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Table of Contents 5

UTOPIA PIPELINE WILL ENTER WAYNE COUNTY

BRAINSTORMING IDEAS FOR SHALE ACADEMY

SHALE-ABRATION SET FOR JUNE

G.C. Dix II

PROPOSED GAS & OIL TAX OPPOSED

David Dix

FARM BUREAU TO HOST SAFETY BRIEFING

PRIDE OF THE HILLS TO ADD 40 NEW EMPLOYESS

TREMORS SHAKING UP WELL DISCUSSIONS

RULES FOR CHEMICAL DISCLOSURE

WOMEN IN ENERGY

KEEP THE BOOM ALIVE

BILL TO REPEAL ETHANOL MANDATE

PIPELINE AWARD PRESENTED

UNITIZATION BILL PASSES HOUSE

UPCOMING EVENTS

PRESSURE FOR TOUGHER SAFETY RULES

OFFICIALS DISCUSS ROVER PIPELINE

PUBLISHERS Andrew S. Dix

EXECUTIVE EDITORS Ray Booth Rob Todor Lance White Roger DiPaolo

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

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ADVERTISING Kim Brenning

Jeff Kaplan

Rhonda Geer

Harry Newman

Janice Wyatt

Jeff Pezzano

DIGITAL MEDIA MANAGER

Brad Tansey

ART DIRECTOR Pete Kiko

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OOSTER — Can there be Utopia here? Before answering, recognize it is yet another proposed pipeline through Wayne County. Ken Collins, a consultant with Kinder Morgan, a Houstonbased energy infrastructure company, met with county officials to inform them about the proposed Utopia East line. If approved, it will run about 240 miles and feature two 12-inch lines to carry ethane, a refined product. The ethane will be converted to ethylene, which is used in the manufacturing of plastics. It is considered a wet gas. The line will start in Harrison County and move northwest to Fulton County. There will be four points feeding into the line in Harrison and Carroll counties. The pipeline will enter Wayne County east of Mount Eaton in Plain Township and exit west of New Pittsburg. Affected townships in Wayne are Paint, Salt Creek, East Union, Franklin, Wooster, Plain and Chester. Because the pipeline will be only in Ohio, the U.S. Army Corps of Engineers will be the lead agency and not the Federal Energy Regulatory Commission. Other agencies that will be involved in the process include the Ohio Department of Natural Resources, the Ohio Environmental Protection Agency and U.S. Fish and Wildlife Service. Commissioner Ann Obrecht wanted to make sure someone from Kinder Morgan was going to meet with landowners and township trustees. “We want to make sure landowners are treated fairly and the land is still useable,” Obrecht said at Wednesday’s meeting. Collins said it will happen. The pipeline is still in its preliminary stages, and no open houses have been scheduled. But, people will talk to landowners and the trustees. “We will meet with all stakeholders along the route,” Collins said. Duane Wood, program administrator for the Wayne Soil and Water Conservation District, raised concerns about top soil, subsoils and the compaction of top soil.

“We want to make sure the soil gets put back as close to original as possible,” Wood said. Farmers want the top soil saved and put back, and they do not want too much rock in the subsoils. Additionally, there is a lot of systematic drainage tile in Wayne County, and Wood would like to see a drainage contractor available to deal with any issues post construction. It could be a long time before problems arise regarding drainage, Obrecht said. Wood also spoke about fragipan, a layer in the soil that limits water. If the fragipan layer is broken, water will flow through it and likely cause a wet stream to appear. While the pipeline will require about 50 feet of permanent easement, the number will likely be 100-150 feet during construction to allow for equipment on the property. Wood said soils will be compacted as pipe is delivered, and he wanted to know what access farmers will have during construction when the route cuts through their farms. “A lot of people are concerned about pipelines and what they will do to their properties,” Obrecht said. Collins said he will take all of the questions back to Kinder Morgan’s experts for answers. The project is expected to employ “hundreds” of union laborers, and if Kinder Morgan receives a permit to construct the pipeline, several sections will be under construction at the same time. Letters have been sent to the affected property owners. A survey is expected to be done in the spring. The application and permit is expected to come in January 2016, with construction beginning November 2016 and the line being in service in January 2018 for the Utopia East pipeline. It will carry about 50,000 barrels a day. Reporter Bobby Warren can be reached at 330-287-1639 or bwarren@the-daily-record.com. He is @BobbyWarrenTDR on Twitter.

