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Table of Contents 5
Drilling Down: Part 4 of 4 Part Series
6
ODNR to Regulate Well Construction
8
Job Outlook High for 2014
10
Supply Industry Feeling Gain
13
Fortis College Offers Welding Courses
14
Atlas Announces New President
16
Benefits will Reverberate Throughout State
18
Controversial Well Ordered Plugged
20
A Landowner’s View
22
Shrugging Off Winter’s Bite
24
Oilfield Expo
27
State of American Energy 2014
28
Mac LTT Expands Out of State
30
Finishing Touches to Gas/Oil Land Lab
31
Pipeline
Laurie Huffman / Dix Communications
Laurie Huffman / Dix Communications Rob Todor / Dix Communications
Kelley Mohr / Bobby Warren / Dix Communications Alison Stewart / Dix Communications Lauren Sega / Dix Communications
Judie Perkowski / Dix Communications
Goldman & Braunstein / Attorneys James MacPherson / Associated Press Judie Perkowski / Dix Communications
Kyle McDonald / Dix Communications Judie Perkowski / Dix Communications
A Business and Events Directory
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Gas & Oil
January 2014 Edition - Dix Communications
Northern Zone Edition
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January 2014 Edition
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Drilling DOWN
ODNR ADdresses Part 4 of 4 part series Laurie Huffman Dix Communications
T
he public’s concern about possible wa- designed for this type of waste disposal. ter contamination resulting from Ohio’s Maps of the locations of Class II Injection Wells are found underground injection well operations is on the ODNR website, at www.ohiodnr.gov. something the Department of Natural Resources Also, anyone with a question about injection well disposal is takes seriously. Public meetings are held periodically to ad- invited to send an email to oilandgas@dnr.state.oh.us. dress these concerns, and during one such meeting in Portage County Tom Tomastik, a geologist for the DNR’s division of Oil and Gas Resources Management, spoke on the subject. He said Ohio law regulates Class I, hazardous waste, and Class II injection wells, which are used by the oil and gas industry. “In Ohio, Class II Injection Well sites have three layers of steel casing to protect the water,” said Tomastik. In addition, he said Class II sites require, by state regulations, continuous monitoring of the maximum surface injection pressure. Surface injection pressure is set by a formula, and can be adjusted. Also, unannounced inspections are conducted on these sites every 11 to 12 weeks or more. “These regular inspections are used to check injection pressures and the integrity of the of the injection well, and to look for pipeline leaks,” said Tomastik.“Failures of injection wells is typically in the tubing area. But, the tubing is still surroundTRUCK SALES, INC. ed by multiple layers of steel casing and cement. So, there is no threat to the water.” The ODNR states the natural gas and drilling process creNew & Used Truck Sales - Leasing Young Freightliner ates oilfield wastes, often called brine, that are composed of & Isuzu Service - Parts - Body Work fracturing fluid or flowback. As defined by the U.S. EPA, only Sales, Parts & Service Not just highway trucks! We also service oilfield wastes may be transported from drilling sites and in1-800-362-0495 RV’s, school busses, fire trucks, all types jected into Class II deep injection wells, which are specifically
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Gas & Oil
Northern Zone Edition
January 2014 Edition - Dix Communications
ODNR triples regulatory staff,
poised to regulate gas,
oil well construction
James Zehringer
Laurie Huffman Dix Communications
C
ANTON -- The Ohio Department of Natural Resources wants the public to know while they want to see the gas and oil industry succeed in Ohio, they don’t want it to be at the expense of the environment or the citizens of the state. “That is our mission,” said James Zehringer, director of ODNR. Zehringer and Rick Simmer, chief of the ODNR’s Division of Oil and Gas Resources, presented information on Ohio’s gas and oil exploration and production during a talk recently held at Malone University, in Stark County. The event was organized by the Canton Regional Chamber of Commerce. Zehringer was brought on board by Governor John Kasich a little more than two years ago, after previously serving as the director of the Ohio Department of Agriculture. “Ohio is blessed with natural resources. Along with gas and oil, we have coal, water and public lands,” said Zehringer. “Our goals, as the division of the ODNR in charge of resources are 1) to safeguard the water quality; 2) clean up our 74 state parks; and 3) to regulate oil and gas responsibly, which is pretty important, because we have to do this right. We have nine divisions in the ODNR, and Oil and Gas Resource Management is one.” Zehringer pointed out there has been a shift to Southern Ohio recently, in Noble and Belmont counties, in particular, in terms of oil and gas exploration and production, and he said there has been some pretty staggering results. Also, a new well in Monroe County is breaking records for oil and gas production, grossing $1 million per week. “That is just one well, and most wells don’t gross anywhere near that amount,” said Zehringer. Zehringer said the ODNR projects the wells to be drilled in Ohio will take a large jump next year, with 1,180 predicted to be drilled in 2014, compared to 625 in 2013, and 215 in 2012. As he pointed out with this prediction, the activity is expected to go through the roof. In anticipation, the ODNR has beefed up its staff. In 2010, the ODNR had only 37 full-time people to regulate the oil and gas activity. “We have talked to other states to discuss lessons learned, and we’ve learned we have to
have our regulatory staff in place,” Zehringer said. “So, we’ve tripled our staff in the last two years. That includes 50 on-theground inspectors.” Zehringer said regulation is the key to keeping the industry a safe one for Ohioans. He said there is a proposed severance tax, but no amount has yet been set, and as far as the impact of that on the industry is concerned, he said, “I don’t know what that will be, but, I can tell you our severance taxes are pretty low.” He also pointed out Governor Kasich’s intent with the severance tax is to lower income tax. Simmers also spoke to say it is the ODNR’s intent to regulate well construction, which is “largely unregulated now.” New rules will be put in place in draft form as of Jan. 1, and once they are finalized, the gas and oil companies will be required to submit an engineering plan for ODNR approval. “We’ll review their plan and make sure they follow the proper processes during construction,” said Simmers. Simmers also told those present during the talk the ODNR has residency requirements for its staff. “We live and work in the areas where we inspect, and in the counties where we regulate,” he said. “Utica is developing faster than any play in the U.S.,” Zehringer concluded, “and, we’re expecting to see a lot of positive results continuing.”
