Economic Development

Suburban Gushers

In Ohio, you can drill wells in unlikely places.
by | April 2006

Lottery shortfalls aren't the only quirky consequence of high energy prices. Drive around the suburbs of Cleveland these days, and you'll be surprised at what you see. Scores of natural gas wells have been popping up in parks, on golf courses and even in cemeteries. Some of the suburban towns aren't too happy about this, but there may be nothing they can do to stop it.

Cities in Ohio lost the authority to regulate gas wells in 2004, when state lawmakers transferred that power to the Department of Natural Resources. And as prices have risen, the incentive to drill has risen along with them. The impact has been greatest in the northeast corner of the state, near Cleveland, where the most geologically promising ground seems to be located. Since the state took over regulation, some 270 new wells have been approved in just six northeast Ohio counties, sometimes over the objection of local officials.

Not that it's been a bad financial deal for the local governments. Revenues from the new wells, buoyed by last year's record-high gas prices, have provided a significant windfall for some of them. Citizens of Gates Mills, a community of 2,400 people less than 10 miles from the Cleveland border, are expecting to save $30,000 a year in natural gas prices thanks to three new wells, which are also likely to yield hundreds of thousands of dollars for city projects down the line. Other municipalities in the area, even those traditionally opposed to the unsightly wells, are now preparing to receive them.

Still, local leaders believe they--not the state--should have the power to authorize and regulate new drilling projects. That's why eight communities have sued to overturn the 2004 state law. Many of the towns involved in the suit, including Gates Mills, are benefiting from the gas revenues. Indeed, they may welcome the new wells. But that isn't the point, they argue. "It's a question of constitutionality and a question of home rule," says John Mahoney, deputy director of the Ohio Municipal League. "The state can't just say carte blanche, 'We're the sole regulators.'"

The lawsuit isn't likely to be settled for some time. Meanwhile, natural gas wells will become increasingly familiar in the public spaces of many Ohio towns. Several more drilling projects are slated for later this year. As long as gas prices stay where they are now, gushers in suburban Cleveland are likely to remain a fact of life.


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