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.
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.
Next month, the state’s most important environmental/conservation organization plans to give Taft its award for lifetime achievement as a consistent backer of policies and programs for clean air and water. So the governor who skipped his green fees is being recognized as Mr. Green. The Ohio Environmental Council says it will bestow the honor Nov. 10 at its annual “Green Gala” in Columbus.
Taft is being seen in hindsight as the kind of R who wasn’t afraid of standing up for the environment. That is a rarity in today’s GOP, where Rush Limbaugh routinely denounces tree-huggers as enviro-fascists, and the EPA is widely portrayed as a jobs-killing hydra. Of course, few remember that Republican President Richard Nixon created the EPA. Nor do they seem to recollect that Teddy Roosevelt — when he wasn’t hunting elephants or elk — is the patriarch of the national park system.
Taft gets credit for taking on his own party, which recently considered tapping water from the Great Lakes. He had supported strict limits on withdrawing water from Great Lakes feeder streams for industrial and mining purposes — those streams replenished Lake Erie. Taft believed the Great Lakes were resources that needed more protection from special interests; they did not need more abuse and exploitation.
Taft also favored reauthorization of the federal Clean Water Act, and he wanted Superfund legislation fixed to add so-called “brown fields,” which were old industrial sites that could be cleaned and put back into use as commercial real estate. He supported an energy policy that would have 25 percent of all U.S. energy coming from renewable sources by 2025. He pushed natural gas companies to set aside funds to help low income families pay their heating bills.
As far back as 2003, Taft was urging governors and Congress to take drastic action to stop the spread of the Asian carp, the giant jumping fish that now are in the Ohio River near Cincinnati. He called such invasive species “perhaps the most serious and potentially destructive threat” to Ohio’s natural ecosystem. His warning about all the invaders came too true. Since then, Emerald Ash Borers have appeared and destroyed too much of Ohio’s forestland. And Asian longhorn beetles are on the march in Clermont County, where the Department of Natural Resources and Forest Service have drawn battle lines against the pest. Taft worried about water pollution, too. He said too many beaches were closed from bacteria and sewage, and he saw the solution as “not better information about when to close the beach, it’s not having to close the beach in the first place.”
So Taft is getting a thoughtful reappraisal. He may have been comfortable at play on the country clubs. But his reputation is coming back from low ebb.
Do something other than veg out in front of the boob tube tomorrow night. Join a conversation about a topic on everyone’s mind: energy.
Tonight at 6 p.m. the Imago Earth Center (700 Enright Ave., Price Hill) kicks off its First Friday Conversations with a 20-minute video of Al Gore’s New Thinking on the Climate Crisis. Imago’s 2008-09 season features the year-long theme “Enhancing Earth by Getting ‘Off the Grid.’ ”
“Drawing on a broad understanding of ‘the grid,’ we’ll look at many aspects of unplugging from the current models of growth and consumption,” says an event announcement.
For more info, visit www.imagoearth.org or call 513-921-5124.
— Margo Pierce
Dan Whitten, a vice president at America’s Natural Gas Alliance, a Washington-based trade group, had already expressed opposition to the idea, on March 8 telling Bloomberg in an email: “Natural-gas production is a capital-intensive undertaking and we believe generally that fees should be directed to communities where we work, with careful consideration of the possible direct jobs impacts.”
Other trade organizations today spoke out against the increased tax rates, as they would prefer to take all the energy out of Ohio’s land and not pay higher taxes.
Thomas Steward, executive vice president of the Ohio Oil and Gas Association, told The Cleveland Plain Dealer that his organization will fight the tax increase when the plan goes before lawmakers.
"This sounds like something that would have come from the left," Steward said.
Among the methods of extracting the natural gas is a controversial process called fracking, which involves blasting pressurized slurries of water, chemicals and sand into ancient shale formations, thousands of feet below ground. CityBeat reported on Jan. 24 that 43 households have filed a class-action lawsuit in response various environmental hazards allegedly caused by fracking in Geauga County, Ohio. From the story:
Fracking in Ohio is booming rapidly, thanks in part to the barely tapped potential of the vast Utica Shale, a gassy, 445-million-year-old rock formation that lies beneath a third of the state, at a depth of around 7,000 feet. Until last year, only three permits had been granted for horizontal drilling into the Utica, but in 2011 the number exceeded 40.
