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Table of Contents 4

Crashing the Glass Ceiling

Natural Gas Prices Lower

OOGEEP Program Promotes Safety Training

Guernsey Uses Gas and Oil Royalties for Improvements

Halliburton Buys Out Baker Hughes

Pipeline to Take Northerly Route

Petro Pros

Industry Provides a Return Home

PUBLISHERS Andrew S. Dix G.C. Dix II

Judie Perkowski / Dix Communication

David Dix

Thomas Doohan / Dix Communication Rachel Sluss / Dix Communication

Rick Stillion / Dix Communication

EXECUTIVE EDITORS Lance White

John Fahey / AP Energy Writer

Roger DiPaolo

Kimberly Lewis / Dix Communication

Ray Booth

Linda Hall / Dix Communication

Rob Todor

John Lowe / Dix Communication

No Injuries in Pipeline Fire

Law of the Land: Legal System Adapting with Industry

C.A.T. Partners for Five New GAIN Clean Fuel Stations

Republicans: Keystone Pipeline Down, But Not Out

Training Surpasses 1,200 Firefighters

Rex Energy Donates $30,000 to Shelter and Fire Department

Gas and Oil Industry A Boon for Lodging

Chemical Industry Investing in Shale

Kristen Spicker / Dix Communication

Dina Cappiello / Associated Press

Sara Klein / Dix Communication

Dan Davis / Dix Capital Bureau

REGIONAL EDITORS Kimberly Lewis Erica Peterson Cathryn Stanley Niki Wolfe Judie Perkowski

Laurie Huffman / Dix Communications

U.S. Chamber of Commerce: Energy Security Improving

Important Cases Before Ohio Supreme Court David Wigham / Attorney

LAYOUT DESIGNER

ADVERTISING DIRECTORS Kim Brenning

Rhonda Geer

Harry Newman

Jeff Kaplan

Ed Archibald

Jeff Pezzano

DIGITAL CONTENT MANAGER COVERAGE AREA Brad Tansey ART DIRECTOR Pete Kiko

LAYOUT DESIGNER Jenna Conaway

Ohio OCTOBER 2012 • www.ohiogo.com

A FREE MONTHLY PUBLICATION

Dominion Foundation Awards $200,000 to OH Colleges

Energy Briefs

Three Tips to Protect Your Oil and Gas Interests

What Does Shale Gas Mean for U.S. Plastics Industry?

Beck Energy Files Complaint Against Munroe Falls

Study: Middle Class Owns Oil and Gas Companies

Seismic Survey Paints Picture with Sound

Beck Energy Dismisses Complaint Against Munroe Falls

Firefighter Safety

Project to Provide Housing for Gas/Oil Workers

Local Farmers Learn About Land Use Contracts

Severed Royalty Interests is Personal Property

Chevron Provides Funding for Stark State Training

Airgas is ‘Positioned Nicely’

One of Four Communities OK Drilling ‘Bill of Rights’

Industry Representatives Give Update on Pipelines

EPA May Require Producers to Limit Emissions

Frank McClure / Attorney Laurie Huffman / Dix Communication

Judie Perkowski / Dix Communication Jeff Saunders / Dix Communication

John Lowe / Dix Communication

Judie Perkowski / Dix Communication Amadeus Smith / Dix Communication Sophie Kruse / Dix Communication

GLASS Judie Perkowski Dix Communications

ANTON — As the highest ranking woman in the company, Dora Silvis, executive vice president and chief operating officer for the Alliance Petroleum Corporation, is responsible for its daily operations. In other words, Ms. Silvis has to know the who, what, where, when, why and how much [money] is relevant to the corporation’s welfare. “I deal with the bottom line,” she said. “I work in tandem with three vice presidents and four district supervisors who are in charge of maintaining 4,954 wells in three states,” said Silvis. “We speak daily to the owner/president and chief operating officer of Alliance, Thomas S. Wright of Lake Forest Acquisitions Corp., who bought Alliance in January of 2012.” Silvis was hired at Alliance as a production accountant in 1988, and moved up the corporate chain of command until she reached the top rung of her goal. Prior to joining Alliance, Ms. Silvis’ interest in the “bottom line” was apparent, serving as district controller for Browning Ferris Industries and as an accountant for LTV Steel. Born and raised in Ohio by devoutly religious parents, she elected to go to school in Florida to become a teacher, which she did, for a short time. “Because I am the youngest of three children my father was a little nervous about me going off to school so far away, but my mother told him not to worry, I came out of the womb 30 years old! “After deciding that pursuing a teaching degree was not the

profession I would happily spend my years toward retirement, I returned to Ohio and enrolled at Malone College, a Christian liberal arts college — which is now Malone University — where I earned my bachelor’s degree in business administration and my MBA. “My parents are not wealthy or educated, but the older I get, the more I appreciate my parents, they kept me grounded,” she said. “The word ‘can’t’ was not in their vocabulary. I credit them for who I am today. “I have a beautiful sister, who has in the past couple of years has devoted herself to caring for our aging parents. Without her help I would never been able to continue the career path I am now on ... She takes very good care of our 89-year-old father and 81 year-old-mother. My sister and I believe that caring for our parents is a privilege. I don’t know if my sister will ever understand how thankful I am for her love and devotion to our parents and me.” She also credits her husband, Patrick, who recently retired, for her continued success. “He is the love of my life, and a house husband. Before he retired we spent a lot of money having someone do a lot of ‘home work.’ Now he manages our home life and does everything from laundry and shopping to paying bills and looking after our parents. Coming from a management world himself, he runs our home like a business and keeps me abreast of all the ‘home happenings.’ Without him taking over all those obligations, I really wouldn’t be able to devote the time and effort my current position requires.” In retrospect, she said her career started in male dominated

GLASS environments, first at a major stainless steel company then at a waste management corporation, which she said, taught her many lessons. “I learned how I did not want to be treated or treat other employees. I also knew there were no women in any management position at either company. So, advancement was probably out of the question. I knew I would not be happy,” she said. “It was by answering a simple ad in a local paper for a position that I was over-qualified to hold, and lengthy conversations with the management team that I came to Alliance Petroleum Corp. as a revenue distribution accountant 25 years ago. Gradually I moved up to controller and assistant secretary, then was named vice president of accounting and administration. “The former president of the corporation always asked for a woman’s point of view. He was a smart man and tackled all decisions with input from all his managers, male and female. “I currently work at the discretion of Mr. Wright. He also has learned the value of listening to women, and appreciates my talents in my current position as executive vice president and chief operating officer.” Silvis said she believes more and more women will advance to leadership positions in business because as the older leadership retires, the younger generation [in her opinion] is generally more receptive to women in corporate management positions. Regarding Alliance employees, she is adamant about her appreciation for her employees’ contribution to the company. “Our company’s greatest and most important assets are human beings. There is more to a job than a paycheck ... It’s to feel appreciated, and I truly appreciate the fact that they [our employees] are all unique and wonderful. “In this business there are so many rules and regulations, you need people who are good at what they do. One person cannot begin to know every detail of every job. Let people do what they do. I just organize the work process,” she said. “I don’t need to be an expert in the entire process, I just need an understanding of who is doing what. “We obtain the land, secure leases and sub-contract drilling of wells, but we utilize employees to operate our wells. Alliance also owns pipelines through which we sell our product to purchasers. We provide services for third parties and company-owned properties,” she said. To make sure people who sit behind the desks at the offices do not lose sight of Alliance’s primary function, Silvis schedules field trips to well sites with her staff to help them better understand the whole process. “Sitting behind a desk you lose the reality of what goes on out there, on the oil field,” she said. “It is really something to experience. I never want to forget what our people do on a daily basis,” she said. Their hard work and effort is commendable. “I remain in this industry because I truly believe the wise use of energy, combined with searching for new and alternative energy using advanced technology, will ensure a strong America. “I have attempted to be a good steward of my time and talents,

I have spent several years setting up accounting and finance procedures for area churches, implementing controls of the highest quality of business integrity. I have shared my expertise in money management with women to instill financial responsibility in themselves and their families. “I have been truly blessed to have people around me who supported me so I could excel in what I do best. My advice is to find out what you like to do, what you are good at, and go for it. Find your talent. Make it a priority. I did. And I love my job.” Silvis is a member of the Ohio Oil & Gas Association, Pennsylvania Independent Oil & Gas Association and the West Virginia Independent Oil & Gas Association. She and her husband, Patrick, live in the Canton area. They have two adult children. Alliance Petroleum Corp. is a privately-owned, independent gas and oil company founded in 1987, in the business of developing, producing and operating gas and oil properties in the Appalachian Basin. Alliance employs 83 full-time office and field employees. The company’s main office is in Canton with district offices in Marietta and Magnolia, Ohio, two offices in Pennsylvania and two in West Virginia. u

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Thomas Doohan Dix Communications the greatest return on investment,” Bennett said in a follow-up email. “So while these depressed oil and natural gas prices are great for Ohio consumers, if these prices continue (to) decrease some producers in the Appalachian basin will have to slow their rate of development in the state.” At this time, Cleveland State University economist Iryna Lendel said that has yet to happen. She said production in the Utica and Marcellus regions is so vast that there is no need to relocate to a different area. “There are shale wells that are so prolific, even at these lower prices it is still profitable for operators to do their operations.” she said. Reporter Thomas Doohan can be reached at 330-287-1635 or tdoohan@the-daily-record.com.

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OOSTER OH — Natural gas costs have been sustained at a low level and experts say drilling in the Utica and Marcellus shale regions is a contributing factor. Dominion East Ohio senior communication specialist Neil Durbin said decreased prices can be clearly seen in its Standard Choice Offer rates. For November, 2014, he said the rate for 1,000 cubic feet of natural gas under the companies basic offer is about $4.16. For October, 2014, the rate for the same plan is $4.41. Around the same time in 2013, rates were at similar levels. Those sustained rates, Durbin explained, can be attributed, in part, from drilling in the Utica and Marcellus shale formations. “The availability has increased,” he said, explaining it “has helped hold down the costs of natural gas for this up coming heating season.” Durbin explained the decreased costs are all the more significant because the natural gas has continued to become a more significant resource for the generation of electricity. “Even though we have seen an increase in natural gas in generating electricity, the availability of the shale resources has helped to keep those natural gas resources in line,” Durbin said. In July of 2008, he said, prices spiked to the highest of all time. It was the middle of the summer air conditioning season and natural gas was coming into fashion as a fuel for producing electricity. At the time, Durbin said, there was less natural gas being produced in the region and rates spiked to $14.55 per 1,000 cubic feet of natural gas. “Since then, we have seen an even greater amount of natural gas used for electricity,” he said, adding the prices have remained low and stable. “That is good news for our 1.2 millions customers.” Ohio Oil and Gas Association senior vice president Shawn Bennett also said prices have been staying low. He said natural gas prices in Ohio average at about $4.50 for 1,000 cubic feet. That is an average of $2 less than the rest of the country, he explained. Like Durbin, Bennett said the low costs results from increased production in the Utica and Marcellus region. “We have such a glut of natural gas coming out of that basin,” he said. While this is a good thing for consumers, Bennett said it has the potential to be negative for well operators. Its all about margins, he explained. As the cost of natural gas decreases, operators have fewer resources to invest in replenishing their reserves. “Oil and gas operators allocate resources to areas that give them

