17AP-145

2018 Ohio 3028
CourtOhio Court of Appeals
DecidedJuly 31, 2018
DocketAm. Water Mgt. Servs., LLC nka A.W.M.S. Water Solutions, L.L.C. v. Div. of Oil & Gas Resources Mgt.
StatusPublished

This text of 2018 Ohio 3028 (17AP-145) is published on Counsel Stack Legal Research, covering Ohio Court of Appeals primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
17AP-145, 2018 Ohio 3028 (Ohio Ct. App. 2018).

Opinion

[Cite as 17AP-145, 2018-Ohio-3028.]

IN THE COURT OF APPEALS OF OHIO

TENTH APPELLATE DISTRICT

American Water Management : Services, LLC, n.k.a. AWMS Water Solutions, LLC, :

Appellant-Appellee, : No. 17AP-145 v. : (C.P.C. No. 16CV-6218)

Division of Oil & Gas Resources : (REGULAR CALENDAR) Management, : Appellee-Appellant. :

D E C I S I O N

Rendered on July 31, 2018

On brief: Comstock, Springer & Wilson Co., LPA, and Thomas J. Wilson, for appellant-appellee. Argued: Thomas J. Wilson.

On brief: Michael DeWine, Attorney General, Brett A. Kravitz, and Brian Becker, for appellee-appellant. Argued: Brett A. Kravitz.

APPEAL from the Franklin County Court of Common Pleas

BRUNNER, J. {¶ 1} Appellee-appellant1, Division of Oil & Gas Resources Management of the Ohio Department of Natural Resources (separately "ODNR Oil & Gas" or "division" or "ODNR"), appeals a December 23, 2016 decision and a February 21, 2017 entry of the Franklin County Court of Common Pleas, acting as an appellate court for ODNR and reversing a decision of the Oil & Gas commission ("commission") that affirmed an order of

1Because this is an appeal pursuant to R.C. 119.01 et seq. the parties are listed first by their status as appellant or appellee before the common pleas court on administrative appeal and second by the status as appellant or appellee before this court of appeals. No. 17AP-145 2

the Chief of ODNR Oil & Gas ("Chief") instructing appellant-appellee, AWMS Water Solutions, LLC ("AWMS") to shut-in their No. 2 injection well at AWMS' wastewater injection site in Weathersfield Township, Trumbull County, Ohio. Following its decision on administrative appeal, the common pleas court entered a judgment that included a plan for the resumption of wastewater injection activities at the AWMS site. Because we find that the common pleas court did not account for the mandate of R.C. 1509.022 to the Chief of the division and the scientific possibility for seismic events to increase suddenly in magnitude and spread beyond the drilling site, the common pleas court's judgment is unreasonable and unlawful and must be reversed. I. FACTS AND PROCEDURAL HISTORY {¶ 2} Following approximately ten minor earthquakes in 2011, the most significant of which were of magnitude 2.7, ODNR ordered a waste injection well3 known as "Northstar 1" to cease operation. (Admin. Record at 1171, 1192, filed August 1, 2016.) At 5:00 p.m. on December 30, 2011, a representative of ODNR witnessed the well shutdown. Id. at 1171. The following day, the area around Youngstown, Ohio (near the Northstar 1 well) experienced a 4.0 earthquake. Id. at 1172, 1192. Following that event, ODNR Oil & Gas declared a one-year moratorium on waste-water injection permits to study the issue of induced seismicity (earthquakes caused by human activities). Id. at 900-02. {¶ 3} One week before the shutdown of Northstar 1, on December 23, 2011, AWMS had applied for a permit to drill a class 2 waste injection well at a site known as AWMS No. 2 in Trumbull County, Ohio, approximately seven miles from Northstar 1. Id. at 641-43, 969, 1026. Because of the moratorium, it took approximately 19 months for the permit to be granted and 27 months before the AWMS No. 2 well became operational. Id. at 616-17. When the permits to drill and operate issued, they did so with a considerable volume of conditions and specifications, including a catch-all provision requiring the operation of