In 2004 Ohio’s State Legislature repealed the abilities of elected local governments to regulate or refuse gas drilling, instead handing full authority to the industry-friendly Ohio Department of Natural Resources (ODNR). In 2005, the U.S. Congress ruled to exempt fracking from regulation under the Safe Drinking Water Act.
The gas extraction
process has been found to be so environmentally detrimental that
France and Bulgaria have banned the practice in their countries. New
Jersey is the only U.S. state where it is banned. CityBeat in
January reported that State Rep. Denise Driehaus (D-Price Hill) had
sponsored one of three state bills that would tighten fracking
regulations and Rep. Robert Hagan (D-Youngstown) introduced a bill to
put a moratorium on wastewater injection.
Kasich’s interest in reducing income taxes comes one year after his two-year budget cost counties, municipalities and townships $167.1 million, according the The Columbus Dispatch, which described the plan’s impact on the state in the following manner: “Kasich's budget slashes aid to local governments: Tuition hikes limited to 3.5% for higher education.”
Ohio’s budget deficit was $8 billion when Kasich offered his 2011 budget, which his administration said would save $1.4 billion through reform measures that included reduced funding for social service programs such as the health and developmental disability departments.
Despite the still existing state budget deficit, Kasich wants to reduce income taxes, even though his spokesman Scott Milburn proudly told Bloomberg that, “the governor has already cut taxes by more than $800 million.”
What happens when tree-huggers go to school? You get “Green & Healthy Schools.”
ALLY: Alliance for Leadership and Interconnection is a “citizen’s group providing leadership coaching and strategic guidance for policy development and implementation of environmental sustainability programs.” According to their Web site. And their first significant action in 2004 was to begin the Growing Green and Healthy Schools Network.
A performance audit for the Cincinnati Service Department
could save the city $3.7 million. The audit claims $2 million could be
saved every year if the city privately contracted solid waste collection
and street sweeping. An additional $1.7 million could be saved if the
city reduced overtime, sick leave and staffing levels. Along with other recommended savings measures, the changes could
amount to 7.9 percent of Cincinnati’s budget.
Trayvon Martin’s parents will be visiting Cincinnati today to take part in the national conference hosted by the Children’s Defense Fund. The conference will target violence and race-related issues.
Procter & Gamble and the U.S. Environmental Protection Agency have teamed up to improve environmental sustainability at manufacturing facilities and supply chains.
The worst U.S. drought in half a century is putting pressure on oil and gas companies to recycle and conserve water used for fracking. Fracking uses millions of gallons of water to free oil and gas from underground rock formations.
Gay marriage has generated $259 million in economic activity in New York City.
The Congressional Budget Office said repealing Obamacare would increase the deficit by $109 billion.
Voters sometimes punish politicians for bad weather.
Some scientists are saying the plot of The Amazing Spider-Man might not be too far off from reality.
Plan Cincinnati is expected to be approved by City Council Wednesday, according to Vice Mayor Roxanne Qualls. The plan was unanimously approved by the Livable Communities committee last night. Plan Cincinnati, which is Cincinnati’s first comprehensive plan in 30 years, emphasizes the city’s urban center through new infrastructure, transportation options and goals to make downtown residents stay in the area. CityBeat previously covered the plan in greater detail here.
At the request of the sole Democrat on the Hamilton County Board of Commissioners, a vote on the 2013 budget is being delayed by one week. Commissioner Todd Portune asked Commission President Greg Hartmann, a Republican, for the vote delay to address funding to juvenile courts and plans for future financial stability. Hartmann agreed to the delay, noting consensus is important for budget issues. The budget won’t raise taxes, but it could put 150 Hamilton County employees out of jobs.
Wastewater injection wells, which are used to dispose of fluids used during the fracking process, will soon be popping up around Ohio again. The wells are the first to get state approval since earthquakes around Youngstown in December were blamed on nearby wastewater injection wells. It’s clear little — not even earthquakes — will stop Ohio’s fracking boom, but at what cost? It is generally accepted switching from coal to natural gas would bring down pollution that causes global warming, but some findings from Australia suggest problems still lay ahead. One study found an abnormal amount of greenhouse gases around an Australian fracking site. Methane leakage in particular is a problem at natural gas sites because over 100 years methane is 25 times more effective at trapping heat than carbon dioxide, according to the Intergovernmental Panel on Climate Change.