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Two educated workers about possible snakes in oil field locations. They were informed about species of snakes to be wary of ANTON — The Oil and Gas Energy Eduand how to handle snake infestations. In Ohio, there are over 30 cation Program (OOGEEP), a non-profit education and public outreach program, held different snake species that could show up in the field and three one of its Industry Safety Training sessions Nov. 12 venomous snakes. “It is very important that we were able to assist those in contact and 13 in the courtyard by the Marriott in Canton. and make them aware so we don’t have injuries to workers,” Reda Industry Safety Training sessions take place multiple times a said. “Last year we had a handful of snake encounters.” year in locations relevant to the industry and provide workers Session Three provided security training that is crucial to with the latest updates in standards and technology. OOGEEP has protect employees and their company from protestors on location. trained over 2,500 workers overall and more than 100 workers They were given the most effective and legal means for handling attended the November sessions. protestors. “They’re not required to attend; however, they need certain “It’s really about safety and making sure that these workers on certifications throughout the year, and we can provide them at no location are not going to get hurt,” Reda said. “Often times, these charge,” OOGEEP Executive Director Rhonda Reda said. “We are protestors can enter areas that are illegal for them to be in, and it an industry funded organization.” raises concern that they could be putting themselves in a safety At the Nov. 12 meeting, Session One consisted of an oil and position. So, it’s more about safety for both sides.” gas safety council meeting that covered reasons Session Four included basic fire safety information and the Occupational Safety and Health how to properly use a fire extinguisher on oil and gas Administration (OSHA) might emergencies, and Session Five discussed the imporvisit, citations and tance of safe driving in the industry. During Session current penalty Six, workers discussed safety measures taken in the structure. incident of H2S gas exposure and the importance of Session monitoring it. They also covered monitoring LEL air levels. All participants were provided OOGEEP spill kits during Session Seven and were given an overview of oil spill cleanup and prevention. Reda said the spill

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UERNSEY CO. — As 2014 draws to a close, Guernsey County coffers have benefitted from the oil and gas wells on countyowned land including the county farm adjacent to Countryview Assisted Living on County Home Road in Wills Township and property located in Oxford Township. The revenue totaling $858,693.58, as of the last available report, has been distributed to various county agencies to address various needs. In addition to royalty checks, the county has received $50,000 for surface damage due to the lease agreement for drilling at the county farm and $18,000 in mineral rights from the Oxford Township property. “We have spread it throughout the county,” said Commissioner Ernest “Skip” Gardner. “But, we are already seeing a decline in the amount of the checks as the price (for oil and gas) decreases due to the availability of those products.” According to Gardner, not all of the revenue from the wells goes to the county. “We have an interest in the wells but it’s only a percentage based on the lease,” he said. “We don’t get all the money from those wells.” A concern expressed by Gardner and fellow commissioners is knowing they are getting a good deal on the royalty checks. “The checks have been all over the board,” quipped Gardner. “We thought they would be a consistent amount after the first few checks, but they have been all over the board. We just want to know we are receiving the proper and fair amount.” The first revenue was utilized to complete upgrades at Countryview Assisted Living, formerly known as the County Home “We have replaced windows, doors and the heating and cooling system for the benefit of the residents,” said Gardner. “Those upgrades were really needed and they are nearly complete.” The revenue has also been used to replace cruisers at the Guernsey County Sheriff’s Office, preliminary engineering work for three future sewer projects including Coventry Estates and Beech Meadows, and hiring an officer to manage an electronic-monitoring program to help ease overcrowding at the county jail. Non-violent offenders released from jail can be subjected to electronically-monitored house arrest and community service projects as part of their jail sentences. The county is also saving a portion of the revenue for future

capital improvements at county-owned buildings. “We are making improvements and saving money for future improvements,” said Kathy Hibler of the Guernsey County Auditor’s Office. As the county continues to receive revenue from the wells, Gardner said new projects will be funded by the county. Gardner confirmed the revenue from the wells cannot be used for road repairs and maintenance, as the funding for local roadways by Ohio law is received from a percentage of the gasoline tax. Commissioners plan to ask state legislators to change that funding method as the county is receiving less money to maintain deteriorating roads. rstillion@daily-jeff.com

10266750

Jonathan Fahey AP Energy Writer

EW YORK (AP) — In a deal that shows just how quickly falling prices can upend the energy industry, Halliburton is buying rival oilfield services company Baker Hughes for cash and stock worth $34.6 billion. Global oil prices have tumbled 31 percent over the past 5 months to levels not seen in four years. That has forced the industry to cut costs by delaying or scaling back drilling — which means less work for Halliburton and Baker Hughes, companies that manage oil and gas fields for energy companies. Even when prices were high, oil and gas companies had begun to slow capital spending and new drilling as rising costs cut into profit margins. Energy companies now have even less to spend. Halliburton Chairman and CEO Dave Lesar said Monday that the combined company will be able to reduce costs by $2 billion a year. The oil plunge also lowered the price tag on Baker Hughes. Baker Hughes shares slumped 32 percent — from $75 to $51 — between late June and Thursday, when the companies said a deal was being discussed. The drop reduced Baker Hughes’ market capitalization by $10.4 billion. Halliburton will pay $78.62 per Baker Hughes Inc. share. Baker Hughes shareholders will receive 1.12 Halliburton shares plus $19 in cash for each share they own. Baker Hughes shares gained $5.34, or 9 perper cent, to $65.32. Shares of Halliburton fell $5.85, or 10.6 percent, to close at $49.23. When the transaction is complete, Baker Hughes stockholders will own approximately 36 percent of the combined company. More energy deals may be in the works as companies with stronger balance sheets buy those that have seen their value drop precipitously. In a recent conference call with investors, ExxonMobil hinted that it may be a good time to use its considerable cash position to buy undervalued assets. Kurt Hallead, an analyst at RBC Capital Markets, says conglomerates General Electric and Siemens, which have been beefing up their oil and gas services divisions, could look to expand further now that potential targets have gotten cheaper. The Halliburton-Baker Hughes deal comes just days after talks between the two had stalled. Baker Hughes said Friday that Halliburton refused to raise its first and only offer and Halliburton was preparing to attempt a hostile takeover.

The combined company would generate slightly larger revenue than Schlumberger Ltd., now the world’s biggest oil services company. “The combined entity would not have the breadth or depth of Schlumberger,” wrote Judson Bailey, an analyst at Wells Fargo in a research report before the deal was agreed to. But, “we do believe (Halliburton-Baker Hughes) creates a more formidable number two competitor in several areas.” While Halliburton operates in 80 countries, industry analysts say it didn’t have the global scale to compete with its larger rival, Schlumberger. Halliburton and Baker Hughes have both benefited from a boom in U.S. drilling, which they helped fuel through the development of technology used extract oil and gas from shale, deep offshore, and other tricky geo geologic formations. Halliburton is a leader in hydraulic fractur fracturing services, a method used to create cracks in oil and gas-bearing rock that allows the hydrocarbons to flow to the surface. Baker Hughes has developed some key technology that would help Halliburton expand its offerings in U.S. shale plays. Baker Hughes created drill bits that can change direction underground, allowing drill drillers to stay in the most productive sections of rock. Baker Hughes also has developed sensors that allow drillers to understand what kind of rock they are encountering underground, and chemicals to help make the oil and gas flow more easily out of the well. Halliburton will also gain access to Baker Hughes technology that can extract oil from older oil fields. These fields no longer have enough subterranean pressure to push oil to the surface, so drillers must force it out using a process known broadly as “artificial lift.” The boards of both Houston companies approved the deal unanimously and it is expected to close in the second half of 2015. Shareholders and regulators must still sign off on the tie-up. Halliburton said that it is willing to divest businesses that generate up to $7.5 billion in revenue, if required by regulators, but the company believes it will have to sell significantly less. Halliburton has also agreed to pay a termination fee of $3.5 billion if the deal falls through. Jonathan Fahey can be reached at http://twitter.com/JonathanFahey.

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he proposed Nexus Gas Transmission pipeline will take a northerly route through Ohio, starting at the Utica East Ohio Midstream‘s cryogenic processing plant in Kensington, Columbiana County, and traveling northwest through Stark County toward Michigan. On Wednesday, Oct. 8, property owners, businesses and elected officials along the proposed route were invited to an informational open house at Stark State College in North Canton to learn more about the proposed pipeline and how it will affect them. Nexus Gas Transmission pipeline will transport natural gas for approximately 250 miles across northern Ohio into Michigan. DTE Energy and Spectra Energy are the lead developers of the project. “We are early in the process,” stressed Arthur Diestel, manager, stakeholder outreach at Nexus Gas Pipeline. “We are starting to meet with property owners and engage in a process of collaboration with them as we evaluate the proposed route.” Diestel noted the company has started contacting property owners for permission to survey their properties and to listen to the landowners regarding the location of the pipeline. Nexus anticipates it will begin the pre-filing process with the Federal Energy Regulatory Commission by the end of the year. The actual construction of the pipeline is not expected to begin until 2017. Nexus has a tentative route that spans 600 feet and travels through West and Knox townships in Columbiana County and Washington, Nimishillen and Lake townships in Stark County as

it travels a northwest route to Michigan. The company’s proposed route tries to follow existing utilities, like overhead power lines or existing pipelines, Diestel explained. Once the company receives a landowner’s approval to survey their property, the route would then be narrowed to 100 feet with a 50-foot permanent easement. Another primary focus of the open house was to listen to landowners to determine any concerns or problems with the proposed route. “We want to listen to the property owners. Ultimately we want the least impact as possible on the property,” Diestel said. The Nexus Gas Transmission project includes the construction of 195 miles of 45-inch pipeline in Ohio and 45 miles in Michigan to supply existing pipelines to Dawn, Ontario, and possibly Chicago. The pipeline would be buried in a depth of three feet, possibly more depending on whether the property owner tills the land, he explained. “No one knows their properties like they do.” The pipeline is anticipated to deliver up to two billion cubic feet of natural gas, which would heat approximately eight million homes per year, he noted. The project would require approximately 150-175 people during construction. The Ohio State University will be conducting an economic study for the pipeline project, which is expected to be a $1.5 billion investment. “We would attempt to hire local contractors,” Diestel said, pointing out the company has already established partnerships with Stark State College and Eastern Gateway Community College for job training. He believes the company will continue to

BETHEL MACHINE & MANUFACTURING, INC. develop more relationships with schools to discuss job requirements and opportunities. “This is an exciting opportunity for Ohio,” he said of the recent exploration of Utica and Marcellus Shale Play. “There is a significant amount of interest in Appalachian natural gas. We’re really proud of the role we are playing in our nation’s energy independence by providing an abundant domestic supply generated to heat homes and cooking.” Diestel pointed out the company representatives will continue to work with the property owners once the pipeline is constructed. “The growth of the shale play is great for the region as long as we are stewards to the environment,” Diestel pointed out. He noted the company will inspect the pipeline and patrol the grounds once the pipeline is built. He anticipates another 30-50 employees will be added to maintain and monitor this pipeline. “We’ve (Spectra Energy) been in the state for 70 years and have 75 permanent employees,” said Diestel. “With our existing assets, we contribute $13 million to the state in taxes.” Any landowner or stakeholder who was unable to attend the open house and has questions or concerns may call 1-844-5893655.

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OOSTER, OH — Petroleum Professionals — nicknamed “Petro Pros” — are becoming familiar faces in Ohio classrooms. They’ve given 300 presentations in schools across the state over the past year and a half, said Rhonda Reda, executive director of Ohio Oil and Gas Energy Education Program (OOGEEP). The program supplements OOGEEP’s teacher workshops, annual two-day sessions training teachers in hands-on lessons they can take back to their own classrooms to involve their students in preparing for the mushrooming oil and gas industry. The learning standards incorporated in the lessons “aren’t our requirements,” Reda said, but rather those mandated by the state and connected to curriculum developed by the teachers themselves. Not only do Petro Pros bring personal expertise to the study of all areas of STEM (science, technology, engineering and math), but they also demonstrate to students the variety of careers open to them in the oil and gas industry, according to Reda, who pointed out that beginning in middle school, “teachers are required to start talking to (their students) about careers.” Petro Pros show students “what they do for a living,” offering an inside look at “the industry and everyday life,” Reda said, to “enhance learning” in the classroom. The occupational experts handle learning standards from kindergarten through 12th-grade, starting with instruction related to porous and non-porous rocks and permeability, Reda said. By high school, students are “getting into distillation and early refinement,” concepts for which Petro Pros can set up classroom labs. Experts are also available in environmental science, engineering and math, said Reda, stressing, subject matter “really varies.” “A big part of their presentations is career (options), especially as students get older,” said Mark Bruce, OOGEEP’s communication director. The pros don’t stop at outlining their occupations, but extend information to a summary of what training is demanded and where it can be obtained. “There are jobs out there; and because of the growth in the industry, there are jobs close to home,” Bruce said. “It’s always fun to have a guest speaker,” Reda pointed out, especially when it comes to giving students the opportunity to ask questions. Significantly, she said, not all of the careers delineated require a four-year degree. “Only 21 percent of high school graduates in Ohio will go on to get a four-year degree,” Reda said. It’s important for students to understand welders, diesel mechanics and machinists are also needed and tie into the oil and gas industry.

