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 for plugging and related work, protecting those dollars from being reallocated in the state budget, while preserving legislative oversight. (Testimony by Rob Rendrett; Claire Linkhart)

- Orphan-well program and notice changes: The bill would modify notice provisions for the landowner pass-through plugging program and streamline title and transfer paperwork in some well-sale situations, which proponents said would speed plugging and the transfer of liability paperwork between sellers and buyers. (Rob Rendrett; Bruce Levingood)

- Permits and expedited permitting: The bill would reinstate an expedited permit option, capped at 10 per operator per year with discretion for the chief to allow more. Proponents asked the committee to extend expedited treatment to plugging permits as well. (Rob Rendrett; Bruce Levingood)

- Road Use Maintenance Agreements (RUMAs) and frost laws: The bill would set a minimum three-year term for road-use maintenance agreements and provide that operations may continue during local frost-law periods if parties have attempted an agreement. Witnesses described local frost laws as seasonal local rules intended to protect roads from damage during freeze–thaw periods. (Rob Rendrett)

- Other clarifications: The bill would (as described in testimony) align lease statute-of-limitations language (reducing a 21-year termination period to six years), clarify the definition of “owner” for permitting where multiple parties hold rights, clarify that gathering lines are not subject to public-utility tax, and confirm the Division of Oil and Gas’s authority over cross-state drilling and interagency memoranda of understanding. Witnesses emphasized the bill does not change state unionization law. (Rob Rendrett; Bruce Levingood)

Numbers and priorities cited by witnesses

- Scale of wells: Witnesses cited the state’s estimate of “over 20,000 orphan wells” and industry reviews suggesting many more well records lack plugging dates. Bruce Levingood said industry review found nearly 49,000 well records without a plugging date.

- Plugging pace: Testimony said Ohio’s program plugged about 20 wells per year a decade ago; today the program plugs roughly 500 wells per year and proponents said the program aims toward about 1,000 wells per year if funding is secured and protected. (Rob Rendrett; Bruce Levingood)

- Costs: Committee members asked about per-well costs. Witnesses said plugging costs vary widely by severity and complexity; an industry witness estimated costs “anywhere from tens of thousands to hundreds of thousands” of dollars per well and said the Division of Oil and Gas can provide more precise figures. (Claire Linkhart)

- Severance-tax receipts: One industry witness gave historical severance-tax figures for context: roughly $2.56 million in 2010, $21.3 million in 2015 and about $58.4 million in 2023 (as presented in testimony). The same witness estimated a potential aggregate plugging liability in the billions (testimony cited a $3.5 billion ballpark), noting estimates vary with scope, condition and inflation. (Bruce Levingood)

Local-economic testimony and impacts

Nicholas Harmarkhausen, executive director for community and economic development in Harrison County, described local economic gains tied to oil-and-gas activity: 728 wells in Harrison County, pipeline and processing infrastructure, property tax and utility revenues that have supported school and infrastructure projects, and a stated interest in ensuring plugged, remediated land for future development. He urged the committee to update laws to reflect current industry realities.

Questions from committee members

Senators pressed witnesses on prioritization of plugging (how the Division prioritizes wells based on environmental risk and location) and on the public-harm consequences of unaddressed wells. Witnesses described the Division of Oil and Gas as using a risk matrix (severity, environmental risk, urban vs. rural location, age) to prioritize work and said unsealed legacy wells can present groundwater and safety risks, although specific incidents vary by site. (Questions from Senators Schaffer, Timken, Serrano and Ranking Member Smith; responses from witnesses.)

No committee action recorded

The hearing record contains testimony and committee questions; there was no formal committee vote or final action on SB 219 at the hearing.

Next steps

Committee members were given written testimony on committee iPads and the hearing was adjourned with the matter pending further committee consideration.