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Taking STEPS for safety
Creating a new customer base Energy Institute planned
Realtor: Hire an attorney
NOW HIRING - CDL Drivers
Buckeye Water Service Company is actively seeking Class A & B CDL Drivers. Requirements include: P P P P P P P
PREFER 2 years driving experience. Prefer water hauling, dump truck, or roll-off experience. PREFER Class A, but will accept Class B with experience. We are on call 24/7 by our customers and our drivers are on call 24/7. Willingness to work long hours as needed. Our drivers usually get several hours overtime. Good driving record and be insurable. No hazmat requirement.
You will be hauling brine water in 75/100 barrel water trucks to disposal wells, or drill cuttings [not garbage] in dump trucks or roll-off winch trucks with dumpsters [20-30 yard] to landfills. This is for the oil and gas industry currently drilling wells in our area, so you will be traveling township and county roads as well as state and interstate highways. Driving is local work.
Wages and Benefits
P P
Competitive wages. P Raise after 30 days of proven ability Medical, Dental, Vision, and Life Insurance available after 90 day probationary period Buckeye Water currently pays 100% of the employee health benefits. FR Uniforms provided by Buckeye at no cost to you, after 30 days. Direct Deposit for payroll checks. P Paid Vacation after one year. P Local driving!
Interested candidates can:
Apply in person at our office. You may mail or email your resume to: Buckeye Water Service Company PO Box 409 1535 John Glenn Hwy, New Concord, OH 43762 Office: 740.826.7674 / Fax: 740.826.7267 • Email: denny@bwscompany.com
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Gas & Oil
July 2013 Edition - Dix Communications
Table of Contents 4
Buckeye STEPS meeting
6
Importance of a business plan
8
We can grow anything
10
Realtor Says: ‘Get an Attorney’
12
Stay tough on fracking
14
High-pressure gas line planned
16
Compressors are heart of production
20
Supreme Court to hear appeal
24
Industries supporting the industry
28
‘Blood and Oil’
30
Hartley Co. ponders cng options
32
Lawmaker proposes increased taxes
30
Upcoming Gas and Oil Events
36
‘Historic era’ for Ohio oil production
38
Region racing to train workers
Judie Perkowski / Dix Communications
David Schallanberger / CPA
Mallory Evans / Dix Communications David Dix / Dix Communications
Mark Kovac / Dix Communications Laurie Huffman / Dix Communications Norm Shade / President ACI Services
Jeff Saunders / Dix Communications
Laurie Huffman / Dix Communications
Abby Armbrusters / Dix Communications
Judie Perkowski / Dix Communications Mark Kovac / Dix Communications
July through December
Mark Kovac / Dix Communications
Linda Hall / Dix Communications
Southern Zone Edition
Andrew S. Dix Northern/ Southern Zone ASDix@dixcom.com G.C. Dix II Southern Zone GCDixII@dixcom.com David Dix Northern Zone DEDix@dixcom.com
EXECUTIVE EDITORS Ray Booth Southern Zone RBooth@dixcom.com Rob Todor Southern Zone RTodor@dixcom.com Lance White Northern Zone LWhite@ dixcom.com Roger DiPaolo Northern Zone RDipaolo@dixcom.com
REGIONAL EDITORS Cathryn Stanley Southern Zone CStanley@dixcom.com Niki Wolfe Southern Zone NWolfe@dixcom.com Judie Perkowski Southern Zone JPerkowski@dixcom.com Kimberly Lewis Northern Zone KLewis@dixcom.com Erica Peterson Northern Zone EPeterson@dixcom.com
LAYOUT DESIGNER Kelsie Davis “Gas & Oil” is a monthly publication jointly produced by Dix Communication newspapers across Ohio. Copyright 2013.
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Kim Brenning Southern Zone Sales Cambridge, Ohio Office KBrenning@dixcom.com 740-439-3531 Peggy Murgatroyd Southern Zone Sales Barnesville and Newcomerstown, Ohio Offices PMurgatroyd@dixcom.com 740-425-1912 Barnesville 740-498-7117 Newcomerstown Jeff Kaplan Southern Zone Sales Alliance & Minerva, Ohio Office JKaplan@dixcom.com 330-821-1200 Rhonda Geer Northern Zone Sales Wooster & Holmes, Ohio Offices RGeer@dixcom.com 330-287-1653 Harry Newman Northern Zone Sales Kent, Ohio Offices HNewman@dixcom.com 330-298-2002 Janice Wyatt National Major Accounts Sales Manager JWyatt@dixcom.com 330-541-9450 Jeff Pezzano VP Advertising Sales & Marketing Kent Ohio Office JPezzano@dixcom.com 330-541-9455
COVERAGE AREA OTTAWA
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MADISON
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PICKAWAY AY
40
BBQ for Cambridge Heights residents
42
Utica East to build heliports
44
Stark State plans Energy Institute
48
‘Shallow’ vs. Deep
52
‘Covenants’ of leasing
56
The Geologist’s view
62
School doing the right thing
64
Chesapeake Energy and partners bring HELP
66
Gas industry experts talk to students
Laurie Huffman / Dix Communications Kimberly Lewis / Dix Communications
Don Gadd / Landman
Ethan Vessels / Marietta Attorney Judie Perkowski / Dix Communications
Laurie Huffman / Dix Communication Cathryn Stanley / Dix Communications
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Buckeye STEPS meeting highlights
safety, health issues for gas/oil workers
D
elving into areas relating to health and safety in the gas and oil industry, the Buckeye STEPS Network sponsors bi-monthly meetings to deliver information from experts in programs designed to protect workers from preventable injury or disease and the environment from hazards or disasters. The Buckeye STEPS Network is an acronym for Service, Transmission, Exploration, Production and Safety. Its membership includes operators and contractors in the gas and oil industry, in partnership with the Occupational Safety and Health Administration, Judie Perkowski the National Institute of Occupational Dix Communications Safety and Health, and other trade associations. President of Buckeye STEPS and program moderator is Joe Greco, director of new business development and outside safety compliance at the Pennsylvania-based Excalibur Machine Co. Guest speakers at the June 7 meeting at the Willett-Pratt Training Center on the Zane State College campus were representatives from the Akron office of the Bureau Veritas Group. “Bureau Veritas is an international business that serves the gas and oil industry, and all our clients, by providing testing, inspections and certification for health and safety, independent inspections, environmental diligence and compliance, quality assurance, and training, either online or in classrooms,” said Drew Carlson, BVG senior project manager. Presenting information on worker exposure to silica dust and what can be done to protect workers from exposure, Hans Umhoefer, BVG senior industrial hygiene manager, said silica is used in many industries, including gas and oil.
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“Respirable crystalline silica sand is used in hydraulic fracturing. The water and sand stimulates well production. Anyone who is working at the fracking site, including truck drivers who deliver the sand and others in the supply chain may be vulnerable to exposure. Transporting, moving and refilling silica in trucks, then on to conveyors and into blenders releases silica dust into the air,” said Umhoefer. “The biggest health concern from breathing silica is silicosis, in addition to other respiratory diseases. Silicosis is classified into three types: chronic, accelerated and acute. It is treatable, but not curable. “This is not a new process [the use of silica in hydraulic fracturing]. It has been done for many years, but has increased substantially because of horizontal drilling and multi-stage fracking. “OSHA has jurisdiction over work safety and health hazards. OSHA is the law and issues controls and standards. NIOSH offers guidelines. “Employers have to determine which jobs exposes workers to silica and take the necessary action to control overexposure and protect workers by engineering controls, work practices and protective equipment, in addition to worker training. But, protective clothing and equipment are only effective if worn properly. Another way of reducing exposure is to use an alternative proppant that is silica-free, but it is more expensive and still requires regular monitoring.” OSHA, NIOSH and other health-related agencies have specialists who help identify and correct hazards at the worksite. Both agencies have experts who have formed a silica focus group to further study silica exposure and to develop short and long-term solutions to protect worker safety and health. After a short break, attendees listened to a presentation from attorneys of a Columbus-based firm, Roetzel and Andress, who spoke to the group about “protecting and preserving your company in crisis or a catastrophe.” Shane Faralino, Doug Spiker, Douglas Kennedy, Brian Tarian and Mike Trevan provided tips and strategies that can help any company that is hit with a catastrophic incident and how to deal with those incidents in a decisive time period to minimize liabilities. “We work with clients to set a plan in place to be prepared for accidents and to protect work products,” said Kennedy. “The first 24 hours is critical in reconstructing incidents and collecting evidence to determine who or what is responsible for what happened, and evaluating the risk. Data must be available to identify the work process. There are also site variables that must be accounted for, such as the weather. “If someone is injured or killed, an OSHA inspection will
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be within the first 24 hours of the incident. Issues that should be addressed before an OSHA inspection: Training and documentation, compliance with regulations, injury/illness reports for the past five years. All documentation must be readily available.� To learn more about legal rights and responsibilities, including what to expect during an OSHA investigation, visit ralaw. com. The next Buckeye STEPS meeting will be 9:30 a.m. Aug. 2 at the Willett Pratt Training Center in Cambridge. EQUAL HOUSING
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Importance of a business plan B
usiness owners often find themselves in a state of transition. They know change is needed. They have a vision. They have goals. What they are missing is a specific plan mapping out how everything will come to fruition. This is especially true for one northeast Ohio farmer who clearly recognizes that his operations need David Shallanberger to change. He’s having difficulty finding the help he needs, in his CPA case that means farm hands who can handle some of the more labor intensive tasks at an economical price. He also recognized that he needed to build two or three new buildings and shore up the old barn. This work has to be accomplished in order to make the transition to a less labor intensive operation. Honestly, he is a bit overwhelmed and unsure as to where to focus his efforts. Yes, he has a strategic vision and knows how to change to remain successful. However, he has not yet pulled together a business plan to map out exactly how he is going to accomplish his goals. Sound familiar? If so, consider developing a solid business plan. Start by writing down the company’s vision. From there, begin listing the action steps needed to make this strategic vision come true. After the steps are outlined, be sure to prioritize them so the business focuses on what is truly important first. While the farmer was very excited about his new building and the progress he had made on it, that enthusiasm was short lived when he came to the realization that it should not have been his top priority. He recognized that he really needed to shore up the existing barn first to prevent any major disruptions
to his business. As a business owner, prioritize those mission critical elements in the business plan. Every sustainable successful business has a business plan; it’s something they all have in common. Without a written plan, critical steps toward achieving the strategic vision can be missed. Part of a successful plan is having a good understanding of the business’s cash flows and cycle time. However, that is not the only important component needed. A good business plan focuses on a strategic plan for long-term goals, illustrates an understanding of the business’s needs to reach mid-term goals and contains specific action steps. Not only does it help the leader with self-accountability, but it helps with holding the entire team accountable for their roles, too. Employees, business partners and advisors should all follow the strategic vision that has been set for the organization. A business plan is a key document for any entrepreneur trying to grow or maintain the business. Before changing, expanding or trying something different to take advantage of new opportunity, sit down and start writing. The time invested up front will pay off in the long run.
