Ohio octobER 2012 • www.ohiogo.com OCTOBER 2013 • www.ohiogo.com
A FREE FREE monthly MONTHLY PublicAtion PUBLICATION
Hazardous water not an issue U.S. Chamber weighs in on shale Safety training ‘top of mind’
DRILLING
DOWN
Dix Communications - Gas & Oil
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October 2013 Edition
auction “EXCITING OHIO UTICA SHALE OPPORTUNITY”
• 2,000 ACRES GAS/OIL RIGHTS •
MONDAY - NOVEMBER 4, 2013 - 5:30 P.M.
TO BE OFFERED IN 14 PARCELS LOCATED IN: Belmont, Monroe, Tuscarawas, Knox, Stark, Holmes, and Morrow Counties of Ohio. Here is your chance to invest in one of the biggest shale plays in history. Absolute auction, all sells on location to the highest bidders: at the KIKO Auction office located at 2722 Fulton Dr. NW Canton, Ohio 44718. Directions: Take I-77 north of US Rt. 30 to Fulton Dr. (Exit #107B) go west to address. For online bidding go to www.kikoauctions.com or www.proxibid.com. PARCEL #1: 168.9 acres. Goshen Township in Belmont County. PARCEL #2: 260 acres. Mead Township in Belmont County. PARCEL #3: 449 acres. Salem Township in Monroe County. PARCEL #4: 130 acres. Perry and Rush Township in Tuscarawas County. PARCEL #5: 164 acres. Perry and Rush Township in Tuscarawas County. PARCEL #6: 210.5 acres. Jackson Township in Knox County. PARCEL #7: 157 acres. Jackson Township in Knox County. PARCEL #8: 40 acres. Tuscarawas Township in Stark County. PARCEL #9: 87.7 acres. Tuscarawas Township in Stark County. PARCEL #10: 147.8 acres. Tuscarawas Township in Stark County. PARCEL #11: 143.8 acres. Tuscarawas Township in Stark County. PARCEL #12: 117 acres. Sugarcreek Township in Stark County. PARCEL #13: 184 acres. Paint Township in Holmes County. PARCEL #14: 160 acres. Franklin Township in Morrow County. Bidding will be per net mineral acre. Mineral title search reports available on request. TERMS ON REAL ESTATE: 10% down due day of auction. Buyer’s premium of 10% to be added to the final bid to establish the purchase price. All information contained herein was derived from sources believed to be correct. ONLINE TERMS: 15% Buyer’s premium to be added to highest bid to establish purchase price. Go to www.proxi.com/kiko to register for on line bidding and terms. AUCTIONEERS/REALTORS®: Peter R. Kiko, 330-705-5996. Email peter@kikocompany.com. www.kikoauctions.com
Attention Investors & Entrepreneurs
1,000+ Acres of Surface Rights Gas & Oil Rights
SATURDAY – NOVEMBER 2, 2013 – 10:30 A.M.
Several Farms and Vacant Land Tracts Offered Separate & Together Western Pennsylvania- Mercer & Lawrence Counties Lackawannock, Pulaski, Mahoning, and Beaver Townships Absolute auction, all sells to the highest bidder on location Check out our website, www.kikoauctions.com for more details and exact locations. Don’t miss out on this opportunity to participate in one of North America’s largest shale finds. TERMS ON REAL ESTATE: 10% down auction day, balance due at closing. Buyer’s premium of 10% to be added to the final bid to establish the purchase price. Any desired inspections must be made prior to bidding. All information contained herein was derived from sources believed to be correct. AUCTIONEERS/REALTORS: Randall L. Kiko, 330-806-5697, & Russell T. Kiko, Jr.
Clifford Baum Farm • 75 ACRE STOCK FARM • (3) 2 ACRE BldG. LOTS - GAS/OIL RIGHTS SELL SEPARATE
SATURDAY - OCTOBER 19, 2013 - 10:00 A.M. Pike Twp. - Stark County - Sandy Valley School District Also Selling: 34 Head Hereford - Quality Farm Equip. – 1,500 Bales of Hay – Road Grader – Cattle Eq. – Misc. Items. Absolute auction, all sells to the highest bidder on location. Check out our website, www.kikoauctions.com for more details and exact locations. TERMS ON REAL ESTATE: 10% down on auction day balance due at closing. A 10% Buyer’s premium will be added to the highest bidder to establish the purchase price. Any desired inspections must be made prior to bidding. All information contained herein was derived from sources believed to be correct. TERMS ON CHATTELS: Cash, Check, Visa, or MasterCard with proper ID auction day. 4% buyer’s premium on all sales, 4% waived for cash. AUCTIONEERS/REALTORS: Peter R. Kiko, 330-705-5996, Richard T. Kiko, Sr. & Eugene Kiko.
330-453-9187
WE TURN ASSETS INTO CASH.
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Gas & Oil
Northern Zone Edition
October 2013 Edition - Dix Communications
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Dix Communications - Gas & Oil
www.OhioGO.com
October 2013 Edition
Table of Contents
ADVERTISING DIRECTORS Rhonda Geer Northern Zone Sales Wooster & Holmes, Ohio Offices RGeer@dixcom.com 330-287-1653
4
Safety is No. 1 Concern
7
Testing the Water
8
A Shale Renaissance
Kim Brenning Southern Zone Sales Cambridge, Ohio Office KBrenning@dixcom.com 740-439-3531
11
Drilling Down: Part 1 of 4 part Series
14
U.S. Chamber Weighs In on Energy Development
Peggy Murgatroyd Southern Zone Sales Barnesville and Newcomerstown, Ohio Offices PMurgatroyd@dixcom.com 740-425-1912 Barnesville 740-498-7117 Newcomerstown
17
Smith Dairy Fleet Moves to CNG
18
Get Appraisal Before Selling
20
Carroll County Energy Project
23
Success Lies in the Pickle
Janice Wyatt National Major Accounts Sales Manager JWyatt@dixcom.com 330-541-9450
24
Small Producers Keeping Pace
27
OSU Professor Funded for Fluid Research
Jeff Pezzano VP Advertising Sales & Marketing Kent Ohio Office JPezzano@dixcom.com 330-541-9455
28
Company Expands Due to Gas & Oil
29
Agriculture Keeping Up to Date with Gas & Oil
30
OSU Team Researching Shale
31
Pipeline
Harry Newman Northern Zone Sales Kent, Ohio Offices HNewman@dixcom.com 330-298-2002
Jeff Kaplan Southern Zone Sales Alliance & Minerva, Ohio Office JKaplan@dixcom.com 330-821-1200
LAYOUT DESIGNER Pete Kiko
Bobby Warren / Dix Communications Alison Stewart / Dix Communications
Laurie Huffman / Dix Communications Judie Perkowski / Dix Communications Marc Kovac / Dix Capital Bureau
Kyle McDonald / Dix Communications Kimberly Lewis / Dix Communications Marc Kovac / Dix Capital Bureau
Alison Stewart / Dix Communications
Dave O’Brien / Dix Communications
Bobby Warren / Dix Communications
A Business & Events Directory
Ohio octobER 2012 • www.ohiogo.com OCTOBER 2013 • www.ohiogo.com
A FREE FREE monthly MONTHLY PublicAtion PUBLICATION
Hazardous water not an issue
“Gas & Oil” is a monthly publication jointly produced by Dix Communication newspapers across Ohio. Copyright 2013.