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January 2014 Edition - Dix Communications
Jobs outlook high for 2014
Northern Zone Edition
Rob Todor Dix Communications
J
ob opportunities in the gas and oil industry continue to grow as the need for experienced and qualified workers are in demand, says Mike Chadsey, Director of Public Relations with the Ohio Oil & Gas Association (OOGA). In the first quarter of 2013, there were more than 5,000 job postings online in Ohio in core and ancillary shale-related industries, according to a report published by the Ohio Department of Job and Family Services. “Stable jobs … increased in all core shale-related industries: oil and gas extraction, support activities for mining, pipeline transportation of natural gas, and utility system construction,” the report said. Chadsey says the top-five careers needed are CDL drivers, machinists, diesel mechanics, welders and well-tenders. “CDL drivers and welders have always been a need,” says
Chadsey. “Those jobs have been there from the start. The others fluctuate as the needs change.” With the emphasis on more upstream construction in the last 12-18 months, particularly in Eastern Ohio, some of the jobs in need have changed. However, with those upstream facilities completed and operational, the need for drivers, particularly, continues to be strong to bring the product from the field. “There are so many loads to move,” says Chadsey, “whether you are talking about water, aggregate and sand to the site, or bringing the product or water out. More of our wells are now being turned on-line.” With the continued demand for skilled laborers, drivers and field technicians, there’s been more emphasis on proper instruction and training for potential hires. According to Chadsey more than 70 programs in high schools, colleges and tech-
SHALE-RELATED EMPLOYMENT BY YEAR 2011 – 161,435 2012 – 167,310 2013 (1st quarter) – 169,235 SHALE-RELATED ESTABLISHMENTS BY YEAR 2011 – 13,387 2012 – 13,412 2013 (1st quarter) – 13,480 Wages (2012 2nd quarter through 2013 1st quarter) The average wage across all industries was $44,367. The average wage in core shale-related industries was $74,382, which was $40,015 greater than the average for all industries. The average wage in ancillary shale-related industries was $59,154, which was $14,787 greater than the average for all industries. Source: Ohio Department of Jobs and Family Services
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Jobs outlook high for 2014 nical schools have been approved for supplying the gas and oil industry with qualified workers. As well as jobs that demand a strong, physical labor force are positions that require engineering degrees, says Chadsey. “There are so many jobs that require the ability to work with computers,” he says, “that it requires a different sort of person than 50 or 100 years ago. Now you have to be able to work with your brain as well as your back.” Whatever the position, flexibility is a key component. There’s a lot of travel involved, not just from site to site, but as new well sites are developed. Interested persons who require training for specialized jobs in the gas and oil industry can visit local OhioMeansJobs Centers, which provide free training and other services. Individuals can also post their resumes and look for jobs at www.ohiomeansjobs.com. “Without question jobs will continue to be filled in the shale industry,” says Chadsey.
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January 2014 Edition - Dix Communications
Northern Zone Edition
Supply industry feeling gain of oil/gas drilling Kelley Mohr / Bobby Warren Dix Communications
M
ILLERSBURG -- To the untrained eye, Holmes and Wayne counites have been unaffected by the oil and gas industry in Ohio in the past year. However, local businesses have seen a direct impact from oil and gas exploration in other parts of the state. “Most of the activity is east of us, so it has not had a major impact on lodging and tourism,” said Holmes County Chamber of Commerce Executive Director Shasta Mast. Last year, it seemed Holmes County was on the brink of a flurry of oil and gas activity. However, that activity never came. There had been a lot of hope swelling in Wayne County that the oil and gas development east of here would migrate this way. In the summer of 2012, Devon Energy Production became the first major player to secure a permit to drill a horizontal, hydraulic-fractured well in the county. However, the results were not what was expected, and the company pulled out. Though the play is not here now, Wayne Economic Development Council President Rod Crider and Project Manager Shawn Starlin have continued to work with local companies who are providing products to gas and oil producers. “What we’ve seen is that most of the land men and the oil companies who were trying to buy leases, that activity has slowed. Most of them are either gone or have considerably downsized their presence in Holmes County,” explained Mast. “That’s not to say it’s not going to come here, but with the price of gas decreasing it made it less affordable for them to get it out of the ground and a lot of the infrastructure needed to move the oil and gas once it is out of the ground isn’t in place.” Now, the activity is to the east and the southeast, where infrastructure is being developed to accommodate the oil and gas industry. That’s not to say that oil and gas activity has not had an impact in Holmes County. “I think it has had an impact on businesses in Holmes County that supply the oil and gas industry — like Pride of the Hills, who is still experiencing considerable growth,” said Mast. Pride of the Hills Manufacturing, based in Big Prairie and Killbuck, manufactures, installs and services pressure vessels,
piping and other equipment and services used in the oil and gas industry. The latest project involved Pride of the Hills Manufacturing Wooster, formerly TRING Corp. The Wooster-area manufacturer joined with Pride of the Hills, Killbuck, and it is undergoing an expansion with nearly $3 million invested in new equipment. Much of the growth Pride of the Hills is seeing in Holmes County is being driven by the gas and oil business. The company manufactures gas production units, and Dan Oliver said Pride of the Hills’ technology will be able to help producers who engage in hydraulic fracturing to save money. The gas production units separate gas, oil, sand and water, and it reduces the pressure of the gas coming out of the ground. Because it separates the gas, drillers will be able to use the gas to power the engines that drive the fracking process. “The gas is theirs; they pay for diesel” to operate the engines,” Oliver said. Looking forward, Mast expects to see casual interest from oil and gas companies in leasing Holmes County land, and “I think from the supply perspective, businesses like Pride of the Hills will continue to grow, hire and expand. Different businesses are adding shifts, adding employees, adding space and adding equipment. So while we’re not in the thick of it, it certainly impacts Holmes County,” she said. It’s already happening. Just look at the Village of Killbuck, home to Pride of the Hills and several other businesses. “Their industrial park went from being empty to being full,” said Mast. WEDC also worked with Bob Gralinksi, general manager for Scot Industries, on an expansion project earlier in 2013. The company received certification from the American Petroleum Institute to capitalize on opportunities to work with supply companies and provide them with heat-treated pipes. Another project was with Wooster Tool & Supply, a Westerman company. The company manufactures gas and oil separation tanks and gas production units that are used by companies drilling for gas and oil in the Marcellus and Utica shale plays. The expansion was due to the expected continued growth of oil and gas drilling in Ohio.
