Senate committee hears bill to protect severance-tax fund for orphan-well plugging

The Ohio Senate Energy and Natural Resources Committee held the second hearing on Senate Bill 219, which would create a custodial fund to protect severance-tax revenue earmarked for oil-and-gas regulation and orphan-well plugging and would make multiple technical updates to state oil-and-gas law.

Supporters told the committee the bill would prevent future budget diversions of the Oil and Gas Well Fund, speed plugging of long-neglected wells and clarify permitting, leasing and road-use practices. Rob Rendrett, introduced by the clerk as representing the Ohio Oil and Gas Association and identified in his testimony as the association’s president, said the bill “makes the necessary steps to create a custodial fund to protect those dollars from future and potential raids from different from future administrations while at the same time ensuring there's still potential legislative oversight.”

Why it matters: Testimony said Ohio has tens of thousands of legacy wells and that the Oil and Gas Well Fund—largely funded by industry severance taxes—currently pays for regulation, the state geological survey and the orphan-well-plugging program. Witnesses said steady, protected funding is needed to scale plugging from recent annual totals into the thousands of wells per year.

Key provisions described by witnesses

- Custodial fund: SB 219 would direct severance-tax revenue into a custodial account administered through the Treasurer of State and paid out to the chief of the Division of Oil and Gas…