Cincinnati home sales shot up in October, according to the Cincinnati Area Board of Realtors. The report paints a great picture for the city’s housing economy. Housing was one of the biggest sectors hit by the financial crisis of 2007-2008, so a recovery in housing is a sign the economic downturn could soon be a thing of the past.
University of Cincinnati researchers want to know if testing emergency-room patients for HIV makes sense. ER doctors worry about longer wait times, disrupted operations and possible interference with emergency services, but the health benefits could outweigh the negatives.
FirstGroup America is looking into moving from its Cincinnati headquarters. The company originally got a million-dollar tax incentive from the city for moving to downtown.
Ohio Gov. John Kasich hopes his rejection of Obamacare’s health exchanges will ignite some re-election fundraising. Kasich is up for re-election in 2014. Exchanges are subsidized, heavily regulated insurance markets that will go into effect in 2014 as part of Obamacare. They are supposed to bring down costs by offering more transparent, open competition through a fair, regulated marketplace. With Kasich’s rejection, the federal government will manage Ohio’s exchange.
Ohio Secretary of State Jon Husted finally had a good day in court on Saturday. In a reversal from the lower court’s ruling, the Sixth U.S. Circuit Court of Appeals said ballots without proper identification should not be counted. It’s estimated that, at most, the ruling will affect about 2,000 votes.
A Dayton man allegedly robbed the same bank twice.
Behold, the greatest thing the internet has ever created: The Spice Kittens livestream.
With a nose cell transplant, paralyzed dogs are walking again.
Not long before Earth Day, Arbor Day and other green-focused days there’s a vast call for volunteers to do all kinds of thing from trash pick up to planting more green stuff. But after it’s all done, there’s little information provided about what was accomplished.
Ohio Secretary of State Jon Husted is under fire for alleged voter suppression once again. In response to recent court rulings on provisional ballots, Husted sent out a directive on Nov. 2 that shifts the burden of proper identification during the provisional ballot process from poll workers to voters. The directive may not even be legal, according to a lawsuit quickly filed by voters’ rights activists in response to the new rule: “Ohio Rev. Code § 3505.181(B)(6) provides that, once a voter casting a provisional ballot proffers identification, ‘the appropriate local election official shall record the type of identification provided, the social security number information, the fact that the affirmation was executed, or the fact that the individual declined to execute such an affirmation and include that information with the transmission of the ballot.’”
President Barack Obama was at the University of Cincinnati yesterday to make a closing argument to Ohioans. In his speech, Obama compared his own ideas and policies to those of Bill Clinton, while comparing Mitt Romney’s ideas and policies to those of George W. Bush. With just two days of voting left, all eyes are on Ohio as it could play the decisive role in the presidential election. In aggregate polling, Obama is up 2.9 points in Ohio and 0.4 points nationally. FiveThirtyEight, The New York Times’ election forecast model, has Obama at an 86.8 percent chance to win Ohio and an 86.3 percent chance to win the election.
Early voters packed polling places around the state yesterday. The line around the Hamilton County Board of Elections wrapped around the entire building for much of the day. Butler County had a lot of early voters as well. Early voting was only available to all Ohioans yesterday thanks to a lawsuit from Obama and Democrats, which opened up in-person early voting during the weekend and Monday before Election Day despite strong opposition from state Republicans.
Election Day may be tomorrow, but the entire process may not be finished at the end of the day. In 2008, Ohio took weeks to count the last 490,852 ballots.
Slate reenacted the entire presidential campaign, from finding the Republican nominee to today, through video games.
Some in northeast Ohio are still without power due to Hurricane Sandy’s fallout. Most people affected are in Cleveland and surrounding suburbs.
Ohio gas prices are dropping.
Early results from air quality tests show no signs of pollution near shale gas drilling wells. But the results are early, and more tests are ongoing. CityBeat wrote in-depth about fracking and concerns surrounding the process here.
The deadline for Ohio’s exotic animal registration is today. The new requirement came about after an Ohio man released 50 exotic animals, including some dangerous predators, shortly before committing suicide in 2011.
A lonely Asian elephant learned how to speak some Korean, and scientists want to know how and why.