Because of engaging the students “in the back of the room” who may not have otherwise connected with the lesson, teachers have enthusiastically reported back success in piquing the interest of students who are not typically reached, but responded positively to the speakers. “You’re hitting so many disciplines,” Reda pointed out. Scholarship options may also be discussed with students, she said, because “it’s never too early to start looking at those.” Science fairs, now called STEM fairs, Reda said, are additionally discussed with students, related to what opportunities are open to them. Speakers are readily available, she said, because more than 180,000 people are employed in the oil and gas industry statewide. “We’ve got a pretty extensive group of volunteers.” Requests from teachers are generally directed to the OOGEEP office, she said, which will contact someone within the organization or a local professional. Many of the requests from speakers originate from teachers who have attended OOGEEP workshops. Other teachers who ask

—

Rhonda Reda

for a speaker subsequently become acquainted with OOGEEP programs and then are motivated to sign up for a workshop, said Bruce. “They feed off of each other.” One of the reasons speakers are enthusiastic about making classroom presentations is “seeing the wheels spinning in an eight-grader’s head” after he or she becomes personally interested in a lesson taught. “That’s a great feeling for everybody,” he said. The lessons offered by speakers incorporate hands-on experience, such as “physically holding a core sample” or looking at a fossil, Reda said. It’s “real life.” A student who, for example, asks, “When will I ever need algebra?” learns it is a necessary component in the study of engineering and “something you’ll use every day,” she said. Reporter Linda Hall can be reached at 330-264-1125, Ext. 2230, or lhall@the-daily-record.com. She is @lindahallTDR on Twitter.

John Lowe Dix Communications

Cadiz, Ohio area native who started his work life as a laborer who had to leave the region to remain employed has returned as a result of a resurgence in the gas and oil industry. J. Todd Henwood now serves as survey manager for Michael Baker International. He is licensed as a land surveyor in two states and is enjoying a prestigious career not far from where he grew up. But employment prospects were not always so bright. “I graduated from Cadiz High School and grew up in Cadiz,” he said. “That’s where my family is from. When I graduated, there wasn’t anything going on job-wise. So I got a job surveying for fiber optic cable lines down in Kentucky.” He worked as a rodman on a survey crew and he went on to Texas and Arkansas surveying for natural gas pipelines. That assignment was followed by another job surveying more fiber optic lines in Florida. “Hotel living began to wear on me, so I settled down for a while in Okeechobee, Florida.” Eventually, he returned to Ohio, albeit to Columbus — still more than 100 miles from home. But his Columbus sojourn was a turning point for him because it was then that he resolved to obtain a professional surveyor’s license after years of working on survey crews. “Now, you have to have a four-year degree, but I ‘grandfathered’ in,” he said. “So, I sat for the test, passed it and got my professional surveyor’s license.” As a professional surveyor, he was transferred to Cincinnati. About five or six years ago, his mother, Jane, who works in the

office of the Harrison County Clerk of Courts, began to notice a trend at the courthouse. Increasing numbers of people were coming in to the recorder’s office to do title searches. It was the first hint of the coming gas and oil industry resurgence. “Every year that I came home, I saw more and more trucks on the [Harrison County] roads,” he said. “It just amazed me how much it had increased. “Once the coal [industry] had dried up, there was nothing here. Gas and oil has rejuvenated these counties and I wanted to come back and be part of that.” He got his chance seven months ago when the opportunity arose with Michael Baker International, a global provider of engineering, development, intelligence and technology solutions. The company employs a gamut of professionals from surveyors to engineers and environmental experts. “They really watch the environment and work hard to put things back the way they were,” he said. Henwood said an economic flowering has resulted from the booming gas and oil industry. “It’s a plethora of industries and companies contributing to this,” he said. He cites welders, heavy equipment operators, truck drivers, computer aided design professionals and engineers among others. He also believes the industry is here for the long haul. “I was at a conference and one of the corporate executives said that the engineer who is designing the last drill pad isn’t even born yet.” The boom also is extending beyond the gas and oil industry,

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AMERON (AP) — Officials say no one was injured when a pipeline in southeast Ohio carrying a toxic substance produced during natural gas and oil processing caught fire Tuesday. Authorities said the pipeline fire began near Cameron in Monroe County early Tuesday morning and burned for several hours. It burned numerous acres of woodland in the area before the pipeline pressure dropped and the fire could burn itself out.

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ARIETTA, OH — Employees from Brouse McDowell law firm spoke at the Marietta College and Brouse McDowell Oil and Gas Symposium on Oct. 16 about how the legal system is growing and changing with the gas and oil industry. Christopher Swing, real estate attorney, discussed the Ohio Dormant Mineral Act and how it affects determining mineral rights holders versus property owners. While the statute was intended to help clear mineral rights discrepancies, it creates confusion in courthouses because there are two versions to the legislature. The 1989 Ohio Dormant Mineral Act had a “use it or lose it” philosophy according to Swing. A mineral owner had to use mineral rights within a 20-year period by 1992 or else the surface owner regained the mineral rights without having to give the mineral owner any notice. “From 1969 to 1999 [the mineral rights holders] had to establish a savings event or else mineral rights automatically revert to the land owner,” Swing said. However, a 2006 amendment of the law required that land owners had to send a notice to mineral rights owners if they wanted to reclaim mineral rights after a 20-year period if inactivity. “Under the ‘89 statute it was automatic abandonment, no notice required,” he continued. “Under the 2006 statute, notice is required before those interests could be considered abandoned.” It’s an issue that courts are struggling to decide as well. Swing explained that the two versions raised three key issues: 1) Which statute applies: the 1989 or 2006 version? 2) Are mineral rights rolling or static? 3) What is the constitutionality of the laws? 4) What defines a savings event? Megan Moore, partner at Brouse McDowell specializing in environmental law, continued the discussion with another heated topic in the industry: environmental and compliance trends. The oil and gas industry is currently left to states and local government to regulate, with the federal government remaining absent from the issue.

In Ohio, regulation is left solely with the state. “The Ohio Department of Natural Resources Division of Oil and Gas Resources and Management is vested with exclusive authority to regulate the permitting, location, spacing of wells and production operations of all wells in Ohio,” Moore explained. While the local governments in Ohio have no regulatory power, Moore added that many smaller municipalities have been taking cues from other state’s local governments in an attempt to have more control over the oil and gas industry. “So far none have succeeded,” Moore said. “The issue has come up as far as the Supreme Court where small municipalities have come together and claimed damage in their surface water, their air, their noise issues and they’re trying to say that they should have some say over the jurisdiction over what’s happening in their areas.” However, the ONRD remains the sole regulator of the oil and gas industry. With its authority, the ONRD has created new and stronger permits, most recently regarding drilling near faults. Any permits for horizontal drilling within three miles of a known fault or an area with seismic activity within two magnitudes, oil and gas companies must install sensitive seismic monitors. If a monitor has reading greater than one magnitude, all activities must pause for investigation. If it reveals that there is probable connection between the seismic activity and any “fracking activities” then all activities are permanently suspended at the location. Moore stated that the new regulation has caused some stoppage at well sites, but to her knowledge all well activities were resumed. She also reported that some chemical regulations were included in an finance bill that allowed companies to choose which chemicals they disclose to the public. Anything a company does not want include can be considered a “trade secret.” “The only exception to this is if someone is injured or has some sort of illness and goes to a hospital to be treated,” Moore explained. “Medical professionals must be told what the trade secret chemicals are, but the medical officials have a gag order in place.”

LAW OF THE LAND: nal patent date. With the oil and gas industry growing on a daily basis, more laws and regulations are created everyday to keep up with the constantly expanding industry. Whether a company, worker, landowner or concerned citizen, the changing legislature affects everyone touched by the industry.

Moore added that Ohio Governor John Kasich has been pushing for an adaptation to the law that require companies to disclose trade secret chemicals to first responders in emergency situations. A third area Moore believes Ohio will see more regulation is the injection of waste water into deep wells. “Ohio is the only state that does not require permit applicants to characterize the fluids used in deep well injection,” she said. Because of the looser restrictions, Pennsylvania and West Virginia are sending their waste water to Ohio. Many local communities in Ohio are pushing for regulation that would at least prohibit wastewater from other states. With technology constantly evolving in the gas and oil industries, companies and individuals are scrambling to claim ownerships over any new intellectual property. Michael Craig, an attorney at Brouse McDowell, explained that intellectual property is covered by patents or trade secrets. Patents are a 20-year monopoly that require full disclosure to the United States Patent and Trademark Office. “It’s not a patent for you to do it,” Craig explained. “It’s a monopoly so others can’t, whether to do it or not.” Patents allows individuals and companies 20 years to develop a new technology or idea, while barring competitors from using or developing it. On the other side, trade secrets remains a secret to the individual or company, but it still protected by the government. A trade secret has no deadline, as long as it remains a secret. Craig explained that the benefits of a patent is that it prevents competition and leads to revenue. However, they are expensive and are limited to new, useful and not obvious information. A trade secret is less expensive and doesn’t require the company to disclose information to the government. The downside is that f the secret because public information it is no longer protected by the government. One ways that companies try to keep trade secrets within the company is by requiring employees to sign a confidentiality clause in their employment agreements. With companies and employees working to develop new technology, confusion between who actually owns the intellectual property is common. Craig explained that most companies include property agreements in their employment contracts so that companies can retain ownership. Even though the initial ownership is assigned to the inventor or coinventor, companies can require ownership to automatically be signed over to them. A recent change to the United States’ patent laws is the way the ownership is decided. “We are a first to file country,” Craig stated. That means that the first person to file for a patent is recognized as the owner. Previously, the U.S. went by the first inventor. The change in the law has lead companies to paten information as soon as possible. Companies can also file a provisional application, which gives them a year to file a real patent application while saving the origi-

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PPLETON, WI — C.A.T. Inc. has signed an agreement with U.S. Oil for the construction of five GAIN® Clean Fuel compressed natural gas (CNG) stations in the United States and Canada to support C.A.T.’s recent acquisition of 100 Ryder CNG sleeper tractors. The stations will be located in Toronto, Ontario; Montreal, Quebec; Laredo, Texas; Charlotte, North Carolina; and Scranton, Pennsylvania. “GAIN stations have a great reputation of being extremely reliable which is critical as we’ll be utilizing CNG for our overthe-road fleet,” said Daniel Goyette, President of C.A.T. Inc. “The partnership with U.S. Oil is critical to our business needs. These new stations will be strategically located and pair well with existing GAIN stations throughout the country to create the nationwide network we need.” U.S. Oil currently has 38 GAIN stations in operation or under construction. “We understand the importance of CNG in our industry, and this partnership is very important for C.A.T. and our company’s commitment to the future,” Goyette added. C.A.T., formerly known as “Canadian American Transportation C.A.T. Inc.”, recently signed an agreement with Ryder for the lease of 100 sleeper tractors operating on CNG. This comprises nearly a third of C.A.T.’s fleet of 325 tractors. “There are so many benefits to using CNG and we want to be sure were are leveraging the benefits to better serve our customers,” Goyette explained. C.A.T. serves the automotive, appliances, paper, and food service industries in the United States, Mexico and Canada through its six terminals located in North America. The agreement with GAIN will build on their ability to reach all regions of the country with their trucking operations. Bill Renz, general manager for GAIN® Clean Fuel, sees the partnership as a game-changer for the industry. “Many carriers do small, incremental conversions to their fleets,” Renz explains. “To make the decision to convert 100 trucks at once is a true testament of significant benefits CNG offers carriers and U.S. Oil is working hard to ensure that the network is in place for carriers to benefit from it. That network now includes Canada.” Among the main advantages for fleets converting to CNG is that it is a cost-effective alternative to diesel fuel, offering major savings and lower CO2 emissions. Another significant advantage with CNG is that it is domestically produced. This provides price stability when compared with diesel fuel which is influenced by the price of oil on the world market. In the past few months alone, U.S. Oil celebrated the grand opening of six GAIN stations. “We are really seeing a desire by carriers to expand their use of CNG,” Renz explained. “We believe the trend for CNG conversion will continue to grow, and