U.S. Chamber weighs in on shale Safety training ‘top of mind’
DRILLING
DOWN
OnTheCover
COVER PHOTO: Ray Booth/Dix Communications A pipeline stretches through the countryside of southern Tuscarawas County.
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Gas & Oil
Northern Zone Edition
October 2013 Edition - Dix Communications
Bobby Warren Dix Communications
W
OOSTER — Flames shot up around an oil tank on the afternoon of Sept. 8 as crude oil burned, filling the skies with a plume of black smoke and heating up the immediate area off of Millborne Road. Forty firefighters from 15 departments from around Ohio were at the scene, not due to any emergency, but to receive training in handling gas and oil fires at the Wayne County Fire & Rescue Regional Training Facility. The Ohio Oil & Gas Energy Education Program has a training site on the grounds of the facility, and it was leading another session on Sept. 8 and 9. OOGEEP Executive Director Rhonda Reda said there are so few oil and gas emergencies, despite 65,000 wells in Ohio, that firefighters do not receive training for dealing with these kinds of fires. “The organization feels obligated to provide the training, and this was the first of its kind in the country,” Reda said, adding several other states have modeled their programs after the one developed here. People like Mark Lytle of Buckeye Oil Producing Co., Jim Smail of JR Smail Inc., Ron Grosjean of Ken Miller Supply and Bill Bennett of Cedar Valley Energy were instrumental in pushing for funding and instruction. The result has been a 12year relationship with the regional training facility, and OOGEEP trained its 1,000th firefighter this year. It costs about $750 to train a firefighter, and the oil and gas producers in the state pay for it, Reda said. Fire departments from seven other states have sent personnel here to train, Reda said. However, this year, they have had to turn away those from outside of the Buckeye State because of the demand at home. The organization is running more training sessions: Six a year, up from four. The number of participants is kept at 40 to maintain a ratio of one instructor for every five firefighters. Instructors will also lead several class-only training sessions. “This is why Ohio is considered a leader in safety and education,” Reda said. During the two-day sessions, the first day is spent in the classroom, and the second one is spent outdoors working with “the props,” including a crude oil tank, and putting out live fires. Steve Waltman, training facility director, delayed Sunday afternoon’s exercises after the wind shifted during lunch. The equipment had been set up based on the wind patterns, but it
Firefighers take part in a training exercise.
had to be moved to react to the new flow of air. Waltman said he would rather slow things down than risk the safety of the firefighters. “Safety is our No. 1 concern,” Waltman said. Once the crude oil was ignited, teams of firefighters approached the blaze and hit it with water, at times retreating because of the intense smoke or to allow another team to train. While a foam product will knock down the fire in three to four minutes, using the water allows all of the trainees to gain experience dealing with the fire, said Eric Smith, OOGEEP board chairman. It also allows them to see how the fire moves. OOGEEP’s lead instructor, Charlie Dixon, said the facility is an outdoor behavior lab, where participants learn the principles behind flammable liquid fires, especially crude oil. They get to see the vapors burning, the cooling effects of water and the extinguishing effects of the foam, Dixon said. “Guys get a lot of good experience” at the training facility, instructor Mike “Pineapple” Raymond said. “The guys get to see fire; it’s the only way to get a good education.” “There is nowhere else to get this kind of training in the state,” instructor Dallas Terrell said. Matt Moran of Canaan Township Fire Department and Andrew King of the Chippewa Township Fire Department were among the local firefighters who attended the training session. Both appreciated being a part of it. “I learned a lot,” King said. “They kept it realistic.” “It’s hot,” Moran added. Several times he and his colleagues had to retreat because of the smoke. “This hits home,” King said. “We have a lot of wells in Wayne County,” Moran said. Both said they would recommend the training to others bwarren@the-daily-record.com.
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Dix Communications - Gas & Oil
October 2013 Edition
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Gas & Oil
Northern Zone Edition
October 2013 Edition - Dix Communications
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Dix Communications - Gas & Oil
October 2013 Edition
7
Alison Stewart Dix Communications
R
AVENNA — The Portage County Health Department is approaching its busiest season for well water sampling. According to state sanitarian and geologist Jack Madved, the arrival of fracking in Portage County has caused local well owners to inquire about testing for hazardous materials that could be in their water. “It has been a little bit of a learning curve for us,” said Madved. “Well owners have been contacting us the past couple of years concerned about fracking and how it affects their water. We provide them with information about fracking and its risks as well as a water sampling service.” According to Madved, no hazardous minerals have been found in Portage County’s well water as a result of fracking. He recommends people get a water sample taken before fracking begins in order to get a baseline of what minerals are in their water. A tier test can be provided for those concerned about their water quality. These tests were put together by the Ohio Department of Natural Resources, Ohio Department of Health and Ohio EPA. A tier one test samples the water for the most common minerals found in Ohio water including sodium, magnesium, potassium, etc. A tier two test samples the water for those minerals and then some including calcium, iron, and the level of hardness in the water. The most efficient and most costly test, the tier three, samples water for all the minerals from the first two tiers plus BTEX and methane. Overall, the number of calls for testing has dropped, he said. “About two years ago I was receiving about 15 to 16 calls for water samples a day,” said Madved. “Things have dwindled down quite a bit. Some weeks we’ll have four or five tests a week and then other weeks we won’t have any.” The Summit County Health Department’s Water Quality Programs Coordinator Tom LaPlante said drilling in Summit has not been as big of an issue as it has been in Portage. “Summit County hasn’t seen a lot of horizontal hydraulic fracking,” said LaPlante. “Therefore, we do not need to spend a lot of resources on this issue.”
LaPlante said the occasional concerned water well owner will call, but it is rare, with approximately half a dozen phone calls a year. The Summit County Health Department offers the same tier samples as Portage County, but so far no water tests have been requested. “Normally when people think they are having an issue with fracking it ends up being iron, dissolved methane or another organic material caused by having an older well,” said LaPlante. “We advise them to have their well physically cleaned to
“Normally when people think they are having an issue with fracking it ends up being iron, dissolved methane or another organic material caused by having an older well.” – Tom LaPlante remove sulfer and iron reducing bacteria.” According to LaPlante, the total cost for the land owner comes to $531 for those receiving a tier three test. The tier one and tier two tests are less, at between $300 to $400. “The majority of our time is spent explaining the process of fracking and its risks,” said LaPlante. According to LaPlante, along with water quality, there is also a potential risk to air quality. Sam Rubens, director of air quality for the Akron Regional Air Quality Management Agency, said drilling has the potential to create ozone, but a case of this has not yet been seen in Ohio. “Diesel emissions from the trucks and drilling equipment and natural gas can combine and create ozone in the air,” he said Rubens. “Any extra ozone in this area is going to be a problem. We have not seen these ozone elevations here. It is just a potential problem.” Rubens handles air quality matters in the Summit, Portage and Medina counties. astewart@recordpub.com
8
Gas & Oil
October 2013 Edition - Dix Communications
Northern Zone Edition
A SHALE RENAISSANCE W
ASHINGTON — A new study illustrates the farreaching economic contributions of unconventional oil and natural gas development, particularly in the manufacturing sector, says API Vice President for Policy and Economic Analysis Kyle Isakower. “The oil and natural gas revolution has created millions of jobs, and this study shows the broader economic benefits are being felt by households and manufacturers across the U.S.,” said Isakower. “Oil and natural gas have been pillars of the recovery, and other sectors are now coming back stronger and faster because of affordable and abundant energy and raw materials -- despite economic headwinds. As a result, Americans have more income, more buying power, and a more competitive economy.” The study by IHS Global Insight, “America’s New Energy Future: The Unconventional Oil and Gas Revolution and the Economy – Volume 3: A Manufacturing Renaissance,” expands on IHS’s earlier research into unconventional oil and natural gas -- resources generally unlocked from shale deposits and other tight formations using hydraulic fracturing and horizontal drilling. The latest report outlines the full chain of economic activity resulting from unconventional development, from drilling and refining to petrochemical supplies and manufacturing. According the study, the full unconventional value chain supported 2.1 million jobs last year, and is projected to support 3.9 million jobs by 2025, including 515,000 manufacturing jobs. “Unconventional energy has been a remarkable economic stimulus with implications far beyond oil and natural gas producing states,” said Isakower. “New supplies are changing the
game for businesses that use or make energy-intensive products including chemicals, aluminum, steel, cement, and foodstuff. But to unlock our full manufacturing potential, those in Washington must turn aside efforts that would impose duplicative regulations on shale development, raise production costs, and limit access to domestic resources.” According to the study, unconventional oil and gas will steadily increase U.S. competitiveness, contributing $180 billion to the U.S. trade balance by 2022. In addition, unconventional energy: Increased disposable household income by $1,200 in 2012, rising to $3,500 in 2025; Generated $74 billion in government revenues in 2012, rising to $138 billion in 2025; Attracted U.S. capital investments totaling $121 billion in 2012, rising to $240 billion by 2025; Contributed $284 billion to the U.S. GDP in 2012, rising to $533 billion by 2025; and Supported $150 billion in earnings for U.S. workers in 2012, rising to $269 billion by 2025. API is a national trade association that represents all segments of America’s technology-driven oil and natural gas industry. Its more than 550 members – including large integrated companies, exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms – provide most of the nation’s energy. The industry also supports 9.8 million U.S. jobs and 8 percent of the U.S. economy, delivers $85 million a day in revenue to our government, and, since 2000, has invested over $2 trillion in U.S. capital projects to advance all forms of energy, including alternatives.
Dix Communications - Gas & Oil
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October 2013 Edition
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Gas & Oil
Northern Zone Edition
October 2013 Edition - Dix Communications
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October 2013 Edition
11
Drilling DOWN
Part 1 of 4 Part Series Laurie Huffman Dix Communications
W
hile there was an oil boom in Ohio in the 1960s, very few injection wells existed for disposal of oil and gas fluids. At that time, most of the waste was disposed of in evaporation pits, which led to groundwater contamination, according to Tom Tomastik, a geologist for the Ohio Department of Natural Resources Division of Oil and Gas Resources Management, who recently gave a talk on the topic at Wingfoot State Park, in Portage County. In 1983, the U.S. EPA established rules for the proper handling of oil and gas waste fluids, which caused the number of injection wells to increase, and in 1986, evaporation pits were eliminated altogether, Tomastik said. As the oil and gas industry began booming in this part of the country, so did the need for a place to store the waste. In 2012, Ohio reportedly accepted 13,990,846 barrels of brine and liquid oilfield waste, and of that amount, 8,050,074 barrels came from out of state. Among the Class II Injection Wells, which are the only type that accept oil and gas waste fluids, there are several types: Class II Saltwater Injection Wells, Class II Enhanced Oil Recovery Wells, and Class II Annular Disposal Wells. Tomastik indicated 98 percent of the oil field fluids in Ohio are injected into Class II Saltwater Injection Wells. There are currently 212 of these types of wells in Ohio, with 181 in operation. Federal law requires Ohio to take oil field fluids from other states as well. That has always been the case, he said, but the numbers are now increasing dramatically. “The Marcellus Play in Pennsylvania increased the volume of injection wells there, and the governor of the state eventually stopped allowing them due to pollution found in the state’s streams. So, the waste was sent to Ohio, and the percentage of out of state wells jumped here from 39 percent to 54 percent in 2010 because of that fact,” Tomastik said. The average Class II Injection Well is about 4,000 feet deep. The most common injection wells consist of three metal tanks set in a row that contain concrete walls and floors. Permit applications for Class II Injection Wells are reviewed by the ODNR, which takes into account all the wells in the area. The agency is looking for any other wells within a one quarter to one half mile radius. Next, 48-hour injectivity tests are done to eliminate problem wells. “The proximity of water wells and surface bodies of water are all considered during a pre-site review, and if these are
too close, additional permit conditions may be required,” explained Tomastik. “A public hearing may also be required of there are any valid objections.” It can take up to 4 million gallons of water to fracture a horizontally drilled shale well, which the ODNR says can be compared to the 4.5 million gallons used weekly by an average golf course. Most of the water used in fracturing remains thousands of feet underground, but about 15 to 20 percent rises back to the surface through a steel-cased well bore and is temporarily stored in steel tanks or lined pits. The wastewater that returns to the surface after hydraulic fracturing is called flowback. In Ohio, oil and gas operators must either recycle their wastewater or inject the flowback into Class II deep injection wells. “Class II Injection Wells are still the best way to dispose of oilfield waste, according to the ODNR. And, as drilling increases, recycling will start to increase as well. And, that will play a role in the Utica development in Ohio,” Tomastik concluded.
