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The Suburbanite
  • Kasich signs new drilling law

  • Although it’s seen as Ohio’s new drilling law, Gov. John Kasich signed the law Monday in the offices of an alternative energy company.

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  • Observers tracking Senate Bill 315 tie it to drilling in the Utica shale, but when Gov. John Kasich signed the bill into law he did it at the offices of an alternative-energy company.
    Echogen Power Systems makes equipment that uses heat from smokestacks to drive turbines and generate electricity. It’s the type of alternative energy company that Kasich’s administration counts as a pillar of Ohio’s 21st Century Energy Policy.
    “This is a piece of legislation that will last 100 years in Ohio, there’s no doubt about that,” Kasich said.
    The 3,500-page bill is an independent energy policy that will be a role model for the rest of the country, Kasich said. It also will guide Ohio’s continued economic development, he said. “We have to do all we can do to meet our energy demands.”
    ENERGY, JOBS
    Monday’s event was billed as “transforming Ohio for growth, the energy to create jobs.” Kasich said the new law evolved from last September’s energy and economic summit, which identified 10 pillars for a comprehensive energy policy. Modernizing regulations for shale drilling led the list, but most of the pillars — generation, cogeneration, compressed natural gas (CNG), renewables, energy efficiency — lean toward alternative energy programs.
    Before signing the energy law, Kasich talked about support for wind and solar power, developing CNG vehicles and fueling stations, and co-generation systems, such as the equipment built by Echogen. “You can clean the environment and generate more energy for the customer,” Kasich said.
    But drilling regulations still took center stage.
    The oil and gas industry, which is using horizontal drilling and hydraulic fracturing to explore the Utica shale formation under eastern Ohio, has supported the new law. Environmentalist have been mixed. Some voiced lukewarm support, but many contend the law was rushed and doesn’t provide enough protection.
    Kasich’s administration said the law creates a combined well construction and hydraulic fracturing chemical disclosure requirement, requires companies to share details about chemicals in fracking fluid with doctors, sets daily fines for well operators who violate rules, orders companies to collect pre-drilling water samples up to 1,500 feet from a well site, requires companies to disclose the source for water used in drilling and fracking, and increases liability insurance for horizontal wells.
    “We have without a doubt the toughest law on fracking fluid in America,” Kasich said, later describing the new drilling regulations as a “breakthrough.”
    THRILLED BY DRILLING
    Kasich said he’s thrilled by efforts to drill the Utica shale, but added that Ohio won’t develop the shale fields at the expense of the environment. State officials are concerned about the environment, he said, “but we’re also not going to wreck our economy and hide under the bed.”
    Page 2 of 2 - After the signing, Kasich discussed his hope to increase the severance tax collected on oil and natural gas production, and use the higher tax to lower the state’s income taxes. The governor wanted the proposed increase in the new law, but relinquished when the industry and Ohio legislators balked.
    Kasich said he has talked with legislators and drilling companies about increasing the severance tax. He said he’s confident the tax will be modernized, which will lead to a cut in income taxes.
    “It’s really a matter of when, not if it will be done,” Kasich said.