TORCH, Ohio — An injection well operator received the green light to temporarily resume operations of three injection wells in Torch while it appeals the state’s finding that the wells threaten drinking water.
The Ohio Department of Natural Resources Division of Oil and Gas Resources Management warned in a July memo that such a decision — issued by Ohio’s quasi-judicial Oil and Gas Commission — would create the “potential for calamity in Athens County.”
“Sources of Ohio’s freshwater could be destroyed,” the division argued.
The commission, however, said in an Oct. 3 order that K&H Partners may continue to operate its three class II injection wells in Torch while the commission considers the company’s appeal of a June suspension order by the division. The commission will hold a public hearing on the appeal on Dec. 5.
Class II injection wells are used to contain toxic waste from oil and gas production thousands of feet underground. Class II wells are intended to isolate the wastewater, known as brine, from groundwater.
However, the oil and gas division has found that waste fluid injected into the three K&H wells had spread at least 1.5 miles underground and was rising to the surface through oil and gas production wells in Athens and Washington counties. The division’s chief suspended the wells as a result.
The division’s order said the K&H wells present an “imminent danger” to health and the environment.
An Athens County well operated by another company, Reliable Enterprises, was suspended on similar grounds in May. Reliable Enterprises did not appeal its suspension.
Environmental activist and former Athens County Commissioner Roxanne Groff has advocated against the operation of the K&H injection wells since they were initially proposed. Groff said the commission’s decision allowing the wells to resume operation shows they “side with industry because God forbid we should stop industry from making money.”
The division declined to comment on the pending litigation. Neither its attorney nor an attorney for K&H responded to a request for comment by press time.
K&H’s petition to stay
In its decision to grant K&H’s petition to stay, the commission considered K&H’s likelihood of success in its appeal; whether the company would suffer irreparable injury if the commission denied the appeal; and whether third parties or the public interest would be harmed by granting the stay.
Harm to the public interest?
The division said in a filing with the commission that suspending its final order would create a “dire” risk to the public.
“The public is better served by enforcement of an order designed to protect drinking water and avoid calamity,” the division said.
However, K&H responded that even if its brine were migrating into the nearby production wells as the division has alleged, “there is no evidence that any groundwater would be contaminated,” given the upward migration through “confining” geologic layers.
The division, in contrast, said the manner in which K&H brine most likely traveled to nearby production wells — through fractures in the Ohio shale geologic layer — poses exactly that risk.
At least 20 water wells within a half-mile radius of the K&H wells could be affected, the division estimated.
In a related case in the Franklin County Court of Common Pleas, which has since been dismissed, the division said it “cannot and does not wait for evidence that the migration has actually impacted an aquifer before issuing an order suspending operation. If [the division chief] did so, it would be too late.”
The ODNR previously told the Independent it has not seen evidence so far that aquifers have been affected.
The Ohio University Voinovich School of Leadership and Public Service conducted baseline testing of nearby water wells before the K&H wells began operations, said Jennifer Bowman, the school’s director of environmental programs. That research was funded by The Sugar Bush Foundation.
Bowman said the school is currently engaged in discussions around follow-up testing.
“We’ve been talking with ODNR, we’ve been talking with the community, but at this point, we don’t have funds to do that or anything lined up,” Bowman said.
ODNR spokesperson Andy Chow said, “The Division is planning to conduct water testing and is working toward that goal.” Chow did not share further details.
In addition to arguments that the division lacks evidence of the threat to water that it describes, K&H argued that the the division’s suspension order would force it to lay off employees, thereby removing $1.2 million in payroll from the local economy in Athens and Washington counties — which it said would harm the public interest.
Likelihood of success?
K&H argued it was likely to succeed in its appeal, pointing to the lack of evidence presented by the division in its order suspending the operation of its Torch wells.
The order followed what the division described as a years-long investigation, but the order did not contain the full results of that investigation.
K&H, meanwhile, provided a June 2020 report by an independent consulting firm. K&H hired the firm the month before to investigate complaints that its injected brine was migrating to the nearby production wells. In its report, the consultants said they had found no evidence K&H was responsible for the brine in the nearby production wells, and said the brine in those wells could be naturally occurring.
The division, however, contended that none of K&H’s evidence disproves its own findings that migration is, in fact, occurring.
The division said it collected evidence from pressure readings, chemical tests, and observations from the plugging of an affected production well. Taken together, this evidence shows there could be no other explanation for the brine appearing in nearby production wells other than migration from the K&H wells, the division said.
K&H also argued its case on procedural grounds. The company said it was given insufficient due process by the Ohio Division of Oil and Gas Resources Management — a claim the division also disputes.
Irreparable injury to K&H?
K&H argued in its petition that the suspension of its operations increasingly causes “reputational damage” to K&H within the oil and gas industry, along with loss of profits and customers.
The company said it would have to permanently lay off 13 full-time employees if the division’s order were not stayed.
The division, however, cast doubt on the extent to which K&H is actually harmed by the suspension. The division pointed out that K&H and its parent company, Tallgrass Energy, are subsidiaries of a trillion-dollar hedge fund, Blackstone Inc.
“Accepting K&H’s valuation of the K&H Wells, they would account for approximately 0.01% percent of the company’s record-breaking assets,” the division said. “Therefore, K&H’s financial position would not be irreparably harmed by a temporary suspension of the three injection wells.”
To the extent that K&H has been harmed, the division said that is a cost of doing business within a regulated industry.
Hearing pushed
The same day the Oil and Gas Commission granted K&H’s petition to stay, Oct. 3, the commission also granted a motion by the Ohio Division of Oil and Gas Resources Management for more time to prepare for the appeal hearing. Initially scheduled for Oct. 10, the commission pushed the hearing until Dec. 5.
In the meantime, K&H can operate its three injection wells.
K&H opposed the motion for a continuance, arguing that the division shouldn’t need more time to prepare if it actually had the evidence it needed to suspend the company’s injection wells in the first place.
K&H also argued that if the division granted the division’s request for more time to prepare for the hearing, it should grant the company’s request to suspend the division’s final order. Otherwise, K&H said, the company would suffer financial harm for a longer period without a final decision by the commission on the merits of the case.
The commission’s order did not explain why it granted the division’s motion to delay the hearing until Dec. 5, or K&H’s petition to stay the division’s suspension order.
The commission declined to comment for this story. Commission representative Cory Haydocy said the commission “will let the public records speak for themselves.”
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