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July 2013 Edition
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
‘We can grow anything’
E
nviroscapes is a landscape operation based in northeastern Ohio whose clients include commercial businesses, universities, high-end residential, and public utility companies, among others. Founder and CEO Todd Pugh said Enviroscapes is already undertaking highly sophisticated projects, and it is natural to transfer what his team already knows into the gas and oil Mallory Evans Dix Communications industry. A Louisville native, Pugh started mowing lawns for $5 as a 14-year-old. He grew that business into Enviroscapes, a multimillion-dollar landscape company. While the company’s list of services is long, Pugh simplified it to the basics: “We can take anything down and we can grow anything.” Enviroscapes offers several services with are useful at well pads and along pipelines. Pugh mentioned hydro-seeding, erosion control, site reclamation and landscaping, clearing and mowing of all types, site monitoring, light excavation and grading. Often, companies like Enviroscapes are called in by utility companies for heavy-duty mowing, clearing and stabilizing before the well or pipeline work begins. Pugh’s company owns more than $1 million in dedicated equipment that would work on right of way projects. Pugh said Enviroscapes goes one step further by carefully
documenting the work done and continually monitoring the site through dedicated account managers. Sites are kept in compliance with soil erosion plans. “Not only do we do the work, we document and store it in our database,” he said. Pugh said photo documentation and follow-up are integral to the Enviroscapes protocol. Pugh said his team is always searching for the latest technology. These technologies are used for everything from mapping sites with GIS equipment to stabilizing soil with bonded matrix fibers. On a recent trip to Pennsylvania, Pugh and his team purchased a $180,000 piece of equipment to safely mow steep hillsides. Safety is always a concern for Enviroscapes, which has participated in the STARS Safe Company Program. “When you work for a utility company, I always say number one is safety, number two is documentation and number three is doing a good job,” Pugh said. “When we are working with a contractor, we consider it an honor to work with them.” Enviroscapes has a master service agreement with multiple utility companies already. Those service agreements take time to secure, and local contractors must demonstrate that they have the financial capacity to complete the job. In West Virginia and Ohio, Enviroscapes employees have been clearing right of ways and mowing for a - Todd Pugh regional natural gas company for nearly a decade. Pugh and his team work with many pipeline and utility companies, including FirstEnergy, Dominion, American Electric Power, Century Link and AT&T. He said it takes time to build relationships with utility companies, but Enviroscapes has proven its ability to respond
“The real influx of work we expect to see is in the next 18-24 months.”
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July 2013 Edition
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quickly when a company approaches them with a project. “The real influx of work we expect to see is in the next 18-24 months,” Pugh said. As a local operation, Enviroscapes aims to bridge the gap between utility companies and clients. “Being a local company, when we talk to a client, we have a certain level of respect,” Pugh said. He said they are nearby to fix problems or respond to concerns. Enviroscapes is located in Louisville, with branches in Akron, Canton and Youngstown. Satellite campuses are located in Columbus and West Virginia. For more information, see the Enviroscapes website at www.growinggood.com.
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Realtor says: ‘Get an attorney’
P
roperty owners approached to lease drilling rights on land they own that has fracking potential should hire an attorney to review any leasing document submitted to them for signature, Ravenna Realtor Jack Kohl said. Without the benefit of attorney, the person leasing his or her land could sign away rights they had no intention of giving up. Kohl said he has leased deep drilling rights on the horse farm he and his wife, Heidi, own in Ravenna Township in Portage County. “We leased only deep drilling rights because we did not want a pipeline going across our land or a big holding tank sitting on it,” he said. The first wave of leasing deep drilling occurred three years ago and most of the then-deemed promising land already was leased, Kohl said. Depending on how successful the wells are that are drilled will determine if another wave of leasing occurs, he said. Four or five wells have been drilled and the companies so far are not saying how successful they are.
Some of the drilling rights have already been taken out of the hands by the property owners who leased their drilling rights for the Clinton wells that were drilled in the early 1970s, Kohl said. Those were shallow wells that tapped oil and gas when prices went up after OPEC reduced supply. Many of those leases, Kohl said, were written to include deep drilling rights so in those instances the energy Jack Kohl companies that own those leases already own the deep drilling rights. The other factor that may result in a second wave of leasing is that many of the original deep drilling leases were written to expire in five years and will be up for renewal in two more years, Kohl said. “I think that is how many of the Chesapeake leases were written up so if the area is shown to be rich in natural gas and oil, that means another wave of leasing will start to occur soon,” he said.
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July 2013 Edition
Quaker City (740) 679-2141 Zanesville (740) 455-2141 St. Clairsville (740) 695-2141
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Industry, environmental groups agree: STAY TOUGH on ‘fracking’ infractions
R
Mark Kovac Dix Communications
epresentatives from two state groups with generally opposing viewpoints on energy policy are more like-minded in their positions on companies that illegally dump oilfield wastes. Both Tom Stewart, executive vice president of the Ohio Oil and Gas Association, and Jack Shaner, deputy director of the Ohio Environmental Council, told an audience in Columbus in late May that companies caught participating in such activities should lose their op-
erational permits. “We have been very outspoken in saying that if laws were broken and this person purposely polluted and avoided his obligations under the law, then that person should suffer the full consequences of the law,” Stewart said. Shaner took it a step further, calling for the implementation of a “corporate death penalty,” meaning the guilty parties
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“They’re not going to let scofflaws get away with things, and they have been all over these, and I salute them for that.” - Scott Shaner
should be blocked for doing business. He said, “If the character in Youngstown, if found guilty, that guy should not only lose his current permit, which [the Ohio Department of Natural Resources] has suspended... His ability, his right to ever do business in the state of Ohio again on anything, should be permanently revoked,” he said. Stewart and Shaner offered the comments during a forum before the Columbus Metropolitan Club, the third such session that has focused on horizontal hydraulic fracturing and eastern Ohio’s growing shale oilfields. Shaner, often a vocal critic of the oil and gas industry and the potential environmental harm posed by fracking, acknowledged policies adopted by Gov. John Kasich and Republican lawmakers. He cited crackdowns on D&L Energy and affiliated companies in the Youngstown area and brine hauler in Belmont County allegedly dumped oilfield waste fluids. D&L lost its permits to operate injection wells, a decision it is appealing with the Ohio Oil and Gas Commission. “Kasich’s team got all over that guy, wants to put him out of business,” Shaner said. “They’re doing the right thing.” Harch Environmental Resources of St. Clairsville plans to meet with ODNR officials to present evidence to prevent a revocation of its state permit. “Some clown backed up the tanker and let ‘er all down the hill literally into a farm pond,” Shaner said of the latter, citing orders released by ODNR earlier in the week. He added of the Kasich administration, “They’re backing up their words. They’re not going to let scofflaws get away with things, and they have been all over these, and I salute them for that.” But Shaner said there’s still a lot more that should be done to ensure the oil and gas industry operates without widespread harm to the environment. He said the state still has far too few inspectors to keep tabs on the tens of thousands of active oil and gas wells in production, and increased enforcement and fines should be leveled at those companies that are breaking the law or not meeting state rules. But Stewart said rule violations need to be kept in perspective. A company that fails to have a required sign in place on Continued on pg. 22
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
High-pressure gas line planned to cross northeast Ohio
A
high-pressure gas pipeline may wind up crossing through Columbiana and Stark counties on its way from Kensington, where a new gas processing plant is nearing operation. It’s planned to go all the way to Michigan and possibly on to Ontario. “As we continue down the Laurie Huffman road to energy independence, Dix Communications and we continue to harvest or explore opportunities (for gas), we’re going to have to either rail it, pipe it, or haul it. This is part of the end process. And I think it’s all good,” said Stark County Commissioner Richard Regula. A meeting was recently held with Spectra Energy to discuss the project that included Regula as well as with one representative from each township in Stark County. Mort DeHoff attended for Washington Township, Mike Lynch for Nimishillen, John Hagan for Marlboro Township and Ellis Erb for Lake Township. According to DeHoff, the proposed pipeline was said to be only speculation at that time, as energy company officials, which included Ronald Johnson, a right of way projects manager for Spectra, said they would not lay out the money for the project unless it was “sold” first. DeHoff said the word now is the company is trying to find end users in Michigan before moving forward. The project will also have to be approved by the Regulatory Commission, and discus-
sions indicated the project could take two years to get off the ground. According to information obtained from the Spectra website, the project, called the Nexus Gas Transmission Project, will involve partner companies DTE Energy, Enbridge and Spectra Energy, and it has a projected in-service date of November 2016. “There will be a lot of federal regulations because this is an interstate project. So, there will be a lot of hoops to jump through,” said Regula. The plan is to use the path of existing power lines because right of way has already been obtained, and Regula said it appears Spectra will partner with other power companies for the project, which could be electric, gas, or both. The pipe will be 36 inches in diameter, which DeHoff said is considered a big line, and it will be a high-pressure line. The pipe will be buried according to state regulations, which is thought to be 48 inches. “It was agreed by all involved in the meeting that the Stark County
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engineer should draw up standards for crossing the township roads, and then the townships can adopt them,” said DeHoff. “This will be a pretty major job, and we don’t know if they intend to bore into the roads or dig them up.” DeHoff indicated the state will provide the standards for state highways and there will be federal guidelines for cutting into U.S. roadways and railroads. The proposed NGT system will move critically needed supplies of Ohio Utica shale gas to high-demand markets in the Midwest, including Ohio and Michigan, as well as to Ontario. The new pipeline will serve local distribution companies, power generators and industrial users in these markets. The NGT project will originate in Ohio, will include approximately 250 miles of large diameter pipe, and will be capable of transporting at least 1 billion cubic feet per day of natural gas. The pipeline will originate in Columbiana County, traveling through West and Knox townships, and then into Stark County. In Stark, it will enter Washington Township around Louisville or Mahoning Street (state Route 153) and head northwest toward Maximo. It will enter Nimishillen Township at the northeast corner around Parks and State streets, and cut into Marlboro Township around State Route 44 and State Street, on its way into Lake Township. It will continue in a northwesterly direction toward Toledo and enter Michigan near Detroit on its way to Canada.
