To: Rick Simmers, Chief, ODNR Dept of Natural Resources and Governor Mike DeWine
Stop Allowing Oil and Gas Companies to Seize Private Assets for Personal Economic Gain
Stop the process of mandatory pooling in the state of Ohio. A mandatory pooling order is issued when an oil and gas operator does not have the acreage necessary to complete a drilling unit. When a person is mandatory pooled, the oil and gas company is permitted by the State of Ohio to seize the person’s mineral assets. Currently, a hearing takes place in front of a biased and pro-drilling panel which makes recommendations to the Chief of Oil and Gas Resources Management at the Ohio Department of Natural Resources, who has sole authority to issue or deny a mandatory pooling order. This procedure is not consistent with due process rights and undermines the judicial practice that is supposed to ensure justice in a free society. The Ohio and U.S. Constitutions protect due process rights, which brings the constitutionality of this law into question.
Why is this important?
The properties of Massillon, Ohio resident and Viet Nam veteran Jim Huebner and 14 of his neighbors were mandatory pooled into a drilling unit in November, 2013. Everflow Eastern Partners, LLC requested a pooling order from the Ohio Department of Natural Resource’s (ODNR) Technical Advisory Council (TAC). Everflow’s Leasing Manager, Les Dunics, told TAC that he had Massillon City property leased when in fact the city had not yet signed a lease for 8.10 acres of city-owned roadway within the drilling unit.
The chief of the ODNR Division of Oil and Gas Resources Management approved the pooling order on December 10, 2013. On the same day Everflow was issued a permit to drill, though they did not have the necessary acreage under lease and had knowingly given false testimony to the TAC. The fact that TAC nor The Chief took the time to review the evidence provided illustrates the way in which the ODNR merely serves as a rubber stamp for the oil and gas industry to do as they please.
To further demonstrate the way in which ODNR acts as a rubber stamp for oil and gas: by law (ORC 1509.38) the TAC must have eight members, six of which represent oil and gas producers, one to represent landowner royalty interest, and one member to represent the public. Effectively, seven of the eight council members represent the oil and gas industry. The public representative’s seat has not been filled for several years because the Governor of Ohio has not appointed anyone to that position.
What the Stark Summit Coalition want to know is: Why didn’t the TAC or the Chief review Everflow’s leases before issuing the mandatory pooling order and permit? And why are the legal proceedings weighted so heavily in favor of oil and gas?
Had the TAC and the Chief reviewed the leases, an order would have never been issued and neither would the permit. Had there been a balanced process and representation, evidence would likely be reviewed.
Mr. Huebner had thirty days to file an appeal with the Ohio Oil and Gas Commission and he did. Since Everflow had the permit, they could technically drill if they wanted to. Mr. Huebner also had to file a request for a Stay of Execution of the Mandatory Pooling Order to attempt to prevent any drilling from occurring while he was going through the appeal process.
As the primary basis of his appeal and request for a Stay of Execution, Mr. Huebner alleged that Everflow provided the TAC, and consequently the Chief, false information regarding their lease agreements with the City of Massillon, as Massillon’s City Council had not approved the lease agreement, and backed up the allegation with documentation. As a result, the Chief revoked the drilling permit and the pooling order. Mr. Huebner is still working on his Stay of Execution and appeal because Everflow Eastern now has 30 days to appeal the revocation order.
MANDATORY POOLING HAS TO STOP:
1. A Mandatory Pooling Hearing takes place in front of a biased and pro-drilling panel; the TAC. This procedure is not consistent with due process rights and undermines the judicial practice that is meant to ensure justice in a free society. The Ohio and U.S. constitutions protect due process rights, which brings the constitutionality of this law into question.
2. Pooled person(s) do not have representation on the TAC when the request is made to pool. It is unjust to force a person into a drilling unit without fair and equal representation with independent, knowledgeable council members who have no ties to the oil and gas industry.
3. Being forced to surrender an asset violates a person’s right to form or decline a contract.
4. Current oil and gas law does little to protect Ohioans from impacts that emerge over a long period of time or affect their health in ways that are difficult to prove with the high standard of certainty required for legal proceedings. The law is unclear about the liability the mandatory pooled person(s) have in the event of an accident that occurs as a result of the presence of a drilling operation or well and the associated activities when they have been forced to participate. “Owners” of the well may be liable for future problems. Those currently forced into “ownership” should not be held liable for any damages that occur. Furthermore, the company should have to remediate damages incurred on the property fully and promptly.
The chief of the ODNR Division of Oil and Gas Resources Management approved the pooling order on December 10, 2013. On the same day Everflow was issued a permit to drill, though they did not have the necessary acreage under lease and had knowingly given false testimony to the TAC. The fact that TAC nor The Chief took the time to review the evidence provided illustrates the way in which the ODNR merely serves as a rubber stamp for the oil and gas industry to do as they please.
To further demonstrate the way in which ODNR acts as a rubber stamp for oil and gas: by law (ORC 1509.38) the TAC must have eight members, six of which represent oil and gas producers, one to represent landowner royalty interest, and one member to represent the public. Effectively, seven of the eight council members represent the oil and gas industry. The public representative’s seat has not been filled for several years because the Governor of Ohio has not appointed anyone to that position.
What the Stark Summit Coalition want to know is: Why didn’t the TAC or the Chief review Everflow’s leases before issuing the mandatory pooling order and permit? And why are the legal proceedings weighted so heavily in favor of oil and gas?
Had the TAC and the Chief reviewed the leases, an order would have never been issued and neither would the permit. Had there been a balanced process and representation, evidence would likely be reviewed.
Mr. Huebner had thirty days to file an appeal with the Ohio Oil and Gas Commission and he did. Since Everflow had the permit, they could technically drill if they wanted to. Mr. Huebner also had to file a request for a Stay of Execution of the Mandatory Pooling Order to attempt to prevent any drilling from occurring while he was going through the appeal process.
As the primary basis of his appeal and request for a Stay of Execution, Mr. Huebner alleged that Everflow provided the TAC, and consequently the Chief, false information regarding their lease agreements with the City of Massillon, as Massillon’s City Council had not approved the lease agreement, and backed up the allegation with documentation. As a result, the Chief revoked the drilling permit and the pooling order. Mr. Huebner is still working on his Stay of Execution and appeal because Everflow Eastern now has 30 days to appeal the revocation order.
MANDATORY POOLING HAS TO STOP:
1. A Mandatory Pooling Hearing takes place in front of a biased and pro-drilling panel; the TAC. This procedure is not consistent with due process rights and undermines the judicial practice that is meant to ensure justice in a free society. The Ohio and U.S. constitutions protect due process rights, which brings the constitutionality of this law into question.
2. Pooled person(s) do not have representation on the TAC when the request is made to pool. It is unjust to force a person into a drilling unit without fair and equal representation with independent, knowledgeable council members who have no ties to the oil and gas industry.
3. Being forced to surrender an asset violates a person’s right to form or decline a contract.
4. Current oil and gas law does little to protect Ohioans from impacts that emerge over a long period of time or affect their health in ways that are difficult to prove with the high standard of certainty required for legal proceedings. The law is unclear about the liability the mandatory pooled person(s) have in the event of an accident that occurs as a result of the presence of a drilling operation or well and the associated activities when they have been forced to participate. “Owners” of the well may be liable for future problems. Those currently forced into “ownership” should not be held liable for any damages that occur. Furthermore, the company should have to remediate damages incurred on the property fully and promptly.