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ASHINGTON (AP) — Incoming Senate Majority Leader Mitch McConnell is promising the new Republican majority will quickly resurrect Keystone XL pipeline legislation killed by Democrats, potentially setting up an early 2015 veto confrontation with President Barack Obama. “I look forward to the new Republican majority taking up and passing the Keystone jobs bill early in the new year,” the Kentucky Republican said Tuesday, shortly after the bill fell one vote short of the 60 votes needed to advance. He was joined by incoming Senate Energy Committee Chairwoman Lisa Murkowski, R-Alaska, who said the fight wasn’t over. The vote was a blow to Sen. Mary Landrieu, D-La., who had forced the issue onto the Senate agenda, and who faces difficult odds in a Dec. 6 runoff election against Republican Rep. Bill Cas-

sidy. “I’m going to fight for the people of my state until the day that I leave, and I hope that will not be soon,” she said. Republicans are likely to have enough votes to assure the bill’s passage in January, when they will have at least 53 seats — 54 if Cassidy wins the Louisiana runoff. “If you look at new Congress, you can count four more (GOP seats) right away, and there may be others,” Sen. John Hoeven of North Dakota, the lead sponsor of the bill, said after the 59-41 vote Tuesday. “You can see we’re well over 60.” Hoeven acknowledged that Republicans would need 67 votes to override a veto, but said one possibility is to include Keystone in a larger energy package that may not prompt a veto threat. The vote was one of the last acts of this Senate controlled by the Democrats. It is expected to complete its work by mid-December.

Cassidy, Landrieu’s Republican opponent, said Louisiana families “need better jobs, better wages and better benefits,” and the pipeline would provide them. Democratic divisions were on vivid display in a bill that pitted environmentalists against energy advocates. While Obama opposes the measure, likely 2016 presidential candidate Hillary Rodham Clinton has repeatedly refused to take a position. Most recently, her spokesman did not respond to two requests over the weekend to do so. The project would move oil from Canada into the United States and eventually to the Texas Gulf Coast. Supporters say it would create jobs and ease American dependence on Middle East oil. A government environmental impact statement also predicts that a pipeline would result in less damage to the climate than moving the same oil by rail. Critics argue that the drilling itself is environmentally harmful, and said much of the Canadian crude would be exported with little or no impact on America’s drive for energy stability. At the White House, press secretary Josh Earnest said the measure is something “the president doesn’t support because the president believes that this is something that should be determined through the State Department and the regular process that is in place to evaluate projects like this.” After the vote, five people were handcuffed and led off by Capitol police outside the Senate chamber after breaking into loud yowls. One was wearing what appeared to be Native American beads and feathers in his hair.

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RANVILLE — Nearly 100 firefighters complete OOGEEP training, bringing the total number trained to 1,200. The Ohio Oil and Gas Energy Education Program recently completed its fall firefighter training series, adding 92 firefighters to the number of first responders who have been trained how to effectively manage and address potential and rare incidents associated with the oil and gas industry. First responders from the Cumberland Volunteer Fire Department and New Concord Fire Department recently completed the accredited training course. “As oil and gas activity continues to grow, we need additional training and I’m so glad OOGEEP provides this course,” said firefighter Ted Norris from the New Concord Fire Department. “I learned valuable information from the knowledgeable instructors and staff. “I now understand the oil and gas industry better and feel prepared should I have to respond to an incident,” said firefighter Adonis Poland from the Cumberland Volunteer Fire Department. “The average person, not only firefighters, could benefit from this training.” Funded by Ohio’s oil and gas producers, OOGEEP regularly educates firefighters and other personnel about possible emergency situations involving the oil and gas industry. Firefighters participate in a two-day training that includes classroom instruction and field demonstrations. First responders learn: Basic information regarding Ohio oil and gas activity and development; differences between emergencies and non-emergencies or common oilfield practices; common terminology and types of equipment used during oilfield activity; and hands-on techniques for responding to potential incidents, including live demonstrations

“The mission of the firefighters and the industry is the same: To make sure at the end of the day, everyone safely goes home,” said Eric Smith, chairman of the OOGEEP Board of Directors and oil and gas producers. “Our industry clearly recognizes our role as good neighbors and corporate citizens, and that’s why we’ve funded training for hundreds of firefighters and will continue to do so.” Since 1999, OOGEEP has trained more than 1,200 firefighters from Ohio and seven other states. The training curriculum was collaboratively developed by OOGEEP, the oil and gas industry, regulatory agencies, firefighters and emergency response experts and meets state and federal fire safety standards. “Firefighters who live and work near oil and gas activity must know how to effectively and safely respond to potential emergencies and this training gives them that knowledge,” said Charlie Dixon, OOGEEP safety and workforce director. “Ohio’s oil and gas producers continually demonstrate their commitment to firefighters through donations, education and training and we thank the industry for their willingness to work with the fire service throughout Ohio.” The program is endorsed by the Ohio Society of Fire Service Instructors, Ohio Fire and Emergency Services Foundation and the Ohio Fire Chief’s Association. OOGEEP holds multiple training sessions each year at a dedicated center located at the Wayne County Regional Fire and Rescue Training Facility. The Ohio Oil & Gas Energy Education Program is a nonprofit organization responsible for public outreach on behalf of Ohio’s natural gas and crude oil industry. The mission of OOGEEP is to facilitate educational, scholarship and safety programs, and to promote public awareness about the industry and its positive impact on the economy. For more information, visit www.oogeep.org.

Sara Klein Dix Communications

ARROLLTON, OH — Rex Energy, based in Pennsylvania, presented a combined $30,000 in donations to Caritas House Domestic Violence Shelter and the Carroll County Volunteer Fire Department at check presentation ceremonies. Dave Rogers, senior director of land for the oil-and-gas company’s Appalachian regional division, presented a check for $25,000 to Syndy Willen, Caritas House executive director; Peggie Conner, program director; and Board Vice President Suzy Burns. In a separate ceremony, Rogers presented a check for $5,000 to Matt Nicholas, who serves as treasurer for the Carroll County Volunteer Fire Department. Each year Rex Energy selects local organizations to receive donations as part of its charitable giving program, according to information the company released prior to the Aug. 18 presentations. Willen said the donation for Caritas House is funding security upgrades, a remodeling of the shelter’s kitchen and the purchase of equipment and other resources to help residents at the shelter. “All of us at Caritas House wish to express our sincere thanks to Rex Energy for their generous donation,” Willen stated. “This gift will enable us to take a major step in reaching our goal of providing a local hub for safety from violence and promoting awareness and opportunities for victims,” she added. The 13-bed shelter for victims of domestic violence and abuse is the only one of its kind in Carroll County, according to Willen, who commented that the Rex Energy donation was “a game-

changer” and “as much of an emotional boost as a financial boost.” Speaking on behalf of the Carroll County Volunteer Fire Department, Nicholas said the $5,000 contribution from Rex Energy will fund the purchase a new rescue truck to replace the department’s outdated 1980 model. “We’re in desperate need of a new rescue truck,” stated Nicholas, noting that the department has been raising funds to purchase the truck over the past two years. Carroll County Fire Chief Jack Swinehart explained that the department is seeking to purchase a truck with specialized equipment that can help first-responders extricate accident victims from automobiles. The new truck would also carry equipment used to refill oxygen units for breathing as well as equipment used to contain hazardous materials involved in spills. “Rex’s continued support of organizations shows their commitment to give back to local communities.” Swinehart commented. “We do appreciate Rex Energy’s support and commitment to help us do our job in serving and protecting the community we call home.”

Sara Klein / Dix Communication

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“There’s no doubt about it,” he said. “It has stimulated the growth of hotels. Three opened, one remodeled, another being built right now. And still we’re getting inquiries!” But Cambridge is not the only local community in the cross hairs of the lodging industry. “We have three extended stay facilities on the books right now,” Blanchard said. “One of them we already know, they’ve taken down the Pomengranate building (near Byesville). There’s two others we’ve been working with for a long time. If all of them come, that’ll be another 400 ‘extended stay’ rooms. It looks like one might be built over at New Concord.” But some critics claim the boom of today will be the bust of tomorrow, and in just a few years the local occupancy rate will decline to a level Blanchard said indications are the trend for growth will not waiver for many years. Though much industry activity has already occurred here, the exploration phase is still under way. It could be likened to a sporting event that has barely began. “Some people have said we haven’t even played the National Anthem yet,” Blanchard said. ddavis@daily-jeff.com u

AMBRIDGE, OH — Lodging in this part of Ohio is definitely feeling the effect of the ongoing gas and oil industry boom. “If you look at the whole... 88 percent (occupancy),” said Norm Blanchard, executive director of the Cambridge-Guernsey County Community Improvement Corporation and Guernsey County Port Authority. “Four of them had 100 percent (occupancy).” Blanchard quoted a May 2014 study that surveyed 13 hotels in Cambridge and the immediate surrounding area, including Salt Fork Lodge. The occupancy rate in December 2012 stood at 68 percent, though fewer hotels were operating at that time than are currently. “So you can see how it’s climbed in that two-year period,” he said. The 13 hotels offered collectively 1,159 rooms for customers. Of these, 148 rooms at Salt Fork Lodge, which typically has an occupancy rate of 80 percent. Fairfield Inn, once completed along Dozer Road, will add about 100 rooms to the total. The four maximum occupancy hotels? Hampton Inn, Days Inn, Comfort Inn and Southgate Hotel, all located along or near Southgate Parkway. Blanchard largely attributes the growth of the lodging industry in the Cambridge area to the influx of gas and oil workers.