July 2013 Edition
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July 2013 Edition - Dix Communications
Southern Zone Edition
Compressors are heart of natural gas production
W
ith the development of the Utica Shale, more and more natural gas compressors are appearing on the Eastern Ohio landscape. Gas compressors have always been part of Ohio’s oil and gas production, however, the size of the Utica play requires more and larger compressors than ever before. Norm Shade Raw natural gas is commonly President, collected from a group of adjaACI Services cent wells and, after processing at the collection point to remove water and natural gas condensate, it is pipelined to a gas processing plant. After further processing to remove salable liquid hydrocarbons (ethane, propane, butane, etc.), the natural gas is then delivered into the interstate pipeline grid, which takes it to commercial, industrial and residential customers. Natural gas compressors are literally the heart of natural gas production. Shale gas wells tend to produce at very high pressures and flow rates initially, but they decline rapidly to a lower level that is sustained for many years. As the pressure declines, gas compressors must be deployed to boost the gas pressure high enough to push it through pipelines to market. Just as the heart is vital to collecting and pumping blood throughout the body, a gas compressor collects natural gas from underground wells and “pumps” it to market. Gas compressors are prevalent throughout the interstate pipe-
This 4450 horsepower reciprocating gas engine and compressor package is one of many built for the Utica and Marcellus Shale plays by Dearing Compressor & Pump Co. of Youngstown. The six-cylinder compressor was manufactured by Ariel Corp. of Mount Vernon.
line grid and in gas processing plants, strategically located in a limited number of centralized plants. But upstream of those plants are many more “gathering” compressors, located at or near the actual wells that produce gas from deep underground. Gathering compressors typically sit out in the open, not housed in buildings. They pull gas from individual or a group of wells and boost the pressure to push it into a gathering pipeline that leads to various types of processing facilities. Most natural gas compressors are reciprocating (i.e., pistontype) compressors, driven by reciprocating engines that use natural gas fuel. Much larger than the average 110 to 150 horsepower automobile engine or even a 450 horsepower semi-truck engine, turbocharged compressor engines are typically more than 1000 to as high as 4500 horsepower or even larger. Engine exhaust is quieted by a large industrial muffler, and to meet environmental regulatory requirements, exhaust is treated with a catalytic convertor, just as automotive engines are. Large industrial gas compressors have two to six cylinders with internal pistons and check valves. Connected into a pipeline, a compressor draws gas in at a low pressure and delivers it out again
Continued on pg. 18
Festivals, homecomings, music, parks, camps, museums, lakes for boating, and great restaurants to suit everyone. Check our website often for updated lists of things happening in the county!
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877-727-0103
10125013
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July 2013 Edition
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18
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Compressors” from pg. 16
throughout the world. Most large compressor packages are mounted on concrete slabs. Some are housed inside buildings, but most gathering compressors operate out in the open. Gas gathering compressors operate around the clock, often running more than 8400 hours a year. To put that figure in perspective, driving an automobile 15,000 miles a year at an average speed of 50 mph takes only 300 hours. A typical new Utica Shale gathering compressor has the capacity to deliver as much as $50,000 of natural gas each day, make high reliability extremely important. Computerized controls operate and monitor the engine and compressor, keeping the system operating reliably or automatically shutting it off if maintenance is required or a problem occurs. Satellite or cellular links allow operators to remotely monitor the compressors, and mechanics are automatically called out when unscheduled maintenance is needed. With annual maintenance and major overhauls every 4 or 6 years, these large compressor packages typically last for more than 20 years.
at a higher pressure to move it through the pipeline system. Depending on the needs of the particular gathering system, the cylinders on a compressor may be configured to operate in parallel or in series (called staging). Most gas gathering compressors are configured in two- or three-stages. The compression process naturally causes the gas to heat up, so cooling is required before it enters the next stage for further compression or before continuing on into the pipeline. This is accomplished with large air cooled heat exchangers. Similar in principal to the radiators in cars and trucks, the heat exchangers also cool the engine and compressor. The engine, compressor and heat exchanger are mounted on one or more welded I-beam skids that allow the packaged compressor system to be built in a factory and transported to a field site on one or more large trucks. The skid also provides a platform for mounting accessory items such as gas separators that remove small amounts of liquid from the gas, pulsation bottles that smooth out the pressure waves from the compressor, controls, and other equipment. Most compressor packages are built in the Southwestern states, however, Youngstown, Ohio packager, Dearing Compressor & Pump Co., has enjoyed major growth with the development of the Marcellus and now the Utica Shale. Another Ohio company, Ariel Corporation in Mount Vernon, manufactures the majority of the large reciprocating gas compressors used
Drill string Drill•string noun : A column, or string, of pipe that transmits drilling fluid (via the mud pumps) and torque (via the Kelly drive or top drive) to the drill bit.
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July 2013 Edition
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10151408
20
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Ohio Supreme Court to hear appeal
T
he Ohio Supreme Court agreed June 19 to accept an appeal filed by the city in March in its attempt to exert more control over oil and natural gas wells drilled within the city. Justice Terrence O’Donnell dissented in the decision to accept the appeal. The city filed the appeal after the Ninth District Ohio Court of Appeals overturned part of a 2011 Summit County Court of Common Pleas rulJeff Saunders ing that the city could oversee drillDix Communications ing related to Ravenna-based Beck Energy Corp.’s plans to drill a gas well on private property on Munroe Falls Avenue. The appellate court ruled that some city ordinances could not be applied to Beck Energy’s plans if the ordinances restricted drilling operations because those operations are overseen by the Ohio Department of Natural Resources. The appeals court, however, did uphold the Common Pleas Court ruling that the city can apply ordinances governing general operations
by developers, so long as they do not discriminate specifically against drilling operations. Beck Energy attorney John Keller said June 20 that the appeals court’s ruling was “thoughtful and well written” because it conforms with state law. “What the decision said is exactly what the (Ohio) General Assembly said,” he said. Beck Energy President David Beck said he did not wish to comment until the case was decided. City Law Director Jack Morrison and Mayor Frank Larson did not return calls seeking comment before press time. The city said the issue began when Beck Energy began preliminary work at 224 Munroe Falls Ave. on March 30, 2011, by bringing in a bulldozer and employees to begin construction of a driveway to support the drilling operation. Morrison previously said the city issued a stop-work order because despite being informed in writing by the city that the company would need zoning and building permits, the company failed to do so because it believed it only needed the oil and gas permit it had obtained from the ODNR. Larson said in February that there was a larger issue at stake, that of home rule, and that he believed it was wrong for the state to have complete authority over oil and gas wells.
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“It’s an important issue and we believe this is an important case for the Supreme Court to hear.” - Atty. John Keller Also in February, Beck said that the company would adhere to all state laws and court rulings in its operations. Beck also said he did not believe that communities should have home rule over drilling because it would be too onerous for companies to have to contend with a patchwork of local regulations and “a lot of wells wouldn’t get drilled at all.” According to the city’s Supreme Court appeal, filed March 22, the city is arguing that city ordinances regarding such matters as streets, rights-of-way, zoning and those specifically concerning drilling. The city further argues that its drilling ordinances, which require a driller to have a zoning certificate; pay an $800 fee “to fund safety and emergency response forces;” a public hearing, notice to neighboring property owners and approval by City Council before drilling can begin; and payment of a $1,000 performance bond are not in conflict with state law. “This court should accept jurisdiction over the present appeal to clarify whether and to what extent [state law] preempts local ordinances,” states the appeal. “This is an issue likely to repeat itself many times over the coming years, as Ohio’s oil and gas reserves
July 2013 Edition
21
are developed. It also invokes constitutional questions regarding the extent of a city’s local zoning power.” In its response to the appeal, filed April 22, Beck Energy argued that “the Ohio General Assembly has made a public policy decision that the development of oil and gas resources in Ohio should be regulated at the state level rather than by local officials. The Court of Appeals applied settled principles of Ohio law, which need no further explanation by this court, and properly found that the city’s drilling ordinances prohibit what state law permits and therefore exceed the limits of its home rule authority.” Keller said the case is a significant matter. “It’s an important issue and we believe this is an important case for the Supreme Court to hear,” he said.
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22
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
“STAY TOUGH ON FRACKING” from pg. 12
He added, “I don’t understand why one industry is being singled out. ... I thought Ohio was open for business? ... That’s not a very business friendly way of inviting people into your state.” • Law changes: Asked to identify a couple of changes they would make to the state’s biennial budget bill, Stewart said he would include more support for compressed natural gas vehicles to assist in the construction of infrastructure to allow consumers to fill their cars. He also said excess severance tax collections, under current rates, should be used to boost programs that plug wells that are no longer being used. Shaner voiced concern about language in the budget legislation OK’d by the Senate’s Finance Committee Wednesday covering the handling and disposal of technologically advanced naturally occurring radioactive materials, saying state law should be stricter and more in line with federal standards. He also advocated for increased public review and appeals on the placement of oil and gas wells. “If you live next to an oil and gas well, you have no right to appeal the terms and conditions of that permit whereas if it’s a coal mine you certainly do,” he said. “Something’s wrong with that picture, and we ought to be fixing that.”
a well, for example, should not face felony charges or permit revocations. Recent administrations have “always tried to identify compliance issues and get them resolved instead of trying to send people to jail,” he said. In response to a question about the Youngstown dumping incident, Stewart said, “If you’re a person who’s responsible for the company and you’re an officer any my understanding is the allegation is that he directed them to do it, then I think that he should be denied permits ... I don’t think anyone in my industry disagrees with that.” Among other issues addressed during the forum: • Severance Taxes: Stewart continued to voice opposition to Kasich’s proposal to increase tax rates on oil and gas produced via horizontal hydraulic fracturing. He said producers should be able to reinvest their net revenues into their drilling operations, not forced to turn a portion over to the state. Proponents of the tax increase “never tell you what it took to find that barrel of oil... They never tell you what it took to lift that barrel of oil 7,000 feet from below the ground to the surface. They never tell you what it cost to replace that barrel of oil plus find more. By the time you get these calculations in, you’re closing in on $80-$90 a barrel of oil [in costs].”