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Supply industry feeling gain of oil/gas drilling
January 2014 Edition
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MARCELLUS SHALE
18 3 9 0 6 0 0 36
Wells Permitted Wells Drilling Wells Drilled Not Drilled Wells Producing Inactive Plugged Total Horizontal Permits
388 89 297 0 250 0 0 1024
UTICA SHALE
Wells Permitted Wells Drilling Wells Drilled Not Drilled Wells Producing Inactive Plugged Total Horizontal Permits
Data as of 12/14/13 Source: Ohio Department of Natural Resources
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Northern Zone Edition
January 2014 Edition - Dix Communications
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January 2014 Edition
Fortis College offers welding courses
13
Alison Stewart Dix Communications
R
AVENNA -- As an area of study, welding has become popular in recent years due to the demand for jobs in the industry. Fortis College, in Ravenna, offers courses for those interested in a career in welding. “Welding has really taken off and welding is a part of trucking,” said Vicki Young. Fortis College’s welding department Chair. “We have large trailer producers in this area and a huge segment of our student population are employed by these companies.” Welding engineering employs science and engineering in joining components made of metals, ceramics, plastics, and other materials. Welding engineering includes design of the joints to be welded, development of the detailed joining procedures to be used, selection of the materials incorporated in the joint, joint inspection, and quality control for the final product according to Young. “The duration of our welding program is fifteen months,” said Young. “Each class is ten weeks in length.” Young said there are currently 75 students enrolled in the welding program at the Ravenna location. The program consists of a great amount of math, safety and operation, gas welding, metal welding and more. The courses consist of lectures and labs. Young said there are many reasons why jobs in this industry are in such high demand. “The baby boomers are retiring, so it is essential younger people be trained to be able to take over these jobs,” said Young. “There is also a high deficit in the welding industry be-
cause of a lack of skilled laborers. It is sort of like fighting two entities at once, to fill the void of skilled labor and to replace the void of people retiring.” There has been an influx of repairing infrastructure in the United States, Young said. The shipping industry has also become more important these past few years. The demand for truck drivers has increased greatly due to large manufacturing industries taking off, said Young. There are several Fortis College locations across the country, but the branches in Ravenna (at 653 Enterprise Pkwy.) and Atlanta, GA are the only two that offer welding courses, according to the Fortis College website. astewart@recordpub.com
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January 2014 Edition - Dix Communications
Northern Zone Edition
Atlas Oil announces new president Lauren Sega Dix Communications
A
tlas Oil Chairman and CEO Sam Simon announced the selection of former Vice President Michael Evans as the new president and chief operating officer, effective immediately. This newly created position will be fully established by the first of the year. “After 28 years of being involved in the day to day leadership of Atlas, I will now move to a more strategic and visionary role,” said Simon. “Michael and I have been partners and business associates for the past 17 years. I have complete confidence in his ability to take over the reins as president.” Evans joined Atlas in 1996, and has held several executive positions, including directing real estate development sales, serving as commercial and industrial sales manager and as chief development officer, said Evans. “I have also directed several acquisitions for the company, so I have pretty much touched every part of the business,” he added. Evans’ business career spans more than 24 years, said the Oct. 16 news release. For eight of those years, Evans served as a financial analyst supporting General Motors Executive Staff business units at Electronic Data Systems. Evans eventually earned the lead financial role for the negotiating team on EDS’ spin off from General Motors in 1996. Atlas Oil, which currently supplies 15 gas stations in Ohio, also has an affiliate-- Seaway Fuels Trucking-- in Toledo, which handles regional distribution of fuel products. Earlier this year, Atlas Oil launched a crude hauling business in Canton.
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“Probably the biggest industry change is the growing crude hauling business that is developing not only in Ohio, but in other parts of the country,” Evans said. “We have a business unit dedicated to crude transportation and logistics and that business has been growing steadily with the recent surge in domestic oil production.” Evans’ new role as president and COO will be to oversee the day-to-day operations. Retail, commercial, emergency fueling and crude transloading and transportation are some areas he will be responsible for. “I will also be responsible for developing and improving our overall processes as a company to keep us focused on serving our customers,” Evans said. “This change will help us to evolve into the best company in this industry and charting paths for new growth opportunities.”
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January 2014 Edition - Dix Communications
Northern Zone Edition
Benefits will ‘reverberate’
throughout state Judie Perkowski Dix Communications
C
AMBRIDGE — Presenting a synopsis of several towns and cities, off the beaten path of oil-rich eastern Ohio, that have benefited from the presence of dozens of gas and oil companies entrenched in the majority of the 32 Appalachian counties, Linda Woggon, executive vice president of the Ohio Chamber of Commerce, told attendees at the Guernsey Energy Coalition meeting, “the benefits from the development of gas and oil in eastern Ohio will reverberate throughout the state,” and that we (communities) are beginning to understand what gas and oil has to offer, including challenges we need to overcome, and how we can all benefit without an oil well in our backyard. The monthly meeting at the Southgate Hotel, sponsored by the Cambridge Area Chamber of Commerce and moderated by Chamber President Jo Sexton, engages speakers associated with the gas and oil industry to inform, educate, and entertain, local business, civic and government leaders and officials about the status of the gas and oil phenomenon in Appalachian Ohio. “Practically everyone knows that Carroll County is the epicenter of oil and gas with three times the well activity of the next county in second place. It was not too long ago that Carroll County had predominantly dirt roads and one motel. To date, more than $40 million has been spent in road construction, sales tax revenue hit the million dollar mark this year, there is a brand new hotel in Carrollton, and the county boasts 200 new millionaires,” said Woggon. “The Atwood Lake property, in Tuscarawas and Carroll counties, has been rescued from bankruptcy, local businesses have expanded their product lines and number of employees. Many people have been hired just to service the needs of the gas and oil industry. The same is happening in Steubenville where a company that makes signs recently hired one employee to handle rush orders for gas and oil business, and Youngstown is starting to make a comeback after the earthquake episode. A steel pipe factory there has 350 new hires and 800 people were hired in spin-off jobs. An estimated $8 billion has been invested in the Youngstown area since 2008. Woggon cited several cities in western Ohio, such as Dayton and Cincinnati, where supply chains to the gas and oil industry are on a steady growth. Dayton has seen in the largest increase in employment, related to the gas and oil industry, in 20 years.
“Cincinnati businesses joined the Ohio Oil and Gas Association to become part of the member list of businesses. The companies were eager to make their presence known and to their availability. A landscaping company in Cincinatti began making calls to gas and oil companies about reclamation of well pad areas. They landed a job, and one job led to another and another. So much business, they opened an office in eastern Ohio. “Baker Hughes has announced they are building a huge processing plant in Massillon, and Chesapeake has opened their main Ohio office in Canton. “This is just the tip of the iceberg,” she said. Woggon said there are three things she believes are important to retain Ohio’s economic growth: We don’t want to be overly aggressive with regulations and legislation; we have to make sure our workforce has the right skills needed for industrial growth; and we have to be aware of the many groups, locally and from out-of-state who are trying to ban drilling altogether. Also offering his expertise in legislative affairs was State Sen. Troy Balderson, who was appointed to serve as a member of the National Conference of State Legislatures Task Force on Energy Supply. Balderson, a leader in energy policy from the Statehouse, is also chairman of the Senate Standing Committee on Energy and Natural Resources. Balderson reiterated his commitment to Senate Bill 1, cosponsored by Sen. Bill Beagle. “OhioMeansJobs Workforce Development Revolving Loan Program, created by SB 1, is a loan program for education funded by $25 million from casino taxes, with no burden on tax-payers,” said Balderson. The money will provide an education, from public or private college, career schools and career-technical training centers that offer adult training for qualified applicants for growing job sectors, such as gas and oil, while facilitating quick job placement after fulfillment of the require education. The funds will be used to provide loans to individuals to cover their education. Preference will be given to schools that have partnered with businesses that will pay back part or all of the participants’s loan that provided the funds for the training program. Balderson recounted his experience years ago when he could not find qualified people to work in his family’s auto repair business. He said he eventually spoke to a represen-
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January 2014 Edition
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THE BENEFITS: Jo Sexton, president of the Cambridge Area Chamber of Commerce, welcomes Linda Woggon, executive vice president of the Ohio Chamber of Commerce, and State Sen. Troy Balderson, to the Guernsey Energy Coalition meeting Thursday morning. Woggon and Balderson were guest speakers.
tative of the Chrysler Corp. and asked about sponsoring an apprenticeship. Balderson said he paid half of a young man’s education in return for a three-year commitment from his future employee to finish his schooling and become part of Balderson’s workforce. “Business and educators are ready and willing to participate in SB 1, they are just waiting for the money, which is controlled by the Board of Regents (Ohio Treasury Department),” said Balderson. “They just need the money from the Regents. “The key is for business leaders, future employees and educators work together to form a plan. It is up to them. They can structure their plan any way that works for them. Who they want or need to hire and the education required to fill the jobs,” he said. “Age is no barrier. Anyone can work out a plan with an employer for education and future employment. All it takes is commitment.” Balderson also said we need our children to focus on the current and future job market. All jobs do not require a college education, some good paying jobs only require a certification or special training. “Our kids are not engaged in what’s going on in the job market today, especially in technology. Everything associated with gas and oil industry is run by technology ... The technology that runs the oil and gas industry is incredible. It’s worth businesses time to talk to educators. We need businesses and educators to form a partnership. To be on the same page. “We have the facilities, we have the people, and not just gas and oil jobs,” he said. “We have 100,000 jobs on the state’s website, OhioMeansJobs. We have the opportunity now, what we change now will insure growth and a stable future.” jperkowski@daily-jeff.com
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Gas & Oil
January 2014 Edition - Dix Communications
Northern Zone Edition
Controversial well ordered plugged
M
ILLERSBURG — Unproductive since 2009, a controversial well has been ordered plugged by a Holmes County judge. Judge Robert Rinfret’s decision was the culmination of a civil lawsuit filed in Holmes County Common Pleas Court by Darrell and Dortha Helms against Thomas Whitney and Donald Ridgeway, who lease land and own a well on the Helms’ Brinkhaven property. Whitney and Ridgeway are now appealing that decision. The well, originally drilled in 1918, is known as Crider No. 4 and had been used by Whitney and Ridgeway to produce oil and gas from 1976-2009, according to court records. To that point, and into 2010, royalty payments were made to the Helmses. Production stopped in 2009 after a storm knocked down a goat pen and disrupted electric power to the well, according to court records. Conflict ensued about restoration of power. Rinfret found Helmses’ “only objection to the electrical line was that the new pole be placed in their yard.” He notes that a generator could have supplied power in the interim and full power could have been restored following erection of a new electric line in 2011 or 2012. Whitney and Ridgeway, through their attorney Robert Eckinger, continue to claim a generator would not have provided the steady source of power required to operate the pump and the Helmses failure to cooperate is the cause of the lack of production. From 1998-2009, the well averaged 97.75 barrels of oil a year, according to Eckinger, who said there is no question about its potential to produce. Nevertheless, Rinfret found the well, unproductive for more than two years, was inactive and must be plugged by Whitney and Ridgeway. Rinfret’s decision nullifies the claims of Whitney and Ridgeway on the mineral rights, including those associated with future production associated with horizontal drilling.
It’s the ruling the Helmses were hoping for when they hired attorney Thomas White to help them clear the property’s title. The outstanding lease with Ridgeway and Whitney would have entitled them to signing bonuses and the better part of royalties paid by deep drilling into the shale. With signing bonuses in southeastern Ohio reaching $7,000 an acre, the financial gain is great for the holder of a property’s mineral rights, said White, who said many landowners are now tidying up old claims to avoid problems in the future. But, he said, producers also are taking notice of the financial potential, often making last-ditch efforts to breath life into old wells to preserve a claim on future production, which, because of technological deficiencies may be several years down the road for residents in Holmes County, where reserves of natural gas are not enough to force the deep oil to the earth’s surface. In fact, Eckinger said, Ridgeway and Whitney had made efforts to make the well active after being contacted by ODNR about well. Their efforts were abandoned when the lawsuit was filed in November 2012. Nevertheless, Eckinger said, he believes the well not only has the potential of being productive, but even more so than before. This, plus his clients’ potential gains from fracking, have prompted him to appeal to the Fifth District Court of Appeals. Significant in Rinfret’s decision was not only the “inactive finding,” but “he gave the court authority to have the well plugged,” said White, explaining it is the first time he knows of a court making such a far-reaching order, otherwise the responsibility of the Ohio Department of Natural Resources. “We think that is perfectly fine,” White said or Rinfret’s order to plug the well, calling it “a tremendous assist to landowners in getting old wells and leases off land.” Ridgeway and Whitney would disagree, and in light of the pending appeal have asked the court to stay imposition of the order to have the well plugged.
Dix Communications - Gas & Oil
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January 2014 Edition
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Gas & Oil
January 2014 Edition - Dix Communications
Northern Zone Edition
A landowner’s view Goldman & Braunstein Attorneys
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ore than 100 pipelines are currently planned or under construction in Ohio and it’s safe to say that more are on the way. Thus, the number of landowners affected by these projects is growing rapidly, particularly in areas where farmland is prevalent. Each landowner we represent—and we only represent landowners, never pipelines—has unique concerns when it comes to a pipeline easement agreement. Compensation is a major issue, but so is how their land is used, potential future development, and, of course safety. What is consistent though in each of these cases is that when the landowner has legal representation from an experienced eminent domain attorney, the deal they end up with is almost always far better than the initial offer from the pipeline company. The following landowners, each of whom we represented, have agreed to share their personal stories in hopes of helping other landowners who may face similar situations.
Preserving A Family Farm
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arming is the Armand family business. The Armands operate two farms totaling more than 900 acres. Their properties include The Harper Valley Farm that has been owned and run by the Armand’s since 1941. In early 2012 a surveyor showed up at Albert Armand’s door. That’s when he learned that the Enterprise Pipeline would affect both properties. “We weren’t happy about the prospect of a pipeline,” Armand explained. “In the best case scenario we feared it would be a mess for us.” You see, the Armand’s have a history with pipelines. Armand remembers when his grandfather negotiated two pipeline easements through the property in the early 1950’s. They lost a crop and the land was never restored properly. So this time around the integrity of the property was Albert Armand’s main concern. “The dollar value was not out of line,” Armand said. “But we wanted guarantees that the ground would be as productive after they left and that the work would be environmentally responsible. We also wanted assurances that when they left, we would not have to worry about inadvertently violating any regulations in terms of erosion or pollution.” “I actually tried for quite some time to work out a deal regarding land quality issues, but the land agent would not cooperate. The answer was always ‘we can’t do that. We can’t do this.’ The land agent implied that if I didn’t sign, we would lose in court and get less money than what they were now offering.” That’s when Armand sought legal representation. Eminent domain attorneys Michael Braunstein and William Goldman stepped in, collected all the information the Armands could provide, and ultimately negotiated what Armand describes as “a more equitable settlement,” that included five times more
money than had been originally offered by the pipeline company. In addition, Armand is confident that the integrity of his family’s land will now be preserved for future generations. “It is important for all of us to do whatever we can to look after the quality of the land we grow food on. I wanted to make sure that when this pipeline project was finished the land was as good as it could be. Our attorneys worked very hard to make that happen.”
Studio 1492 Photography The back row from left to right is - Ellie Armand, Diane Armand, Albert Armand, Lexie Armand - Front row is Will Armand with dogs Shadow and Reese.
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Dix Communications - Gas & Oil
January 2014 Edition
21
Can That Easement Stand?
L
ike Albert Armand, Ken Detterman comes from a long line of farmers. His 110-acre farm has been in his family since 1836, when his great- great-grandfather bought it. Ironically, Detterman’s grandfather also dealt with a pipeline and signed an easement agreement back in 1942. Now Sunoco Logistics has a pipeline that is routed across the Detterman land. And while no product has been pumped through that old line in more than a decade, Sunoco Logistics still claimed the 1942 easement was valid along with the provisions that went with it. “My grandfather got a grand total of around $50 for that easement,” Ken Detterman explained. “I can’t believe any court in the country would uphold that judgment all these years later.” Upon learning a number of his neighbors were facing the same situation, Detterman set up a landowners’ meeting and then created a landowners’ group. The Ohio Farm Bureau referred him to Goldman & Braunstein. “The first attorney we met with worked by the hour, so we didn’t know how much it would ultimately cost us,” Detterman explained. “Goldman & Braunstein work on a contingency fee. We were more comfortable with that.”
Goldman & Braunstein have hammered out a new easement agreement on behalf of Detterman. And while the new pipeline will follow the same route as the old one, the compensation is greater than they were initially offered and safeguards are now in place. “They can only put one line in and we are protected legally if there is ever a leak,” Detterman said. “This will protect our future and the future of our kids when they inherit the land.”
A Pipeline Set To Run Through A Community Jewel
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he Dawes Arboretum in Newark, Ohio: 1,800 acres of beautiful grounds dedicated to increasing the love and knowledge of trees, history and the natural world. The Arboretum’s mission is to provide exceptional education programs and events, as well as maintain incredible horticulture collections. When Arboretum executive director Luke Messinger first saw an aerial photo outlining the proposed path of the ATEX pipeline, his first thought was “How can we stop this. “ He feared the impact of the pipeline’s proposed path through the Arboretum would be incredibly detrimental to their daily operations. Messinger learned quickly that stopping the pipeline wasn’t an option. “I was hopeful however that if we had experienced legal help on our side we could propose an alternative route on our property that would minimize disruption to our operations,” he explained. Eminent domain attorneys Goldman & Braunstein were retained. Their first order of business was to tour the Arboretum, taking a close look at the proposed path and alternative routes that Messinger believed would cause less damage to both the natural habitat and the work that is done there daily. “Their ability to understand the uniqueness of our property and our daily operations was critical in order for them to negotiate in our best interests,“ Messinger explained. “You can’t just arbitrarily draw a line through this property if you don’t understand its use.” According to Messinger, the attorneys were able to both “demonstrate and clearly communicate the value of the land.”
ATEX agreed to move the 8,500 feet of pipeline on the Arboretum’s property so research and youth education areas were not impacted. Messinger believes they would have been had ATEX stuck with its original routing. “From the start, our goal was to minimize the pipeline’s impact. The pipeline company was agreeable I think, because Goldman & Braunstein were able to communicate the passion, level of education and love the community has for this property. It was in the pipeline company’s best interest to work with us.” Attorneys Michael Braunstein and William Goldman can be reached at 614-229-4512 or toll free at 888-229-4569. For more information visit www.ohiopipelineresults.com or www. eminentdomainattorneysoh.com.
Photo Courtesy of Dawes Arboretum
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Gas & Oil
January 2014 Edition - Dix Communications
Northern Zone Edition
Shrugging off winter’s bite
in NORTH Dakota oilfields
James MacPherson Associated Press
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ISMARCK, N.D. (AP) — Some people were choosing to stay indoors as an arctic blast swept across the Northern Plains, but the prospect of temperatures not cracking single digits had a different effect on the roustabouts, roughnecks and thousands of others working outside in western North Dakota’s oil patch. For them, it was just another challenge to face as they go about the task of pulling nearly a million barrels of oil a day out of the ground. “This is what I love to do,” said Craig Hovet, during a break from maintenance work on a well near Mandaree. “The joke around here is: This kind of weather keeps out the riffraff.” Hovet and his crew shrugged off blowing snow and singledigit temperatures in early December, but the real deep freeze was just ahead. The projected high for Dec. 5 was minus 6 degrees, falling to minus 10 by Dec. 7, with overnight lows to 24 below as a major winter storm bulldozed from the Rockies eastward. Temperatures that had hovered in the single digits across Montana began dropping Dec. 4, and the National Weather Service forecast record or near-record lows in several parts of the state overnight. The bitter cold predicted ranged from minus 9 degrees in Missoula to minus 27 in Butte and Shelby. The extreme cold prompted the Red Cross to release a statement urging people to stay inside or layer up to guard against frostbite if they must go out. The agency also asked residents to check on their neighbors, especially if they require special assistance or live alone. The cold snap was widespread, blamed on the jet stream’s move southward and expected to linger through much of the week. In Minnesota, the icy blast came with a snow dump approaching 3 feet in the northeast, though much of that was lake-effect snow on the shores of Lake Superior. At least five people died in fatal crashes in Minnesota, plus at least two more in Montana and North Dakota. Oklahoma postponed high school football championship games as the storm moved in. North Dakota historically has conjured up images of a bleak, wind-swept and treeless wasteland. The perception was so great that one group a decade ago proposed changing the state’s name by dropping “North” and leaving just “Dakota,” to dispel the state’s image of inhospitable winter weather. That was before North Dakota’s recent oil bonanza that has brought swarms of people to the state in search of a good
economy, a job and a fresh start. Now, thousands of new oil wells have been punched though the prairie, bringing billions of dollars to the state and more jobs than takers. It’s a boom that doesn’t stop for the weather. “Harvesting oil is a 24/7, 365 operation,” said Ron Ness, president of the North Dakota Petroleum Council, an industry group that represents hundreds of oil-related companies. “The pace probably slows during extreme blizzard conditions — and there are extra precautions on safety — but it’s work that is not going to stop.” Longtime oilmen say clothing has improved over the years. And many rigs now have “doghouses” — small heated buildings — nearby and workers can go to them to get warm. “You have to know when to give them breaks, and learn to watch them so they don’t get too cold,” said Larry Dokken, 67, of Williston. Dokken has worked in the oil patch for nearly 50 years, with not-so-fond memories of working in minus-85 wind chill. He now operates a consulting firm that finds workers for oil companies, and prefers hiring cold-acclimated people from North Dakota or Montana — with at least five years of experience, too. “If they’ve made it that long, they’re probably going to stick around. A lot of people don’t know what cold is,” Dokken said. “My history books in grade school said George Washington and his army suffered at Valley Forge, and I’m sure they did,” said Daryl Andersen, a North Dakota native and 30-year oilman who now runs a well services company. “But we’re colder here than they ever were.” North Dakota’s notorious bitter cold isn’t a deterrent for Dylan Grossman, a 23-year-old Alaska native who has posted a Craigslist ad seeking a laborer’s job in the oil fields. Grossman is currently in Florida, where he’s struggled to find work. He said he intends to move to North Dakota soon and has asked his mother to mail him his warmest clothes. “I’ve heard it’s cold and flat in North Dakota,” Grossman said. “I think I can layer for it.” Hovet, who grew up in North Dakota, has heard that before. He recalls four Texans walking off a job site after being in North Dakota for just one day last winter. “It was about 5 above and sunny and really kind of a pretty day,” Hovet said. “They got their truck stuck in a ditch and their equipment got frozen up. They said, ‘The heck with this, we’re going back to Texas.’”
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January 2014 Edition
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Gas & Oil
January 2014 Edition - Dix Communications
Northern Zone Edition
Oilfield Expo, Safety Congress draws crowd, many exhibitors Judie Perkowski Dix Communications
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LEVELAND — If you ever wanted to know anything about the oil and gas industry, the Ohio Oil and Gas Association Oilfield Expo and Safety Congress was the place to be. The OOGA Expo at Cleveland’s I-X Center Dec. 4-5, sponsored by the International Union of Operating Engineers Local 18 and dozens of energy and energy associated businesses and organizations, attracted 212 exhibitors and a thousand visitors. While there were many out-of-state exhibitors represented, from as far west as Washington and Calfiornia, as far south as Florida, Georgia and Texas, and from Kansas and Nebraska in the mid-west, the majority of exhibitors were from Ohio. Exhibitors at the Expo from Guernsey, Noble, Muskingum, Tuscawaras or Belmont counties: Nicolozakes Trucking & Construction, Kimble Companies, Rig Power, Ohio Oil Gathering, Truck Sales & Service, Inc., Weavertown Environmental Group, Zanesville-Muskingum County Port Authority, Energy in Depth, Ohio Project, and Pace Analytical Service Center. The Dix Communications booth, was manned during the event by company personnel: Kim Brenning and Judie Perkowski of The Daily & Sunday Jeffersonian and Ohio GAS&OIL magazine, Janice Wyatt from the Dix corporate office in Kent, Pete Kiko from the Wooster office and Joe Gasper and Harry Newman, both from Record Publishing. Dix is the parent company of several communication entities. Copies of the Dix Ohio GAS&OIL magazine were distributed throughout the event by advertising gurus Brenning and Wyatt who offered visitors “A Luck of the Draw” chance to win a full-page, color ad in the magazine by dropping their business card into a container. A card was drawn at the close of the Expo. Winner was Sunpro, a North Canton business that provides environmental, emergency, oil and gas and high voltage services. The cavernous facility offered vendors the space to exhibit and, in some cases, demonstrate their equipment, educate the public about their business and do a lot of networking. Visitors
could chat face-to-face with representatives of businesses in virtually every facet of the oil and gas industry. The well-organized event offered sessions on industry training, continuing education and technical programs, in addition to safety rules and regulations. OOGA Director of Public Relations Mike Chadsey said, “We are very excited to almost double the number of exhibitors from last year’s event. It’s a positive indication of what’s happening with gas and oil in Ohio ... It’s a good place to do business. The Expo is an event that allows people in the business to network and showcase their services and products.” Since 1947, when a small group of independent oil and gas producers became advocates for the rapidly growing industry, the Ohio Oil and Gas Association, which has grown in size and stature, now represents more than 3,000 members in all areas of Ohio’s oil and gas industry, none more important than the discovery and development of Utica Shale. jperkowski@daily-jeff.com
Even the Pro Football Hall of Fame had an exhibit. Amy Schiefer, account executive promoting Aultworks Occupational Medicine, said football and medicine go hand in hand. The booth, one of the many at the Ohio Oil and Gas Association Oilfield Expo and Safety Congress, distributed useful information and promotional items.
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A huge Baker Hughes truck used for transporting equipment to oil fields, had plenty of room to show off its cargo and accommodations for its driver. The multi-million dollar transportation vehicle and machinery were on display at the Ohio Oil and Gas Association Oilfield Expo and Safety Congress Dec. 4-5 at Cleveland’s I-X Center.
Joe Gasper, r, sales manager at The Record Courier in Kent, a Dix Communications newspaper, presents Pete Eliades, l, and Josh Nickles, c, of Sunpro, provider of environmental, electrical and emergency services, with a certificate for a free full-page color advertisement in the Dix Communications Ohio OIL&GAS magazine. Sunpro, provider of environmental, electrical and emergency services, has its corporate office in North Canton. Sunpro employees won the free ad at the event by depositing their company business card in a container at the Ohio Oil and Gas Association Oilfield Expo and Safety Congress. The event was held in Cleveland, Dec. 4-5 at the I-X Center.
Michael Bertolone, business representative for the International Union of Operating Engineers, Local 18, in Cleveland, operates a simulator used to demonstrate what it actually feels like to operate heavy equipment, at the OOGA Oilfield Expo and Safety Congress at Cleveland’s I-X Center Dec. 4-5. Bertolone said it is easier, and definitely safer, for prospective employees to practice on the simulator. The technology allows unions to integrate the training into apprenticeship programs on a variety of equipment, from earth movers to bulldozers and cranes.
Dix Communications - Gas & Oil
January 2014 Edition
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A waste water tank that holds frack water for recycling was one of the 212 exhibits from businesses in the oil and gas industry at the OOGA Oilfield Expo and Safety Congress at the I-X Center in Cleveland Dec. 4-5. More than 1,000 visitors attended the annual event.
A Sunpro truck, one of the large vehicles and equipment on display at the Ohio Oil and Gas Association Oilfield Expo and Safety Congress, Dec. 4-5 at the I-X Center in Cleveland. Sunpro provides environmental, electrical and emergency services for the gas and oil industry.
Representing the Ohio Oil and Gas Energy Education Program at the OOGA Oilfield Expo in Cleveland, Rhonda Reda, OOGEEP executive director in dark jacket, and Michelle Chippas, Steiner public relations professional in red jacket, speak to visitors at the OOGEEP exhibit.
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Gas & Oil
Northern Zone Edition
January 2014 Edition - Dix Communications
TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY BY NUMBER OF SITES
1. Carroll County 360 2. Harrison County 154 3. Columbiana County 94 4. Noble County 74 5. Belmont County 65 6.Guernsey County 64 7. Monroe County 59 8. Jefferson County 37 9. Mahoning County 29 10. Portage County 15 Tuscarawas County 15 Trumbull County 15 11. Stark County 13 12. Washington County 9 13. Coshocton County 5 14. Morgan County 3 Muskingum County 3 Holmes County 3 15. Knox County 2 16. Ashland County 1 Astabula County 1 Geauga County 1 Medina County 1 Wayne County 1 WELL SITES IN VARIOUS STAGES: PERMITTED, DRILLING, DRILLED, COMPLETED, PRODUCING, PLUGGED SOURCE: OHIO DEPARTMENT OF NATURAL RESOURCES AS OF 12/14/13
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Dix Communications - Gas & Oil
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January 2014 Edition
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State of American Energy
2014
W
ASHINGTON — American Petroleum Institute President and CEO Jack Gerard will deliver a major address to outline priorities for oil and natural gas industry on Tuesday, Jan. 7, 2014. Members of the media are invited to participate in API’s 2014 State of American Energy event. Journalists outside of the DC metro area who RSVP in advance will receive the log in information for the live webcast and dial in information, for the post event press briefing and Q&A session with Gerard. The new year presents an unprecedented opportunity for fueling America’s future, creating jobs and providing much needed revenue to the government. We are in the midst of a game changing point in our history, and America’s future success depends on the choices that decision makers make today concerning the Keystone XL Pipeline, energy production, infrastructure, tax policy and federal regulations. Those choices can mean the difference between more jobs and investment in the U.S. or less, increasing or decreasing imports, and making the U.S. more or less energy secure. API will issue a new report examining oil and natural gas industry investments in America’s infrastructure. Gerard will
also announce a new campaign to continue to engage API’s 20 million and growing, grassroots network of American energy supporters during the coming election year. Gerard will host a news conference immediately following his address for credentialed members of the media that will include a question and answer period. To participate in the press briefing, RSVP to porterr@api. org, or by calling API media relations at 202-682-8114. What: The State of American Energy Who: Jack Gerard, API President and CEO When: Tuesday, Jan. 7, 2014 Keynote Address and webcast: noon Reporter Only News Conference: 1:15 p.m. (Eastern Standard Time) Where: Live from The Newseum in Washington, DC. Details on how to view the event online, and participate in the Q&A session with Mr. Gerard by phone, will be shared in response to RSVPs. Broadcast interviews with API experts available by request following the event. Credentialed media are invited to attend the luncheon, address and news conference in person as well.
