March 10, 2026 · Energy Committee · 2,132 words · 5 speakers · 17 segments
We will now come to order. Will the clerk please call the roll? Chair Chavez? Here. Vice Chair Landis? Here. Ranking Member Smith? Here. Senator Serino has checked in. Senator DeMora? Here. Senator Lange? Here. Senator Manchester? Here. Senator Reinecke? Here. Senator Schaefer? Here. Senator Timken? Here. Senator Weinstein? Here. Senator Wilkin? We have a quorum. We'll proceed as a committee. So as the beginning of every committee, we stand for the Pledge of Allegiance. Ask Senator Timken to lead us today.
I pledge allegiance to the flag of the United States of America and to the republic for which it stands, one nation under God, indivisible, with liberty and justice for all.
Thank you. Members, a copy of the minutes from the February 17th meeting are on your iPads. Please take a moment to review them. The question is, shall the minutes be agreed to? without objection the minutes are agreed to. The first and only order of business is the second hearing of Substitute House Bill 170. First, we have opponent testimony from Peter Maxwell. Not seeing Peter, we'll move on. Next, we have interested party testimony from Evan Calico with the Ohio Farm Bureau Federation. Welcome to committee. You may begin when ready.
Thank you, Chairman Chavez, Vice Chair Landis, Ranking Member Smith, and other honorable members of the Senate Energy Committee. Thank you for the opportunity to provide an interested party testimony on House Bill 170. My name is Evan Calico. I'm proud to serve as the Director of State Policy for the Ohio Farm Bureau Federation. Understanding our members' distinct views on carbon sequestration is crucial. In agriculture, this concept is not recent. All crops absorb CO2 from the atmosphere for their growth, many modern farming practices such as no-till and cover crops enhance soil carbon sequestration, thereby boosting the organic matter available to crops as nutrients. Though not new technology, the injection of carbon dioxide into suitable geological formations has gained traction recently, facilitating a balance between economic growth and capturing excess atmospheric carbon. In agriculture, ethanol facilities have implemented this technology to capture CO2 generated during production. This legislation could draw new ethanol and biofuels plants to Ohio, creating essential market demand for Ohio's crops amidst one of the most unstable agricultural economies we've experienced. Ohio Farm Bureau thoroughly reviews all legislation to align our stance with the policies approved by our grassroots members. Regarding carbon sequestration, our policy seeks to protect landowner rights, minimize environmental and land risks wherever possible, ensure fair compensation, and establish sound regulations that treat all interested parties equitably. We believe the piece of legislation before you today reflects the culmination of debate and compromise among various interested parties and aims to do what I set out above The current bill sets a path for efficient and responsible regulation of carbon capture while attempting to protect landowner rights wherever possible We are grateful for many of the additions that were made in the House and I would highlight those provisions here. House Bill 170 grants the Ohio Department of Natural Resources or ODNR legally binding primary enforcement authority or primacy to permit, regulate and enforce operations on US EPA class 6 wells focusing on carbon dioxide sequestration installed in Ohio. Primacy is not a new concept to DNR. This state agency has held similar primacy enforcement authority on class two injection wells, focusing on sequestration and disposable drilling brine since 1983. While Farm Bureau does not take a stance on which level of government or agency should have this authority, we believe that regardless of who holds it, all rules and regulations would adhere to the policy that I mentioned earlier. This bill represents a significant first step toward ensuring a fair and equitable process for geologic carbon sequestration in our state. We were very grateful to see language added to the bill requiring properly constructed agreements to be in place to protect the private property rights of affected landowners. Given the technical requirements for a Class 6 well, agreements governing the placement of infrastructure in open rural areas will need to simultaneously incorporate language addressing leasing, service agreements, and easements. While this may seem standard, our members have experienced many instances where their surface property has been damaged or altered by similar activities with no recourse under their contracts to hold service operators accountable. Indiana, which is similarly setting up its own regulatory scheme for carbon capture technology, includes similar language in its statute to better protect landowner rights. The bill also sets a unitization percentage for 70% for carbon capture projects. We appreciate that this has been increased from 65% compared to oil and gas wells. While Ohio Farm Bureau strongly opposes any usurpation of private property rights, we recognize the similarities between carbon sequestration and oil and gas leasing, and that unitization may sometimes be necessary to complete a project. However, the unit size of carbon capture projects can be in the thousands of acres, and we believe it is appropriate to have a higher unitization percentage. Furthermore, we support the provision that physical wells must be located on the property of a voluntarily participating landowner becoming unitized or force pooled is something that we would like to avoid in every scenario, and this provision helps mitigate further disruption to those unitized landowners. Lastly, we were grateful to see that those projects would be similar to similar field drainage system repair and remediation requirements as required by power siding board rules for electric generation, transmission, and other types of projects, similar in Ohio Administrative code 4806408E, which requires that developers map field drainage systems, determine ways to mitigate or avoid damage to drainage systems, and promptly repair or restore drainage conditions. Unfortunately, drainage repair work can often be forgotten during project development. It is integral to much of Ohio agriculture and many farmers have invested significant time and financial resources to maintain proper drainage systems It is important that landowners have the protection of a governmental authority to enforce drainage remediation as their only recourse otherwise is to spend thousands of dollars in civil litigation to simply get their drainage systems returned to working order. Unfortunately, impacts on neighboring land can often harm or impede drainage systems, and that is why OFBF has advocated for these baseline protections in other areas of energy development. We would like to thank Representatives Peterson and Rob Blaisdell for their willingness to work with all interested parties on this legislation and put forth the bill that you have in front of you today. This process has allowed critical safeguards to be put into place that will allow for responsible and efficient regulation of carbon capture in Ohio. Thank you for the opportunity to testify, and I'd be happy to answer questions at this time.
Thank you for your testimony. Any questions from the committee? Senator DeMora.
Thank you, Mr. Chair. You mentioned on your testimony that the use-laced percentage is 70% up from 65%. Are you okay if somehow we would make it 75% or 80%?
Through the chair to the senator, our policy that our members have passed would support a higher percentage of 75. But we have worked a lot with other interested parties, and I think if 70 percent is what is able to help this bill get across the finish line, I think we would be okay with that. We recognize that there are other things in the bill that we're working on, so I think it's a difficult question. But, again, we've appreciated the process that has gone throughout this bill, and we are okay with 70 percent. Thank you, Mr. Chairman.
I'll go ahead and follow up on that one.
It's a pleasure, the chair.
Yeah. So a percentage is a percentage. It's regardless of how big the unit size is. So can you think of a compelling reason why it should be a higher percentage?
Yeah. So to the chair, as I cited in my testimony, when we're looking at the 65% for your normal oil and gas wells that we're discussing, that we already have primacy for in the state, Most of those, I would say, your biggest project size is going to be hundreds of acres. But when we're talking about carbon capture projects, we're looking at some unit sizes in the minimum thousands of acres, if not in the hundreds of thousands of acres. So I think we think that a 5% higher unitization threshold just makes that much more sense since it's affecting that much more people, I think is our view. Just since it's a bigger project size, it requires that bigger percentage. Which is the 70%.
Thank you.
Senator Smith. Thanks very much, Mr. Chair. Thanks very much for being here. As we set out to try to establish carbon capture storage rules, regulations, and laws here in Ohio, I think we would be more than willing to learn the best practices of other states. Do you, based on your knowledge of this subject matter, what are the one or two or three states that have had this in place the longest
that therefore might be able to provide some teachable lessons for us Thank you very much Mr Chair Through the chair to the senator like I had said in my testimony I believe Indiana is currently setting up their regulatory scheme I believe they already had some previously passed legislation but they're making some updates. West Virginia, I believe, has as well, and I know that there's projects also going on in Pennsylvania, but I do not know how similar their legislative schemes would be to this. I think the proponents probably touched on that more, but I can't say specifically which ones have had it in place the longest. I would probably say Indiana, but don't quote me on that. That's the best I can think of right now. Any other questions?
Senator Reinecke. Thank you, Mr. Chairman. Thank you. I am always just curious on the Farm Bureau why you're an interested party when it sounds like you really like the bill. It's just really complicated. This is a whole different world, and it brings business to Ohio. I know a lot of these are in my district with Poet and those kinds of things. So what would make it better, and why are you not a proponent based on your testimony? Yep. So through the chair to the senator, I think you bring up a very good question. As I've learned very quickly in this job, in the Farm Bureau, we often have positions that are difficult to take. We're trying to thread the needle between many different views that our members have. And while we can recognize that carbon capture, especially on the ethanol industry, could have many benefits, from a landowner rights perspective this bill does establish unitization and I would say all above our members do not like unitization they do not like being told what to do with their land if it's not what they want to do with it so even though there were lots of good things in this bill since the bill establishes unitization I think interested party is the best that we can go but again I do want to thank all the interested parties and the sponsors of the bill there has been a great process to take a lot of suggestions that we've given but unfortunately that's just kind of the line that we have to walk we are a private property rights organization, and even though we could recognize the good things in this bill, it's establishing unitization. That's just kind of a line for our members. Any other questions? Senator Timken.
Thank you, Chairman. I guess, so, for clarification's sake, it is only the unitization aspect of this bill that you are not a proponent. Are there other aspects that your members are concerned with? Through the Chair to the Senator,
I think in the House we addressed a lot of the other concerns that we had so I would say at this point I think the unitization is really the only thing that would prevent us as I said to kind of go into a proponent but we again have had great conversations the other interested parties and we feel that this piece of legislation you have in front of you is pretty darn good. Any other questions? Seeing none thank you for your testimony. We will give one more call for Peter Maxwell okay so members we do have written only testimony on your iPads for review this concludes the second hearing a substitute bill House bill 170 with no further business for the committee we are hereby adjourned