C|M|LAW Associate Dean and Professor Heidi Gorovitz Robertson recently posted ODNR Revises the Rules on Unitization in Crain’s Cleveland Business’ Shale Report. The Ohio Department of Natural Resources recently revised its rules for oil and gas companies seeking to “unitize” large swaths of land for shale gas drilling. Longstanding state law — Ohio Revised Code section 1509.28, enacted some 48 years ago — allows drilling operators to request that ODNR approve a designated drilling unit, even if it means including land against some landowners’ wishes. Ohio property owners’ land can thus be “unitized” against their will. ODNR grants the unitization request if the driller’s access to that land is predicted to yield substantially more oil and gas from the pool than would be produced without access to that land, and the added value of that extra oil and gas makes the whole operation cost effective.
Under the revised rules, the agency put in place and clarified the requirements for what the applicant must provide in order for the agency to grant a unitization request. Requirements range from the mundane — a cover letter requesting unitization — to more complex factors, such as the identification of the geologic formation(s) to be developed, an estimate of the value of the recovery of oil and gas for each well proposed to be drilled in the unit area, and an estimate of the cost to drill and operate a well in the proposed unit –and much,much more.
The process seems far from trivial and can yield 100+ page applications. However, despite this major effort to clarify and intensify the unitization application procedures, ODNR’s decisionmaking process still lacks any formal or required mechanism for considering specifically any rights or wishes of the affected landowner.
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Robertson is a regular to contributor to Crain’s Shale Report. To read her other posts, see: