OEC Budget Priorities - Request for Support

April 7, 2015

TO: Members, Ohio House Finance Committee

Finance Committee Members and Staff-

The Ohio Environmental Council respectfully asks for your support for the following prospective amendments and funding requests to the Biennial Operating Budget - House Bill 64 (As Introduced). These requested improvements will build upon the Executive Budget's "blueprint" for natural resource conservation and environmental protection by:

  • Health and Safety: better protecting life, limb, and property during emergency events
  • Stewardship: better fulfilling our shared stewardship responsibility to care for Ohio's air, land, water and wildlife resources
  • Accountability: better transparency for certain government operations
  • Fairness: better opportunities for Ohioans to save money on utility bills and to connect to jobs

Protecting first responders and local communities during chemical fires, spills, leaks and other environmental emergency events

1. SERC study - Require the State Emergency Response Commission to review and report to the General Assembly on local and state agencies' emergency response capabilities and best practices. It has been more than a year since the chemical storage tank spill in Charleston, WV experienced serious water contamination following the rupture of a chemical storage tank and massive leak of chemicals into Elk Creek. This is a wake up call that Ohio should heed.

B.

- EPCRA removal

- undue delay

2. Protecting aquatic wildlife and holding oil + gas operators accountable

background checks on oil + gas applicants

- strengthened penalties on oil + gas violations

- headwater stream protection on oil + gas water withdrawals

3. Protecting soil + water resources and ensuring government accountability

- SWCD funding

- reporting of manure distribution

- critical natural resource area designation

- authorize audits of 401 certification

- require transparency of 401 certification

4. Conserving Ohio's forests for travel + tourism and water quality protection

- DOF mission

- DOF costs

- tax incentives

- better fund Wildlife Division's Heritage Database Program

5. Improving opportunities for average Ohioans to save money on utility bills and to connect to jobs and other important destinations

 Leverage the private market to help consumers save money on electric utility bills

- on-bill repayment amendment

6. EMERGENCY RESPONSE HC1224 – Trade secret chemical disclosure

Challenge: HC1225 – SERC report on best practices - Protecting local communities from a Charleston, WV-type chemical storage tank spill

It has been more than a year since Charleston, WV experienced serious water contamination following the rupture of a chemical storage tank and massive leak of chemicals into Elk Creek. This is a wake up call that Ohio should heed.

OEC Recommendation: Direct the State Emergency Response Commission (SERC) to review and report to the General Assembly on current emergency response capabilities and recommend best practices for the incident command in response to the need of state and local responders

Challenge: "Undue delay" in disclosure of trade secret chemicals to officials in emergency

The Governor's Budget directs an oil and gas well owner to submit to specified public officials the identification of trade secret chemicals involved in an emergency situation, without "undue delay." Because "undue delay" is not defined, the provision could actually cause delay.

Recommendation: To avoid any legal ambiguity and to help ensure the protection of public health and safety, we urge an  amendment to place a limit of one hour on the submission of the specified information to public officials.

7. COMMUNITY RIGHT TO KNOW (HC1229 – Removes EPCRA language)

Challenge: Singling out oil and gas industry for separate chemical inventory reporting

Together, proposed sections 1509.23 and 1509.231 of the Governor’s budget bill revises the state's compliance with the Federal Emergency Planning and Community Right-to-Know Act (EPCRA) by requiring specified chemical inventory information  be filed with the ODNR Oil + Gas chief in place of reporting to the State Emergency Response Commission,  local emergency planning committees, and the local fire departments which have jurisdiction over a facility, as is required by all other industries using chemicals over a certain threshold in Ohio.

