Rig the System – Transcript

April 19, 2016
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The law isn’t always black and white. Let’s say your neighbor wants to drill for oil in their backyard. It could be loud and it might even pollute the groundwater. You’re worried. Your neighbor feels like it’s a good idea–and it’s his land. But who has the authority under the law to determine whether your neighbor can drill for oil or not? People living in states like Ohio, want their local governments to decide…and have gone as far as to change the state constitution to grant local governments something called “home rule,” which gives locals the power to govern themselves, as long as local laws don’t conflict with state and federal laws. Seems clear enough. Or so it seemed for people living in Ohio, until the oil boom came to town pitting neighbors who wanted a piece of the oil action against neighbors who didn’t want to live next to an oil well. Question is, when it comes to oil and gas, who has the power to decide who can drill, and where? In part 2 of our series on a Fair Fight for a Fair Court, Life of the Law’s Jonathan Hirsch, has this story.

Drilling for oil promises big things for people in states like Ohio. Wealth for local landowners. Free oil for people who lease their land. An influx of new jobs. But to some people  in Northeastern Ohio, all of that sounds like it might be too good to be true.

As for drilling itself, what it actually sounds like is this:

SOUND OF FRACKING WELL

This is what Pat McCrudden says she has been hearing from the front porch of her home, every night, all night…for the past three years. It’s the sound of a fracking well. Fracking is a specific way of drilling for natural gas where liquid is injected at high pressures deep into the ground. The liquid breaks apart the rock, which releases the natural gas. And it’s controversial, because, among other things, it uses a lot of water, can lead to pollution, and may even cause earthquakes.

McCrudden lives in a small suburban community about 10 miles from Youngstown, Ohio. It’s called Westwood Lake. And according to McCrudden, the well has brought all kinds of things to Westwood Lake. Noise. Traffic from waste disposal trucks. Felling of the trees that used to grow  right across from her front porch.

McCrudden says she didn’t want the well–but that she and her neighbors at the Westwood Lake Mobile Home Park weren’t consulted about it.

MCCRUDDEN: Oh my let me tell yah I went to the county commissioner’s. I went to the uh township trustees. I went up the ladder with Capri Cafero, she’s State Senator Cafero.

In 2013, State Senator Capri Cafero’s office arranged a meeting with representatives from the Ohio Department of Natural Resources, the state agency that regulates oil and gas leases. Also, FYI: for the rest of the story, we’ll be calling the agency the ODNR, since this is how most Ohioans refer to it.

MCCRUDDEN: The top five men came in. Sat down. Started talking to each other. And I says, “Who’s responsible for permitting this?” And this guy says, “I am.” And I says, “What were you thinking? What were you thinking!? Putting that over there, there’s 335 homes over there and it’s very compact because it’s a mobile home park.” So I says, “What are you doing that for?”

McCrudden says the representatives seemed sympathetic, but not enough to shut down the well. And McCrudden’s situation is pretty common in Northeastern Ohio. A resident can object to a well in their town, but if the ODNR has already approved it there’s little that can be done. In Ohio, the ODNR is the authority that decides the placement of well sites.

But then, the city of Munroe Falls–forty miles from McCrudden’s house–sued an energy company for attempting to drill a fracking well in their town. Suddenly Pat McCrudden–and a whole lot of other people in Ohio–were paying close attention to Munroe Falls.

For an energy company to drill a well, first they’ve gotta get landowners to sign a lease. And if you’re a landowner, there are some perks.

DONNA WILLINGHAM: At the time we wanted it, yeah. Because he said we’d get free gas for the house. That’s all I know about it because my husband did all the talking.

That’s Donna Willingham, a resident of Munroe Falls, a small city of about five-thousand people on the banks of the Cuyahoga River. In 2011, Donna’s husband, Joe Willingham, reached out to David Beck, the CEO of a fifteen person company based in Ohio called Beck Energy. Joe wanted to negotiate a lease on the Willingham property. David Beck applied for a drilling permit with the ODNR, the ODNR gave its stamp of approval, and a deal was struck with the Willinghams.

Donna Willingham says she and her husband trust David Beck.

WILLINGHAM: Oh he’s a sweetheart. He really is. And he’s a Christian man and everything. And he’s really a good guy in my opinion.

But the city government of Munroe Falls said Beck Energy also needed to submit plans for its  approval before any drilling could happen–because of something in the Ohio Constitution known as Home Rule.

In a nutshell, the Home Rule amendment says that cities can create their own laws–as long as they don’t interfere with state or federal laws.

But Beck Energy refused to go through the city permitting process, citing changes made to Ohio’s oil and gas leasing law in 2004. New language had given the ODNR, “the sole and exclusive authority,” over drilling leases in the state. And Beck Energy said that this meant drilling was out of Munroe Falls’ jurisdiction.

So the city of Munroe Falls filed for an injunction against Beck Energy’s drilling operation in the Summit County Common Pleas Court.

Donna Willingham doesn’t think the city handled the situation well.