TEUBENVILLE- Officials from education and industry met recently to brainstorm ideas for the Utica Shale Academy on how to better prepare students for the oil and gas field. A dozen people representing the Jefferson County Educational Service Center, Utica Shale Academy, Southern Local School District, Ohio Department of Education, Barnesville Exempted Vocational Service District, Escalys, Express Energy Services, and Utica East Ohio LLC gathered at JCESC for a Utica Shale Academy Advisory Council meeting and discussed ways to fine tune the curriculum to benefit both students and their potential employers. A teleconference was also conducted concerning the OPEN Petroleum Education Network, which provides online courses for the shale school. “We all have different roles and our goal is to educate kids and get them jobs in oil and gas,” said Dr. Chuck Kokiko, chief academic officer at JCESC, which sponsors the academy at Southern Local High School. “We wanted provide them a link to the industry where they can get jobs. We’ve fulfilled that promise and the kids are learning. The key to being successful is to include folks like you.” The idea was borne of talks last year between Southern Local Superintendent John Wilson, Dr. Kokiko and JCESC Superintendent Dr. George Ash. Since opening its doors, the program has more than 40 students involved in a blended learning curriculum using a mixture of virtual learning, handson activities, lectures from shale industry representatives and field trips to area rig sites. Utica Shale Academy Director Eric Sampson provided a glimpse of a typical day for a student, saying the flexibility of blended learning enables them to work at home or at school to catch up on general classes required for graduation, in addition to shale-related studies. “Students have core courses and work on their PetroEd modules,” Sampson said, adding that current modules include International Association of Drilling Contractors (IADC) Rig Pass, Introduction to the Petroleum Industry DIT Drilling Focus, and Introduction to Well Control . “We visit rigs for field trips and supplement with speakers. [Brian Logue of Express Energy Services] has talked four or five times. We have 45 students and 33 are enrolled in PetroEd trying to get certified for jobs or they’re going to college for a degree.” Sampson said PetroEd had a full catalog of courses but could develop more specific ones if necessary, adding leaders

were also looking at career tech certification. Moreover, there were articulation agreements with two colleges but he hoped that will grow even more. Cameron Thompson, a representative of PetroEd, gave an overview of the course catalog. He said it rains mostly for drilling contractors and has worked with the likes of Chesapeake and Chevron, while the program supplements existing courses at the university and high school levels. He said there were roughly 400 different courses available but more could also be developed to meet specific needs. Thompson described various modules and explained how students would log into the system to study the programs and perform post-assessments. OPEN worked with such sites as BP, Texas A&M and Halliburton to develop the catalog and uses industry sponsorships to defray costs. Since all of the content is online, it does not require instructors or textbooks. Programs can be translated in languages such as English, Spanish and Vietnamese and it further includes online assessments which are graded in real time. Thompson said pupils would also complete a final assessment. On the administrative side, educators and even industry officials would be able to access test results and related information. Dr. Kokiko said the group would look at introductory courses and officials should be cognizant of the level of training and skill set for the high school students. He also queried industry reps about what they were looking for in student preparedness. Mark Hay and Chad Butler of the UEO Buckeye fractionation facility in Scio said instrumentation was in demand in this area, while Logue also mentioned mudding and wirelines. Discussion ensued and Kokiko said courses could be designed through PetroEd or some other vendor. Kevin Williams, who works with agricultural and environmental Pathway systems for ODE, said the blended learning concept was innovative. He said the ODE’s Pathways program included four courses from hydraulics and electrical systems to environmental science at a minimum of 450 hours. The oil and gas program was developed with Stark State University and mirrors an introductory course at the college. Following the two-hour session, the local leaders expressed their pleasure with the conversion school and the opportunities it gives to students and the community. Hay and Butler expressed their desire to work with the conversion school, be it as lecturers or for field trips to the Harrison County facility.