Tom Gellrich Topline Analytics Laurie Huffman Dix Communications

ANTON -- The chemical industry has seen the Shale natural gas boom, and it is responding by investing, And, while that alone is an important factor, Tom Gellrich, founder of Topline Analytics, believes the other thing to note is the chemical industry will also drive the next wave. Gellrich recently gave a presentation on the topic during a Utica II Summit held in Stark County. He said the U.S. energy landscape is changing dramatically on the back of cheap natural gas from Shale deposits, which is turning producers away from offshoring energy-intensive industries. “Shale gas is a huge, and potentially long-term competitive advantage for U.S.-based companies,” he pointed out. He also outlined the fact that the chemical industry uses propane, ethane, methane and some other agents that can make up 90 percent of production cost. So, since our costs for these chemicals are up to one third less than our competitors across the globe, he believes we can only imagine what that can mean. Gellrich said methane, ethane, propane, and butane, all byproducts of the natural gas drilling in the Shale region, are used to create other chemicals needed down the production line. Methane is used to create ammonia and methanol, which are, in turn, are used to produce fertilizers, adhesives, and alkyd resins. Methanol is used to make adhesives, solvents, and corrosion inhibitors. Ethane is transformed into ethylene, which is used to make solvents, textiles, inks, adhesives, shampoos, detergents, and soaps. When propane is turned into propylene, it is used to produce inks, adhesives, shampoos, detergents, soaps, paints, coatings, pipes, hoses, wire coating, coolant, antifreeze, films, packaging, and bottles. Butane is used to create N-butylene and Isobutylene, which are used, either independently or in combination together, to make paint remover, plastics, tires, rubber, lubricant additives, solvent, and industrial cleaners. But, the production chain does not end there. Those products

are used to make apparel, beverages, tobacco products, chemicals, computer and electronics, non-electrical machinery, nonmetallic mineral products,metal products, food products, leather, allied products, paper, petroleum, coal products, pharmaceuticals, plastics and rubber products, primary metal manufacturing, printed matter and related products, textile and fabrics, textile mill products, transportation equipment, and wood products. The investments Gellrich discussed will bring a 50 percent increase in jobs and federal, state, and local taxes. Chemical industry investments planned from 2012 to 2022 equal $125 billion in capital investment in association with 197 projects. This is anticipated to create 703,000 permanent jobs and 275,000 temporary positions. Taxes are anticipated at $20 billion during the investment phase and $18 billion on-going by 2023. The outlined chemical industry’s stake is also expected to create $274 billion in economic output. The old normal is shifting from the Middle East producing ethylene at half the cost of the rest of the world, based on 2005 figures, to a new normal where the Middle East and North American are at parity, with the rest of the world’s cost coming in at four times higher, Gellrich said. Another important thing to remember, he added, is the feedstock cost for new crackers (facilities to convert ethane into ethylene) in Saudi Arabia will be around $6/ MBtu, as there’s not enough ethane availability. This cost will be much higher than the U.S. gas price, which is currently at $3.50to-$4/MBtu. “The Shale gas revolution initiated in the U.S. is now reshaping not only the energy industry, but the global economy and geopolitics as well,” said Gellrich. “This could cause a great deal of discomfort to Asia’s petrochemical sector.. The Shale gas revolution in the U.S. has turned the global petrocmenical industry inside out. Basic petrochemicals can now be made in the U.S. for about half the cost as in Europe.”

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ASHINGTON, D.C. — The 2014 edition of the U.S. Chamber of Commerce’s Institute for 21st Century Energy’s Index of U.S. Energy Security Risk continues to show positive trends for America’s energy security — thanks largely to increased oil and gas production — but warning signs remain. This year’s index is the fifth annual edition of the Energy Institute’s groundbreaking tool, which tracks 37 individual metrics in four primary areas from 1970-2014. As the index shows, America’s energy security risk dropped to 87.4 in 2013 — the first time the score has been below 90 since 2004, and a 5 percent reduction in risk from 2012. “Much of America’s improved energy security over the past year can be attributed to increased oil and gas development, particularly from unconventional sources,” said Karen Harbert, president and CEO of the Energy Institute. “Given continued geopolitical uncertainty, rising U.S. oil and gas output couldn’t come at a better time, and has helped insulate our nation from instability. Yet, over the long term, there is still the potential for big risks, especially from the continued forced reduction of coal, which threatens America’s electricity reliability and diversity.” Of the 37 metrics studied in the report, 14 showed a decreased risk of 1 percent or more, 10 showed an increased risk of 1 percent or more, and 11 stayed the same as 2013 numbers. In particular, rapidly expanding oil and natural gas output drove large improvements in metrics related to energy expenditures, price volatility, and imports. The sub-indexes measuring geopolitical, economic, and reliability risks also showed improvement while the sub-index for environment remained essentially unchanged. Looking forward to 2040, the index shows rising risks related to crude oil prices and electricity reliability and diversity. For those reasons, after a continued period of declining risk over the next few years, risks will begin to climb again after 2018. “Our index found that risks related to electricity generation diversity will rise to an all-time high by 2040, due largely to planned federal regulations targeting coal plants,” said Steve Eule, vice president at the Energy Institute. “These concerns have recently been echoed by the North American Electric Reliability

Corporation and by various states that are looking at EPA compliance issues and should sound alarm bells for policymakers as they consider regulatory proposals.” The mission of the U.S. Chamber of Commerce’s Institute for 21st Century Energy is to unify policymakers, regulators, business leaders, and the American public behind a common sense energy strategy to help keep America secure, prosperous, and clean. Through policy development, education, and advocacy, the Institute is building support for meaningful action at the local, state, national, and international levels.

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David Wigham Attorney

fter years of inconsistent and contradictory lower court rulings, the Ohio Supreme Court is poised to issue a series of rulings that will hopefully clarify several unanswered questions under Ohio’s Dormant Mineral Act (“OMDA”). To briefly summarize the ODMA, the statute was originally enacted effective March 22, 1989, and was amended on June 30, 2006. Its purpose is to eliminate “dormant” or unused mineral interests in favor of the current surface owner. The 1989 ODMA provides that where the severed mineral interest owner has not utilized its minerals as specified in the statute for a period of at least 20 years, the mineral interests are deemed abandoned and the title vests back to the current surface owner. Importantly, the 1989 ODMA is selfexecuting, meaning that the severed minerals in question will be automatically abandoned if no activity related to the minerals has occurred. The only subsequent action that surface owners need to take is to file a lawsuit to obtain a court order declaring the minerals to be abandoned and returned to the surface owner. Under the 2006 ODMA, surface owners must first file a serve and Notice of Abandonment on the severed mineral owners before proceeding with the lawsuit seeking abandonment. Although infrequently used previously, the ODMA has become a touchstone statute to the disposition of hundreds of lawsuits between surface owners and severed mineral interests vying for lucrative bonus payments and royalties related to Utica Shale development. There are currently four ODMA cases pending before the Ohio Supreme Court, and the Court could decide to hear additional cases in the next few months. Dodd v. Croskey is an appeal from Ohio’s Seventh Appellate District, which includes the majority of counties experiencing Utica development. The propositions of law on which the Court will rule are: (1) Whether the recitation of a prior mineral reservation constitutes a title transaction under Ohio’s Dormant Minerals Act (“ODMA”); and (2) Whether a mineral interest owners filing of a preservation affidavit after a notice of abandonment acts to “cure” prior activity with respect to the mineral interest rather than only giving a right to “contest” the abandonment. The Court’s ruling in this case will significantly alter how lower courts interpret the ODMA and could dramatically shift the playing field in favor of surface owners. Chesapeake v. Buell is a case in which the Ohio Supreme Court accepted certified questions of law from the United States District Court, Southern District of Ohio. Those questions are: (1) Is the

recorded lease of a severed subsurface mineral estate a title transaction under the ODMA; and (2) Is the expiration of a recorded lease and the reversion of the rights granted under that lease a title transaction that restarts the 20-year forfeiture clock under the ODMA from the time of reversion. Again, a ruling by the Supreme Court could expand on instances that could be interpreted as “savings events” under the ODMA, thus favoring the rights of mineral owners. Corbin v. Chesapeake, LLC is another case in which the Ohio Supreme Court agreed to hear certified questions from the United States District Court, Southern District of Ohio: (1) Does the 2006 version or the 1989 ODMA apply to claims asserted after 2006 alleging the rights to oil and gas and other minerals automatically vested in the surface landowner prior to the 2006 amendments as a result of abandonment; and (2) Is payment of the delay rental during the primary term of an oil and gas lease a title transaction and a “savings event” under the ODMA. Walker v. Noon is another appeal from Ohio’s Seventh Appellate District. The propositions of law to be decided by the Court all involve the ODMA interplay between the 1989 version and the 2006 version of the ODMA and whether surface owners can bring claims under the 1989 ODMA subsequent to the 2006 amendment of the ODMA. Rulings in the Corbin and Walker cases could dramatically swing the balance of power under the ODMA in favor of the rights of surface owners. In addition to the foregoing cases, discretionary appeals to the Ohio Supreme Court have been sought in these cases: Hupp v. Beck Energy. This is an appeal from the Seventh Appellate District in which the primary appellate court ruling centers upon whether the oil and gas lease used by Beck Energy in Monroe County is void as against public policy because it is a no-term lease. A favorable ruling for the plaintiff-landowners in this case would invalidate a form of oil and gas lease commonly used across the state and would directly impact all landowners in Monroe County who currently have undrilled Beck Energy Leases. Eisenbarth v. Reiser. Several briefs have been filed in support of jurisdiction and the Appellees filed a waiver of a responsive memorandum which would seem to make it more likely that the Court will hear the case. Eisenbarth is the case in which the Seventh Appellate District ruled that the 1989 act required a static rather than a rolling 20-year look back period. The lower court’s ruling limited surface owners’ ability to seek abandonment of severed mineral interests because the 10-year look back period was calculated from

March 22, 1989 (plus a 3-year grace period) rather than using any rolling 20-year period beginning with the latest savings event and ending anytime between March 22, 1989 and June 30, 2006 (the date the ODMA was amended). Farnsworth v. Burkhart. This is a case similar to Eisenbarth in which the Seventh Appellate District ruled that the 20-year look back period is fixed, not rolling and it also included a Dodd issue in which the Court ruled that mineral owners filing a timely preservation claim served to preserve an abandonment sought under the 2006 ODMA. It appears that any issues to be decided in Farnsworth may well be rendered moot by the anticipated rulings in the Dodd and Eisenbarth cases currently pending before the Court. These cases illustrate the volatile nature of the current state of Ohio case law interpreting the ODMA, and the risks involved when analyzing how to proceed with abandonment actions. Surface owners should only seek counsel from experienced oil and gas attorneys who are knowledgeable and up to date on the current changes in Ohioâ&#x20AC;&#x2122;s oil and gas law. 4839-1700-7136, v. 1 David J. Wigham is a second generation oil and gas attorney at the law firm of Critchfield, Critchfield & Johnston, in Wooster, Ohio, with more than 20 years of industry experience. He is also the current chair of the Natural Resources Committee of the Ohio State Bar Association.

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T. CLAIRSVILLE, OH -- Belmont College was one of eight Ohio institutions that received a combined $200,000 in Dominion Foundation Higher Education Grants for 2014. The grants focus on programs that help prepare students for technical positions in Ohio’s growing energy production and other industries. The Dominion Foundation, the philanthropic arm of Dominion Resources, Dominion East Ohio’s parent company, is dedicated to improving the physical, social and economic well-being of the communities served by Dominion companies. Dominion and the Foundation annually award more than $20 million to causes that protect the environment, promote education and help meet basic human needs. “Ohio industries require an increasing number of well-trained candidates to meet the demand for skilled employees, said Scott Miller, Dominion East Ohio Vice President and General Manager. “Ohio’s colleges, universities and technical schools, are helping to train this new generation of workers, and Dominion is committed to supporting these educational efforts.” Ed Mowrer, Manager of the Belmont College Energy Institute stated, “The Dominion Grant will be used to update equipment in Belmont College’s Instrumentation Lab. This type of technology is in demand by oil and gas companies and the grant positions Belmont to be a leader in instrumentation training.” Belmont College received $20,000 to expand its Instrumentation and Control Lab. The laboratory and associated equipment will help train students to install, calibrate, maintain and repair prospective energy industry-related equipment in the field, service centers and factories. Other Dominion Foundation Ohio Higher Education Partnership Grant recipients are: Zane State College, Marietta College, Kent State University at Stark, University of Akron, Cuyahoga Community College, Malone University, and Stark State College. “Students in the Industrial Electronics: Instrumentation and Control program will have hands-on experience as they prepare for in-demand jobs” stated Judy Sandstead, Director of Program Development at Belmont College. The Instrumentation and Control program prepares individuals to apply basic engineering principles and technical skills in support of engineers engaged in developing control and measurement systems and procedures. Coursework includes instruction in instrumentation installation and maintenance, calibration, design and production testing and scheduling, automated equipment functions, applications to specific industrial tasks, and report preparation.

The Ohio Higher Education Grants are part of $1.3 million in grants the Dominion Foundation is awarding this year to colleges and primary and secondary schools in states where the company does business: Ohio, Connecticut, Maryland, North Carolina, Pennsylvania, Virginia, West Virginia, and the District of Columbia. Dominion is one of the nation’s largest producers and transporters of energy, with a portfolio of approximately 23,600 megawatts of generation, 10,900 miles of natural gas transmission, gathering and storage pipeline, and 6,400 miles of electric transmission lines. Dominion operates one of the nation’s largest natural gas storage systems with 947 billion cubic feet of storage capacity and serves utility and retail energy customers in 10 states. For more information about Dominion, visit the company’s website at www.dom.com.