WILLINGHAM: They were real buttheads about it. They just, the mayor we had, Mayor Larsen, had his own opinions about everything. And he was so adamant about not drilling. So it didn’t happen.

The city of Munroe Falls won. But then Beck Energy filed an appeal–and the case ended up at the Ohio State Supreme Court, where it would set a precedent for millions of dollars in oil and gas leases all over the state.

Because it stood to have such big implications, a lot of people were paying attention. Like Michelle Garman of Vienna, Ohio.

Vienna is a small township about 50 miles east of Munroe Falls. Michelle Garman lives on the state road that goes through town, next to a local airport.

GARMAN: My name is Michelle Garman. I lived here in Vienna for about 16 almost 17 years. My husband’s family has been on this land for five generations.

Garman says that she loves Vienna because it’s always been a good place to raise her son, Dominic. He’s sixteen.

GARMAN: My son was born here in Vienna. I enjoyed the smaller school, the close knit community. I liked the fact that everyone knows each other. [Laughs] My husband calls it me having my nose in everyone else’s business, but I like it.

In 2015, an injection well–the kind of well used to dispose of toxic waste generated from fracking–erupted down the street from her house. And a nearby pond was contaminated with a reported 2,000 gallons of waste.

Still, Garman says that even then she didn’t spend a lot of time thinking about how injection wells might negatively impact her community.

GARMAN: I’m guilty of not paying too much attention, until one was coming up next to me.

She does, however, remember the day she found out that an injection well was going to be built next door.

GARMAN: They put the legal notice in the paper. For the permit to drill. And luckily my husband, he actually reads the legal notices everyday. I can’t bring myself to do it because it’s boring. [Laughs]

Garman and her husband wrote a letter of objection to the ODNR. Her husband,Tom, was so upset that he wanted to leave the area. To move away from the land where five generations of his family have lived.

GARMAN: He was furious. He was actually ready to pick up and leave. It’s actually still a contention between us. I’m, “No way no how letting anyone push me off this land.” And he’s like, “I’ve had it. They’re just gonna let the area go to crap.”

Garman approached Vienna’s township trustees, but they didn’t take action against the drilling company. Unlike Munroe Falls, the township of Vienna left the decision to drill entirely up to the ODNR.

GARMAN: So the only people to object to it would be the airport on the other side, and there’s a vacant property across the street. After that, there was really no more neighbors.

Tom Houlihan is an attorney and a resident of Munroe Falls. He also represented the city before the Ohio State Supreme Court in Munroe Falls vs. Beck Energy in 2014.

HOULIHAN: For 100 years prior to 2004, Ohio had a system where cities determined where within their boundaries oil and gas could go.

During oral arguments, Houlihan argued that Beck Energy should have approached the city government of Munroe Falls, instead of going around it. According to Houlihan, even if the state oil and gas statute provided sole and exclusive authority to the ODNR, it didn’t mean that a company could just show up in a city and start drilling without discussing it with local officials.

HOULIHAN: The way the ODNR is construing the statute is kind of an extreme position, given that even states like Texas and Oklahoma, major oil and gas drillers, allow their cities to determine what land is available within the cities for drilling and then the state controls the details of the drilling location.

Judges on the case also showed concern about the implications of their ruling. Justice Paul Pfeifer suggested that the state’s reading of the oil and gas statute had elevated the ODNR’s director to a god-like status because local opponents would effectively have no power to appeal in the courts.

Here’s Justice Pfeifer questioning Beck Energy attorney John Keller during the oral arguments, which were recorded.

PFEIFER: So this is a pretty important permitting process. So unlike, for example, the location of windmills, which goes through the power citing commission, for those who object there’s no place to go.

KELLER: The general…

PFEIFER: The political solution. But in terms of courts, there’s no access to courts period, right?

KELLER: Because the general assembly decided in 2004 to give the state the sole and exclusive authority…

PFEIFER: To be God, in this case, right?

KELLER: Pardon?

PFEIFER: To be God. The director of the Natural Resources is God in this case.

Heidi Gorovitz Robertson is a Professor of Law at Cleveland State University. She followed the case closely.

ROBERTSON: Munroe Falls lost. The ordinances were struck down. It was as close as a Supreme Court decision could possibly be. There were three justices in the majority, three in the dissent, and one hanging out in the middle.

The one, “hanging out in the middle,” was Justice Terrence O’Donnell.

And the situation was what’s called a “plurality decision.” The court couldn’t agree on exactly why Munroe Falls lost. What  a majority of the justices did agree on was that Beck Energy should be allowed to move forward with drilling on the Willingham’s land.

Justice William O’Neill, one of the dissenters, saw the decision as a sign that oil and gas companies had swayed lawmakers in the Ohio General Assembly into creating laws in their favor. He wrote in his dissent that, “What the drilling industry has bought and paid for in campaign contributions they shall receive.”

I spoke with almost two dozen Ohio residents who live near drill sites for this story. And of the people I spoke with, all but a few expressed concern over oil and gas companies using money and their lobbies to sway political opinion in their favor.