Angela Hannah, who represented Barnesville EVSD, said another USA site was being eyed for her area in Belmont County and Dr. Ash noted that five Utica Shale Academy schools were being eyed in the region. Dr. Kokiko encouraged industry officials to spread the word so more companies could get involved for the betterment of the academy and community. “We all have different roles and the goal is to educate kids and get them jobs in oil and gas,” Dr. Kokiko concluded, saying further discussion would occur over the curriculum.

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LD WASHINGTON — The Cambridge Area Chamber of Commerce is hosting the second annual Friends and Family Fest 2015 - A Shale-abration, on June 20 at the Guernsey County Fairgrounds. This day-long event celebrates Ohio’s energy production and Ohioans’ stewardship of the land. The Chamber of Commerce is currently seeking sponsors for this annual event being held for its second year. Eclipse Resources and the International Union of Operating Engineers have each signed on as Platinum sponsors. Buckeye Water Service is a Silver sponsor. Additional sponsorships are currently being offered at multiple levels with various benefits and promotional opportunities. Friends and Family Fest is a free event, due to partnerships with interested businesses and organizations. Sponsors will have exhibit booths along with educational and product displays on the fairgrounds. The fairgrounds can accommodate large equipment displays and demonstrations. An aggressive marketing campaign and community outreach plan is underway, in order to give sponsors ultimate recognition and exposure. The Chamber of Commerce is securing stage entertainment to be announced in a few weeks. Returning this year for day-long entertainment are the Dock Dogs and Dan Armitage, the Buckeye Sportsman. The Hawg Trough and children’s Trout Pond are scheduled for interactive entertainment throughout the day. The Oglebay Good Zoo is sure to be an attraction for young children and families. The Ohio Oil and Gas Energy Education Program is developing entertainment that will be exciting for all ages. And the Mobile Energy Education Unit will make another appearance this year. “This event brings the community and the oil & gas companies together for increased understanding and knowledge of the oil & gas industry,” said President Jo Sexton of the Cambridge Area Chamber of Commerce. “At the same time, the festival will include many family activities that are sure to

entertain and engage all age groups. It will be family friendly and educational. And of course, food vendors will be serving up festival fare!” Sponsor packages are as follows: Platinum • $10,000 (limited sponsorships available) • Pre-event promotions: logo/name in all pre-event marketing • 20 free tickets to VIP reception • Event day promotions; ½ page ad in program; banner; public address announcements • Prime booth space and equipment display space Gold • $7,500 (limited sponsorships available) • Dock Dog sponsor day of event — runs all day • 12 free tickets to VIP reception • Event day promotions; ¼ page ad in program; banner, public address announcements • Preferred booth space and equipment display space Silver • $5,000 (unlimited sponsorships available) • 6 free tickets to VIP reception • Event day promotion; bold listing in program; banner, public address announcements • Booth space. Additional sponsorships are available, by request, for individual events and activities including those for: stage sponsorship, stage acts and bands, parking, children’s trout pond, the Oglebay Good Zoo, sphering and the Kiss the Pig Contest, among others. Booth rentals are also available. Sponsorship inquiries should be directed the Cambridge Area Chamber of Commerce at 740-439-6688, or by email to jsexton@cambridgeohiochamber.com.