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COMPROMISE ALLOWS DRILLING IN NATIONAL FOREST ORFOLK, Va. (AP) — Environmentalists and energy boosters alike welcomed a federal compromise announced in November that will allow hydraulic fracturing in the largest national forest in the eastern United States, but make most of its woods off-limits to drilling. The decision was highly anticipated because about half of the George Washington National Forest sits atop the Marcellus shale formation, a vast underground deposit of natural gas that runs from upstate New York to West Virginia and yields more than $10 billion in gas a year. The federal management plan reverses an outright ban on hydraulic fracturing that the U.S. Forest Service had proposed in 2011 for the 1.1 million-acre forest, which includes the headwaters of the James and Potomac rivers. Those rivers feed the Chesapeake Bay, which is the focus of a multibillion-dollar, multistate restoration directed by the Environmental Protection Agency. A total ban would have been a first for America’s national forests, which unlike national parks are commonly leased out for mining, timber and drilling. .

MDU GAS-FIRED ELECTRIC GENERATOR IN ND COMPLETED ANDAN, N.D. (AP) — Montana-Dakota Utilities says its new gas-fired electric generator at the Heskett station in Mandan is ready. KXMB-TV (http://bit.ly/1ufPgwi ) reports that the 88-megawatt turbine has been completed after a little over a year of construction. Frank Morehouse is the chief operating officer of MDU. He says the $77 million project will share equipment and labor with the Heskett station, which will result in a more cost-effective operation.

The project also includes a 24-mile natural gas pipeline. The unit can start producing power within 30 minutes from kicking in. The utility serves about 140,000 electric customers across 4 states. N.D. OIL PRODUCTION AT RECORD LEVELS ILLISTON, N.D. (AP) — Regulators say North Dakota produced a record high of 1,184,635 barrels of oil a day in September. That’s 50,000 more barrels a day than August. Oil production figures have a two-month lag time. The natural gas flaring rate dropped from 27 percent in August to 24 percent. Natural gas is a valuable byproduct of oil production. But without infrastructure in place to capture it, it is burned off by oil producers. New regulations call for producers to reduce flaring to below 26 percent starting with their October production. If they fail to meet that mark, they may face production restrictions. The drilling rig count in the state dropped from 191 in October to 186 as of Friday. Department of Natural Resource Director Lynn Helms blamed that on low oil prices.

NEW STANTON FIRST TURNPIKE PLAZA WITH NATURAL GAS EW STANTON, Pa. (AP) — The New Stanton service plaza has become the first on the Pennsylvania Turnpike to offer compressed natural gas. The Pittsburgh Tribune-Review (http://bit.ly/11nUywd ) reports Sunoco opened three pumps there in mid November. One is for passenger vehicles, one for commercial vehicles and the third — just outside the plaza’s gate — is for vehicles not using the turnpike. The plaza is located at the junction of Interstate 70 and the

turnpike, about 30 miles southeast of Pittsburgh. Mark Compton, the chief executive officer of the Pennsylvania Turnpike Commission, says the plaza was chosen because onethird of the vehicles using the toll road in that area are commercial. Rick Price, executive director of the Pittsburgh Region Clean Cities, says an increasing number of commercial trucks use natural gas. It sells for about $1.99 per gallon equivalent of gasoline. OIL PRODUCTION UP IN MISSOURI BUT PROBLEMS REMAIN ANSAS CITY, Mo. (AP) — Oil production in Missouri has more than doubled since 2008 but the state’s complex geology presents significant hurdles to expanding the business in the state. The state produced 201,000 barrels of oil in 2013, compared with 98,000 barrels in 2008. Most of the increase came from Cass, Jackson, St. Louis, Vernon and Atchison counties, according to the Missouri Department of Natural Resources. “There’s a lot of oil in the area, but it’s a hard fight to get it,” said Jim Long of Nevada, who has drilled several wells in Missouri. Missouri’s oil production still would be enough only for 15 minutes of U.S. oil supply and the difficulty of extracting it has kept most large oil companies away from the state. Missouri oil typically starts around 150 feet below the surface, which doesn’t provide enough natural pressure to be easily recovered. And much of the oil is heavy and flows slowly.

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common misconception I often hear is that only wealthy families and people in high risk professions need to create an asset protection plan. But let’s be real, anyone can be sued. A car accident, foreclosure, unpaid medical bills, or an injured tenant can result in a monetary judgment that will deplete your finances. Here are three tips that you can use right now to protect your assets from creditors, predators and lawsuits. What Exactly is Asset Protection Planning? To understand what follows, we will review what you need to understand about what asset protection planning is. In simplest terms, asset protection planning is the use of legal structures and strategies to transform property that creditors might take away from you, into property that is completely, or, at the very least, partially, protected. Unfortunately, this type of planning cannot be done as a quick fix for your existing legal problems. Instead, you must put an asset protection plan in place before a lawsuit is imminent. In other words, you can’t wait until the lawsuit is filed at the courthouse. So, now is the time to consider implementing one or more of these tips. First Asset Protection Tip – Load Up on Liability Insurance The first line of defense to protect your assets is insurance, including homeowner’s, automobile, business, professional, malpractice, long-term care and umbrella policies. If you do not have an umbrella policy, then now is the time to get one since it is relatively inexpensive when compared with more advanced ways to protect your assets. You should also check all of your current insurance policies to determine if your policy limits are in line with your net worth and make adjustments as appropriate. You should also review all of your policies on an annual basis to confirm that the coverage is still adequate and benefits have not been stripped to keep premiums the same. Second Asset Protection Tip – Maximize Contributions to Your 401(k) or IRA Under federal law, tax-favored retirement accounts, including 401(k)s and IRAs (excluding inherited IRAs) are protected from creditors in bankruptcy (with certain limitations). Therefore, maximizing contributions to your company’s 401(k) plan is not only a

smart way to increase your retirement savings, but it will also keep the investments away from creditors, predators and lawsuits. On the other hand, if your company does not offer a 401(k) plan, then start investing in an IRA for the same reasons. Third Asset Protection Tip – Move Rental or Investment Real Estate, and Oil & Gas property interests into an LLC(s) If you own oil & gas interests or if you are a landlord or a real estate investor, then aside from having good liability insurance, moving your real estate interests into a limited liability company (LLC) can be a great way to help protect your assets from creditors, predators and lawsuits. I have talked in previous articles about the use of LLCs, and how they provide help in protecting your assets. It is important to understand that there are two types of liability that you should be concerned about with oil & gas, rental or investment property. The first is inside liability (where the property is the source of the liability, like an explosion at a well site, or a slip and fall on the rental property, and the creditor wants to seize an LLC owner’s personal assets and not necessarily the property where the claim arose). The second is outside liability (where the creditor of an LLC owner wants to seize LLC assets to satisfy the owner’s debt). An LLC will limit your inside liability as stated above to the value of the property owned by the LLC. In Ohio, as in some other states, the outside creditor of the member of an LLC cannot get their hands on the member’s ownership interest in the company. This type of outside creditor protection is often referred to as “charging order” protection. This protection is beyond the scope of this article. In Ohio because the statute that created these protections is relatively new, this may only work for multi-member LLCs, and not single-member LLCs. You may also want to look into using an irrevocable trust to own you units in your LLC to provide even better protection. If you are interested in asset protection planning for your oil & gas interest or for any other investment real estate using an LLC, then you will need to work with an attorney who understands and practices in the LLC and asset protection area. If you are interested in learning more about these topics, please contact our office or go to our website at www.fmcclurelaw.com.

Michael Taylor SPI

Laurie Huffman Dix Communications

to $3,500 per household by 2020. “And the impact is not just in money and jobs,” said Taylor. “The five big game changers that could raise the GDP by 2020: Energy, trade, big data, infrastructure, and talent, all reinforce one another, fuel one another. And, they will have a large economic impact as well as a societal impact.” Sectors outlined by Taylor that could potentially be affected by the game changers are: resource extraction; knowledge-intensive manufacturing (autos, aerospace, chemicals); resource-intensive manufacturing (metals, pulp, refinery products); labor-intensive manufacturing (apparel, furniture); construction and utilities; retail; wholesale, transport, and logistics; information and media; financial, legal, and technical services; real estate; hospitality and other services; education and health care; and government. Some of the economic and societal impacts anticipated by 2020 include a rise in the GDP; increases in productivity; improved overall trade balance; stimulation in private investment; job creation; stimulation of innovation in the economy; enablement of entrepreneurship; building up of workforce readiness.

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ANTON, OH — The answer to that question is: Plenty. Michael Taylor, primary expert on international trade policy programs and activities for SPI (the plastics industry trade association) recently reported 37 percent of companies with sales above $1 billion were actively considering or actually planning a move from China to the U.S., based on data collected in 2012. Taylor talked on the topic at the Utica Summit II, event recently held in Stark County, and he also dropped another bombshell on those in attendance: In 2012, plastics manufacturer’s spent more than $9.6 billion on new capital investment here in the U.S. In the same year, plastics were the third largest industry in the U.S., shipping more than $373 billion in goods, and employing 892,000 people in 15,949 facilities located in every U.S. state. And, a large percentage of those workers, 7.7 percent, are found in Ohio. Second only to the state of California, Ohio has 68,800 workers in plastics, compared to the Golden Coast’s 74,600. “Shale gas increased production by 440 percent between 2007 and 2012. This is no doubt a game changer,” said Taylor. “And, as of July 2014, more than $120 billion in Shale-related investments have been announced.” The result? A growing polymer industry in the state of Ohio. Between 2004 and 2010, polymer companies announced 235 major projects with intentions to invest $2.7 billion. Ohio leads the U.S. polymer industry in employment in rubber products, custom compounding purchased resins, resilient floor coverings, and plastic bottle production. “Shale energy equals growth,” said Taylor. He pointed to estimates on jobs, to jump from 2.1 million in 2012 to 3.3 million by 2020; tax revenue, to be catapulted from $75 billion in 2012 to $125 billion by 2020; U.S. GDP (gross domestic product), to rise from $283 billion in 2012 to $469 billion by 2020; and household expendable income, to spike from $1,400 per household in 2012

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ASHINGTON — The owners of America’s oil and natural gas companies are largely retirees and middle class Americans saving for retirement, according to a report by Sonecon, Who Owns America’s Oil and Natural Gas Companies, commissioned by the American Petroleum Institute. “When oil and natural gas companies do well, so do millions of their owners all across America,” said Kyle Isakower, API vice president of regulatory and economic policy. “The study concludes that a large proportion of the benefits of oil and gas company stock ownership goes to middle class Americans.” In 2014, public and private pension and retirement plans, including 401(k)s and IRAs, hold 46.8 percent of all the shares of U.S. oil and natural gas companies, according to the study. Individual investors own 18.7 percent, and asset management companies including mutual funds hold 24.7 percent of shares. Institutional investors like banks, insurance companies, foundations and endowments hold 6.9 percent of shares. Together, these groups hold 97 percent of oil and gas industry stock. By comparison, the officers and board members of U.S. oil and gas companies own less than 3 percent of total shares. “As companies announce third quarter earnings, it’s important to remember how they’re in line with other manufacturers, how they’re large as a total dollar figure because these are large multinational companies that compete on a global stage with foreign nationally-owned oil and natural gas companies, and how these earnings represent good news for millions of Americans,” Isakower said. “The U.S. oil and natural gas industry is a major part of our nation’s economy. It supports 9.8 million jobs and pays more taxes than any other industry and at higher effective rates. As the Sonecon study shows, the industry also benefits millions of Americans who are its true owners.” API is the only national trade association representing all facets of the oil and natural gas industry. API’s more than 600 members

include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 20 million Americans.

