio Secretary of State Jon Husted.
Ohioans, including CityBeat’s most dazzling staff member, apparently enjoy swearing.
Before the IRS harassed tea party groups, it harassed gay rights groups.
No further explanation necessary: "Police: Man used grenade to rob Hamilton bank."
Scientists have created the first cloned human embryo.
A new laser scanner can detect someone watching you from a kilometer away.
Yesterday, Hamilton County Judge Robert Winkler gave a ruling that effectively opened the parking plan to referendum, but city officials said the decision poses major fiscal and legal challenges to the city. Mayor Mark Mallory and City Manager Milton Dohoney Jr. said the lack of a parking plan will force the city to lay off 344 employees, including 80 firefighter and 189 police positions, to balance fiscal year 2014’s budget in time for July 1, and City Solicitor John Curp said the ruling, which concludes emergency clauses do not eliminate the possibility of a referendum, greatly hinder the city’s ability to expedite the implementation of laws. The parking plan, which was previously approved by City Council, would lease the city’s parking assets to the Port of Greater Cincinnati Development Authority to help balance the budget for the next two years and fund economic development projects, but the court ruling means the plan must be put on hold at least until a referendum effort is complete.
Ohio Democrats say Gov. John Kasich’s local government funding cuts are to blame for Cincinnati’s budget woes. In a statement, Chris Redfern,
chairman of the Ohio Democratic Party, said, “Make no mistake, the only
reason Cincinnati has been forced to debate firing hundreds of police
and firefighters is because Gov. Kasich cut tens of millions of dollars
to the city in his last state budget. As communities like Cincinnati
struggle to deal with the last round of cuts, Kasich’s at it again,
proposing to steal another $200 million from local communities to help
pay for tax giveaways to the rich. If Kasich gets his way and passes his
proposed handout to his friends, more communities across the state will
see layoffs, skyrocketing local tax levies, and deep cuts to schools.”
Kasich’s local government funding cuts have caused Cincinnati to lose
$40.7 million in state funding over two years, according to Policy Matters Ohio. CityBeat covered Kasich’s local government funding cuts here and his budget proposal here.
A study found a wastewater injection well used for fracking caused Oklahoma’s largest-ever earthquake. The findings echo fears from Youngstown residents, who experienced an earthquake early in 2012 that was pinned on nearby wastewater injection wells, which are used to dispose of waste produced during the fracking process. CityBeat covered fracking, the relatively new drilling technique that injects water underground to open up oil and gas reserves, in further detail here.
In private budget news, a survey by Card Hub found Cincinnati residents have some of the nation’s worst budgeting habits. In the 30-city survey, Cincinnati ranked No. 28 for budgeting habits, ahead of only Tampa, Fla., and Orlando, Fla. Boston was ranked No. 1 in the nation.
The Port Authority is carrying out a demolition in Jordan Crossing that will pave the way for $75 million in redevelopment. Mayor Mark Mallory described his experience with the development, “This has been a source of frustration, but also a source of hope. … This area is prime for job creation and redevelopment.”
State legislators are once again trying to get student members of schools’ board of trustees the ability to vote — a move that would empower students in public universities. The bill was introduced last year, but it died a slow death after facing opposition from administrators at Ohio University and Bowling Green State University. Gov. John Kasich and Ohio State officials reportedly support the idea.
A Sunday school teacher at a local church near Dayton was fired after declaring her support for same-sex marriage.
Cincinnati Financial Corp. and Meridian Bioscience Inc. were named among the country’s most trustworthy firms.
New national science education guidelines say climate change should be in classrooms.
Caffeine-addicted bacteria die if they get decaf. Scientists say they want to use the bacteria to clean caffeine-polluted waterways.
A Purcell Marian High School administrator was fired for declaring his public support for same-sex marriage. Mike Moroski, who was the assistant principal at the Catholic school, wrote about his support for LGBT equality on his personal blog. Following the blog post, Moroski claims he was given an ultimatum by the Archdiocese of Cincinnati to resign or recant his statements. CityBeat covered same-sex marriage and the amendment that could bring marriage equality to Ohio here.
A board vote failed to remove State Board of Education President Debe Terhar from her position. In response, Ohio Democrats filed a lawsuit seeking access to her cell phone and other records. Terhar has been receiving heavy criticism for a Facebook post that compared President Barack Obama to Adolf Hitler. CityBeat wrote about Terhar’s ridiculous Facebook post here.
Cincinnati Public Schools and Winton Woods City Schools were among nine city school districts found to be scrubbing attendance data by the state auditor. The school districts claim most the errors were simple mistakes, not intentional manipulation of data. Both the auditor and schools agree state policy is too confusing and must change.
The city of Cincinnati is beginning the process of sorting through construction bids for the streetcar. Three bids ranging from $71 million to $87 million have already come to light, according to The Cincinnati Enquirer. The bids could push up the price tag on the streetcar, but Meg Olberding, city spokesperson, cautions the process is barely starting. CityBeat covered the streetcar and how it relates to the mayor’s race here.
