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Ohio justices hear local drilling rules dispute

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COLUMBUS, Ohio (AP) - Ohio Supreme Court justices vigorously challenged attorneys on Wednesday over the power of state-level oil and gas drilling regulations to supersede local zoning laws.

One justice asked whether Ohio's regulatory scheme violates communities' constitutional home rule protections, while another said an inability for cities to challenge state-issued drilling permits gives Ohio's natural resources director seemingly god-like sway.

The questioning came in a case brought by the Akron suburb of Munroe Falls against Beck Energy Corp. The lawsuit is being closely monitored by both pro- and anti-drilling forces for its potential impact on community efforts to block hydraulic fracturing, or fracking, used by the industry to capture gas or oil from underground shale. A court decision is expected in a few months.

The energy company in this case received a state-required permit from the Ohio Department of Natural Resources in 2011 to drill a traditional well on private property in Munroe Falls. The city sued, saying the company illegally sidestepped local ordinances by not involving the city in the process.

Deputy Solicitor Peter Glenn-Applegate, the state's attorney, told the court Ohio's natural resources director was empowered in 2004 to regulate drilling and that a permit can't be gained without meeting established setbacks, fencing and other siting requirements.

He and Beck's attorney, John Keller, argued that state lawmakers made the decision to centralize authority over drilling at the state level after a period of decades when local governments were in charge.

"That was a conscious decision by the General Assembly to eliminate the dual regulation as to the location of wells," Keller said.

Justice Paul Pfeifer drew a distinction between that process and the locating of windmills, which goes through a commission. "For those who object there's no place to go. ... The director of natural resources is God in this case," he said.

Glenn-Applegate said although Ohio citizens can't directly challenge drilling permits issued by the state, they have a remedy through the courts if they feel the natural resources director failed to adequately protect public health and safety.

Munroe Falls attorney Thomas Houlihan argued that cities have the right to impose zoning restrictions as they plan their communities. He told the court the two levels of government can and should work together.

The law says Ohio has sole and exclusive authority to regulate the location of wells, which Houlihan said is different from determining their location.

"If the state seeks to pre-empt local zoning, it can attempt to do so, but it must do so with express language," he said.

Justice William O'Neill questioned why Houlihan wasn't going further with this legal argument to challenge Ohio's regulatory setup as a violation of constitutional protections of home rule.

"If the state is given exclusive control over the location of a building, a structure, or a well, isn't zoning gone?" he asked.

Houlihan kept his arguments focused on the ability of state and local laws to work in tandem, citing similar shared authority in other drilling states such as California, Oklahoma and Texas.

In New York, where fracking isn't yet legal and many communities have instituted pre-emptive bans, and in Pennsylvania, where fracking is widespread, similar cases have been decided in favor of shared regulation, with municipalities overseeing such things as land use and aesthetics and the state overseeing safety and construction.

Beck said in court filings that Ohio's 2004 law was intended "to end the confusion, inefficiency and delays under the earlier patchwork of local ordinances, and to ensure that Ohio's oil and gas resources are developed on a uniform statewide basis."

The company's lawyers said the only area of Munroe Falls that's zoned for industrial development is the tiny corner of a small airport that was not conducive to oil and gas development.

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

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