SB 219: Revise the law governing oil and gas wells - Ohio

As Passed by the House → As Enrolled · 8 edits · Jun 24, 2026

MODERATE

This bill updates Ohio's oil and gas laws to modernize leasing procedures for state-owned land, strengthen environmental protections, and improve financial accountability. It establishes a formal nomination and bidding process for state lands, mandates specific lease terms like a one-eighth royalty and surface use agreements, and creates stricter rules for permitting wells in urban areas and horizontal wells. Additionally, it expands the definition of 'owner' to include lessees who do not actively produce, increases insurance requirements for horizontal wells, and refines how funds are used to plug orphaned wells.

Scope change

The bill significantly expands the regulatory scope for state-owned lands by creating a mandatory nomination and bidding system for oil and gas leases, whereas previously state agencies had more discretion. It also extends the chapter's applicability to include specific definitions and requirements for horizontal wells and urbanized areas.

REQUIREMENT

Establishes a formal nomination and bidding process for leasing state-owned land, requiring specific disclosures about land ownership and proposed bonuses before bids are accepted.

Mandates that all state oil and gas leases include a one-eighth gross landowner royalty, a five-year primary term, and a prohibition on surface use unless a separate agreement is negotiated.

Increases liability insurance requirements for horizontal wells from $1 million to $5 million and requires environmental endorsements on policies.

DEFINITION

Adds new definitions for 'horizontal well,' 'well pad,' 'orphaned well,' and 'urbanized area' to clarify regulatory standards and permit requirements.

ELIGIBILITY

Expands the definition of 'owner' to include persons who lease mineral rights but do not actively produce or hold a permit, ensuring they remain liable for compliance.

TIMELINE

Sets specific timelines for permit issuance, such as 18 days for urbanized areas and 30 days for horizontal wells, to streamline the approval process.

FISCAL

Clarifies that fines and forfeited bonds must be deposited into the oil and gas well fund for plugging orphaned wells and restoring land, with specific spending priorities.

ENFORCEMENT

Requires the Division of Oil and Gas Resources Management to conduct pre-drilling water sampling within specific distances (300 feet for urban wells, 1,500 feet for horizontal wells) to protect water supplies.

As Passed by the Senate → As Passed by the House · 8 edits · Jun 3, 2026

MODERATE

The bill was amended to remove federal mineral royalty provisions and add new budget transfer rules, while significantly expanding the scope of oil and gas regulations to include stricter safety, water protection, and orphaned well plugging requirements. The changes shift the bill's focus from managing federal royalties to regulating state-owned lands and ensuring comprehensive well safety and environmental protection.

Scope change

The bill's scope expanded from primarily addressing federal mineral royalties and state land leasing to include broader oil and gas safety, water sampling, and orphaned well management, while removing the federal royalty section entirely.

FISCAL

Deleted the section establishing the 'federal mineral royalty clearing fund' and rules for distributing federal payments to counties of origin.

REQUIREMENT

Added new rules requiring water sampling within 300 feet of proposed wells in urbanized areas and 1,500 feet for horizontal wells before drilling begins.

Increased liability insurance requirements for wells in urbanized areas from $1 million to $3 million and for horizontal wells to $5 million.

Established a scoring matrix to prioritize the plugging of orphaned wells based on risk factors like proximity to injection wells.

Added new lease terms prohibiting surface use for oil and gas development unless a separate surface use agreement is negotiated.

Expanded permit application requirements to include agreements for road maintenance and access for horizontal wells.

Created a new definition for 'horizontal well' specifically tied to the Point Pleasant, Utica, or Marcellus formations.

SCOPE

Removed references to amending Section 1503.35 and enacting Section 131.52, which were related to federal mineral royalties.

As Introduced → As Passed by the Senate · 6 edits · Nov 19, 2025

MODERATE

The bill was significantly expanded from its original version to address federal mineral royalties and streamline state-owned land leasing. It creates a new fund to distribute federal royalties directly to counties of origin and establishes a competitive bidding process for state agencies to lease oil and gas formations on state-owned land. The bill also updates definitions to include new well types and clarifies rules for permits, bonds, and orphaned well plugging.

Scope change

The bill's scope expanded from general oil and gas regulation to specifically include federal mineral royalties and the leasing of state-owned land formations. It also added new definitions for modern drilling technologies and expanded the regulatory authority over various well types.

FISCAL

Established a new 'federal mineral royalty clearing fund' to receive payments from the federal government and automatically distribute them to the counties where the wells are located.

SCOPE

Created a new leasing process for state agencies to lease oil and gas formations on state-owned land through a nomination and competitive bidding system.

DEFINITION

Added new definitions for 'federal mineral royalty,' 'county of origin,' 'horizontal well,' 'well pad,' and 'production operation' to modernize the code.

REQUIREMENT

Increased liability insurance requirements for horizontal wells from $1 million to $5 million and updated permit fees based on municipal population.

Updated permit application requirements to include pre-drilling water sampling for wells in urbanized areas and stricter access road agreements.

ENFORCEMENT

Enhanced procedures for identifying and plugging orphaned wells, including a scoring matrix to prioritize high-risk sites and reimbursement for landowners who plug wells.

Revise the law governing oil and gas wells

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