These provisions pose several concerns from the OEC’s perspective:

  • This proposal stops direct reporting from oil + gas well owners to state and local emergency planners and fire departments nearest each well. Direct reporting was just reinstated a year ago, after a 12 year lapse.  .
  • The onus will be placed on local emergency responders and firefighters to seek out chemical inventory information from the ODNR, instead of having the information immediately and automatically provided to them by the industry.
  • The ODNR Oil + Gas chief would have the discretion to decide whether and to what extent to share the chemical information with the public, despite the fact that federal EPRCA law requires that information about chemical inventories at facilities be made available to the public.
  • ODNR’s proposed primary means of providing chemical information to first responders, through an internet-based database, will not always accessible, especially in rural areas with unreliable internet access.
  • Federal emergency planning law and Ohio emergency planning law both make hazardous chemical information available to the public for every other industry in the state. Why an exception for oil and gas drillers? 
  • Federal emergency planning law states that facilities must report information directly to state and local emergency planners and the fire departments nearest each facility, and says that states enacting their own emergency planning laws must make them consistent in “scope, content and coverage” with the federal law. No provision is made for a third party agency to receive this information.

Recommendation: Reject the Governor's Budget provision. If modernizing Ohio’s EPCRA compliance is a priority, we recommend that it be a priority for all industries that are subject to EPCRA, and that a proper statewide stakeholder process be developed to properly update the law.

8. OIL + GAS WELL SAFETY + PENALTIES

Challenge: Maintain Governor's Budget strengthening of Oil + Gas law and related penalties

OEC continues to commend Governor Kasich and Director Zehringer for their continuing efforts to improve Ohio’s oversight of the state’s booming horizontal drilling operations. The OEC generally supports the statutory changes related to Oil & Gas regulation proposed in the Governor's Budget, and belive most of the provisions improve upon current law.  Specifically we support, and urge the Committee to conserve the following are provisions in the Governor’s proposed budget:

  • Requiring oil and gas operators to register and submit to verification of background information under R.C.§1509.051
  • Notification of emergencies concerning oil and gas operations under R.C.§1509.232
  • Modernizing compulsory unitization of oil and gas operations under R.C.§1509.28
  • Strengthening penalties for violations under R.C.§§1509.33 and 1509.99

We recommend, though, several provisions in the Governor's Budget for renovation  and new construction.

Idle and Orphaned Well Program

An improvement to Ohio oil and gas law important to, which the House of Representatives was key in developing address safety of citizens in districts throughout the state unfortunately is missing from the Governor’s proposal.

In HB375 in the 130th General Assembly, OEC worked with House leadership and the industry on a proposal to increase the efficiency, accountability, and transparency of the ODNR Idle and Orphan Well Program.   These abandoned and unused wells -- especially the legacy wells that were abandoned before the existence of modern regulations -- can pose risks to safety, the environment, and development. These wells are scattered around the state and can be found in rural as well as urban areas. Experts believe that thousands of these wells likely exist in Ohio.

Our proposal, as passed by the House, would have required the ODNR Division of Oil and Gas Resources to:

  • Provide sufficient staff to identify, locate, and plug idle and orphaned wells located in Ohio;            
  • Develop and maintain an inventory of all known and suspected idle and orphaned wells located in this state;
  • Prioritize the plugging of idle and orphaned wells identified in that inventory based on the relative risk of those wells to public health and safety;
  • Report annually to the General Assembly on actual and projected expenditures and related well plugging activity for the immediate preceding and immediate upcoming fiscal years, respectively.

While that bill was not adopted by the Senate, the need for identifying and plugging idle and orphan wells is still an environmental and human safety priority. We believe that codifying the program along with the other statutory directives will results in increased productivity, efficiency, and accountability by the ODNR.

OEC thus recommends the Committee amend HB64 to include the reforms passed by the previous House in HB375 (130 GA).

Other reforms to Ohio Oil & Gas Law

While, again, we commend the Administration for proposing some improvements to Ohio’s oil and gas law, OEC still feels that there is work to be done to make sure our laws and regulations meet or exceed those in other shale producing states.  For example, OEC has drafted amendments for:

  • Increased setbacks or buffer zones between horizontal wells and homes, horizontal wells and drinking water supplies, and horizontal wells and ecologically sensitive areas;
  • Emergency rules mandating that all horizontal wells adopt approved spill prevention measures and approved secondary containment systems;
  • Prohibition on water withdrawals for horizontal wells from headwater streams, streams with low flow, and streams with federally or state endangered species.

