In a long-awaited decision, the Ohio Supreme Court on February 17, 2015, held that the comprehensive oil and gas well permitting system established under Chapter 1509 of the Ohio Revised Code preempted certain local zoning and permitting requirements established by the City of Munroe Falls, which dramatically restricted the potential to develop oil and gas wells within the City. The majority opinion in the court’s 4-3 decision specifically limited its reach to the local ordinances established by Munroe Falls and took care to note that the court was not making any judgment regarding whether more carefully tailored local ordinances could coexist with the state’s oil and gas well permitting system. Justice O’Donnell providing a concurring opinion which further emphasized that whether or not a municipality has authority to enact local zoning ordinances, which regulate aspects of the placement of oil and gas wells was a “question yet to be decided…”
The court’s majority opinion was based on four local ordinances established by Munroe Falls, which prohibited drilling without obtaining a separate approvals from the municipality. The court found that this municipal permitting system directly conflicted with the permitting system established under Ohio Revised Code Chapter 1509 and thus could not stand. Further, the regulations impermissibly discriminated against oil and gas drilling activities otherwise regulated under Chapter 1509.
In a lengthy dissent, Justice Lanzinger suggested that while the state’s well permitting requirements were comprehensive, they did not necessarily conflict with or otherwise preempt a municipality’s authority to establish and enforce local zoning. Further, the legislature did not specifically declare that Chapter 1509 preempted all local land use controls. Finally, the dissent noted a number of other state jurisdictions, which had recognized the validity of local zoning despite a comprehensive state-wide oil and gas well permitting systems.
In short, while the Ohio Supreme Court’s opinion established certain guideposts for evaluating whether the comprehensive oil and gas well permitting requirements of Chapter 1509 preempt local zoning and land use controls, the larger issue remains very much undecided. The court’s opinion focused solely on the ordinances established by the City of Munroe Falls and it specifically reserved the opportunity to consider other perhaps more carefully crafted land use ordinances, which might, nevertheless, affect oil and gas drilling and production.