Cincinnati is speeding up the demolitions of condemned buildings this year, particularly buildings near schools and family zones.
A new report from the Ohio Department of Job and Family Services found employment in the shale industry was up 17 percent in the first quarter of 2012. Critics caution the jobs aren’t worth the risks — pointing to a number of environmental and health concerns related to hydraulic fracturing, or “fracking.” CityBeat wrote about fracking and its extensive problems here.
One in 25 students in Columbus schools are restrained or secluded. The state’s lax seclusion policies have been under heavy criticism in the past year following the discovery that school staff were using seclusion for convenience, not just to restrain students.
On Wednesday, Metro staff will be holding a security exercise meant to gauge counterterrorism capabilities. Metro bus service will not be affected.
The Horseshoe Casino pays homage to Liuzhou, China — Cincinnati’s sister city of 25 years.
The chief curator resigned from the Cincinnati Art Museum.
A Cincinnati woman was charged with helping her daughter beat up a student during a classroom brawl.
Curiosity is officially the first robot to drill another planet.
The resolution expresses council’s dissatisfaction with the Ohio Legislature for granting “special privileges to the oil and natural gas industry” and asks it to repeal any laws that pre-empt local control over drilling.
The resolution targets the controversial practice of hydraulic fracturing or “fracking,” which uses chemically-laced water to free up natural gas trapped in shale formations underneath Ohio.
Fracking opponents worry that the chemicals used in the fluid — which companies aren’t required to disclose — can be toxic to people and animals.
Prior to the council vote, Vice Mayor Roxanne Qualls and Councilwoman Laure Quinlivan held a news conference on the steps of City Hall.
“I believe local officials should have a say on all matters related to potentially hazardous activities such as fracking,” Quinlivan said in an emailed statement. “I urge my colleagues to send a strong message to the Ohio Governor, the Ohio Legislature, and Cincinnati residents by passing this resolution.”
A 2004 state law puts regulation of oil and gas drilling
under the state’s purview, preventing municipalities from regulating
drilling on their land.
Copies of the resolution will be sent to Gov. John Kasich and members of the Ohio General Assembly elected from the Cincinnati area. The resolution comes after Ohio recently lifted a moratorium on new injection wells, which shoot wastewater deep underground for storage.
There had been a temporary ban on new wells almost a year ago after seismologists said an injection was to blame for 11 earthquakes around the Youngstown area.
City council in August passed an ordinance to band injection wells within city limits. Because the injection well ban doesn’t mention drilling, council hoped it wouldn’t clash with the state law preventing local regulation of oil and gas drilling.
It will soon be official. Vice Mayor Roxanne Qualls will announce her mayoral campaign on Thursday at 10 a.m. Qualls has already announced her candidacy and platform on her website. Qualls will be joined by term-limited Mayor Mark Mallory, which could indicate support from the popular mayor. Right now, Qualls’ only known opponent is former Democratic city councilman John Cranley, who has spoken out against the streetcar project Qualls supports.
As part of City Manager Milton Dohoney’s budget proposal, anyone who lives in Cincinnati but works elsewhere could lose a tax credit. The budget proposal also eliminates the property tax rollback and moves to privatize the city’s parking services, which Dohoney says is necessary if the city wants to avoid 344 layoffs. The mayor and City Council must approve Dohoney’s budget before it becomes law. City Council is set to vote on the budget on Dec. 14. Public hearings for the budget proposal will be held in City Hall Thursday at 6 p.m. and in the Corryville Recreation Center Dec. 10 at 6 p.m.
Vice Mayor Qualls and Councilwoman Laure Quinlivan are pushing a resolution that demands local control over hydraulic fracturing, or “fracking,” activity. But the resolution will have no legal weight, so the state will retain full control over fracking operations even if the resolution is passed. Qualls and Quinlivan will also hold a press conference today at 1:15 p.m. at City Hall to discuss problems with fracking, which has come under fire by environmentalist groups due to concerns about air pollution and water contamination caused during the drilling-and-disposal process.
Greater Cincinnati hospitals had mixed results in a new round of scores from Washington, D.C.-based Leapfrog Group.
In an effort to comply with cost cutting, the Hamilton County recorder is eliminating Friday office hours.
The Ohio-Kentucky-Indiana Regional Council of Governments is looking for feedback for the Tristate’s transportation and economic plans.
This year’s drought is coming to an end in a lot of places, but not southwest Ohio.
The Ohio Senate passed a concussion bill that forces student athletes to be taken off the field as soon as symptoms of a concussion are detected.
As the state government pushes regulations or even an outright ban on Internet cafes, one state legislator is suggesting putting the issue on the ballot. State officials argue unregulated Internet cafes are “ripe for organized crime” and money laundering. An Ohio House committee is set to vote on the issue today. If passed, the bill will likely put Internet cafes that use sweepstakes machines out of business.
