Ohio Legally Reclassifies Natural Gas As “Green Energy”

As Mike DeWine was sworn in for his second term as governor of Ohio, he signed a few controversial bills into law, including an amendment on oil and gas drilling in state-owned lands and the reclassification of natural gas as a form of green energy.

The amendment shifts the language of a 2011 state law about the authority of state agencies over leasing their land for oil and gas exploration and production from “may” to “shall,” therefore forcing them to award leases to any oil and gas driller “in good faith,” with the current requirements being only that they need to be licensed and insured.

“As my administration has analyzed this bill,” DeWine argued in a statement, “I believe the amendments in House Bill 507 do not fundamentally change the criteria and processes established by the Ohio General Assembly in 2011 that first established the policy of leasing mineral rights under state parks and lands.”

The part of the amendment that changes the classification of natural gas was intended, like a twisted workaround, to help companies who want to invest in drilling for natural gas to meet ESG investing standards.

The amendment’s author, state Sen. Mark Romanchuck, a Republican from Ontario, told Energy News in December that he doesn’t know if his idea “would work,” and that he believes that there isn’t “anything magical” in adding the word “green,” and that its potential legal impact is uncertain.

The amendment assigns the term “green energy” to include “energy generated by using natural gas as a resource,” and also as energy generated by using a resource that “is more sustainable and reliable relative to some fossil fuels.”

Green energy, by essence and actual definition, refers to energy derived from renewable sources, particularly, the sun and wind, and never fossil fuels. Fossil fuels, a category of energy sources under which natural gas belongs, along with coal and oil, are according to the UN “non-renewable resources that take hundreds of millions of years to form. Fossil fuels, when burned to produce energy, cause harmful greenhouse gas emissions, such as carbon dioxide.”

“Characterizing natural gas as green energy is regressive and a fallacy,” Cinnamon Carlarne, the Robert J. Lynn Chair in Law at the Ohio State University, told Cleveland.com. “Natural gas is not green energy. The labeling is a little bit Orwellian.”

The European Union in July last year voted to allow some specific uses of natural gas and nuclear energy to remain in its green taxonomy, its system for defining “environmentally sustainable economic activities” for investors, policymakers, and companies.

But unlike the amendment to Ohio’s HB 507, the EU’s decision to keep natural gas and nuclear energy in its taxonomy of sustainable energy sources only applies to certain circumstances like when they are used to generate electricity or keep homes warm or cool. They should also be below certain emissions thresholds, and are only cleared until 2030 or 2035.

Information for this story was found via Energy News, Cleveland.com, CNBC, and the sources and companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

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