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July 2013 Edition
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24
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Industries supporting
the industry
LRC
Laurie Huffman Dix Communications
Lance Repair Company
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T
he recent oil and gas activity in northeastern Ohio has already brought support industries to the area, with many more, undoubtedly, on the way. Below is a list of the gas processing plants, field offices, and industries that serve the oil and gas industry currently entering the area. Utica East Ohio Sister plants in Kensington, located in Columbiana County, and in Scio, in Harrison County, are being erected in a partnership called Utica East Ohio. The partnership consists of three companies: 3M Midstream, Access Midstream, and EV Energy Partners, and the Kensington and Scio plants are part of a $900 million investment by the entity. The Kensington plant is nearly complete, in its first phase, and should be operational this month, and construction is underway in Scio as well. But, according to Joe Giles, vice president of operations at the sister sites, recently reported construction will continue one or more years, even after the massive plants open. The Kensington plant is where the gas will be processed, and it will be separated at the fractionation plant in Scio. The construction phase alone has brought about 350 workers to Kensington and hundreds more to Scio. Construction of a third sister plant will start later this year. This plant, to be situated in Leesville, within Carroll County, will be another gas processing site slated to be up and running by June of 2014. Chesapeake Energy An industrial park in Louisville is the site of a new Utica Field Office being built by Chesapeake Energy. Chesapeake purchased nearly 300 acres at the site, which is adjacent to a railroad line. The location will house an office building, at least five stories high, a shop where equipment can be worked on, and another building for some of Chesapeake’s affiliate oilfield service companies. Louisville city Manager Tom Ault has reported Chesapeake is spending tens of millions of dollars on the site, and he said that is a good indication they will be here for some time to come. A railroad loop is to be built on the site where sand can be shipped in and loaded onto trucks to be used for hydraulic fracturing processes that bring the gas up out of the ground and eventually out to market. Baker Huges Baker Huges, a Texas-based energy company, has purchased over 100 acres within Northeast Ohio Commerce Park, in Massillon, for a Utica shale gas operations hub, it has been reported. Baker Huges sought property in the Interstate 77 gas and oil corridor, and according to a spokesperson at the company, the Massillon site was a go because of its proximity to I-77 and because
Dix Communications - Gas & Oil
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there is also a railroad line on the southern portion of the property. The land purchase is estimated at more than $3 million and the site is located on Millenium Drive. It will provide a regional hub for the company, which would serve oil companies and their drilling operations across the Ohio Utica shale activity. The project is slated to break ground late in the year. Oilfield Trucking Solutions Chesapeake’s Oilfield Trucking Solutions, which held an open house in April, is located in North Canton. It immediately brought jobs to local truck drivers for oilfield-related fluid transportation. OTS has more than 15 years of water hauling experience and it became an affiliate of Chesapeake, the na-
July 2013 Edition
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26
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
“INDUSTRY SUPPORTING” from pg. 24
close to $3 million on 140 acres of land in an industrial park within the Village of Strasburg, in Tuscarawas County. About 250 jobs are projected to be available there after the company opens later this year. And, according to a realtor in the area, three additional companies have committed to coming to the village to be near Schlumberger, a major oil and gas service provider worldwide. Pennant Midstream The Hickory Bend plant, a $300 million gas gathering and processing plant is being built in Springfield Township, Mahoning County, is being developed by NiSource Midstream Services LLC, and Hilcorp’s joint venture, Pennant Midstream LLC. The project includes a $150 million gas processing plant and an additional $150 million worth of pipelines that will run from western Pennsylvania to Mahoning and Columbiana counties. Officials from NiSource have stated this project could actually grow to a $1 billion investment in the very same location. Roughly 1,000 tradesmen are expected to gain jobs during construction, slated to begin this month.
tion’s second largest producer of natural gas, in 2005. OTS operates as a carrier for oil and gas activity in both the Marcellus and Utica shale plays, located in Ohio, Pennsylvania and West Virginia. MarkWest Utica EMG MarkWest, in partnership with EMG, recently opened its first gas processing plant in northeastern Ohio. The gas processing plant is found in Cadiz, and it has dramatically increased the income tax revenue in the small Harrison County community already, with an 18 percent increase over this time last year. The first week of June, company officials hosted a meet and greet at the Cadiz plant, located in Sally Buffalo Park. Residents were keen to learn more about the developments there, as Harrison County is now the second-most permitted county for gas and oil in the Utica play, following Carroll County. Schlumberger Ltd. Schlumberger Ltd., a major oilfield service provided spent Ashtabula Lake Williams
Lucas
Fulton
Ottawa Wood
Henry
Defiance
Geauga
Lorain
Huron Putnam
Trumbull
Cuyahoga
Erie
Sandusky
Portage
Summit
Seneca
Paulding
Medina Mahoning
Hancock
Van Wert
Ashland
Crawford
Wyandot
Wayne
Allen
Columbiana
Stark
Richland
Hardin
Mercer
Marion
Auglaize
Holmes
Morrow Logan
Knox
Carroll
Harrison
Coshocton
Shelby Darke
Jefferson
Tuscarawas
Union
Portage County
Mahoning County
Delaware Licking
Champaign Miami
Guernsey
Franklin
Belmont
Muskingum
Clark Madison Preble
Montgomery
Noble
Fairfield
Greene
Monroe
Pickaway
Perry
Morgan
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Fayette
Butler
Warren
Clinton
Pennant Midstream
Washington
Hocking Ross
Athens Vinton
Highland
Hamilton
Meigs Clermont
Pike Brown
Adams
Jackson Gallia
Scioto
Lawrence
KENSINGTON PLANT
North Canton
Oil Field Trucking Solutions (Affiliate of Chesapeake Energy)
Louisville
Massillon Baker Hughes
Stark County Village of Strasburg
Schlumberger Ltd.
Chesapeake Energy Utica Field Office
Utica East Ohio Partnership Kensington Processing Plant
Carroll County
Lisbon
Columbiana County
Carrollton
LEESVILLE PLANT
Tuscarawas County
Utica East Ohio Leesville Processing Plant Utica East Ohio Hub-Fractionation Plant in Scio
Harrison County
Jefferson County
HARRISON HUB
Cadiz
Mark West Energy Partners
Gas and Oil Map/Wendy Prince
Dix Communications - Gas & Oil
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July 2013 Edition
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28
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Do you miss...
Home-Cooked Meals? BREAKFAST • LUNCH • DINNER 10157264
Kinsey’s Korner Restaurant
OPEN 7 DAYS A WEEK
330-947-2288
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ER LA N D B M U C Discovery Channel photo
Josh Cutter (left), Beth Cutter, CJ Cutter, Kristin Anthony and her husband, Ray Anthony, pose for cameras on the rig on CJ Cutters property, in West Salem.
‘Blood and Oil’
A
Continued on pg. 34
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family oil drilling business in West Salem is now the focus Abby Armbrusters of a television show on the Dix Communications Discovery Channel called “Blood and Oil.” The show follows West Salem local CJ Cutter and his family, whom operates Cutter Oil, as they go toe-to-toe with big drilling industries that have moved into Ohio searching for oil. “My biggest thing is that I want big landowners to see that smalltown companies are still doing it,” Cutter said. “Just because they’re big doesn’t mean they’re the best.” Cutter’s immediate family, including Beth Cutter, the current owner of Cutter Oil, and siblings Josh Cutter and Kristen Cutter Anthony are a part of the season as well since they all have a hand in the business. In 2010, former owner Chuck Cutter passed away, leaving the business in the hands of Beth and CJ. Filming began in late 2012, but recently wrapped this spring. The first episode aired Tuesday, June 18. “We were brought this idea from a production company called BSG. We loved it,” Executive Producer David Pritikin said. “The family in general, they’re a hard-working family. ... The one thing I’ve heard from everybody about the Cutters is they’re hard workers.” When the family was first approached with the idea of filming a
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Hartley Co. ponder compressed natural gas options
Judie Perkowski Dix Communications
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cknowledging rumors about converting one of the gas stations in Cambridge into a compressed natural gas station, Hartley Company President Doug Hartley said, “we are educating ourselves about compressed natural gas. We are unsure about public reaction to the whole idea of CNG-fueled vehicles. But, we are willing to take the proverbial ‘leap of faith’ and install a compressor and lines for CNG at the former BP station on Steubenville Avenue and Clark Street, which is currently leased as a used car lot. “When the lease is up this fall, our plan is to adapt the station to CNG, and eventually convert some of our (gasoline-powered) vehicles to run on CNG. With the price of compressed natural gas about half the cost of a comparable gallon of regular gasoline, offering CNG to fleets will be our target, and eventually make it accessible to all consumers.” When asked if the Utica Shale gas and oil boom has had an effect on the Hartley Company, he said they are going to re-open one of the BP stores in Harrison County that was closed several years ago. The store will be renamed to carry the Starfire brand. And there is more good news regarding employment at the Hartley Company. “We have created five new positions within the company and promoted four of our managers to a higher level,” said Hartley. Retail and wholesale gas is the company’s primary business, although they maintain a partnership with two area roofing companies, Saup-Hartley and Fleming-Hartley, referred to by Hartley as “sister” companies. In regards to the company’s bottom line, he said, “we have never seen anything like this in probably the 100-plus years since the business was founded. We cannot keep up with the demand (for gasoline) ... If people are smart they can benefit from all of this.” Doug Hartley is the fifth generation to assume a leadership role in the family business, which includes his step-brother, Eric Johnson, a senior vice-president, and his sister, Sarah Allen, who resides in
Texas and does computer work. The Hartley family entered into their first business venture in 1870 when W.H. Hartley and Sons opened a hardware store in Quaker City, which provided heating and roofing throughout the area. The rapid growth of the business lead to an expansion into Cambridge in the early 1900s. At the request of his son, Milton, Hartley added a 100-gallon tank in front of the store offering gasoline to customers for 12 cents a gallon, delivered to them in five-gallon cans. Since 1912 when the first Hartley gas station was opened at the corner of Wheeling Avenue and 12th Street, to the present day, the Hartley Company’s success has depended on the innate business acumen of family members to continue William Hartley’s legacy for future generations. The Hartley Company currently owns 49 convenient-gasoline stores in Ohio under the brand names of BP, Shell, Starfire and Gulf.