Marc Kovac Dix Capital Bureau

OLUMBUS — Industry representatives But Chis Zeigler, executive director of the American Petrovoiced opposition on March 3 to Gov. leum Institute of Ohio, said there could not be a worse time to John Kasich’s proposed tax increase on raise severance taxes. oil and gas produced via horizontal hydraulic “There should be no doubt that development of Ohio’s fracturing. shale resources in 2015 will look markedly different from just The Ohio Oil and Gas Association, the American Petro- last year,” he said in testimony submitted to the House’s Ways leum Institute and others reiterated what they’ve been saying and Means Committee. “The impending economic impact on for several years, since the governor initially proposed the sev- supporting small businesses and local governments is yet to be erance tax change — that is, a tax increase would drive away determined. Again, there is never a good time to be the recipiexploration and investment and any resulting economic boost ent of increased taxes, but for the oil and natural gas industry in eastern Ohio’s emerging shale oilfields. and supporting businesses the results could be devastating.” Shawn Bennett, executive vice president of the Ohio Oil Brian Chavez, co-owner of an independent oil and gas comand Gas Association, told the Ohio House’s Ways and Means pany and speaking on behalf of the Southeastern Ohio Oil Committee that dropping oil prices have prompted a retreat and Gas Association, said businesses like his are already payin investment in the state. ing more in taxes than other industries. He offered a list of companies who have pulled out of Ohio, “The proposed severance tax increase will limit our ability waiting for commodity prices to rebound. to continue to produce oil and gas we have worked genera“In December of 2014, Ohio had a record 59 rigs operating tions to develop and maintain,” he said in testimony to lawin the Utica,” Bennett said in testimony submitted to lawmak- makers. “The Utica and Marcellus shales are a blessing for ers. “Today, a third of those rigs have simply left the state....” Ohio’s future, but to develop them is extremely expensive, and He added, “The legislature should not add additional tax most producers are hesitant to stake their entire company to burdens on an already-struggling industry. The proposed sev- drill these wells.” erance tax before this legislature will dramatically decrease Some other groups that submitted testimony to lawmakers the chance of success in this effort and only serves as a deter- Tuesday urged a severance tax increase but with more prorent to future recovery, growth and stability in Ohio’s oil and ceeds directed to eastern Ohio communities affected by the gas industry.” industry. The administration and others have countered such asser“While no one likes to increase taxes, in reality this in my tions, saying Ohio’s current and proposed severance tax rates mind is an impact fee,” said Harrison County Commissioner are well below other shale oil states and would not deter ex- Don Bethel. “Most of our county villages and townships reploration and production. ceive little benefit from this industry, and with many oil and Kasich’s budget proposal calls for increased tax rates for oil gas employees living and working outside a municipality, our and gas produced via fracking to 6.5 percent. Twenty percent villages are without much needed income tax but yet deal of the proceeds would be directed to communities in eastern with a multitude of issues and extreme pressure to upgrade Ohio’s emerging shale oilfields. their severely inadequate infrastructure. Currently, Harrison “I’m disappointed by those who say the severance tax re- County has over $85 million of infrastructure issues that have form will kill the industry,” Kasich said during his State of the needed done for years. Our villages have spent three decades State speech earlier this month. “That’s a joke. That’s a big in poverty since the coal industry waned, and many of our refat joke because I’ve talked to them in private. And I’ll tell tirees are very regretful that they didn’t ask for a severance you what, our severance tax will still be competitive with our tax or impact fee on coal.” energy-rich states. And you know what? Let’s reform the severance tax so all Ohioans can have lower income taxes and we Marc Kovac is the Dix Capital Bureau Chief. Email him at all benefit from this whole industry.” mkovac@dixcom.com

