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What landowners should consider if offered a 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. Drilling for oil and gas in Ohio began in the 1860s

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What landowners should consider if offered a gas well for “free”

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  1. 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

  2. History of Ohio’s Oil and Gas Industry • 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

  3. 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

  4. Division of Oil and Gas • 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

  5. ODNR – Division ofOil and Gas Resources Management • 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.

  6. Ohio Laws and Rules • Chapter 1509:1 of the Ohio Revised Code • The section of Ohio Law that regulates Oil and Gas activities • Chapter 1501 of the Ohio Administrative Code • Rules associated with Ohio Oil and Gas Law

  7. Registered Wells • In 2012 there were 5,836 registered well owners in Ohio • 4,368 domestic owners • 1,468 commercial owners

  8. Exempt Domestic Well • Definition (1509.01): • Owned by the landowner • Used primarily for owner’s domestic use • 200 feet from a dwelling • 200 feet from a public building, etc.

  9. What landowners need to consider if offered a gas well for “free” • Understand the liability • Count the cost • Process for becoming an exempt well owner

  10. Understand the Liability • Well must maintain yearly production • Plugging responsibility • Restoration responsibility • Emergency plan for a spill or gas leak • Insurance

  11. Count the Cost • Purchase of the well • Brine disposal • Well maintenance • Cost of plugging • Cost of restoration • Non-refundable $100 application fee • Annual $60 fee

  12. Process for becoming an Exempt Well Owner • Meet the exempt domestic well owner requirements (1509.31): • 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

  13. Additional Sources • Division of Oil and Gas Resources Management website • http://oilandgas.ohiodnr.gov/ • Central Office • Ohio Department of Natural Resources, Division of Oil and Gas Resources Management • 2045 Morse Road, Building F2, Columbus, Ohio, 43229-6693 • (614) 265-6922

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