Ohio Supreme Court sides in favor of company with shuttered Weathersfield injection well

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The Supreme Court sent the case back to the court of appeals for consideration of the economic impact of the well's suspension

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(WKBN) – The Supreme Court of Ohio ruled in favor of a company that operated a Weathersfield saltwater injection well, which was shut down by the Ohio Department of Natural Resources after earthquakes in the area.

AWMS Water Solutions, LLC operated the wells on 5.2 acres of industrial property in Weathersfield Township. They were used for disposing of saltwater, a byproduct of oil- and natural-gas production.

On July 28, 2014, a 1.7-magnitude earthquake was recorded near the company’s second well. On August 31, 2014, a 2.1-magnitude earthquake was recorded in the same area.

ODNR’s Division of Oil and Gas Resources Management ordered that AWMS suspend operations at the second well, saying it may have contributed to the seismic events.

AWMS contends that it submitted plans to rectify any issues to ODNR but said responses from ODNR were delayed while the division worked on implementing a statewide policy to address induced seismicity.

The Franklin County Court of Common Pleas originally ruled in favor of AWMS, ruling that the division’s failure to respond to AWMS’s plan for resuming operations was unreasonable. The court stated, “[It] defies logic as to how [the division] can expect [AWMS] to formulate and submit a comprehensive plan that would comply with a statewide policy that has yet to be formulated and completed.”

ODNR appealed, however, and the Tenth District Court of Appeals reimposed the suspension of operations at the well.

On Aug. 26, 2016, AWMS appealed to the Eleventh District, alleging that the suspension order effected a governmental taking of its property, which would require the state to pay compensation to AWMS.

AWMS argued that it had complied with the law and permit conditions, had not endangered public health and safety of the environment and had been subjected to a “permanent shutdown,” rather than a temporary suspension of its operations.

The Eleventh District Court sided with the state, saying that ODNR only shut down operations at one of its wells and that the company could continue other operations at the site to its economic advantage. It also found that AWMS’s investors had been aware of the seismic activities in the Youngstown area and of the risks involved with the operation of AWMS’s injection wells.

By a 5-1 majority, the Supreme Court of Ohio reversed that decision, however, sending the case back to the court of appeals for consideration of the economic impact of the well’s closing. The court also ordered the court of appeals to look at the parties’ evidence of claims that ONDR’s suspension of operations constituted a “total-taking” of the company’s operations, depriving it of the economic benefits of the well being in operation.

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