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elmont, Guernsey, Monroe, Noble and Washington County landowners and interested residents are invited to attend a special oil and gas briefing on safety procedures and practices, sponsored by Farm Bureau offices in area counties. The briefing will be held at the Mid-East Career Center, 57090 Vocational Road, Senecaville, Ohio April 20 at 7 p.m. The program will be facilitated by Dale Arnold, Director of Energy, Utility and Local Government Policy with the Ohio Farm Bureau Federation (OFBF). Joining Arnold will be Charles Dixon, Director of Safety and Workforce Development with the Ohio Oil and Gas Energy Education Program (OOGEEP). “Landowners in the area understand that they have a responsibility to monitor oil and gas production that goes beyond lease agreements,” Arnold said. “Many are looking for resources that can help them understand the well site safety procedures workers apply on a daily basis and how they work with local first responders to address emergency situations. They want to know what role they and other interested community stakeholders can support the process.” OOGEEP has developed a comprehensive training program on responding to oilfield emergencies and a permanent training facility to support local emergency responders (fire-

fighters, police, state agencies, etc.) by enabling them to understand and implement effective emergency response practices at typical oilfield drilling sites and production sites. This program was the first of its kind in the country. During the briefing, participants will explore technology expansion impacting Ohio’s oil and gas industry and what procedures producers use in evaluating and responding to production site emergencies. “Many local residents have noticed emergency situations in several areas around the region, including Ohio,” Betsy Anderson, Organization Director for Belmont, Guernsey, Monroe, Noble and Washington County Farm Bureau’s said. “While the briefing is not intended to be a training program, meeting participants can get a better understanding of what they need to know, see and do with accident prevention, onsite facility operations and working with energy producers on a regular basis.” The Ohio Farm Bureau Federation is the state’s largest general farm organization, encompassing 88 county Farm Bureau organizations and over 208,000 member families statewide. For additional information contact Farm Bureau (740) 425-3681

Christine Pratt Dix Communications

ILLBUCK, OH — After playing host to a recent job fair, Pride of the Hills is preparing to welcome some 40 new employees into the fold. In the past five years, the business went from employing just over 50 workers to around 300. Pride of the Hills Manufacturing Inc. is a manufacturer and supplier of oil field and natural gas production and automation equipment. PHMI is parent company to Grace Automation, which focuses on sales and support service in the field, and Pride of the Hills Manufacturing of Wooster, which specializes in sheet metal fabrication. At a recent on-site job fair, the company took in more than 100 applications from individuals, 71 of whom stayed for a presentation, which included welder testing, an orientation and tour of the facility, according to administrator Tammy Murray Parsons, who considers the event to have been “wonderfully successful.” Currently, applications are being reviewed and several candidates have moved on to second interviews, she said, noting that while some may be hired in the short term, other applications will remain on file to be reconsidered as jobs open in the future. The organization currently has available 40 positions from entry level to skilled trades. The company has found great success in development of a gas production unit, which helps oil companies separate gas from liquid. It also has started production of a patent-pending gas conditioning trailer, which allows producers to use natu-

ral gas to power engine or to blend natural gas with diesel to power engines used in the process, according to Matt Smith, sales and support service. While the company’s growth spurt has occurred largely over the last five years, Pride of the Hills has been around, under the tutelage of Curt Murray Sr., for 40 years, said Parsons. The company has a national and international presence in the industry, according to Smith, who said field employees do the bulk of their work within a 6-8 hours radius of Holmes County. The company’s approach to hiring, according to Parsons, “goes along with our vision of family. If you have an opportunity to help, you have an obligation to do so. We hire them into our family.” In the area, she said, they’ve given many employees and their families their first exposure to benefits, including health care and investment opportunities. The company’s Pride University provides training for unskilled and skilled employees, helping to send the message to employees, their children and grandchildren that “the American dream is alive and well.” Parsons said the company enjoys benefitting from the strong ethics of the local work force. “A person with the right character attributes can be trained to do very well,” she said, adding, “We get excellent candidates — people who are willing to work hard,” she said. “We like to make an investment in our employees and they make an investment in us.” Reporter Christine Pratt can be reached at 330-674-5676 or cpratt@the-daily-record.com. She’s @drnewsgirl on Twitter.

