State vs Local Control of Oil and Gas Activity: Ohio

On February 17, 2015, in State ex rel. Morrison v. Beck Energy Corp. (Slip Opinion No. 2015-Ohio-485), the Ohio Supreme Court ruled, in a 4-3 decision, that Munroe Falls, a suburb or Akron, could not use local zoning laws to supersede or override the state of Ohio’s regulatory scheme for oil and gas activity. Recognizing that Ohio law “preserves certain powers for local governments, it gives state government ‘sole and exclusive authority’ to regulate the permitting, location, and spacing of oil and gas wells and production operations within the state.” The Ohio Supreme Court rejected the argument that the Home Rule Amendment to the Ohio Constitution grants to the city of Munroe Falls the power to enforce its own permitting scheme on top of the state system and does not allow a municipality to block drilling activities otherwise permitted by the state.

In that case, Beck Energy had obtained a state-issued permit in 2011 to drill a traditional well on private property in Munroe Falls. The city’s resulting suit claimed that Beck Energy had illegally sidestepped local ordinances, rendering its conduct illegal. The Ohio Supreme Court majority rejected Munroe Falls’ claim and held that a town cannot enforce oil and gas drilling regulations that conflict with statewide law and, hence, Munroe Falls had exceeded the limits of Ohio’s Home Rule Amendment. In Justice Terrence O’Donnell’s special concurrence he emphasized that while he agreed with the result, the scope of the majority’s decision was limited, stating: “it remains to be decided whether the General Assembly intended to wholly supplant all local zoning ordinances limiting land uses to certain zoning districts without regulating the details of oil and gas drilling” addressed in state law.

Even though courts in New York and Pennsylvania have ruled in favor of some level of local government control over oil and gas development, decisions rejecting similar local oil and gas activity bans were issued in New Mexico in 2015 by U.S. District Judge James Browning and in 2014 by Boulder District Court Judge D.D. Mallard (now at issue in the Colorado Court of Appeals).