2 R.C. 1509.02 has provided since before December 23, 2011 "[t]he regulation of oil and gas activities is a matter of general statewide interest that requires uniform statewide regulation, and this chapter and rules adopted under it constitute a comprehensive plan with respect to all aspects of the locating, drilling, well stimulation, completing, and operating of oil and gas wells within this state, including site construction and restoration, permitting related to those activities, and the disposal of wastes from those wells." R.C. 1509.02 (2011 amendment notes, noting that "[t]he 2011 amendment * * * inserted 'well stimulation,' 'completing,' 'construction and,' " into the quoted text); see 2010 Am.Sub.S.B. No. 165 (archived online at 2009 Ohio SB 165). 3 An injection well as used in this context is a well designed to pump fluid underground into porous geologic

formations as a means of disposal. No. 17AP-145 3

AWMS No. 2 well to be in compliance with all requirements of R.C. Chapter 1509 and Ohio Adm.Code 1501:9-3. Id. at 962-63, 1028-30. But the conditions and specifications of the permits did not address what would happen if more earthquakes, including human- induced earthquakes, transpired. {¶ 4} In May and June 2014, AWMS began to use its No. 2 well to commercially dispose of drilling waste water. Id. at 617-18. On July 28, 2014, seismic activity of magnitude 1.7 occurred in Weathersfield Township near the AWMS No. 2 site. Id. at 280- 81. Another tremblor, this one of magnitude 2.1, occurred in roughly the same location on August 31, 2014. Id. Three days later, on September 3, 2014, the Chief of ODNR Oil & Gas issued an order (No. 2014-372) requiring a suspension of all well operations (also known as a "shut-in") until ODNR Oil & Gas "c[ould] further evaluate the well." Id. AWMS immediately complied. Id. at 618-19. Two days later, the Chief issued a second order (No. 2014-374) concluding that the seismic events were not certain to be related to AWMS' well operations but that they "may" have been. Id. at 283. The No. 2014-372 order also required AWMS to "submit a written plan to the Division for evaluating the seismic concerns associated with the operation of the AWMS #2 saltwater injection well." Id. at 281. {¶ 5} By way of background, we note that the byproducts of drilling are loosely referred to in the record as "saltwater" or "brine." "Brine" is legally defined as "all saline geological formation water resulting from, obtained from, or produced in connection with exploration, drilling, well stimulation, production of oil or gas, or plugging of a well." R.C. 1509.01(U). But "saline geological formation water" is legally distinct in Ohio from the "fluids" used in the "drilling of a well, flowback from the stimulation of a well, and other fluids used to treat a well." R.C. 1509.226(B)(10). According to the U.S. Geological Survey ("USGS"):

In general, hydraulic fracturing fluid is composed of water, proppant (typically sand), and chemicals. A public Web site known as FracFocus has been established by industry that lists specific materials used in many, but not all, hydraulically fractured wells. Individual companies select a few chemicals to be used from hundreds that are available and the fluids are tailored to the rocks they are being injected into as well as the conditions at the well site. Reporting to the FracFocus Web site is mandatory in some states and voluntary in the rest. The No. 17AP-145 4

specific formulation of some chemicals may be trade secrets that may be exempt from reporting on the site.

United States Geological Survey, What is in the fluid injected into the ground during hydraulic fracturing?, www.usgs.gov/faqs/what-fluid-injected-ground-during-hydraulic- fracturing? (Accessed June 7, 2018). {¶ 6} On September 17, 2014, AWMS submitted a nine-page letter detailing the history of induced seismicity, AWMS' use of No. 2 well, comparing it to other wells that are associated with induced seismicity. (Admin. Record at 1037-45.) Among other points, AWMS noted that Northstar 1 had been permitted to inject at greater depth and higher pressure than AWMS No. 2 well. Id. at 1038.

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