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Marc Kovac Dix Capital Bureau

OLUMBUS — There’s one message that has been heard loud and clear at the Statehouse: The good people of the Mahoning Valley are tired of earthquakes and expect their public officials to do everything in their power to prevent future fracking-induced tremors. Companies that pump massive amounts of salty oilfield waste into the ground now are required to install seismic monitors to track earth movement. When those devices record quakes — even small ones — the state can step in and shut down operations until it can assess the situation and devise plans to prevent additional seismic events. Which brings us to the nearly nine-hour hearing that took place in Columbus in March, before a state panel that is considering an appeal to restart operations at a Trumbull County injection well where a couple of minor quakes happened last summer. Both sides have legitimate-sounding arguments. American Water Management Services Inc. says the two seismic events — a magnitude 1.7 tremor in July and a 2.1 about a month later — were minor and were not felt by the general populace or big enough to cause damage. Company officials want to restart injections at the site, only at a reduced volume, to see whether the reduction would help control any ground movement. The state allowed similar activities at a Washington County well, with the results showing a correlation between reduced injections and reduced seismicity. The company also points out that it has invested millions of dollars in the operation, and officials aren’t happy that the state’s been stringing them along with promises of restarted activities that never come to fruition. Add to that the ongoing development of guidelines by the state for dealing with wells that are tied to ground movement. There’s no timeline for adopting any new guidelines, leaving AWMS in limbo.

“We believe that it is fundamentally unfair to enforce a total suspension against AWMS and this well when we submit the best scientific evidence and opinion support resumption of this well at some level,” John Keller, legal counsel for AWMS, told the Ohio Oil and Gas Commission. “... If the state truly desires to take at least six months if not longer to come up with this statewide policy, at least we should not have to have 95 percent of our revenue in this $5 million facility curtailed for that entire period when admittedly we complied with all of the requirements of the permits and the law and have cooperated in all respects.” The state counters that similar lower-level seismic activity occurred at the Northstar well, about seven miles away, months before a magnitude 4 earthquake shook the Youngstown area. That bigger quake was tied to Northstar, which was shut down. State officials are concerned that the quakes will get bigger if injection activity at the Weathersfield well continues. And that could have dire consequences for the schools, homes, businesses and other community areas nearby. The state “is trying to develop a policy, criteria, in place to minimize the risk,” said Brett Kravitz, legal counsel for the state. “We do not want Weathersfield to be an experiment. They deserve to have an opportunity to have the division formulate this policy as a way of minimizing risk....” Again, both sides offer legitimate-sounding arguments. The ultimate decision in this case will have repercussions for eastern Ohio’s fracking-related activities. The question is whether state officials remember the outcry from residents affected by earlier fracking-induced earthquakes and how that public pressure will affect the ultimate state policy on wells that cause seismic activity. Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.

Matthew Daly and Josh Lederman Associated Press

ASHINGTON (AP) — On March 20, the Obama administration said it is requiring companies that drill for oil and natural gas on federal lands to disclose chemicals used in hydraulic fracturing, the first major federal regulation of the controversial drilling technique that has sparked an ongoing boom in natural gas production but raised widespread concerns about possible groundwater contamination. A rule to take effect in June also updates requirements for well construction and disposal of water and other fluids used in fracking, as the drilling method is more commonly known. The rule has been under consideration for more than three years, drawing criticism from the oil and gas industry and environmental groups alike. The industry fears federal regulation could duplicate efforts by states and hinder the drilling boom, while some environmental groups worry that lenient rules could allow unsafe drilling techniques to pollute groundwater. Reaction to the rule was immediate. An industry group announced it was filing a lawsuit to block the regulaion and the Republican chairman of the Senate Environment and Public Works Committee announced legislation to keep fracking regulations under state management. The final rule hews closely to a draft that has lingered since the Obama administration proposed it in May 2013. The rule relies on an online database used by at least 16 states to track the chemicals used in fracking operations. The website, FracFocus.org, was formed by industry and intergovernmental groups in 2011 and allows users to gather well-specific data on tens of thousands of drilling sites across the country. Companies will have to disclose the chemicals they use within 30 days of the fracking operation.

