by German Lopez
Environment Ohio finds taxpayers could be forced to pay millions for cleanups
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
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.
recommends Ohio work to build stricter financial and regulatory
“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
CityBeat covered the fracking boom and its effects on Ohio in further detail here.
by German Lopez
City debt outlook worsens, Port apologizes for email about parking memo, fracking tax fails
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.
by German Lopez
Interactive map shows Ohio counties are part of national trend
A new interactive map shows hydraulic fracturing, or "fracking," is flourishing in U.S. areas where water is already scarce — a potentially bad sign for Ohio counties that are allowing the water-intensive drilling process within their own borders.The map from advocacy group Ceres shows northeast Ohio counties with fracking activity are made up of low, medium-to-high and high stress areas, with most of the identified fracking wells in medium-to-high and high stress areas.The website explains Ohio's experience is actually better than the national trend: "In the map below, one can see that almost half (47 percent) of shale gas
and oil wells are being developed in regions with high to extremely high
water stress. This means that more than 80 percent of the annual
available water is being withdrawn by municipal, industrial and
agricultural users in these regions. Overall, 75 percent of wells are
located in regions with medium or higher baseline water stress levels."Fracking is a relatively new drilling process that involves pumping millions of gallons of water underground to fracture shale and reveal oil and gas reserves. CityBeat previously covered Ohio's fracking boom in further detail here.
by Hannah McCartney
Posted In: News
at 11:18 AM | Permalink
Lack of information, understanding of industry spurs halt
Ohio environmentalists and conservationists won a small victory in the fracking industry today when Muskingum Watershed Conservancy District decided to halt all water sales from Ohio's largest contained watershed to drillers in the oil and gas industry. Environmental groups have expressed concern that the watershed's water supply could be sold for use in fracking, a fairly new drilling technique in which thousands of gallons of chemical-laden water are shot into the earth in order to fracture shale and free natural oil and gas. Critics of the process say more research is needed on the technique to fully understand fracking's long- and short-term environmental and economic effects. (Read CityBeat's June 6 cover story, "Boom, Bust or Both?" about Ohio's fracking industry, here.)The decision to postpone the sales will be held until data is received in a water-availability study that's currently underway. Pending analysis of the study's results, MWCD plans to update its water supply policy to help deal with interested clients in the future.
believe strongly that it is in the best interest of the public we serve
and the conservancy district to not entertain any water supply requests
until this study has been completed and the MWCD has had an opportunity
to update its water supply policy for review, public discussion and
consideration of the MWCD Board of Directors,”said John M. Hoopingarner, MWCD executive director/secretary in a press release. The MWCD will honor its preexisting agreement to provide Gulfport Energy Co. with 11 million gallons of water from Clendening Lake in Harrison County.
0 Comments · Wednesday, May 16, 2012
The first in a series of nine events in
cities across Ohio, culminating with a rally at the Columbus statehouse,
kicked off in Cincinnati last week to protest the use of fracking
across the state of Ohio.
0 Comments · Wednesday, April 29, 2009
A few weeks ago, my friend Julie and I were walking the sidewalks of downtown and decided to take a No. 1 bus to Mount Adams. It was a nice spring afternoon, and we wanted to take in the sights up on the hill. While walking in Mount Adams, I couldn’t help but notice all the cars parked on the hilly streets.