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Gas & Oil
October 2013 Edition - Dix Communications
Northern Zone Edition
Dormant Mineral Act to decide
‘Winners’ and ‘Losers’ David J. Wigham Attorney
WOOSTER — Ohio’s Utica Shale boom is centered in southeast Ohio where, for nearly 100 years, it was commonplace for sellers of real property to reserve all mineral interests to the property being transferred. Consequently, these counties have become a battleground between surface owners and reserved mineral owners vying for the lucrative bonus and royalty payments offered by Utica producers. Surface owners and reserved mineral owners must be aware of an important, yet sometimes vague and confusing, Ohio statute: the Dormant Mineral Act (“DMA”). The DMA was originally enacted in 1989, and was amended in 2006. Its purpose is to eliminate unused mineral interests, which create uncertainties in title and constitute impediments to the development of mineral interests and surface rights. The 1989 DMA provides that where the severed mineral interest owner has made no effort to use the minerals for at least 20 years and has not filed a statement expressing a continued interest in the minerals, the severed mineral interest is extinguished and the mineral interest transfers to the current surface owner. The 1989 DMA appears to be self-executing, meaning that the severed minerals in question will be automatically deemed abandoned, without any action on the part of the surface owner, if no activity related to the minerals has occurred. One of the uncertainties relating the 1989 DMA is how to determine the relevant 20-year period. Some courts have determined that the relevant twenty year period is from 1969 to 1989. Other courts have determined that any 20-year period without activity prior to the passage of the 2006 DMA is enough. In 2006 the DMA was amended to add a notice requirement. Under the 2006 DMA, surface owners must first file and serve a notice of abandonment upon the severed mineral owner. This process often requires a title search. While the DMA favors actual notice, it allows notice by publication in a local newspaper, which means the severed mineral interest owner will often not receive actual notice. If the mineral owner fails to respond to the notice, and there was no active use of the mineral rights, the severed mineral rights are then deemed abandoned once the surface owner files another affidavit. Of the several hundred DMA lawsuits filed across Southeast Ohio, most are still winding their way through the courts.
Many of the early rulings from courts in counties experiencing the shale boom have been inconsistent. Thus, coupled with ambiguities in the DMA itself and how the two versions of the DMA interrelate, there is considerable confusion and uncertainty as to the true owner of these very valuable mineral rights. The result is that the intent of the DMA is being thwarted: the development of Ohio’s minerals is being delayed because it is difficult for Utica producers to know from whom the minerals should be leased. Until Ohio’s appellate court system is able to interpret both versions of DMA, and reconcile the differing lower court opinions, there will continue to be uncertainty. Several unanswered questions include: 1. What constitutes the mineral interest being the “subject of a title transaction?” Is it enough for the mineral interest to merely be referenced in a legal description or does there have to be an actual transfer of that interest? 2. Does the mere filing of an affidavit to preserve the mineral interest act as a savings event under the 2006 DMA or does there have to be a separate savings event within the 20year period? 3. As stated above, is the 20-year forfeiture period a static period measured from 1989 or is it rolling? Prior to the shale boom, Southeast Ohio was one of the poorest regions in the state, with property values in rural areas hovering around $1,000 per acre. Virtually overnight, the shale boom has lead to bonus payments sometimes exceeding $6,000 per acre in certain areas. Given this sudden increase in value, all of the ambiguities in the DMA, and the lack of case law interpreting the DMA, the shale boom has also led to a litigation boom in Southeastern Ohio. If you are a surface owner or a reserved mineral owner with interests in Southeast Ohio and you are unsure of your rights, I would urge you to contact an experienced oil and gas attorney to help you navigate these complex issues. David J. Wigham is a second generation oil and gas attorney at the law firm of Critchfield, Critchfield & Johnston, in Wooster, Ohio, with more than 20 years of experience in the industry. He is also the current chair of the Natural Resources Committee of the Ohio State Bar Association.
Dix Communications - Gas & Oil
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Northern Zone Edition
October 2013 Edition - Dix Communications
U.S. Chamber weighs in on energy development W Judie Perkowski Dix Communications
ASHINGTON — It was a rare chance to interview someone who not only has access to, but actually was involved in developing the energy policies and initiatives for the legislative, executive and regulatory branches of federal and state governments. Christopher Guith, vice president for policy at the U.S. Chamber of Commerce’s Institute for 21st Century Energy, was a chief representative of the administration during the drafting and debate of the Energy Policy Act of 2005. He was very forthcoming about questions concentrating on the oil bonanza in eastern Ohio. During the interview, he was asked if there are any foreseeable additions or revisions to the Energy Act considering it was enacted almost 15 years ago, based on information gathered in the late 1990s, and that even five years ago Ohio’s 32 Appalachian counties could not even imagine what is going on today in regards to this tremendous oil boom. Guith posits that “the chances are slim and none ... No one knows for sure how this will play out, it is speculative at best. And, it is up to the states to handle all the regulatory issues, they are the best to do that, they have local expertise. “Our goal is to try and present policy that would not inhibit the ‘golden goose.’ Ohio is on a great trajectory, especially relating to the job market. We don’t want policy changes to prevent the goose from laying more [golden] eggs.” In regards to Gov. Kasich’s push for an increase in the severance tax on oil, natural gas and condensate from horizontal drilling, Guith said, “it is not our [the federal government’s] mandate to get involved in state politics, but a comprehensive three-part study: America’s New Energy Future: The Unconventional Oil and Gas Revolution, shows that shale will create millions of jobs and trillions in investments over the coming
decades.” Phase I of the study quantifies the national impacts of shale, while Phase II details the state by state job and revenue impacts. In September 2013, Phase III was released, which goes even further by looking at the impact on manufacturing and other downstream activities. The third phase of the study quantifies the economic impact of reduced shale energy production as a result of a more restrictive regulatory environment. “The problem is, we need to appreciate that Ohio is not the only game in town. Producers have many places they can go to in this country. They will go to where they can get the best deal and the best operating environment,” he said. As Ohio enters into midstream operations, pipelines in general and the Bluegrass Pipeline in particular, have begun to generate concerns from the public. The proposed 1,100-mile pipeline begins in northeast Pennsylvania and travels through Ohio to an existing pipeline in Kentucky to the Gulf Coast. Targeted in-service date is middle to late 2015. “Interstate pipelines are governed by significant federal law and licensed for interstate transportation with the Federal Energy Regulatory Commission,” said Guith. “The Pipeline and Hazardous Material Safety Agency sets the national construction safety standards. “Pipelines are a way to move natural gas liquids ... You can transport oil by truck or rail, but natural gas liquids can only be transported by pipelines. Pipelines will send the product to fractionation and storage facilities and eventually to other pipelines and markets. FERC is responsible for regulating interstate transportation rates and services for natural gas pipelines, the construction of natural gas pipelines, and overseeing related environmenKubota’s rugged RTV utility vehicles are already proven workhorses. And now, an even more powerful Kubota RTV900XT has evolved. Engineered with a 21.6 HP Kubota diesel engine, a smooth VHT Plus 2 transmission and hydraulic power steering. RTV900XT...Evolved to work hard and to work smart.