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July 2013 Edition
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32
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Lawmaker proposes increased
taxes on fracking products Mark Kovac Dix Communications
A
Democratic state lawmaker representing part of Ohio’s burgeoning Utica Shale oilfields wants the state to increase taxes on fuel produced via horizontal hydraulic fracturing — and use a big portion of the resulting proceeds to help eastern counties. The general gist behind the new legislation offered by Rep. Bob Hagan (D-Youngstown) is not too different from past bills and amendments he’s offered. During a floor debate on the biennial state budget, Hagan called for higher frack taxes to support local governments dealing with the bulk of drilling and production activity. But Hagan’s new legislation, HB 212, puts a new spin on the proposal. He wants the state to enact a 7.5 percent severance tax on oil and gas produced via fracking. Of that total, 5 percent would go to local governments, mostly in eastern Ohio. Another 1.5 percent would go to the Ohio Department of Natural Resources to hire and train well inspectors and supplement other costs related to the drilling industry. And the remaining 1 percent would go into a special trust fund, inaccessible to lawmakers until after 2020, for use in future eco-
nomic development and other efforts. “We must plan for the long-term health of our state and work to avoid the ‘resource curse’ of over-dependence on the oil and gas industry,” Hagan said in a released statement. “By designating a small percentage of severance tax revenue for a permanent trust fund, Ohio can create an economic legacy from our natural resources and provide funds critical to the survival of our state’s economy long after our non-renewable resources are depleted.” Hagan’s proposal differs from Gov. John Kasich’s, who has called for an increase in the severance tax, with a portion of the proceeds directed to eastern Ohio counties and the remainder used to cut income tax rates. Industry representatives, including the Ohio Oil and Gas Association, continue to oppose the tax hike proposals. Hagan said his legislation would bring Ohio in line with other shale oil states, with rates ranging from 7 percent-11.5 percent in states like Oklahoma, Texas and North Dakota. “It is clear that Ohio needs to update its severance tax rate to ensure that our precious natural resources are not extracted without proper, appropriate compensation seen in other states,” he said.
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Dix Communications - Gas & Oil
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July 2013 Edition
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34
Gas & Oil
July 2013 Edition - Dix Communications
“BLOOD AND OIL” from pg. 28 show about their lives, CJ Cutter said he thought the production company was joking, since something of this magnitude does not happen to people from Wayne County. CJ Cutter said it took getting used to cameras filming his everyday life, but said the show has been an accurate depiction of what a typical day in the life of an oil driller is. “Everything we do, everything we see is what happens out there,” CJ Cutter said. “They’re getting to see my life every day that I’m living, which could be good or be bad. It’s all in how you look at it. ... It does take a lot to get (oil) out of the ground.” CJ Cutter and Pritikin agree the show will help expose the hardworking Midwestern families that are trying to maintain their status among larger industries with bigger bank accounts. “They’re family, and they work together,” Pritikin said. “In their world, they’re the underdog.” CJ Cutter said he watched the first episode on June 18, and plans to watch the season with friends and family. “I’m going to be sitting there, watching the first episode, like every other American,” he said. New episodes of “Blood and Oil” air at 10 p.m. Tuesdays on the Discovery Channel.
Southern Zone Edition
WORKING FOR THE LAND OWNER Are you unable to benefit from the current gas and oil boom? Have you received a defect letter? Unsure who owns your gas and oil rights? Is your land held by shallow well production? Call today for your FREE CONSULTATION. Dear Land Owners, my name is Amy Giovannone with Mineral Recapture Services, LLC (MRS). We are a locally based company whose purpose is to work toward recapturing the Gas/Oil interests for landowners by clearing defects so gas and oil is able to be leased, or sold.
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Dix Communications - Gas & Oil
www.OhioGO.com
July 2013 Edition
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36
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
UPCOMING GAS/OIL EVENTS July 10-August 1 - OOGEEP workshop series (Drilling Down - Supply Chain Strategy in the Utica Shale), Zanesville Chamber of Commerce, 205 N. Fifth St. Two tracks for four weeks. Visit oogeep.org for more information. July 20-24 - Ohio Fire Chief’s Association Annual Conference and Trade Show, Sharonville Convention Center, 11355 Chester Rd., Cincinnati. Visit www.ohiofirechiefs.org for more information. July 31-Aug. 1 - OOGEEP Science Teacher Workshop, at Mahoning County Career and Technical Center, 7300 N. Palmyra Rd., Canfield. Visit coldsparkdev.com/oogeep for more information. Aug. 5-6 - OOGEEP Summer Meeting, Zanesville Country Club. Aug. 12 - Presentation about the exploration and production of crude oil and natural gas in Ohio, Green Branch Library, 4046 Massillon Rd., Uniontown, Ohio. Aug. 20-22 - Society of Petroleum Engineers (SPE) Eastern Regional Meeting: Bridging Experience and Technology, at David L. Lawrence Convention Center, Pittsburgh, Pa. Visit www. erm-2013.org for more information. Sept. 7-8 - OOGEEP Fall Firefighter Training, at Wayne County Fire and Rescue Training Facility, Applecreek, Ohio. Visit http://coldsparkdev.com for more information. Sept. 16-17 - Think About Energy Summit, Greater Columbus Convention Center. The summit will feature subject matter experts to provide an overview of natural gas, including topics such as the economic impact of safe and responsible development, natural gas for power generation, transportation, manufacturing and pipeline infrastructure. The summit will also host exhibits from the oil and gas industry. Visit www.anga.us <http://www.anga.us> for more information. Sept. 18-19 - Great Lakes Truck Expo, at Cleveland Convention Center. The GLTE is a premier truck show which brings you participation by major truck manufactures, truck body manufac-
tures and countless product and service suppliers. Also spotlighted will be the refuse, cement mixer and snow/ice vocations. In addition to these industry segments, we are also focusing on the latest advances in the Utica shale play in Ohio and information about the Natural Gas Industry. This information will range from new engine technology, CNG and LNG options, education and training which will define the trucking industry for years to come. GLTE attendees include a highly qualified audience of CEO’s and senior level management from local and national companies representing the trucking industry. This audience represents the decision-makers at all levels of the buying process from the leading companies. Nowhere else will you find the same combination of influential buyers, press coverage, and exposure to further your sales and marketing objectives. GLTE will also be hosting a job fair within the expo to further promote the trucking industry by ways of recruiting new drivers, technicians and other careers crucial to the growth of this expansion we are seeing now and expecting tremendous growth of in the future. The many opportunities to showcase your company and products include: exhibit space, sponsorship, special promotional opportunities, customer meetings and social functions. Plan your participation today. Visit our website at www.greatlakestruckexpo.com or contact show manager Beth Trnka and beth@greatlaketruckexpo.com Oct. 12-13 - OOGEEP Fall Firefighter Training, at Wayne County Fire and Rescue Training Facility, Applecreek, Ohio. Visit http://coldsparkdev.com/ for more information. Nov. 13-15 - DUG East Conference and Exhibition, at the David L. Lawrence Convention Center, Pittsburgh, Pa. President George W. Bush will be the keynote luncheon speaker. Visit www.dugeast.com for more information. Dec. 3-5 - OOGEEP Oilfield Expo, Internation Exhibition Center, Cleveland. Visit ooga.org/events/ooga-events/ for more information.
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Dix Communications - Gas & Oil
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July 2013 Edition
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38
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Region racing to train workers
A
s the crude oil and natural gas industry burgeons in Linda Hall Ohio, Ohioans no doubt Dix Communications will seek to be a part of it. At least one organization, the Ohio Oil and Gas Energy Education Program (OOGEEP) has thought ahead to what that means in terms of training and educating them for related job opportunities. In a press release about serving as a source for workforce training, Rhonda Reda, OOGEEP’s executive director, said, “The oil and gas industry wants to hire Ohioans. “And to help make the connection between the classroom and workplace, we have diligently been working with educational institutions around the state to certify that they are providing industry-specific training so that these students can be hired.” Three local schools — The College of Wooster, The Ohio State University Agricultural Technical Institute and the Wayne County Schools Career Center — were identified in the release as providing approved training. Spokespeople for each of those institutions clarified they do
“The oil and gas industry wants to hire Ohioans.” - Rhonda Reda not necessarily have specific programs tailored just to the oil and gas industry, but rather offer courses and programs in which students may gain certain skills needed to be employed in various aspects of the industry, “We landed our first grad (in a job) with a key partner in that industry,” said John Arnold, an associate professor in engineering technologies at ATI. Arnold is a program coordinator for hydraulic power and motion control, power and equipment, and hydraulic service and repair. The graduate, who attended an ATI job fair, Arnold said, is employed by Performance Technologies, a company which does “the actual fracking — the high pressure work (with) all
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Dix Communications - Gas & Oil
www.OhioGO.com
the equipment that comes in when a well is ready (for them) to do the actual fracturing.” “Big companies absolutely rely on other industries as providers,” Arnold said, as well as different areas of expertise and skills. In preparing students with different skill sets, The Ohio State University and its branches can “point out assets we have ... and what our graduates could be capable of (doing),” Arnold said. ATI, for example, offers associate of applied science degrees in hydraulic power and motion control and in power equipment, in addition to a certificated program in hydraulic service and repair. Another degree which could be applicable to the oil and gas industry is ag systems and management, Arnold said, noting also helpful would be students well-versed in “the environmental part of this, too.” The College of Wooster also plays its part. “A number of our alumni who earned their bachelor’s degree in geology at Wooster have gone on to careers in the oil and gas industry, with both major multinationals and small independent companies,” said John Hopkins, The College’s associate vice president of college relations and marketing. At the Wayne County Schools Career Center, a variety of skills taught could be preparatory for careers in the oil and gas industry, according to Lynn Moomaw, director of operations
July 2013 Edition
and adult education. “One of the main things we offer (in that area) is welding,” Moomaw said, noting that many other skills, including truck driving, are needed for “any facet (of the industry).” Diesel mechanics and maintenance or mechanical technician training at the Career Center also made the list on OOGEEP’s comprehensive “workforce development careers educational and training programs” link for educational institutions all across Ohio on its website at OOGEEP.org. Moomaw explained that the Career Center also stands ready to, if asked, provide “any kind of customized training” as different components of the industry “move into Wayne County” and begin to do business there. She said personnel could visit other Career Centers with related programs as a way to more quickly develop curriculum at the Wayne county Schools Career Center as needed. The University of Akron made the OOGEEP list as training its students in oil and gas industry-applicable careers from attorney to transaction analyst, with land mapping technician and geophysicist part of more than a dozen possibilities and opportunities. “The oil and gas companies that are doing business in Ohio want to hire qualified local individuals to work in this expanding industry,” Reda said in the OOGEEP release. “We hope the workforce career and training information on our website will Continued on pg. 46
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40
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
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Dix Communications - Gas & Oil
www.OhioGO.com
July 2013 Edition
41
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42
Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Hydraulic Solution Center
Utica East to build heliports
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afety concerns for employees at two sister gas processing plants, in Kensington (Columbiana County), and Scio (Harrison County), have resulted in a plan to build two new heliports that will be utilized by the companies and will also benefit the communities. The plants are being built in a partnership called Utica East Ohio that includes 3M Midstream, Access Midstream, and EV Energy Partners. 3M contacted Med Flight Ohio earlier this year to learn how air transportation from the plants in Kensington and Scio would be handled during an emergency. “They wanted to be sure there was a plan in place that would be the most efficient one possible,” reported April Eichner, RN and base director at Med Flight. So, she met with Eric Mize, safety/public liaison at 3M, to examine their needs and see how they could best be met. “We gave them an overview of what Med Flight does, and talked about our landing zones. The talks were very well received, at both plants,” said Eichner. “I was
Laurie Huffman Dix Communications
1034 N. Meridian Rd. Youngstown, OH 44509
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Dix Communications - Gas & Oil
www.OhioGO.com
very impressed with their focus on safety and their desire to give back to the community.” Eichner explained 3M hit the ground in January with the plant in Kensington being constructed first, and the one in Scio, which will be at least three times larger, being started not long afterward. Once the gas is processed in Kensington, it will be piped to the Scio fractionation, or separation plant. After the separation process is complete, the products will go out to market. The talks with 3M officials,involving both Eichner and Lee Johnson, a lead pilot for Med Flight , have had some interesting results. “Med Flight is so in tune with giving back to the community, and I find 3M has the same philosophy,” Eichner observed. She indicated the company heads decided they want to put in two permanent landing sites, or heli-ports, near both plants, not only for their use, but for the community. The volunteer fire departments, for instance, will be able to utilize the landing sites to transport someone who has been in an accident. “A cement pad is always the best landing zone,” Eichner said. “We’ll land on fields, on a roadway, or anywhere we need to to pick up the patient. But, helipads are optimal. They provide easier, quicker access to get the patient where they need to go faster.” Through the process of working with 3M, Med Flight also determined an on-site training program would be beneficial to
July 2013 Edition
43
Kevin Graff/Alliance Review
Photo 1: A Med Flight helicopter lands in Alliance during a recent safety exposition. The company is planning two new heliport pads for use during emergencies by two gas processing plants, in Columbiana and Harrison counties, as well as the community.
help educate 3M employees in the areas of First Response, CPR, and in the use of an AED (automated external defibrillator). Classes started the end of May at both of 3M’s sister plants, and Eichner said that program is also moving forward successfully. Med Flight has been in existence for 18 years, being created following a merger, in 1995, between Ohio State University’s Sky Med and Grant Hospital’s Life Flight. “We are now the largest company of our kind in the state,” said Continued on pg. 46
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
Stark State plans ‘Energy Institute’
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tark State College has selected Cornerstone II as the site for its new downtown Canton Satellite Center and Energy Institute, which was approved by the State Controlling Board. According to Dr. Para M. Jones, president of Stark State College, the Board of Trustees approved the $4.9 million purchase at its meeting on May Kimberly Lewis 15. Funding for the building, Dix Communications located at 400 Third St. SE in downtown Canton, comes from a $10 million State of Ohio capital appropriation. The remaining $5.1 million will be used to develop the building and purchase equipment to support current academic programming, as well as oil-and-gas training. An additional $500,000 grant from The Timken Foundation will support equipment purchases. “The board of trustees carefully evaluated numerous downtown locations, taking into consideration the needs of our students and academic programs, room for possible future growth, interstate access and the impact of our satellite center on downtown revital-
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ization,” said Jones. “Cornerstone II meets all these criteria and the location provides excellent access from U.S. Route 30, State Route 43 and I-77 for our current and future oil and gas partners.” The downtown building includes 64,000 square feet of space on 1.3 acres. The purchase will consolidate Stark State’s energy industry training in one location that eventually will include “gas-tank batteries, pump jacks, natural gas collection-and-distribution systems and other industrial service equipment,” according to documents provided to the State Controlling Board. Stark State is quickly becoming a regional training hub for oil and gas as new academic programs are developed under the direction of Kathleen Steere, coordinator of oil and gas programs, in conjunction with an advisory board comprised of community leaders and experts in the oil and gas field. The college currently offers courses that provide basic skills and certifications, as well as oneyear certificates and associate degrees. Plans include Commercial Driver’s License training in the near future. The new center “will train local workers for a new industry that
Continued on pg. 58
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
“UTICA EAST HELIPORTS” from pg. 38 make it easier for individuals to connect their career goals to their education planning.” “Our industry is on track to create and support thousands of Ohio-based jobs in upstream, midstream and downstream activities in Ohio’s 30-plus geological formations that produce natural gas and crude oil, including the Utica shale,” she reported. “RACING TO TRAIN WORKERS” from pg. 42
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
‘Shallow’ vs. ‘Deep’
S
ome of the oldest leases I have read are not much more than a half page in length before you get to the signature part. Most of this comprised the names and addresses of those involved, where the property was, and how the oil and gas money was to be divied up. These leases were called “drilling leases” as that was the only reason they were taken and recorded. Don Gadd I say that because when a lease Landman was taken back then, the company was expected to move in and begin building a derrick to start the drilling process. There were no delay rentals or bonus payments to hold a lease. You got it. You got at it. Period. And, you kept at it as long as you wanted to produce the property. There wasn’t anything such as held by production, spacing requirements, shut in payments or other things currently found in today’s leases or accepted as common place in today’s industry. Once a well was to TD (total depth) and made ready to start pro-
“...looking at an old well spot map in these areas really opens up your eyes as to how wide open the original wildcatters had it.” duction, you better be working on getting another well started during the time of your lease or there would be someone else there on the other side of the fence drilling their well and taking your expected oil and gas. Tough business huh? But, I will leave some of those stories for another time. Suffice it to say, looking at an old well spot map in these areas really opens up your eyes as to how wide open the original wildcatters had it. Sometime along the process it became apparent that in order to grow the business in general and open up additional areas of exploration the lease would have to include language that would allow the drillers to capitalize on their investments while at the same time not having to spend all their resources Continued on pg. 50
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forever drilling on the same property to keep the lease. Thus, the often fought over “held by production” clause came into the lease along with terms like “commercial quantities” and other clauses that now adorn our common lease today. These terms and conditions have worked quite well for the most part in the Appalachian basin for over a hundred years. However, out west, where the big wells matched the size of the big properties many didn’t like that one well could hold their spread of a hundred thousand acres or so. After the wild times at spindle top and other boom discoveries, the leases began to change to include a clause called the “Pugh clause”. This clause is currently being used in the mega leases being handed out today with various limitations. However, it has two different forms. One being the horizontal Pugh clause (think horizon) which restricts the amount of acreage that will be held by production with a well. It can vary according to what is needed by law in the area, what the company wants, or by negotiated contract (the lease). It is in the company’s best interest to control as much acreage held by production as possible while keeping the competition from drilling right next door. (Doesn’t that remind you of what I discussed above?) However, it may not be in the landowner’s best interest if he has a lot of property. Let’s face it. There is more money floating around now than
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most have dreamed of and if you get it once what’s to prevent you from going to the well again? The other Pugh clause is the vertical (think up and down). As it turns out, this clause in the old leases may have saved a lot of consternation and legal grappling. What it does is limit the lease to zones or depths drilled. I have seen it in some leases in this area, but generally it is limited to areas where one company may be drilling a “shallow” sandstone area commonly known as the Berea and/or Gordon. Or, some of the “deep” zones drilled over the last 50 years commonly known as the Clinton and/or Medina. Both zones are now considered shallow in today’s parlance. I worked for a company that drilled “deep” wells at that time and very rarely would I give up rights up hole. Who knows, maybe we would want to drill them someday if the “shallow” was good. Also, if the Clinton/Medina wasn’t any good, there would be a potential to plug back a well to produce the upper zones. Sounds like an oil man’s argument, right? Actually, in the Dunganon area and Crooked Tree in Noble County, Ohio, that’s what happened. And, the Berea/Gordon wells turned out to be quite the bonus as these wells were drilled near existing wells, pipelines, and facilities already in place. It was quite a savings on drilling costs. As for the deep zones below the Clinton/Medina? Come on, this is Appalachia, not Texas. No one in their right mind would
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drill nine or ten thousand feet for all the more we got in production here. The only companies reserving below these zones was Quaker State and East Ohio Gas. What did they know? Technology and time have a way of changing things and what you should look for in a Pugh Clause is my next discussion.
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
‘Covenants’ of leasing R
egarding the rights of landowners versus oil & gas producers, usually the lease itself governs the relationship. Put differently, when a dispute arises, the courts will look at the lease. Whatever was agreed upon controls. Of course, many times the lease itself is unclear regarding what was agreed upon. However, the law also imposes Ethan Vessels on oil & gas producers (the lessees) Marietta Attorney various covenants. Under the law, “covenants” are promises or obligations. In oil & gas law, they are called implied covenants because they need not be expressed in the lease itself. Under Ohio law, these implied covenants require oil & gas lessees (the producers) to: • Drill an exploratory well. The lessee must drill a well—even if only to find out what is under the ground. • Protect the lease from drainage. Sometimes neighboring wells or bad equipment can cause gas to be lost. The producer must
prevent this. • Explore further. One well may not be enough. If the lease covers 500 acres, and the producer gets one shallow well producing, the producer is obligated to keep trying to get more gas from the property. • Exercise care and diligence regarding the lessor’s royalty interest. The law presumes that the lessor’s desire to earn a royalty is the paramount concern. The lessee must be diligent in conducting its operations so that the landowner makes money. • Market the product. Creating a productive well is not enough. The producer must sell the gas or oil. The law imposes these obligations. If the producer does not fulfill these obligations, the landowner-lessor can sue for damages. In some cases, the lessor can cancel the lease. This is a different standard than when suing under the habendum clause of the lease itself. Forfeiture is not automatic. However, the landowner can give these covenants away if not careful. By law, these covenants can be waived if specifically excluded in the lease itself. What constitutes a “specific exclusion” is not clear under Ohio case law. Continued on pg. 54
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July 2013 Edition - Dix Communications
Southern Zone Edition
“COVENANTS OF LEASING” from pg. 52 Today lessees are routinely proffering leases containing elaborate language that excludes all of these covenants. These leases also alter the habendum clause to define production as “capable of producing in the sole opinion of the lessee.” These leases are too favorable to producers, in my opinion. They allow the producers to define how long the lease endures, which is forever, as they have drafted it. Landowners must be careful. Beware of clauses that eliminate the covenants implied by law. Be certain that the lease can, and will, end when profitable production of oil or gas stops.
Ethan Vessels is an attorney in Marietta, Ohio with the firm of Fields, Dehmlow & Vessels, LLC. He is an NBTA Certified Civil Trial Advocate. His firm is actively representing landowners throughout East and Southeast Ohio regarding oil & gas lease forfeiture actions, lease disputes, and other oil & gas matters. Visit www.fieldsdehmlow.com for more information.
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The geologist’s view W
elcoming attendees to the June 6 meeting of the Guernsey Energy Coalition meeting, held at the Southgate Hotel, Cambridge Area Chamber of Commerce President Jo Sexton said she is thrilled to continue to present speakers related to the gas and oil industry at the Chamber-sponsored monthly meeting. “This is the 24th meeting of the Coalition where we have had the opportunity to welcome so many wonderful speakers with so much valuable and useful information to educate us about the oil and gas phenomena, which is a great thing for all the communities in Guernsey County and beyond,” said Sexton. Guest speaker at Thursday’s meeting at the Southgate Hotel was Pete MacKenzie, vice president of operations for the Ohio Oil & Gas Association. MacKenzie presented a geological review of the progress of Ohio’s Marcellus and Utica Shale formations. “We are not alone. The shale revolution is happening in the United States and everywhere around the world,” he said. “As a geologist, I can give you examples of why the Utica Shale is so promising, in regards to gas and oil production.” MacKenzie recounted the history of gas and oil drilling in Ohio, noting
Judie Perkowski Dix Communications
Pete MacKenzie, vice president of operations for the Ohio Oil & Gas Association, was welcomed to Guernsey Energy Coalition’s monthly meeting at the Southgate Hotel in Cambridge, by Jo Sexton, president of the Cambridge Area Chamber of Commerce. MacKenzie presented a geologist’s perspective of the Utica Shale Play in Ohio.
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1953, when hydraulic fracturing revitalized the industry. And, in 2000, when technological advances in horizontal drilling opened the door to tapping into oil-rich shale basins in a more efficient and economically rewarding process. “Shale holds the oil ... That is where it all comes from. Shale is a particle, a very fine grain rock that comes in all shapes and sizes, different organic content and physical characteristics. Those different characteristics can occur in the shale in any part of the formation, from as close as one mile apart, to hundreds of miles apart.” In other words, what works — in regards to the fluids used in the drilling process — here in this area might not work anywhere
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“STARK STATE PLANS” from pg. 44 is currently using out-of-state workers,” according to information provided to lawmakers. Jones said, “Stark County has been an economically depressed area. And with the Utica shale developing, we see that changing.” Documents submitted to the legislatures stated, “The oil and gas boom that is starting in eastern Ohio presents several challenges. First, it is bringing highly skilled workers in from out of state, because we don’t have a well-developed oil and gas exploration and production workforce. Second, support service industries must exist for the oil-and-gas industry. If they don’t exist locally, the services will be provided by companies from out of state. Third, there are no training facilities in this region which can give the workers the skills needed to either move directly into the oil and gas industry or to backfill for skilled workers who are leaving their industries to take jobs in oil and gas.” Stark State is part of a four-college consortium funded through a $14.9 million U.S. Department of Labor grant to develop and implement the first-ever national curriculum for shale oil and gas. The college’s partners in the ShaleNET curriculum are Westmoreland County Community College (Pennsylvania) and Pennsylvania College of Technology in the Marcellus Shale region, and Navarro (Texas) College in the Eagle Ford and Barnett Shale region. Corporate partners include Chevron, Shell, Anadarko Petroleum Corp., Chesapeake Energy, XTO, and Encana. Stark State will receive $2.76 million to provide the ShaleNET credit curriculum in the Utica Shale region and is only one of three Ohio universities that is a ShaleNet approved training provider.
Southern Zone Edition
“There is a strong and growing supply chain around the oil and gas industry in Stark and surrounding counties,” Jones said. “We will continue to work with our business partners in the region to evaluate needs and develop education and training programs to support that supply chain.” “So your Stark State College in Canton will be providing shale oil and gas training for five states in the region,” she said. According to ShaleNet’s website, the labor grant will help workers “gain the credentials they need to secure employment in energyrelated jobs.” As the second part of the ShaleNet grant, Steere noted Stark State College will soon offer two-year degrees that will grow into four-year degrees. “The college has been seeing an increase in students with the offering of one- and two-year certificates,” she said. Stark State offers one-year certificates in specifications, such as ShaleNet pipeline technician, industrial process operation technology, predictive and preventive maintenance and petroleum industrial mechanics technology. Associate degrees will also be offered for those fields of studies, except for the pipeline technician which is under review. While Cornerstone will be used for classroom studies, Steere said Stark State is looking for another site to be used for a “loud” training facility to offer both indoor and outdoor hands-on training on drilling equipment. The indoor training facility will be temporarily located this fall at the former Hoover plant in North Canton until another site can be found. “When other industries are lagging behind in job creation, the natural gas industry and other energy sectors are expected to take
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job growth to a level not seen in a long while. A recent workforce development study looking at Southwestern Pennsylvania’s energy sector found coalitions like ShaleNET will be key to securing the talent needed in the industry. It also identified 14 critical, difficult-tofill jobs for which nearly 2,000 hires are forecasted between now and 2020,” the ShaleNet website stated. In the energy field, Stark State College has for many years led in programming, training and research partnerships with international and world-renowned companies such as The Timken Company, Lockheed Martin and LG Fuel Cell Systems Inc. (formerly RollsRoyce Fuel Cell Systems), which has its global headquarters on Stark State’s campus. In addition, more than 1,100 Stark State students are currently enrolled in classes at several locations in downtown Canton, including sites at the Timken Campus. “The efficiency of having one location downtown will allow us to better serve students and develop additional programs to meet workforce demands,” Jones said. Current occupants of Cornerstone II are Chesapeake Energy and the Bureau of Worker’s Compensation. Chesapeake Energy will locate its Utica shale headquarters in 2014 to the Beck Industrial Commerce Center in Louisville. The College will work with the BWC to relocate its operation. Stark State plans to begin the design and construction bid process this fall and will begin offering classes in the new satellite center in late 2014 or early 2015.
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Gas & Oil
July 2013 Edition - Dix Communications
“THE GEOLOGIST ‘S VIEW” from pg. 56 else in Ohio. “Why are [gas and oil] people here in Ohio? Because we have a lot of wells and a lot of data. We are at the center of the Utica Play because of its presence, depth, thickness, source rock richness, and thermal maturity. We have more information and more accurate maps relating to the geology of the basin,” he said. MacKenzie explained the location and foundation of the Utica/ Point Pleasant Shale with several geological maps of Ohio using a PowerPoint presentation. He said every year the Ohio Department of Natural Resources Division of Oil and Gas Resources Management compiles a report on oil and gas activities in Ohio. While ODNR’s report for 2012 has not yet been issued, OOGA analyzed state records files to provide an estimated summary of oil and gas activity for last year. A few statistics include (as of April 2013) 1,619 permits issued, including 1,000 drilling permits, with an estimated 625 oil and gas wells drilled in 40 of Ohio’s 88 counties. Top gas and oil producing county in the Utica Play (Carroll), top driller/producer (Chesapeake), number of Utica permits issued (424), record drilling depths (four, deepest is 10,980 feet in Monroe County). Also noted, the deepest well drilled in the state of Ohio is in Belmont County, drilled in 2010 to a depth of 13,727 feet. The longest horizontal well in the state was drilled in 2012 in Harrison County, 16,439 feet. MacKenzie answered questions from the audience regarding
Southern Zone Edition
the importance of Senate Bill 315 regulations on the gas and oil industry, the industry’s opposition to the proposed increase in the severance tax, radiation from drilling cuttings on the ground, injection wells and recycled fracking water. In response to a question about water contamination from hydraulic fracturing, MacKenzie said, “There is no water contamination from hydraulic fracturing. After all the years of using this technique, we would have found out by now if there was a problem. I do not think it is a concern,” he said. Because of the meeting’s time constraints, he advised people who want more information about hydraulic fracturing, to visit the websites OOGA.com or FracFocus.org.
