Transcript What Farmers Offered an Oil or Gas Well for "Free"

What landowners should consider if
offered a gas well for “free”
William Ziegler,
Field Supervisor
ODNR – Division of Oil
and Gas Resources
Management
Jan 14, 2014
History of Ohio’s Oil and Gas Industry
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Drilling for oil and gas in
Ohio began in the 1860s
By the 1880s, Ohio was the
world’s leading oil producer
Natural gas was initially
considered a by-product,
but usage began in the
1880s
Oil and Gas Fields of Ohio
• More than 225,000
wells drilled in Ohio
during last 150 years
• In 2012, there were
64,570 active wells in
Ohio
Division of Oil and Gas
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In the early 1960s, oil discovery in Morrow
County started a drilling boom
No spacing or conservation measures in place
Caused a national stir – wasting of resources
Under pressure, Ohio’s governor and state
legislature passed laws and rules in 1965 and
created the Division of Oil and Gas
ODNR – Division of
Oil and Gas Resources Management
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Since 2000, the Division of Mineral
Resources Management was responsible for
regulating all minerals extraction activities
including oil and gas, coal and industrial
mineral mining
In Oct. 2011, the oil and gas program
became stand-alone division at ODNR
Re-named Division of Oil and Gas Resources
Management
Responsible for regulating all oil and gas
activities from permitting to plugging.
Ohio Laws and Rules
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Chapter 1509:1 of
the Ohio Revised
Code
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The section of Ohio
Law that regulates Oil
and Gas activities
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Chapter 1501 of the
Ohio Administrative
Code
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Rules associated with
Ohio Oil and Gas Law
Registered Wells
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In 2012 there were 5,836 registered well
owners in Ohio
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4,368 domestic owners
1,468 commercial owners
Exempt Domestic Well
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Definition (1509.01):
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Owned by the landowner
Used primarily for owner’s domestic use
200 feet from a dwelling
200 feet from a public building, etc.
What landowners need to consider if
offered a gas well for “free”
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Understand the liability
Count the cost
Process for becoming an exempt well owner
Understand the Liability
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Well must maintain yearly production
Plugging responsibility
Restoration responsibility
Emergency plan for a spill or gas leak
Insurance
Count the Cost
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Purchase of the well
Brine disposal
Well maintenance
Cost of plugging
Cost of restoration
Non-refundable $100 application fee
Annual $60 fee
Process for becoming an Exempt Well
Owner
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Meet the exempt domestic well owner
requirements (1509.31):
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Owned by the owner of the land
Used primarily for the owner’s domestic use
Minimum of 200’ from a private dwelling or public
building
Release of Lease
Minimum of 5 acres
The current well owner is required to submit the
application and fee to the Division
Additional Sources
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Division of Oil and Gas Resources
Management website
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http://oilandgas.ohiodnr.gov/
Central Office
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Ohio Department of Natural Resources,
Division of Oil and Gas Resources
Management
2045 Morse Road, Building F2,
Columbus, Ohio, 43229-6693
(614) 265-6922