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U.S. Chamber weighs in on energy development tal matters. FERC is also responsible for regulating interstate transportation rates and services of crude oil and petroleum products. With all that the development of Utica shale has to offer, the best thing it can bring to small towns like Cambridge are jobs. “It is an employees’ market. We don’t have the workforce to accommodate the industry. While more women have entered the workforce in the last five years, gas and oil is still a male driven industry, because of the physical labor. Their best opportunity is in the support and skilled sector — such as geology and petroleum engineering. “The shale development in Ohio will benefit small towns by the investment made by oil and gas companies, which creates new businesses with a new supply of products,” said Guith. “We are on the verge of a manufacturing renaissance across the country, state by state the numbers are there, because of upstream, midstream and downstream operations. It’s a domino effect ... one phase effects the next, and so on and so on. “Numbers based on an IHS study concluded the period, which began in 2012, to 2020, will witness the greatest job growth. By 2025, the gas and oil industry could employ more than 3.9 million people nationwide. Raising taxes would constrain those numbers. If that happens (higher taxes), by 2015, there will be 1.4 million less jobs created than without government intervention.
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IHS, Inc. is a group of engineering, technical, energy and market-specific information services companies. “The market for oil, the global demand has hit a new benchmark, especially in third world countries, which is driving the demand and development of oil and gas. And, it will still be there regardless of the economic situation in the U.S.,” said Guith. Christopher Guith is responsible for developing the Institute’s policies and initiatives as they apply to the legislative, executive and regulatory branches of the federal and state governments. He previously served as the deputy assistant secretary for nuclear energy at the U.S. Dept. of Energy, where he developed the administration’s nuclear energy policies and coordinated the department’s interactions with Congress, stakeholders and the media. While there, he was a chief representative of the administration during the drafting and debate of the Energy Policy Act of 2005. Guith is a graduate of Syracuse University -College of Law and the University of California-Santa Barbara. The Energy Policy Act of 2005 addresses energy production in the United States, including: energy efficiency; renewable energy; oil and gas; coal; Tribal energy; nuclear matters and security; vehicles and motor fuels, including ethanol; hydrogen; electricity; energy tax incentives; hydropower and geothermal energy; and climate change technology.
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October 2013 Edition - Dix Communications
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October 2013 Edition
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SMITH DAIRY FLEET MOVES TO
COMPRESSED NATURAL GAS
Marc Kovac Dix Capital Bureau
C
OLUMBUS — Chuck Diehl will admit he was a little skeptical of the initial talk of compressed natural gas vehicles. The trucks that take milk and other products from Smith Dairy are predominantly run on diesel fuel. So Diehl, the fleet manager for the longtime Orrville company, walked into a meeting late one Friday afternoon in mid-September on the topic with a lot of questions. He told an audience in Columbus that he quickly changed his viewpoint after hearing about the potential benefits and cost savings. And today, there’s a new compressed natural gas fueling station on Hostetler Road in the Wayne County community, where Smith Dairy trucks and the general public can fill up. “We saw the need to not only move toward compressed natural gas, but we also saw the need to build our own fuel site,” Diehl said, adding later, “We see this as a benefit to the public.” Diehl served as moderator for a panel discussion on natural gas-powered fleets during the Think About Energy Summit, a two-day conference coordinated by America’s Natural Gas Alliance. Diehl’s session focused on the university researchers who are studying ways to broaden the use of natural gas vehicles, the energy companies that are trying to accommodate a growing demand for fuel and the companies and Ohio communities that have already made the switch to natural gas for heavyduty trucks and buses. The changes are, in part, a natural outgrowth of eastern Ohio’s emerging shale oilfields, which could provide a close and readily available source of natural gas to power vehicles
on the state’s roadways. “When we choose to drive a natural gas vehicle, that’s something we can do to consume Ohio’s energy,” said Brad Couch, business development manager at Ariel Corp., which makes compressors used in vehicles that run on natural gas. He added later, “You can get in your Honda Civic, you can get in your bi-fuel vehicle and you know that without a doubt, unequivocally, what you’re doing is better for the environment, it’s better for the economy, it’s better for Ohio and it’s better for you and your local family.” Erich Evans, director of regulatory strategy at NiSource (Columbia gas in Ohio), said 10 natural gas fueling stations were completed in the state in the past couple of years, with another 44 in progress. The city of Columbus has one station in place, with work on two more under way. Kelly Reagan, fleet administrator, said the city began switching to natural gas garbage trucks three years ago. The first year, with one truck in service, the city saved $6,000 in fuel costs. Forty-six are now on the road, with double that number expected by the end of the year. The result: A total savings of $400,000 in fuel costs and tax credits (mostly the former) and lines of trucks at the fueling station. By 2020, the city expects to have about 450 compressed natural gas vehicles in its fleet, “shaving $2 million off the budget,” Reagan said. Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.
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Gas & Oil
Northern Zone Edition
October 2013 Edition - Dix Communications
Get appraisal before selling Kyle McDonald Dix Communications
K
ENT — There are multiple ways to get residential and agricultural property appraised and, one way or another, it’s a good idea to do so before selling surface or mineral rights. John Emig, founder and president of the Kent-based appraisal firm Spalding/Emig Company, said getting a property appraised isn’t required unless the government claims eminent domain or when there’s bank financing involved, but going without an appraisal before selling land rights means “you’re operating in the dark” “If they do choose to have a real estate appraisal it should give them a good idea of what their surface rights are worth,” Emig said, adding that once the value of surface rights are determined, the property owner should find out if the appraiser has expertise in analyzing the value of mineral rights, which can be more difficult to determine. There are various types of appraisers with qualifications for various types of property. In Ohio, licensed residential appraisers are qualified to work with one-to-four unit properties, but not complex residential assignments — standard one-to-four unit family residences with acreage or additional structures, such as barns. Certified general appraisers are qualified to appraise complex residential assignments and all types of commercial property. Organizations such as the Appraisal Institute, the largest global association of real estate appraisals, also give out two designations for qualified appraisers: SRA for qualified residential appraisers, and MAI for appraisers who are experienced in the valuation and evaluation of commercial, industrial, residential and other types of properties.