1. PUBLIC TRANSPORTATION

Challenge/Opportunity: The Governor's Budget continues to underfund public transit, falling far short of what ODOT's own report recommends and depriving many Ohioans of reliable transportation to get a job.

OEC Recommendations: Substantially increase the Ohio's investment in public transit through GRF and by "flexing" more flexible Federal highway funds for public transit.

Discussion: "Ohio ranks near the bottom among states in spending on public transportation — just 63 cents per person annually, or less than 1 percent of its transportation budget. The result is an uncompetitive, unbalanced, and inadequate network of mass transit systems in Ohio that must cut service despite growing demands for ridership, raise fares, or both." --Toledo Blade editorial http://goo.gl/dcddXk. Less pithy but equally damning conclusions were reached in the recent Ohio Statewide Public Transit Needs Study (http://goo.gl/akTEZg) released in January by ODOT:

  • Ohio's transit systems need to provide an additional 37.5M public transportation trips over current levels (115M transit trips/CY ) to meet existing unmet demand.
  • An additional $96.7M in operating funding is needed to expand service to meet existing unmet demand, $47.5M for urban systems and $49.2M for rural systems.  Further, an additional $192.4M in capital investment is necessary to purchase new vehicles and infrastructure to meet current unmet demand.
  • If state funds covered 10% of transit spending, costs would equal $37M capital + $83M operating = $120M total ODOT funding goal in 2015.

The Governor's Budget proposes a $8.3M in GRF per FY, an increase of $1M in GRF per FY. This is progress, but it falls far short of what ODOT's own report recommended.

2. LAKE ERIE + INLAND LAKE PROTECTION

Challenge/Opportunity: The General Assembly is making progress (SB1-131GA; SB150-130gA) on reducing the threat of nutrient pollution and toxic algae in Lake Erie. Additional efforts are needed to further that progress to better protect Lake Erie and Ohio's inland lakes.

OEC Recommendations:

* Boost GRF funding for Ohio Sea Grant, Heidelberg University's National Center for Water Quality Research, and ODNR Healthy Lake Erie Fund.

* HC1313 – Lake Erie as Critical Natural Resource Designate the western Lake Erie Watersheds as a Critical Natural Resource Area. This recommendation is right out of the 2012 Directors' Report on Agricultural Nutrients and Water Quality (http://goo.gl/qxZ1mF)., which called for the development of  a nutrient management plan process s for crop and livestock operations. Our recommendation builds on this provision by ensuring these plans incorporate These nutrient management plans apply the results of appropriate soil nutrient test results and ing include to guide the adherence to a minimum set of best management practices based, in part, on the 4R model of using the Right Source of Nutrients at the Right Rate and Right Time in the Right Place.

* HC1314 – Manure application reports - Further close the "Manure Loophole" by requiring CAFO operators and Certified Livestock Managers (CLMs) to annually report to the ODAg director, by sub-watershed, the total amount of livestock manure that is applied by the owner or CLM or the ultimate recipient to which  livestock manure may be sold or transferred. This will better enable the ODAg to track nutrient applications and any correlated waterway hot spots for excessive nutrient loading.

The General Assembly is making solid progress to address nutrient pollution. But, as identified by successive studies including the 2012 Ohio Directors' Report (http://goo.gl/qxZ1mF), more efforts will be needed to protect Ohio's North Coast and inland shoreline economies that are so dependent upon good water quality for fishing and recreation.

3. SOIL + WATER CONSERVATION

Challenge/Opportunity: Help local farmers keep their soil on their land

OEC Recommendations: Boost GRF funding for ODNR Soil and Water Conservation Districts by $2M per FY Discussion: Currently, the state to local county match for soil and water conservation funding is only 80:20. The Governor's Budget flat funds this program at $2.9M per FY in the new biennium, the same level as for FY2015. Increased funding will enhance the efforts of local districts to assist farmers to effectively implement the "4 R" practices and make other soil and water conservation improvements.

4. STATE + PRIVATE FOREST CONSERVATION           

Challenge/Opportunity: Balance timber harvest with conservation and preservation

OEC Recommendations:

* Amend the statutory mission of the DOF to emphasize that the DOF shall be concerned with both forest development and forest conservation, including the designating and managing of forest lands for the goals of reestablishing and protecting in perpetuity  mature, old-growth, and future-old-growth forest habitat.

* Require the DOF to annually report to the General Assembly its timber harvesting program costs, including the cost of forest road maintenance. (HC1310 – Annual forest timber sales report)

* Offer tax incentives for private woodlot owners to restore and preserve mature forest habitat and/or stream or wetland buffers. (HC1312 – Forestry land tax deduction)

Discussion: The OEC is very concerned with the management philosophy of the ODNR Division of Forestry (DOF). We believe:

  • Forest "development," i.e. timber production, dominates DOF thinking and forest management for old-growth forest is all but an afterthought.
  • The public is not receiving the full benefit of its state forest system. See the comprehensive "Shawnee State Forest Economic Study" from October 2010 by Greenfire Consulting Group (http://goo.gl/4Pcut4Q).
  • DOF has poorly managed cuts near popular hiking trails and state near preserves. In addition to devastating the visitor experience, clear cuts invite destructive invasive species, expose soil to erosion, and forestall the restoration of old-growth forest.

5. STREAM + WETLAND PROTECTION

Challenge/Opportunity: Governor's Budget privatizes Ohio's water pollution control certification

OEC Recommendations:

* Preferred action: Reject the proposed authorization of independent Certified Water Quality Professionals. HC1226 – Removes CWQP language

* (HC1308 – Improves CWQP language) Alternative actions: Strengthen OEPA random audit provision of Governor's Budget to keep private consultants' efforts honest by authorizing discretionary and random audits prior to the issuance of 401 project certifications.

* Authorize OEPA to require public disclosure of certified water quality professionals, including posting information on the OEPA webpage identifying teh certified professional and all documents submitted to the OEPA by the certified professional and any agency audits.

Discussion: We are leery of the Governor's Budget proposal to privatize a portion of Ohio’s water pollution regulation via the establishment of private, independent Certified Water Quality Professionals under R.C.§6111.30. These provisions create a certified water quality professional (CWQP) program, along with striking the requirement for a “use attainability analysis” to be conducted on streams and wetlands, and replace it with “data sufficient to determine the existing aquatic life use”. Given Ohio EPA’s 35-plus years of conducting use attainability analyses as a routine part of their overall support for the water programs we are at a loss as to why the current law must be replaced, and even more concerned why it must be replaced with the privatization of the program. OEC believes that this novel proposal is not ready for prime-time and needs to be vetted with stakeholders and the public before the General Assembly even considers moving forward on any further discussion or deliberation of this proposal.  Thus, we recommend that the Committee remove these provisions from the bill. If the Committee however wishes to move forward, OEC has recommendations for providing necessary transparency and public accountability for the CWQPs as well as the ability for Ohio EPA staff to audit CWQP reports concerning impacts on sensitive watersheds and/or significantly sized projects.

Challenge: Water withdrawals by oil + gas industry threatens small streams and aquatic wildlife (HC1230 – Headwater stream protection from water withdrawals)

OEC Recommendation: Current Ohio law requires the applicant for an oil and gas production permit to identify each source of ground and surface water to be used at an oil and gas production well as well as the estimated rate and volume of any water withdrawals. Ohio law does now, however, empower ODNR to restrict water withdrawals. Our draft amendment would 1) require ODNR to consult with the ODNR Wildlife Division and the US Fish and Wildlife Service to determine whether a water withdrawal will impact any state or federally listed of endangered and threatened species and 2) require the ODNR to consult with the ODNR Division of Soil and Water Resources if the withdrawal is proposed to be from a primary headwater habitat stream to determine any impact of the withdrawal.