Ohio Gov. John Kasich could be preparing for a 2016 campaign. Kasich was caught privately courting Sheldon Adelson, the casino mogul who spent millions on Newt Gingrich and Mitt Romney’s failed campaigns for the presidency. The early meetup shows how valued super PAC funders are to modern political campaigns. State Democrats criticized the meeting, saying it was Kasich “actively positioning to be the next Ohio darling of the special interests.”
Ohio Sen. Rob Portman had a bit of trouble giving a speech on the federal debt yesterday. Hecklers repeatedly interrupted Portman, a Republican, as he tried to speak. The final protesters were escorted out of the room as they chanted, “We’re going to grow, not slow, the economy.” Portman says his plan is to promote growth. But both Democrats and Republicans will raise taxes on the lower and middle classes, according to a calculator from The Washington Post. Tax hikes and spending cuts are typically bad ideas during a slow economy.
U.S. House Speaker John Boehner is facing the wrath of his tea party comrades. The far right wing of the Republican Party is apparently furious Boehner purged rebellious conservative legislators out of House committees and proposed $800 billion in new revenue in his “fiscal cliff” plan to President Barack Obama.
To help combat fatigue at space stations, NASA is changing a few light bulbs.
Does this dog really love or really hate baths? You decide:
Ohio’s fracking boom might not be living up to the hype. The Ohio Department of Natural Resources originally estimated that 250 fracking wells would be built by the end of the year, but only 165 have been completed and 22 are currently being built. The disappointing results are being blamed on low natural gas prices and a backlog in work needed to connect wells to customers. Maybe the state’s claim had as much basis as Ohio Gov. John Kasich’s claim that the state’s fracking boom would be worth $1 trillion.
By killing the heartbeat bill and a bill that defunds Planned Parenthood, Ohio Senate President Tom Niehaus, a Republican, apparently declared a war on babies, according to anti-abortion groups. Niehaus is term-limited, so he will not be in the Ohio Senate in the next session, which begins next year. Incoming senate president Keith Faber already said the heartbeat bill could come up to vote in the next Senate session. CityBeat previously wrote about Ohio Republicans’ renewed anti-abortion agenda.
Between 2011 and 2012, Cincinnati had the 12th best economic performance in the United States, according to a Brookings Institute study. Out of the 76 metropolitan areas looked at, only Dallas; Knoxville, Tenn.; and Pittsburgh have recovered from the recession, and 20 areas lost more ground throughout the year.Media Bridges, Cincinnati’s public access media outlet, is the latest victim of the 2013 budget proposal from City Manager Milton Dohoney Jr. The budget plan suggests slashing $300,000 from the organization’s funding. When coupled with state funding cuts, Media Bridges is losing $498,000 in funding, or 85 percent of its budget. Tom Bishop, executive director of Media Bridges, compared the cuts to a “meteor” hitting Media Bridges’ budget. The city says cuts were suggested in part due to public feedback.
The Greater Cincinnati Homeless Coalition is pushing the public to speak out against $610,770 in cuts to human services funding in Dohoney’s proposed budget. Mayor Mark Mallory and City Council have already agreed to continue 2013 funding at 2012 levels, but homeless advocates want to make sure the funding, which largely helps the homeless and low-income families, remains. The group is calling for supporters to attend City Council meetings on Dec. 5 at 1:15 p.m. at City Hall, Dec. 6 at 5:30 p.m. at City Hall and Dec. 10 at 5:30 p.m. at the Corryville Recreation Center.
It’s commonly said Cincinnati is Republican territory, but after the latest elections, that’s looking more and more false.
The University of Cincinnati is stepping up safety efforts around campus. The university held a summit to gather public feedback on possible improvements in light of recent incidents in and around campus. Beginning in January, UC will increase patrols by 30 percent.
Crime around Columbus’ Hollywood Casino has ticked up. Could Cincinnati face a similar fate when the Horseshoe Casino is up and running? A Washington Post analysis found casinos bring in jobs, but also bankruptcy, crime and even suicide.
Results equal funding. That’s the approach Gov. Kasich is taking to funding higher education, but Inside Higher Ed says the approach is part of “an emerging Republican approach to higher education policy, built largely around cost-cutting.” Kasich’s approach is meant to encourage better results by providing higher funds to schools with higher graduation rates, but schools with funding problems and lower graduation rates could have their problems exacerbated.
Josh Mandel, state treasurer and former Republican candidate for the U.S. Senate, insists his big loss in November does not make him a political has-been. Mandel will be pursuing a second term at the Ohio treasurer’s office in 2014. Mandel lost the Senate race despite getting massive amounts of funding from third parties — Democrats estimate $40 million — to support his campaign.
The auto industry is still chugging along with impressive numbers from November.
Gas prices moved down in Ohio this week.
One geneticist says people are getting dumber, but he doesn’t seem to have much to back his claims up.