Emig said active local real estate brokers is another good option. “If someone were getting acreage appraised, number one, I’d recommend they get a state certified general appraiser, and then I would also think they would want to search out someone who has an MAI designation,” he said. Once an appraiser has been selected, Emig said the process will include a visit to the site, information gathering from public records and interviews with previous buyers, sellers or brokers of the property. The process can take up to six weeks, Emig said. “It varies, depending on how complex the assignment is and how busy the appraiser is at the time. In my mind, it’s not possible to get a good valuation done in less than a couple weeks and often we get up to 30 days,” he said. The cost of the service varies greatly as well and depends on how detailed of an appraisal the property owner wants. “Appraisal reports can start at $1,000 and go up to $10,000,” he said. “It just depends on how detailed the client wants it, how large the property is, where it’s located and just how much work is going to be put into the development of the report.” There are three basic levels of appraisal reports. The most detailed, a self-contained report, covers every detail the appraiser relied upon when developing their conclusions, but aren’t done often because they can become cost prohibitive, Emig said. The most common format, is a summary report, and the least detailed and least expensive option would be a restricted use report, which can only be used by one party, he said.
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October 2013 Edition - Dix Communications
Northern Zone Edition
CARROLL COUNTY ENERGY PROJECT Kimberly Lewis Dix Communications
C
ARROLLTON — The Ohio Power Siting Board and Carroll County Energy held a public information meeting on Aug. 22 at Carrollton High School with approximately 35 people in attendance. Residents had an opportunity to speak with representatives of Carroll County Energy, as well as representatives of the Ohio Power Siting Board, to learn about the proposed natural-gas electric-generation plant to be built in Carroll County. This information session is the first step of the process before the Ohio Power Siting Board approves a certificate allowing the plant to be constructed. The OPSB reviews applications for the construction of major utility facilities, including electric power plants and transmission lines. It is comprised of seven voting members, and chaired by the chairman of the Public Utilities Commission of Ohio. Carroll County Energy announced plans in early July to build a 700-megawatt natural-gas electric power plant in Carroll County. The plant would supply enough electricity for 700,000 homes. During the session, it was noted that some environmental studies have been completed and more are underway. Tetra Tech is conducting environmental studies, as well as community issues to be addressed. According to a press release, Carroll County Energy has determined the direct economic benefit of $655.2 million and 500 new construction jobs from direct spending on construction; indirect economic benefit of $62.5 million and 156 new jobs from purchase of local supplies and services; and induced economic benefit of $127.4 million and 450 new jobs from workers spending wages locally. According to the company’s press release, the project is an $800 million capital investment. Winslow said previously it will take two to three years to build the plant. The proposed facility is on 77 acres of land that is a part of a 233-acre farm. The site is approximately one-half mile east of state Route 9 and two-and-a-half miles north of Carrollton. It is adjacent to Carroll County Community Improvement Corporation’s land that is designated for industrial and commercial development. The facility will employ new state-of-the-art General Electric natural-gas and steam turbine technology in a configuration referred to as “combined-cycle.” This configuration captures waste heat and generates additional electricity using a steam turbine. According to a press release, the facility will produce 50 percent of the carbon dioxide and less than 10 percent of the sulfur dioxide and nitrogen
that a conventional coal-fired power plant produces to generate the same electricity. Winslow said the project is in the process of completing environmental studies and will be applying for and obtaining the necessary permits. He expects Carroll County Energy to submit its application to the Ohio Power Siting Board by the end of summer. The application will be reviewed by the Ohio Power Siting Board and includes an application review, an investigation, public notices, public hearing and other steps before the application will be approved. The entire process could take nine months. Additional information about any future open houses will be available at www.carrollcountyenergy.com.
Dix Communications Photo / Kimberly Lewis Mike Settenneri, part of the legal team for Carroll County Energy, (right) speaks to residents about the application process the company is beginning with the Ohio Power Siting Board.
Dix Communications Photo / Kimberly Lewis Jonathan Winslow, project manager for Carroll County Energy, LLC, points to the site of the proposed natural-gas electric-generation plant will be built. He and other employees of Carroll County Energy met with residents during a information meeting hosted by the Ohio Power Siting Board.
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CARROLL COUNTY ENERGY PROJECT
Dix Communications Photo / Kimberly Lewis Carroll County Energy displayed an aerial map that would show where the proposed plant will be built in relation to state Route 9. The 77-acre site will use 17 acres for the generating facility.
Dix Communications Photo / Kimberly Lewis Sean and Janet Smith (from left) ask Matt Butler, spokesperson with the Ohio Siting Board, questions about Carroll County Energy’s proposed power plant and the process that the company’s application goes through at the information meeting held Aug. 22 at Carrollton High School.
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OHIO WELL ACTIVITY
by the numbers
MARCELLUS SHALE
10 3 7 0 7 0 0 27
Wells Permitted Wells Drilling Wells Drilled Not Drilled Wells Producing Inactive Plugged Total Horizontal Permits
UTICA SHALE 3 3 8 Wells Permitted 82 Wells Drilling 327 Wells Drilled 0 Not Drilled 1 5 2 Wells Producing 0 Inactive 0 Plugged 899 Total Horizontal Permits
Data as of 9/21/13 Source: Ohio Department of Natural Resources
10175276
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Marc Kovac Dix Capital Bureau
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OLUMBUS — Some are calling it a pickle, the paramecium shape that stretches, north to south, across eastern Ohio’s Utica shale formation. Tom Stewart, executive vice president of the Ohio Oil and Gas Association, said the area stretches through Carroll, Noble, Harrison, western Guernsey, Belmont, Monroe and possibly Washington counties. “A well-defined sweet spot is becoming much, much more evident, (with) some very good wells in a narrow strip,” he said. Wells in that area, he said, are pumping out the volumes of wet and dry gas that have caused so much talk of an economic boon. To the east there are good wells, too, but it’s mostly dry gas, Stewart said. And to the west, there’s the possibility of crude oil. There’s potential for all three areas - and challenges, too, Stewart said. Industry is still developing the infrastructure to transport and process the energy being produced and new technologies to reduce the cost of production. The latter is important, given the abundant supply of natural gas and the resulting lower prices. Stewart, one of the speakers at the Think About Energy Summit in Columbus last week, said energy companies are still validating their Ohio shale wells to determine which areas offer the best production. “We’re not really there yet,” he said when asked about updated projections for the expected economic impact on the state’s economy. “What we need to see a couple of years in the future is what happens when they are done validating and more interested in doing development of their positions.” The two-day summit, coordinated by America’s Natural Gas Alliance, included a variety of discussions on natural gas exploration and production in Ohio. Panels reviewed the potential for generating electricity using natural gas, the possibility of more widespread use of natural gas vehicles and fueling stations and the need for more training programs to prepare workers for positions in the industry. “If we have a well-trained work force, we can produce oil and gas in this state in an environmentally friendly manner...,”
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October 2013 Edition
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said Rhonda Reda, executive director of the Ohio Oil and Gas Energy Education Program. It starts with the industry and the partnerships that individual companies pursue with these individual colleges and universities.” She added, “We’ve lost several generations of people not wanting to go into the field, especially the trades. We need to work as hard as we can to bring back those jobs.” Stewart said while the full economic impact of Utica shale production is not yet known, Ohioans are benefiting from increased natural gas production. He said households are saving an average of $1,200 a year on their heating bills. “It is Ohio citizens that are going to get the big benefit from having that large-scale supply so very, very close to them, instead of waiting on it to be shipped from the Henry Hub down in Louisiana,” he said. Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.