10272854

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Judie Perkowski Dix Communications

he evolution of the gas and oil industry in eastern Ohio in the past three years has introduced eastern Ohio residents to a nomenclature of words and phrases exclusively used to define a process, equipment and jobs in the search for hydrocarbons. Because gas and oil companies expect empirical evidence of gas and oil reserves before they spend millions of dollars to drill a well, Julie Gordon, onshore operations manager for Houstonbased Tomlinson Geophysical Service (TGS), explains why a picture is worth a thousand words. Gordon has been leading a procession of huge “thumper” trucks throughout the country to perform seismic surveys to extract data from subsurface images of rock formations that provide critical data for gas and oil evaluations, translates the information and develops three-dimensional images. As a geophysicist, Gordon is not just along for the ride, she analyzes and interprets information from the multiple layers of rock several miles beneath the surface. She builds sub-surface images for both on and offshore companies. “Seismic testing and drill logs contain most of the information for geological rock properties,” said Gordon. “My first project in eastern Ohio was lining up permits for seismic testing from Carrollton to Marietta. The survey is an examination and recording of the area and features to construct a map or

a plan. The Firestone 3D survey in Carroll covered 407 miles. It began in August of 2011 and completed in February 2013. “Our current Freeport project has 4,056 receiver units that are currently recording. The receiver units cover a surface area of approximately 20 square miles for each individual sound wave energy source. There will be more than 265 million reflected waves recorded at the field level. This data is then sent to a processing center to be sorted, triangulated and put together to generate three dimensional images,” said Gordon. She said seismic surveys are one way drillers search for oil. “First, using as much subsurface geologic information we have or can obtain from well data and our clients, we create a surface design — a grid of energy source points and receivers. These are spaced to give us a good image at our target horizons. This is our ideal pre-plan. “Once we have this completed we start introducing ‘real world’ issues such as terrain, road systems, houses, water wells, farming and ranching restrictions, oil and gas wells, pipelines, etc. Then we survey all the source and receiver locations precisely, because the most important part of the survey requires accurate positioning to triangulate the sound waves as they travel through the rock layers. Gordon said there are two ways to generate sub-surface sound waves, Small explosive underground charges and vibroseis (thumper) trucks.

“We typically detonate small explosives off the road, set 30 feet below the surface. We also use vibroseis trucks, informally known as ‘thumper trucks’ you have seen on the roads, typically three trucks bumper to bumper. Both methods generate sound waves that can travel more than five miles down and reflect off of the rock layers. It is the reflected waves that we capture with our receivers and process into usable seismic images,” she said. “As for the data we retrieve, we get as much as we can reasonably afford, because the receiver units are expensive, in addition to the manpower, and a helicopter to deploy and retrieve surveying equipment. So basically, the number of units placed in the ground is limited to how many are needed to generate an affordable image of the primary target. “Our seismic images mean very little by themselves. The oil companies incorporate a lot of information from other sources such as well logs, core samples, nearby outcrops, gravity and magnetic surveys to identify the actual rock types and presence of hydrocarbons.” “The timeline for our work typically is six to eight months to obtain permits from landowners and mineral owners, followed by approximately four to six months of surveying and drilling. The recording portion can be six to nine months depending on the weather and other issues. “The current TGS projects in Ohio will finish in July 2015. I will visit the projects one or two times per month.” Born and raised in Texas, Gordon naturally developed a keen sense for gas and oil exploration, graduated with a degree in geology from Texas A&M and landed a position in seismic acquisition and imaging. She has worked for TGS for almost three years, curently in Oklahoma and Ohio. “My first five years were spent across the U.S. from Florida to Alaska. The next five years were spent internationally to the jungles of South and Central America, to the middle East and Russia. A seismic career is like being in the Armed Forces, you get to see the world,” said Gordon. “After 30 years in the industry, I still travel at least 10 days a month and still love trying to get the best sub-surface image possible in the area, and most of all, being outside and meeting a lot of wonderful people who share a love and respect for the wonders of our incredible Earth.” TGS has 12 offices in seven countries, and is active in all domains of geophysical data for worldwide oil and gas exploration and production. TGS staff has significant experience in land data processing and imagining worldwide. With science and technology improving the efficiency of locating pockets of shale oil and gas, in addition to streamlining the exploration process with high resolution, detailed charts and graphs, geophysicists have been in the forefront of successful drilling.

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unroe Falls — A Ravenna-based energy firm has dropped a civil complaint claiming that the city has illegally interfered with efforts to clean up a small oil spill at a North River Road well the company operates, but the complaint could be refiled. Beck Energy Corp. attorney Scott Zurakowski filed a notice of dismissal of the complaint in Summit County Court of Common Pleas Oct. 24, according to court records. However, the dismissal is “without prejudice” and the complaint “is subject, therefore, to refiling” under state law, according to the notice. As of Nov. 24, court records did not indicate the case had been refiled. Zurakowski and Beck Energy President David Beck were not available for comment before press time. “It’s a frivolous complaint,” said Mayor Frank Larson Nov. 6. Larson denied that the city interfered with the cleanup. He said the city only asked Beck to get a zoning permit for excavation work that was part of the cleanup “so we would know what’s going on there.” “We didn’t know what they were doing because we were never notified by [the Ohio Department of Natural Resources] or Beck,” said Larson. In its complaint, filed Oct. 1, Beck Energy said the spill was less than three barrels and occurred in early September. The company immediately contacted the ODNR about the spill on private property at 60 N. River Road because under state law, “ODNR has complete oversight of the remediation process.” According to the complaint and exhibits filed with it, the city issued a stop work order Sept. 12 because the city had not issued

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zoning permits to do work on the property. This was followed by two citations for violating the stop work order that Munroe Falls police issued to a Beck Energy employee at the site on Sept. 15 and 17. The employee pleaded not guilty to the citations Sept. 29, according to Stow Municipal Court records. Zurakowski filed a motion to dismiss the citations Oct. 23 and Judge Lisa Coates is scheduled to consider the motion at a Nov. 25 pre-trial hearing. The complaint sought an injunction ordering that the city cease its actions, stating that ODNR issued permits for the company to operate the well in 2008 and that the city’s actions are in violation of “ODNR’s sole and exclusive authority” under state law. The company was also seeking a declaratory judgement from the court declaring that “any and all work” the company is conducting at the site is “lawful and proper.” Larson said there were also two later incidents at the site that the city is still trying to get some information about. He said that in late September, there was another oil leak that appeared to be much larger than the earlier leak that had been going on for several days. Then on Nov. 3, the city notified Beck Energy of an apparent natural gas leak after a resident reported a hissing sound. Larson said Beck Energy responded and repaired the problem. The city and Beck Energy have been in a dispute for the last few years over who has authority over wells drilled in the city in civil cases filed in common pleas court and in the Ninth District Court of Appeals in connection with a planned well on private Munroe Falls Avenue property. Last year, the city filed an appeal in the Ohio Supreme Court challenging ODNR’s authority. The high court heard oral arguments last February, but has yet to issue a ruling as of press time.

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llen Abby, l, of Kenan Advantage Group Inc., instructs Cambridge firefighters about tanker truck safety. With the increase in the oil and gas industry locally, Abby talked about how to handle tanker rollover accidents, leaking tankers and fire safety. Firefighters pictured are, l to r, Josh Hatfield, Jeremy Kerns, Joe Fowler, Tim Johnson and Josh Lowery.

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YESVILLE, OH â&#x20AC;&#x201D; The development corpo- owned by CSX Transportation, council also had to adopt an emerration that purchased the former Pomegranate gency ordinance authorizing the mayor to enter into a â&#x20AC;&#x153;facility property on the northwest side of town will encroachmentâ&#x20AC;? agreement with CSX. be building apartments to serve as housing for workers of the gas and oil industry, Byesville officials said

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Wednesday. The developer has formed a limited liability corporation for the project, Byesville Southgate Property LLC. To assist the developer, council adopted a pair of ordinances as emergency measures during the regular council meeting last night. The first ordinance authorizes the mayor to enter into an agreement with the corporation to extend the village sanitary sewer line to the property. Rather than extending a line from the Stop 9 Subdivision, the line will be extended from the Leyshon Drive area, Administrator Brennan Dudley said. The development company will undertake the project at its own expense. Once the line is deemed to have met all village standards, it will be accepted into the village sewer system, Dudley said. However, because the line will pass beneath the railroad line

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land to transport gas and oil about the diameter of the pipe, what materials will go through the line, and how far the pipeline will extend. Farmers also must determine if pipeline running on the property will reduce the amount of land they will be able to use and, in turn, income from crops, fruits or timber (tree farms). “You need to be compensated,” he said. Arnold suggested calculating the amount of income one would lose in the coming years due to the inability to use that portion of the property. The market value of the property as well as attorney and land survey fees should be included in a farmer’s final price as well, among other things. Arnold said every part of a contract needs to be discussed. “Many times we leave things off the table,” he said. But contract options can become easements, and land owners, Arnold said, must live with easements for the rest of their lives, as will future generations. u

ale Arnold, director of energy policy with the Ohio Farm Bureau, spoke to local farmers about steps that must be taken to ensure that land leases and contracts don’t go against the farmer’s best interest. The worst place for a farmer to sign a contract with a gas and oil company is “on the hood of your pickup truck.” Several area farmers attended Arnold’s lecture at Marlington High School last week. With the developments in the Marcellus and Utica, gas companies are looking to expand in Stark County and the surrounding area, developing infrastructure to drill for, transport and process oil and gas materials. “Here in Stark County, you’re going to be seeing many kinds of pipelines,” Arnold told the crowd. The purpose of the lecture was to help farmers navigate the negotiation process of land leases and easements. Arnold said farmers need to work with a lawyer. He said typically farmers and gas companies run into fewer legal problems down the road if the farmer has legal representation working with the company to develop a contract that is beneficial to both parties. Arnold also suggested farmers keep records of every contact they meet from the company, any new information they receive, or any questions they might have. Farmers should initially ask the company looking to use their

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present any evidence to support his claim evidencing the transfer of the royalty interest and therefore affirmed the award of summary judgment in favor of the surface owner. Classifying a severed royalty interest as personal property, rather than real estate could have significant consequences for mineral interest owners in Ohio in the future. Further, classification as personal property will require mineral interest owners to carefully consider how title to severed royalty interests are held in order to ensure there are no unintended consequences to the severed royalty interest holder in the future. NOTE: This general summary of the law should not be used to solve individual problems since slight changes in the fact situation may require a material variance in the applicable legal advice. If you have any questions or would like to discuss further, please contact Attorney William G. Williams or Attorney Ryan W. Reaves at 330-497-0700.

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ANTON -- Stark State College oil and gas students will receive $115,000 in scholarship funding as part of a $20 million Chevron Corp. initiative aimed at training a new generation of energy sector workers in the Marcellus and Utica shale regions. “We’ve got to start equipping kids in school early enough and through vocational training programs to provide that connection to real job opportunities,” Nigel Hearne, president of Chevron Appalachia, said in announcing the Appalachia Partnership Initiative. Chevron, the world’s ninth-largest energy company, is working with nonprofits to fund science, technology, engineering and math (STEM) classes and improve workforce training in counties in southwestern Pennsylvania, northern West Virginia and eastern Ohio. “With an historic disconnect between job-seekers and the jobs that are available, this gift will enable us to offer training to even

more students who will be prepared for well-paying careers in fields where demand for workers is high,” said Dr. Para Jones, president of Stark State College. Stark State is part of the ShaleNET collaborative of schools training workers for oil and natural-gas jobs. The Appalachia Partnership Initiative will work with ShaleNET to develop scholarships at Stark State and three other community colleges and target technical training that will help students fill available jobs. “This is a unique window to create economic prosperity,” said Hearne,. Stark State students will see $15,000 of scholarships this fall, along with $50,000 each of the next two years. The college offers associate degrees, one-year certificates, career enhancement certificates and credit and noncredit courses in a variety of programs targeted to the oil-and-gas industry. For more information, see www.starkstate.edu/oilandgas.