Including Michelle Garman of Vienna, the woman who now lives directly across from a large injection well site.

GARMAN: You know, I hear a lot of talk around about, you know, who paid for whose campaign? Things like that. Which I mean that’s an issue that goes all the way up…campaign funding. You know the special interests pay for people’s campaign so why do they wanna regulate them?

An Ohio Supreme Court Justice named Judith French wrote the lead opinion in the Munroe Falls vs. Beck Energy case. When she ran for election to the Supreme Court, French had received over a million dollars in campaign contributions–including contributions from oil and gas companies. She also received funds from the American Petroleum Institute, which filed a brief supporting Beck Energy in the Munroe Falls case.

And another one of her contributors was a law firm called Vorys; this is the firm that represents Beck Energy.

Nonetheless, in the state of Ohio, campaign contributions are not considered grounds for a judge to recuse themselves from a case. So Justice French did not remove herself from the bench during the Munroe Falls vs. Beck Energy. She was one of the judges that ruled in favor of Beck Energy.

I wanted to hear how Justice French looks at the issue of campaign finance and the courts. The office of the justice didn’t return my request for interviews.

Instead, I went to the state capitol in Columbus to speak with lawmakers and other members of the judiciary. I wanted to know, what does the state senate and the judiciary think about the growing conflict between state and local laws when it comes to oil and gas? And are campaign contributions part of the problem?

There, I sat down with Representative Dan Ramos, who serves the district of Lorain County in Northeastern Ohio and supports campaign finance reform.

DAN RAMOS: When energy companies come here, they’ll usually have a lobbyist or a team of lobbyists, you know, come in with a suit and tie call you sir and ma’am and say the same story. “We wanna bring jobs to your community. This is gonna bring wealth in your community, this is gonna do x, y, z.”

Ramos says that oil and gas lobbyists help manage those interests.

RAMOS: And they keep up, “Have you heard any complaints about this? We’re gonna have the well, if you have any problems, you tell them to call me. You do that.” I’m not trying to say that they’re buying influence…but it’s another touch. Another touch from company x. Saying, “Hey, I’m your old friend. Remember me?”

According to Ramos, all of this stems from the fact that political campaigns for public office are financed by individuals and private businesses.

RAMOS: We need to review the entire thing. I think if we were to start somewhere that the judiciary would be a reasonable place to do so. Just because they’re supposed to be so impartial.

While I was in Ohio, I met with State Supreme Court Justice Paul Pfeifer, one of the justices who ruled on the Munroe Falls case.

We grabbed a booth in the local Bob Evans, a breakfast chain like IHOP or Denny’s. And I asked him: do judicial elections influence decisions made on the court? Justice Pfeifer:

PFEIFER: I never felt more like a hooker at a bus station than I did when I was running for the Ohio State Supreme Court

Justice Pfeifer says  he doesn’t think campaign contributions from oil and gas interests played a role in how justices decided the Munroe Falls vs Beck Energy case. But he does say that special interest money in campaigns has affected how judges have voted in the past.

PFEIFER: Yeeeeaaauhhh yeah. It’s indirect. Folks that I serve with and the folks that I’ve served with in the past would deny it. But it’s how they got there. It’s million dollar efforts by independent expenditure groups.

What’s clear right now is that Ohioans, like Pat McCruden from Westwood Lake and Michelle Garman of Vienna, don’t have a lot of say when a drill site pops up in their town.

Back in Vienna, at one point during my interview with Michelle Garman, she tells me to get up and walk to the window. We both crouch down to look out. Garman’s front yard is an empty, marshy field, bordered by a fence. Beyond the fence is a large plot of land the size of a football field, and in the middle of it, a tower of steel piping that makes up the injection well. When the well was being built, Garman says, stadium-style lighting from the well site flooded into her kitchen at all hours.

She says her son, Dominic, is concerned about the safety of the well too. And he asks her, what if the kind of contamination that happened down the road also happens in their backyard?

GARMAN: He gets very bent out of shape about it. It’s always his first question. He says, you know, “What’s gonna happen to me? Is this gonna cause problems for me? Am I in danger, is this dangerous?”

Garman says that at the end of the day, it’s her son that she’s most worried about.

GARMAN: Since he’s been little, you know, I’ve been the momma bear, you know? I’ve solved all the problems. Don’t worry I’ve got it. And it scares me because this is one I don’t think I can just solve.

For Life of the Law, I’m Jonathan Hirsch

Rig the System, Part 2 of our 2016 Series: A Fair Fight for a Fair Court, was reported by Jonathan Hirsch and edited by Annie Aviles with sound design and final production by Shani Aviram. Thanks to Life of the Law’s production team, Alyssa Bernstein, Ashley Cleek, Kirsten Jusewicz Haidle, and Nancy Mullane for their support. Jim Bennett was our engineer. Music by Blue Dot Sessions and Wolf and Crow.   

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