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Northern Zone Edition
October 2013 Edition - Dix Communications
Alison Stewart Dix Communications
T
WINSBURG — William Kinney, 61, president and owner of Twinsburg-based Summit Petroleum, began the small, independent gas operation in 1984. But he has worked in the industry since 1976, when he graduated from Kent State University with a bachelor’s degree in industrial engineering. He started his career at Park Ohio Energy. “I quit the day my son was born, Sept. 10, 1984,” said Kinney, of Hudson. Park Ohio Energy had wanted him to make a special trip to New York during the birth of his son, he said. That’s when he decided to start his own business.
Summit Petroleum drills, owns and operates crude oil and natural gas wells in Ohio, Pennsylvania and New York. The majority of Kinney’s sandstone oil and gas wells are located in Hudson, Twinsburg, and the Geauga county area. “In 1984, there were a number of small producers like me in this part of Ohio,” said Kinney. “The number just keeps dwindling. Only one or two others are up here besides me. We’re a shrinking breed.” But Kinney is determined to stay in business. Summit Petroleum has joined in projects with larger operators coming into the area. “Having partnerships with other companies has given us in-
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terest exposure and knowledge of shale development,” said Kinney. His goal is to see Summit Petroleum continue on as a small independent oil company and hopes to one day see his sons come into the business. Though Ohio’s future in the business is not looking bright in Northeast Ohio, Kinney said, the southern area of the state has a large future in drilling. “This is a rugged technical business which has a lot of appeal,” said Kinney. His favorite aspect of his work is the thrill he gets from creating something. “I like to make stuff happen,” said Kinney. “It’s rewarding for the land owners because they get revenue and free gas. It’s rewarding for the employees that get to keep going. Also, the wells themselves are so different and interesting.” Kinney is not opposed to fracking and believes it is not a dangerous issue. According to Kinney, there have been more than 10,000 horizontal wells completed without environmental damage. “Nothing bad has happened as a result of hydraulic fracking,” he said. “I have personally drilled over 1,000 wells. People hear the word ‘fracking’ and think of a fracture of a broken window, but that’s not what it is. Fracking is more like cutting a piece of cake rather than breaking a window.”
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Fracking has created a lot of wealth for drilling areas, Kinney said. “If there was something wrong about fracking then we wouldn’t do it,” he said. “We give people a reason to move back or stay in states with low economies by doing what we do. I’m proud to say I’m part of that.” Kinney is past president of both OOGA and of the OOGA Executive Committee and currently serves as chairman of the OOGA/Dominion East Ohio Gas Project Review Committee. He was presented with the Oilfield Patriot Award, an annual honor bestowed by the trade association. The award was established in 2006 and recognizes individuals who have made significant contributions to protect, promote and advance the common interests of those engaged in all aspects of Ohio’s crude oil and natural gas industry. Kinney said winning this award is the “high water mark” of his career. “This industry works because I enjoy doing it,” said Kinney. “It is fun, thrilling, and I work with a great group of people. It has never once felt like work. We provide something that the community and country need. I feel pretty good about what I do.” astewart@recordpub.com
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Northern Zone Edition
October 2013 Edition - Dix Communications
TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY BY NUMBER OF SITES
1. Carroll County 308 2. Harrison County 118 3. Columbiana County 80 4. Noble County 51 5. Monroe County 50 6. Belmont County 47 7. Guernsey County 46 8. Jefferson County 38 9. Mahoning County 27 10. Portage County 15 11. Stark County 13 Tuscarawas County 13 12. Trumbull County 10 13. Coshocton County 5 Washington County 5 14. Muskingum County 3 Holmes County 3 15. Knox County 2 16. Ashland County 1 Geauga County 1 Medina County 1 Wayne County 1 WELL SITES IN VARIOUS STAGES: PERMITTED, DRILLING, DRILLED, COMPLETED, PRODUCING, PLUGGED SOURCE: OHIO DEPARTMENT OF NATURAL RESOURCES AS OF 7/20/13
25
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100
125
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310
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C
OLUMBUS — Paula Mouser, assistant professor in the Department of Civil, Environmental and Geodetic Engineering at Ohio State, has received National Science Foundation funding for two projects. In one study, she is examining the fluid and rock characteristics that affect the fate of fluids deep underground. Her lab is measuring the density, viscosity and biodegradation potential of the fluids used in the hydraulic fracturing process and those that return to the surface as flowback. As part of this research, she is collaborating with Dave Cole, professor of earth sciences and director of Ohio State’s Subsurface Energy Materials Characterization and Analysis Laboratory, to determine the permeability and porosity of Marcellus shale samples. Knowing these characteristics will help researchers understand the risk of fluid migration, using a model being developed by her collaborator George Pinder at the University of Vermont. In a second NSF-funded project, Mouser is working with collaborator Desiree Plata at Duke University to identify the organic compounds present in hydraulic fracturing fluids -both those that degrade relatively easily and those that do not. “We’re looking at how fast these compounds degrade in the
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subsurface, from shallow groundwater aquifers down to deep subsurface brine reservoirs,” Mouser said. With support from the Sloan Foundation Deep Life Observatory, Mouser is also tracking the dynamics of microorganisms going into and coming out of shale gas wells. Her observations to date indicate that only a few groups survive the hydraulic fracturing process because of the high temperatures, different chemical conditions, high salinity and high pressures encountered in the deep subsurface. “Certain bacteria can wreak havoc on well infrastructure by producing scale products, corroding the wells or clogging the pore spaces in the deep subsurface,” Mouser said. “That’s why understanding the ecology and metabolic potential of microorganisms residing in these fluids is important.” She suggests that the oil and gas industry could reduce maintenance costs and improve gas recovery efficiencies by understanding how to reduce growth of these detrimental bacteria. “Microorganisms may also be beneficial to the environment by degrading some of the chemicals that are used in the hydraulic fracturing process so they don’t move to shallower aquifers and pose a risk to drinking water resources,” she said.