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July 2013 Edition - Dix Communications
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School: ‘We are doing the right thing’ Laurie Huffman Dix Communications
E
ducation, government and industry specialists joined in a panel discussion on the gas and oil industry at Marlington High School earlier this eyar. Each had their own agenda, but all rolled up their sleeves in an effort to work together to help students and young adults in Ohio take advantage of the industry as it rapidly grows within the state. “Today’s talk reaffirmed we are dong the right thing,” said Nick Evanich, career tech director at Marlington High School. “We’re preparing the kids with basic skills that will serve them in a variety of opportunities in the future. These skills will help them whether they go to work at Enviroscapes, landscaping, EnerVest, well tending, or at a Midstream plant like the one being built in Scio. We’ve got to keep developing it. It was great to have the state here to show us they’re behind us as we continue to serve as trendsetters in training the school students and getting them ready for jobs in the gas and oil industry.” Others who attended the discussion included Richard Ross, Ph.D., state superintendent of public schools; Andre Porter, director of the Ohio Department of Commerce; Gary Cates, senior vice chancellor of the Ohio Board of Regents; Deborah Cain, Ohio Board of Education member; state Rep. Christina Hagan (R-50th District); Todd Pugh, owner of Enviroscapes in Lou-
isville; Joe Gill, vice president of operations at Momentum, a Midstream company; Chris Corso of Whipstock Gas Services in Canton; Rob Todor, executive editor of The Alliance Review; Bob Givens, Gas and Oil Technology program instructor at Marlington High School; Joe Knoll, Marlington superintendent; Derek Nottingham, Marlington treasurer; and members of the Marlington Local Schools Board of Education. During a press conference held following the summit, Pugh noted the oil and gas industry representatives shared what they were looking for in a new hire today. “They are looking for the same things we are,” said Pugh. “We look for someone who likes the outdoors, has an attitude of willingness to learn, and is a good problem solver. We work in unpredictable weather, and our workers have to be able to solve problems as they arise ... Today, EnerVest, a drilling and pipeline company, and Momentum, a processing plant, all asked for the same things. We are all looking for the same qualities.” Pugh reiterated since Enviroscapes is a subcontractor for the big gas and oil companies, the people who work for them must pass the criteria expected of the larger companies, which carry over to the subcontractors. “Anyone looking to work in the industry has to be prepared to meet the gas and oil company qualifications,” said Pugh. “This is a huge opportunity. Workers are starting out at $20 per hour in the Scio gas processing plant, we
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Photo/Kevin Graff 10159351
Todd Pugh, of Enviroscapes, Nick Evanich, director of career tech, State Rep. Christina Hagan, Bob Givens, Marlington Gas and Oil teacher, Deborah Cain, state board of education member, and Joe Knoll, Marlington Superintendent.
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learned today. If I were a 17-year-old, or a 24-year-old straight out of college, I’d be there. Where in the last 50 years have we seen this kind of opportunity?” Knoll said the school officials learned they need to continue to create more cooperative work opportunities in conjunction with businesses, which will take the kids off the school grounds and get them training at various companies for a day or more at a time. “We need to do more of these types of things. But I think for our first year, we’ve done really well,” said Knoll. “We will also
Continued on pg. 70
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Gas & Oil
July 2013 Edition - Dix Communications
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Chesapeake Energy and partners bring HELP Initiative to UL Cathryn Stanley Barnesville Bureau
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maintenance projects on the Union Local school campus. With paint and equipment donated by Marteney, the crew painted a curb, hydrants and safety barrier at the elementary school and the handicapped turnaround at the middle and high schools. Pictured are Marteney (left) and Lowther (right) as they finish work at the elementary school. Crew members from Chesapeake included Manny Johnson and Jessica McFarland, who initiated the project by contacting and consulting with both Marten and Union Local Superintendent Kirk Glasgow.
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July 2013 Edition
65
OHIO WELL ACTIVITY
by the numbers
MARCELLUS SHALE
15 0 5 0 6 0 0 26
Wells Permitted Wells Drilling Wells Drilled Not Drilled Wells Producing Inactive Plugged Total Horizontal Permits
UTICA SHALE
3 81 Wells Permitted 13 Wells Drilling 224 Wells Drilled 0 Not Drilled 109 Wells Producing 0 Inactive 0 Plugged 747 Total Horizontal Permits
Data as of 6/22/13 Source: Ohio Department of Natural Resources “We Always Have Time For You”
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Gas & Oil
July 2013 Edition - Dix Communications
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Gas industry experts talk to students
S
arah Tipka, a gas producer with A.W. Tipka Oil and Gas, Inc. and Ohio Oil and Gas Energy Education Program (OOGEEP) board member, made a presentation to sixth and seventh grade students at Buckeye Trail Middle School recently. The students, who were in Chris Starr’s and Brenda Pontius’ science classes, learned how oil and gas is formed, explored, drilled and produced in Ohio. Students also learned about the 75 different careers associated with the industry, and about the 6,000 plus products that are refined and processed from oil and gas. Brenda Pontius previously attended an OOGEEP Teacher Workshop and has invited OOGEEP speakers to present in her classroom over the last several years. “Because Ms. Tipka is active in the industry and an OOGEEP board member, she is very knowledgeable about all facets of oil and gas,” Pontius said. “She was able to share how the Utica Shale deposits were formed here in Ohio, the number of wells that have been fracked and drilled in Ohio for over the last century and the safety record of the industry. She was also able to share how the oil and gas industry has boosted the local economy and the opportunities for students careers in the oil and gas industry and the many fields associated with the industry.” “This was a great opportunity for me to help the students gain a better understanding of the oil and gas industry in general and the
Charlie Dixon, OOGEEP’s Safety and Workforce administrator, talked to fourth and fifth grade students at Buckeye Trail Middle School recently.
Utica Shale in particular,” Tipka said. “With more than 65,000 oil and gas wells in Ohio and an aging workforce, we need to encourage more young people to pursue these jobs. I think the students were pleased to learn about the many jobs associated with oil and gas development.” OOGEEP’s Safety and Workforce administrator Charlie Continued on pg. 68
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Gas & Oil
July 2013 Edition - Dix Communications
“EXPERTS TALK TO STUDENTS” from pg. 66
Sarah Tipka, OOGEEP board member, talked with sixth and seventh grade students at Buckeye Trail Middle School recently.
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Dixon presented at the Buckeye Trail Elementary School last week. He presented to Mike Legats’ fourth and fifth grade science class. “The students enjoyed seeing the various rock samples including the Utica Shale and learning about all the different everyday products that come from oil and gas,” Dixon said. “Because of all of the drilling activity in this area the students really see to have a grasp of the oil and gas development taking place in Ohio and its importance to the community.” OOGEEP offers a number of free programs to students and teachers throughout the year. Earlier this month OOGEEP sponsored the Academy’s STEM State Science Fair Award #139, presenting eight students with awards. OOGEEP also just awarded scholarships through its Foundation to help students pursue careers in the oil and gas field. Finally, OOGEEP has two teacher workshops planned this summer to help Ohio science teachers foster energy education by connecting science education to the energy industry. The mission of OOGEEP is to facilitate educational, scholarship, safety and training programs; to promote public awareness about the industry; and to demonstrate to the general public the environmental, energy and economic benefits of Ohio’s independent natural gas and crude oil producers. OOGEEP is not funded with any taxpayer dollars.
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Dix Communications - Gas & Oil
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July 2013 Edition
TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY BY NUMBER OF SITES
1. Carroll County 293 2. Harrison County 111 3. Columbiana County 74 4. Noble County 46 5. Monroe County 43 6. Jefferson County 38 Belmont County 38 7. Guernsey County 37 8. Mahoning County 20 9. Portage County 15 10. Stark County 13 Tuscarawas County 13 11. Trumbull County 9 12. Coshocton County 5 Washington County 5 13. Muskingum County 3 Holmes County 3 14. Knox County 2 15. 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 6/22/13
25
50
75
100
125
150
300
69
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Gas & Oil
July 2013 Edition - Dix Communications
Southern Zone Edition
“SCHOOL DOING THE RIGHT THING” from pg. 62 continue to bring business owners out to talk to the kids about what they need. When the kids hear it from someone that’s going to hire them and sign the paychecks, it means more ... We also learned some of the challenges the industry professionals face in selecting a work force. For one thing, applicants have to be able to pass a drug test, have a good driving record and come to work and be there on time. We will also pass this information to our students.” Ross brought a number of good ideas to the table as well. “We need to develop strategies to merge education in the classroom and real-world education, whether it’s through apprenticeships, internships, or some other type of work-related program,” he said. “Studies have shown that many students under the age of 18 are unprepared to go into the work force.” Ross also indicated he is a firm believer in alternate pathways for kids to enter for their futures because not everyone will go to college. “We (state of Ohio) need to work on an equal pathway for our technical students. Maybe a four-year college (right out of high school) isn’t the answer. Can we enter them in an internship or a mentorship program, and then they have the opportunity to enter a two-year program? What we have to be mindful of is one size doesn’t fit all. We need to have a plan that’s flexible for the students and still prepare them for employment opportunities ... We think this (Marlington’s program) is important. Is it perfect? No. But it needs celebrated because it’s providing a model for other schools to follow.”
Photo/Kevin Graff
Anna Minor, assistand superintendent of Marlington Schools, Derek Nottingham, treasurer, Cathy Krupko, Marlington school board, and State Representative Christina Hagan, talk after a round table discussion at Marlington Schools Photo/Kevin Graff
Bob Givens of Marlington’s gas and oil classes talks with Joe Knoll, Marlington superintendent, on Thursday following a gas and oil roundtable at the school.
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