OhioSB 219136th General Assembly (2025-2026)SenateWALLET

Revise the law governing oil and gas wells

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Bill Overview

Analyzed Economic Effects

15 provisions identified: 4 benefits, 2 costs, 9 mixed.

Landowners get help plugging orphaned wells

Landowners who discover an orphaned well or receive notice can apply with required permit information and a proposed plugging contract. Before signing, they need the chief's approval, a plugging permit, and findings that the work meets requirements and costs are reasonable. The contractor must regularly perform well plugging and meet insurance requirements. After compliant work and a proper invoice, the state well fund pays the contractor; landowner-discovered wells still require published or posted notice. The chief must consider nearby injection wells when ranking orphaned wells for plugging and land restoration.

Counties receive injection well fee revenue

Injection fees are $0.05 per barrel for substances produced in-district and $0.20 per barrel for substances produced outside the district. Fees apply to no more than 500,000 barrels per well annually, and owners can retain up to 3% for administration. The state deposits collected fees in the Brine and Waste Substances Permitting Fund, then sends them to counties hosting the well. A well spanning multiple counties generates equal shares for each county, deposited into county general funds.

Well cleanup money stays protected

Ohio's Oil and Gas Well Fund is reserved for authorized well programs, division administration, and critical production-related health, safety, and environmental expenses. Money cannot move to other funds or appropriation items, including excess-balance transfers, or pay judgments and settlements unrelated to the division. Each year, at least 30% of prior-year fund revenue must support orphaned-well cleanup and urgent risks from orphaned or noncompliant wells. The state owns carbon-credit rights from orphaned wells plugged with state or federal money. The chief can obtain or sell those credits, and sale proceeds must enter the well fund for authorized uses.

Well operators gain production and hauling flexibility

The chief must show good cause to stop or limit production for simultaneous work on the same well pad. Operators can use their well permit and required road-maintenance and safe-use agreement in place of a separate vehicle permit. Vehicles must stay within the agreement's maximum size, weight, and axle-spacing limits. Vehicles exceeding those limits still need a separate permit when required by law.

Energy well operators face immediate orders

The chief can issue compliance orders without first holding a hearing for wells exploring or extracting minerals or energy other than oil or natural gas. Orders must require compliance with the applicable law, its rules, or permit terms. This strengthens enforcement of those requirements.

Well owners need stronger financial backing

Well owners can no longer use sworn financial statements instead of a bond or permitted financial deposits. Exempt Mississippian and exempt domestic well owners retain the one-time $50 fee option. A permit transferor stays responsible until the new owner files required information, obtains liability insurance, and files financial backing. Accepted backing includes a surety bond, negotiable certificates of deposit, irrevocable letters of credit, or cash—not other financial-responsibility proof. The former owner can submit the materials using a division form verified and signed by both parties.

Landowners face deadlines for lease claims

The law sets separate filing deadlines for claims involving recorded oil and gas leases or licenses on Ohio land. Claims that a lease ended or expired have a 10-year deadline after the claim arises. Royalty calculation or payment claims follow the deadline in Ohio Revised Code section 1302.98. Other breach claims follow section 2305.06, generally six years for written agreements. These filing windows preserve access to claims, but missing the applicable deadline can block a lawsuit.

Permit appeals expand but participation narrows

Permit holders can appeal any permit term or condition to the Oil and Gas Commission. Other people cannot intervene as parties. For good cause, the commission can allow someone to participate as a friend of the commission, offering arguments without joining as a party. Covered court appeals of chief or commission orders go to the common pleas court where the order's subject originates, instead of Franklin County.

Faster well reviews with annual limits

For wells also needing permits under sections 1509.21, 1509.221, or 1509.22(D), issuance is due within 120 days after public comments close. The chief can instead deny the application by order. The chief cannot refuse expedited review just because other applications could miss the ordinary 21-day period. Expedited filings cost a nonrefundable $250, and each owner is limited to 10 applications and 10 permits per calendar year. The chief can allow an additional expedited permit when an emergency requires it.

New deadlines for state land leases

Ohio's land leasing commission must approve or reject a nomination within 90 days, then advertise approved parcels for bids. This replaces quarterly bidding schedules and removes the former 30-to-120-day meeting window. After selection, the state agency has 30 days to sign and deliver the lease. The selected bidder has 45 days after receipt to sign and return it, or the lease is void.

Ohio permits cover cross-border well owners

Ohio has exclusive authority over every well portion inside Ohio, including wells that cross state lines. Ohio permit requirements also cover those portions and related production work. Agreements with another state do not give that state power to enforce Ohio's oil and gas laws. For permit purposes, owners hold drilling and production rights until plugging; inactive mineral-rights lessees and specified full-interest transferees are excluded.

Seven-day plugging permits carry fees

The chief must immediately process complete expedited well-plugging applications and issue permits within seven days, unless denied by order. Review cannot be refused because it could delay other permit decisions. Each application requires a nonrefundable $500 fee, waived when the chief has ordered the applicant to plug the well. Owners can submit 10 expedited plugging applications per calendar year, with additional applications allowed when the chief finds an emergency.

State lease pauses have defined limits

For state land tied to federal grants, lease time pauses and payments can wait until grant requirements and written notice are complete. Third-party lawsuits or appeals that prevent operations also pause lease time and allow payment delays until a final, nonappealable order. Otherwise, pauses and payment delays require a force majeure event, unless the lease expressly allows another reason. Filing a civil lawsuit alone does not stop drilling; a court injunction or other stop order does.

State leases balance payments and extensions

State-land leases require annual shut-in royalties of $50 per net mineral acre when that payment applies. Operators can extend the primary lease term by five years instead of three by paying the original bonus again. They have 60 calendar days after receiving the agency-signed lease to pay advanced delay rentals or bonuses owed. Unless the chapter provides otherwise, agencies cannot demand royalties above the standard amount or unauthorized extra payments.

Gas businesses get new tax classification

Beginning in tax year 2027, a business primarily gathers natural gas when its annual gathered volume exceeds purchases from nongathered sources. Volumes are measured in dekatherms. This test governs the public-utility tax exclusion for businesses primarily producing or gathering gas rather than supplying or distributing it to consumers. Businesses meeting the test qualify through gathering; those failing it cannot rely on that classification. The law states no tax rate or dollar change.

Sponsors & Cosponsors

Sponsor

Al Landis
Republican • Senate

Cosponsors

Adam Holmes
Republican • House
Andrew O. Brenner
Republican • Senate
Bill Reineke
Republican • Senate
Brian M. Chavez
Republican • Senate
George F. Lang
Republican • Senate
Heidi Workman
Republican • House
Jane M. Timken
Republican • Senate
Jerry C. Cirino
Republican • Senate
Jodi Salvo
Republican • House
Kristina D. Roegner
Republican • Senate
Mark Hiner
Republican • House
Mark Johnson
Republican • House
Mark Romanchuk
Republican • Senate
Monica Robb Blasdel
Republican • House
Sandra O'Brien
Republican • Senate
Shane Wilkin
Republican • Senate
Terry Johnson
Republican • Senate
Thomas F. Patton
Republican • Senate
Tim Schaffer
Republican • Senate
Ty D. Mathews
Republican • House

Roll Call Votes

All Roll Calls

Yes: 137 • No: 43

Senate vote • 6/10/2026

Concurred in House amendments

Yes: 33 • No: 0

House vote • 6/3/2026

Natural Resources: Reported

Yes: 8 • No: 2

House vote • 6/3/2026

Passed

Yes: 63 • No: 30

Senate vote • 11/20/2025