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October 2013 Edition - Dix Communications
Northern Zone Edition
COMPANY EXPANDS TO SECOND SHOP DUE TO GAS/OIL EXPANSION Dave O’Brien Dix Communications
P
ORTAGE Co. — A Louisiana company with experience manufacturing steel products for the oil and gas drilling industry in the Gulf of Mexico has recently set up its second shop in Northeastern Ohio, an area its president said he believes is well-suited to companies exploring eastern Ohio’s Utica and Marcellus shale formations. Winnfield, La.-based Six C Fabrication purchased a former plastics plant, with 222,000 square feet of manufacturing space on 33 acres of property, on South Prospect Street in Rootstown Township in Portage County for $1.25 million earlier this year. The company also has a plant on Salineville Road NE in Carrollton, in Carroll County. Company president Robin Cummings said the Utica Shale formation “is going to have activity for quite a long time,” and that his company is in Ohio to stay. “Utica and Marcellus (shale) have a long lifeline. We’ve been in the industry for a while, and we just think that having a presence and making ourselves available with the possibility of enhancing our corporation was a good move,” he said. Cummings said on-land drilling is easier as far as access is concerned. His company not only manufactures pipes and structural steel products, but helps drilling companies install them. So far, the Ravenna/Rootstown plant is employing 30 people, he said. Some are training new workers, and aiding field crews with installing equipment. He said the company em-
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ploys as many as 130 people across the tri-state area of Ohio, Pennsylvania and West Virginia, and that he enjoys seeing people find jobs in the industry. “We found Ohio a friendly state, with friendly people,” he said. “A kind of a perk we have is by being able to come there and open up, we’ve seen and met a lot of people we were able to help, who got maybe a better-paying job, left some other company or were unemployed. And maybe when they left the other company, someone else got hired.” Employees are busy setting up shop, training Ohio workers and creating more jobs, Cummings said. “We enjoy seeing people better themselves, their lifestyle, as well as the state of Ohio,” he said. “Now there’s need for good people to fill the jobs. It’s really taken a big turn.”
“Now there’s need for good people to fill the jobs. It’s really taken a big turn.” – Robin Cummings
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ILLERSBURG — State Rep. Dave Hall, a Millersburg Republican, has been keeping up to date on the oil and gas industry as chairman of the Agriculture and Natural Resources Committee. Hall is looking forward to more hearings out in the field, probably in Eastern Ohio where drilling is on the rise. As the committee chairman, he is finding himself speaking on a lot of panels and updating citizens about what is going on with oil and gas in the state. As for the upcoming hearings, Hall said they will likely focus on where is the state at with the infrastructure and what’s happening with drilling. Hall, who represents District 70, recently spoke to a delegation from Illinois. The state is in the beginning of a shale play in the southern part of Illinois. This past spring, there were some who wanted to put a moratorium on hydraulic fracturing, known as fracking, and hearings were held. However, Hall said a decision was made to keep moving forward as the committee was confident Ohio is doing it right. As Ohio is becoming “inundated” with “thousands of rigs,” Hall wants to make sure the state proceeds at a pace where “we can stay on top of regulations.” He believes the state has good regulations in place, and “as we move forward, we want to keep on top of things. Other states are looking at what we have done.” Among the things the state has done was to increase the severance tax to raise money to hire more inspectors, and it has worked to protect the water table by requiring triple protection when pipes go through it. “(We want to) have a fail-safe system so we do not have infiltration into our most valuable resource (water),” Hall said. There have been about 200 horizontal wells drilled without a problem, he added. “It seems like the oil industry is going after the easy wells first and leasing other land,” Hall said. “The infrastructure is starting to be built, and I think we are heading in the right di-
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District 70 State Rep. Dave Hall
rection. I think the industry will grow for many years to come.” Hall said there is a lot of shale under the state, and more oil and gas will be able to be extracted when technology improves. While he believes the industry will grow, Hall said he also thinks technological innovations will lead to new jobs and help improve the state’s economy, and entrepreneurs will be leading the way. “A lot of Ohio companies are providing services to local and global corporations,” Hall said. “There’s a greater opportunity to sell products when a company drills elsewhere. “It’s just not Ohio anymore.”
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OSU team researching shale
C
OLUMBUS — Ohio State University researchers have begun focusing their expertise on the shale energy industry in Ohio. With the industry growing at a rapid pace in Ohio and around the country, Ohio State aims to produce research that can help inform policymakers, industry leaders and the public. The university formed a research cluster with a $50,000 seed grant from the university’s Environmental Sciences Network in October 2012. The team, the Shale Environmental Management Research Cluster, has attracted about 30 Ohio State faculty members from four colleges across the campus: the College of Food, Agricultural, and Environmental Sciences (CFAES), the College of Engineering, the College of Public Health, and the College of Arts and Sciences. The group also includes researchers from the University of Toledo’s Department of Chemical and Environmental Engineering and several representatives from the U.S. Geological Survey’s Ohio Water Science Center, and is partnering with faculty from West Virginia University under a new shale energy partnership. All of the Ohio State faculty in the research cluster are also
part of the university’s Subsurface Energy Resource Center (SERC), established in 2011 to provide research and policy guidance in the shale arena. The center now has more than 80 affiliated researchers who provide foundational expertise and integrate research efforts across campus to answer important shale-related concerns. “The shale energy industry is moving very quickly, and there’s not really much science behind what’s happening and what impact it can have, good or bad,” said Zuzana Bohrerova, coordinator of the team and research specialist and associate director of Ohio State’s Ohio Water Resources Center. “There is a lot of misinformation and a lot of fear that does not have a lot of science behind it. We want to work on getting more data, so there can be responsible decision-making around shale issues,” Bohrerova said. Team members have applied to the National Science Foundation (NSF) and the U.S. Department of Energy for nearly $13 million in funding for a half-dozen broad multidisciplinary studies involving ecological health, sustainability and biodiversity related to shale development.
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