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OOSTER, OH — With three pipelines likely coming through Wayne County, an Airgas district manager believes his company is positioned nicely to benefit from the increased activity. With all of the activity, Airgas District Manager Chris Geiser is excited. “The oil and gas business is very large for us,” Geiser said. Airgas has fire retardant clothing, welding equipment and supplies and other equipment it can deliver in the field. Additionally, Airgas is capable of handling large, nitrogen purging projects. When pipe is being installed, sections are blocked off and filled with liquid nitrogen. The nitrogen vaporizes into gas, and it pressurizes the line. Tests are done to make sure the pipes can hold the pressure for 24 hours, which ensures there are no leaks. Branch Manager Brian Tornifolio said when workers are in the field, portability of equipment, like welding machines, is important. Airgas can supply them with filler metals, apparatus to cut and join pipes, torches and safety products. The Allegheny Access pipeline, first announced in September 2012 by Sunoco Logistics Partners CEO Michael J. Hennigan, is going in now along a corridor in northern Wayne County. It is to “give refiners and marketers in the Midwest convenient and cost-effective access to eastern Ohio and western Pennsylvania markets, including Pittsburgh.” It is expected to have the ability to transport 85,000 barrels a day initially, with the ability to increase the capacity to 110,000 barrels per day. Preparations are being made for the E.T. Rover Pipeline that

will cut across southern Wayne County. Commissioners Ann Obrecht and Scott Wiggam recently met with a representative of the project, and they were told meetings will be arranged with township trustees to update them about the pipeline. The entire project is about 380 miles, with the main line being 186 miles. The capacity will be 2.2 billion cubic feet per day through a 42-inch pipe. ET Rover has secured commitments from producers to transport gas from the Marcellus and Utica shale areas in Ohio, Pennsylvania and West Virginia to the Midwest, Michigan and Canada. Another pipeline being discussed will cut through a portion of Chippewa Township.

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TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY BY NUMBER OF SITES

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esidents in four communities in Ohio voted on a Community Bill of Rights initiative in the midterm elections to ban horizontal drilling in Athens, Youngstown, Kent and Gates Mills. We all know by now, the outcome: Yes in Athens, and No to the ban in Kent, Gates Mills and Youngstown, which has voted the measure down for the fourth time. After checking on the geographical location and some vital statistics of each town, Gates Mills, a village in Cuyahoga County, an affluent suburb of Cleveland, with a population of approximately 2,270, voted No to the ban with 508 votes, 233 voted yes. So, 741 cared enough to vote on the amendment. Kent is the largest city in Portage County. It is situated along the Cuyahoga River in northeast Ohio on the western edge of the county. The population was 28,904 in the 2010 Census and 32,345 in the 2013 estimate. Approximately 53.77 percent of the voters said No to the ban. Of the approximate 30,000 voters, 4,360 thought it was worth their time to vote. Youngstown is the county seat of Mahoning County. It also extends into Trumbull County. The city lies 10 miles west of the Pennsylvania state line. Its population, according to the 2010 Census is 66,982, with an estimate of 65,184 in 2013. This is the fourth time the charter amendment has been on the ballot, and was soundly defeated. Again, by 57.85 percent of the voters, who, in essence, said, how many times do we have to say No! Total number of voters was 12,499, 7,231 said no, 5,268 said yes. All of the above rejected the ban on fracking. Athens on the other hand, voted in favor of banning “the exploration for, and extraction of, shale gas and oil, along with associated activities, including the disposal of associated wastes, into injection wells within the City.” A source in the oil and gas industry said “there are no fracking or injection wells in the city of Athens, and there are no plans now, or in the future to drill any kind of well in the city of Athens, Ohio.”

Two representatives of the oil and gas industry offered their opinions about why people vote for or against drilling. Mike Chadsey, director of public relations for the Ohio Oil and Gas Association, said, “the reason these charter amendments failed in Youngstown, Kent and Gates Mills, is because of the bi-partisan broad-based coalitions that included both business and labor, but did not include the oil and gas industry, and the poorly constructed argument made by an overly broad document that would result in lost jobs, small businesses being driven out of town, and pitting neighbor against neighbor. “Since the oil and gas industry is regulated at the state level by the Ohio Department of Natural Resources through the Ohio Revised Code, section 1509, giving them sole and exclusive authority, these amendments have nothing to do with drilling or fracking, but with anti-development people just wanting to say no. “When I used the word “no” it is in reference to those who oppose, or say no to, oil and gas development, businesses downtown, economic expansion, jobs and opportunities. In my view that makes them anti development not environmentalist. Any “no” is not an energy policy.” Rhonda Reda, executive director of the Ohio Oil and Gas Energy Education program, said she was not surprised about Athens, the main campus of Ohio University, although there are prominent men and women involved in the oil and gas industry who graduated from Ohio University, including Reda. “Oil and gas is not unique. There already is local control of what is going on. First of all, it begins with the landowner, who just has to say no to any kind of drilling,” she said. Reda travels throughout Ohio educating thousands of people in cities, towns and rural areas about what it means for Appalachian counties to be setting on oil-rich property, the process of drilling, hydraulic fracturing, injection wells and the local, state and federal regulations that address all the responsibilities of the gas and oil industry. So, if it has anything to do with permitting, drilling or injecting, the Ohio Revised Code has it covered.

“There is a disconnect between what is going on in the real world and people who don’t understand the relevance of gas and oil in our every day lives. There are thousands of products, including energy, that are associated with or are produced from gas and oil. If you consume, you should produce, or find an alternative,” said Reda. Regarding the permitting process, Reda questioned whether local agencies or committees are qualified to issue permits for drilling. “The state — the Ohio Department of Natural Resources — has exclusive authority to regulate the industry, including issuing permits, because they have the expertise.” The Ohio Revised Code states: The director of environmental protection, in consultation with the director of natural resources, shall adopt rules in accordance with the Ohio Revised Code 6111.04 to 6111.049, Chapter 119 of the Revised Code governing the injection of sewage, industrial waste, hazardous waste, and other wastes into wells. The rules shall include provisions 1-9. Since the controversy usually centers around Class II injection wells, according to the ODNR, Class II wells inject fluids associated with oil and natural gas production. Most of the injected fluid is salt water (brine), which is brought to the surface in the process of producing (extracting) oil and gas. In addition, brine and other fluids are injected to enhance or improve oil and gas production. The approximately 144,000 Class II wells in operation in the United States inject over 2 billion gallons of brine every day. Most oil and gas injection wells are in Texas, California, Oklahoma, and Kansas. An important fact to remember is that according to the Ohio Revised Code, all waste water from fracking must be injected back into the ground, far below any aquifer. What are the types of Class II wells? Three types of Class II injection wells are associated with oil and natural gas production. 1. Enhanced Recovery Wells inject brine, water, steam, polymers, or carbon dioxide into oil-bearing formations to recover residual oil and — in some limited applications — natural gas. 2. Disposal Wells inject brines and other fluids associated with the production of oil and natural gas or natural gas storage operations. Class II disposal wells can only be used to dispose of fluids associated with oil and gas production. Disposal wells represent about 20 percent of Class II wells. 3. Hydrocarbon Storage Wells inject liquid hydrocarbons in underground formations (such as salt caverns) where they are stored, generally, as part of the U.S. Strategic Petroleum Reserve. There are over 100 liquid hydrocarbon storage wells in operation. The Oil and Gas Division of the ODNR protects Ohio’s groundwater resources by regulating the disposal of brine and other wastes produced from the drilling, stimulation, and production of oil and natural gas in Ohio. The ODNR’s Division of Oil and Gas Resources Management received primacy of its Underground Injection (UIC) Program from U.S. EPA in 1983.

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epresentatives from the oil and gas industry discussed the current state and future of pipeline infrastructure in Ohio at the Stark County Oil and Gas Partnershipâ&#x20AC;&#x2122;s Pipeline 101 event on Wednesday. Mike Chadsey, director of public relations for the Ohio Oil and Gas Association (OOGA), said companies are waiting on pipeline for 58 wells in the state that arenâ&#x20AC;&#x2122;t in production. â&#x20AC;&#x153;We have to get this pipe in the ground,â&#x20AC;? Chadsey said. Companies have invested $6.6 billion in midstream in eastern Ohio. Horizontal drilling and hydraulic fracturing in the Utica and Marcellus has left companies pushing to develop infrastructure to transport and process record amounts of oil, gas and gas products. The shale play, said Peter Lidiak, pipeline director at American Petroleum Institute, has caused what many call an â&#x20AC;&#x153;energy renaissance.â&#x20AC;? Pipeline and infrastructure construction has had a particularly positive effect on local economies and the national economy. Lidiak, citing a report from the consulting group IHS, said midstream could create 3.9 million jobs in the U.S. by 2025. Additionally, infrastructure development generated about $74 billion

in local, state and federal revenue in 2012, he said, and that could double by 2025. â&#x20AC;&#x153;Weâ&#x20AC;&#x2122;re generating wealth in our economy,â&#x20AC;? Lidiak said. Needing speedy development of infrastructure, companies have caught a break in Ohio. Dylan Borchers of the Bricker & Eckler law firm said the Ohio Power Siting Board has made it possible to fast-track two of three main approval processes -- approval on the letter of notification and a construction notice. â&#x20AC;&#x153;They are subject to automatic approval after a certain period of time,â&#x20AC;? Brochers said. This limits the ability to intervene, and there are also fewer notice requirements of the project developer, he said. Chadsey said he didnâ&#x20AC;&#x2122;t think fast-tracking approval processes jeopardized safe construction and use of pipeline and other midstream infrastructure. He said the state has put in place â&#x20AC;&#x153;good, common-sense regulations.â&#x20AC;? â&#x20AC;&#x153;Good regulation protects the industry and the public,â&#x20AC;? he said. Chadsey said state agencies work closely and continually with companies to regulate pipeline construction and use.

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EW YORK — The Environmental Protection Agency is considering implementing regulations for gas and oil producers to limit their methane emissions, administrator Gina McCarthy said in a release from the agency. On Sept. 2, McCarthy addressed investors in New York, saying that the agency would decide later this year if these regulations would rely on voluntary steps or regulate mandatory cuts. “We’re looking at what the most cost-effective regulatory and-or voluntary efforts that can take a chunk out of methane in the system,” she said, reported by Bloomberg. “It’s not just for climate, but for air quality.” The production of oil and natural gas is responsible for 45 percent of methane emissions — emitted in drilling, production, processing, storage, transmission and distribution. Methane is 21 times more potent than carbon dioxide. McCarthy also said that two sections of the Clean Air Act could be used to regulate methane. In March, the Obama Administration issued the Strategy to Reduce Methane Emissions — setting out a plan to lessen the emissions of methane. Following this, the EPA released five white papers on what they believe could possibly be the significant sources of emission in the gas and oil industry and summarized information available at the time, covering mitigation and emission techniques that target methane and VOCs. These were then reviewed and analyzed by experts. According to a statement from the EPA, they are “reviewing the input we received, along with all currently available information and data on potential methane reductions. The agency will determine how to best pursue additional reductions from oil and gas sector later this year.” The Clean Air Task Force recently released “Waste Not,” a report that details a few ways that the EPA could control the pollution from the gas and oil industry. These are all low-cost ways. Leak detection and repair programs would reduce the pollution an estimated 1,800,000 metric tons a year. This would mean the EPA would require the companies to control leaks from all equipment and regularly carry out inspections. By cleaning out older equipment, nearly 1,200,000 metric tons could be cut a year. This could be done by adding new standards to existing policies in the industry about cleaning up older equipment. The final solution is to capture natural gas that would be released from the wells which would reduce up to 500,000 metric tons per year. These three solutions would also reduce emissions of other pollutants — especially smog-forming volatile organic compounds and toxic pollutants. The cost would be less than 1 percent of the sales revenue in the industry. Already in effect is the Natural Gas STAR partnership — which is voluntary and flexible but encourages the companies to adopt

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