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Gas & Oil
January 2014 Edition - Dix Communications
Northern Zone Edition
Mac LTT expands out of state
Kyle McDonald Dix Communications
K
ENT -- 2013 proved to be a busy year for Kent-based liquid tanker trailer manufacturer Mac LTT. In addition to bolstering production of its DOT 406 trailers, which are designed for hauling gasoline and diesel fuel, the company branched its manufacturing operations out of state for the first time with the takeover of a 90,000-squarefoot facility in Billings, Mont. The company also builds DOT 407 trailers, used for hauling hazardous chemicals; vacuum trailers, barrel truck mount bobtail vacuum units and fertilizer tankers for the farm industry. Mac LTT President Jim Maiorana said Northeast Ohio Region has provided no shortfall of workers whenever the company has needed to increase its workforce. Since opening the Kent facility in 2011, the company has grown its employee base to 165 workers, 30 of which were hired in 2013. “We’ve had great success bringing in people,” he said. “Most people say, ‘We can’t find welders,’ but honestly, we’ve not had an issue.” The company hopes to increase its employee numbers to 200 in 2014. Maiorana said a clean, safe and indoor working environment has created a strong, motivated workforce at the company’s 160,000-square-foot plant at 1400 Fairchild Ave. in Kent. “We like to pay a fair wage for the industry, treat our employees with respect — the way anybody wants to be treated
— and offer benefits,” he said. When the company is in hiring mode, it often hires welders on the spot if they can pass a welding test, and even those without welding skills can still get into the trade through the company’s training program. “One of my best welders in the shop started out as a plumber and mounter,” Maiorana said. “Within a year’s period, he’s become one of our top welders in the shop.” A welder by trade, Maiorana said he often walks the assembly line himself and likes to pick up a welding machine for hands-on training. “Sometimes I come out and show these guys how its done,” he said, adding that Mac LTT’s welders like to compete amongst themselves to see who can do the best job. In Mac LTT’s first year of production in Kent, the company put out 230 tanker trailers. In 2013, it increased its output to 350 units. Upon completion, most of the tankers wind up out west, in areas including Colorado, North Dakota, Texas and Oklahoma. Maiorana said Mac LTT’s goal is to nearly triple that number in years to come. “We’d like to build about 1,000 tankers a year out of here if the market will take it,” he said. “We can do that out of our existing facilities.”
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January 2014 Edition
Mac LTT expands out of state
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January 2014 Edition - Dix Communications
Northern Zone Edition
Zane State College adds finishing touches
To Gas & Oil Land Lab
Judie Perkowski Dix Communications
C
AMBRIDGE — The best way for students to learn about oil and gas formations is to have actual samples of the raw materials and scaled-down versions of the machinery and equipment. Zane State College’s Oil and Gas Engineering Technology Program on the Cambridge campus, boasts one of the first, — if not The first — oil and gas programs to offer students a hands-on experience. Now that a pump jack and related equipment are in place, coming soon to the oil and gas lab is a geological shale column. The column will be comprised of five layers of oil and gas producing rocks and stone typically found in Ohio: Marcellus and Utica shale, Trenton limestone, Clinton sandstone and Berea sandstone. The two samples of shale rock displayed in the photo are from the Marcellus and Utica formations in New York. The Marcellus formation is gigantic — beginning in northern New York it covers at least half of Ohio, and other states in between. Paul Pasley, instructor at Zane State’s Oil & Gas Engineering Technology Program in Cambridge, is spearheading a project to build a column with veneers of actual samples of each layer of rock, sandstone and limestone. “We are going to build a 6-by-2 foot concrete pillar with a granite base which will be covered with veneers of each shale rock sample from the Utica and Marcellus formations,” said Pasley. “We will layer the column according to the actual structure of the stone and shale. I have the plans and design, the next step is building and assembling the column after we have all the components. A granite base is necessary because of the weight it will hold — about 600 pounds when completed. The column will have an educational placard attached to identify each layer.” Pasley said he is currently looking for a source of “Clinton sandstone.” Another addition to the lab’s hands-on materials, is a PIG — pipeline inspection gauge — a valuable instrument used to perform numerous maintenance operations, said Robert Stonerock, also an instructor at the college’s oil and gas program. The PIG will be inserted into a launching station and pro-
pelled through the pipeline using artificial air pressure. While the PIG is propelled forward, it will clean, decontaminate and remove unwanted debris from the pipeline. PIGS can also determine wear and tear or breaks in the pipeline. The pipeline version at the college’s oil and gas lab will be 150 feet long. At the end of the pipe, the PIG will be removed and students can analyze the contents for problems, questionable remains, and potential hazards. This will provide students with real-life experience without exposing them to the possible dangers of high pressure gas. If anyone can help locate sandstone or limestone samples, call Robert Stonerock or Paul Pasley at 740-588-1381 or email rstonerock@zanestate.edu or ppasley@zanestate.edu. jperkowski@daily-jeff.com
Robert Stonerock, l, and Paul Pasley, instructors at Zane State’s Oil & Gas Engineering Technology Program in Cambridge, hold a poster representing the layers of shale rock found in Ohio in the Marcellus and Utica shale formations. Pasley is spearheading a project to build a similar column with actual samples of each layer of rock. Two samples stacked on the table are from l to r, the Marcellus formation and the Utica formation. The Utica shale lies beneath the Marcellus.
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