Interior Secretary Sally Jewell said the rule will allow for continued responsible development of federal oil and gas resources on millions of acres of public lands while assuring the public that “transparent and effective safety and environmental protections are in place.” Jewell, who worked on fracking operations in Oklahoma long before joining the government in 2013, said decadesold federal regulations have failed to keep pace with modern technological advances. “I’ve personally fracked wells, so I understand the risk as well as the reward,” Jewell said. “We owe it to our kids to get this right.” Fracking involves pumping huge volumes of water, sand and chemicals underground to split open rocks to allow oil and gas to flow. Improved technology has allowed energy companies to gain access to huge stores of natural gas underneath states from Wyoming to New York but has also raised widespread concerns about alleged groundwater contamination and even earthquakes. The Interior Department estimated the cost of complying with the rule would be less than one-fourth of 1 percent of the cost to drill a well. Despite that assurance, the new rule drew immediate criticism from energy industry representatives and congressional Republicans, who warned it could disrupt the yearslong energy boom in the U.S. “This administration never misses a chance to appease radical environmentalists,” said House Speaker John Boehner, ROhio. The new rule amounts to “regulating a process that is already properly regulated” by states, Boehner said. “Mean-

while, the people who work hard every day to produce American energy safely and reliably will have to bear needless costs and headaches.” Two groups, the Independent Petroleum Association of America and the Western Energy Alliance, filed suit in federal court in Wyoming seeking to block the rule. The suit claims the rule would impose unfair burdens that will “complicate and frustrate oil and gas production on federal lands.” Sen. James Inhofe, R-Okla., chairman of the Senate environment panel, introduced a bill to keep regulations under state management, saying the new rule “adds unnecessary, duplicative red tape that will in turn make it more costly and arduous for our nation to pursue energy security.” The League of Conservation Voters called the bill an important step forward to regulate fracking. Even so, the group was disappointed with the continued reliance on FracFocus, a private website that has taken on increasing prominence in recent years as it collects data on drilling sites. The final rule improves on previous versions, said Madeleine Foote, legislative representative for the conservation league, but “it represents a missed opportunity to set a high bar for protections that would truly increase transparency and reduce the impacts (of fracking) to our air, water and public lands.” While the new rule only applies to federal land — which makes up just one-tenth of natural gas drilling in the United States — the Obama administration is hoping the rule will serve as a model and set a new standard for hydraulic fracturing that states and other regulators will follow. Brian Deese, a senior adviser to President Barack Obama, said the rules for public lands could serve as a template that the oil and gas industry could adopt to help address the public’s concern about the health and safety of fracking. “Ultimately, this is an issue that is going to be decided in state capitals and localities as well as with the industry,” he said. The rule will make the Interior Department’s Bureau of Land Management the largest customer of FracFocus. Nearly 95,000 wells nationwide are registered with the site, which is managed by the Ground Water Protection Council and the Interstate Oil and Gas Compact Commission. Both groups are based in Oklahoma. The groundwater council is a nonprofit organization while the oil and gas commission is a collection of state officials from energy-producing states. Jewell said BLM will have representation on FracFocus’ board, adding that the group has taken steps to improve its platform, including adopting a new format that allows data to be automatically read by computers. While Inhofe and other congressional Republicans are likely to mount an effort to block the rule, Jewell predicted the rule would survive because the industry recognizes that sensible regulation of fracking is appropriate. “We expect that these rules will stick,” she said.

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ARIETTA — Congressman Bill Johnson (R-Marietta) announces that he is hosting the 2015 “Women in Energy Summit” on at the Zane State College, Cambridge campus, from 9 a.m. to noon Friday, April 17. This event is being held in response to the overwhelming success of Ohio’s first-ever Women in Energy Summit held last April in Mahoning County. Registration opens at 8:30 a.m., the summit will begin at 9 a.m. with opening remarks by LeeAnn Johnson, wife of Congressman Johnson. Two reports will be presented: “The State of the Industry,” presented by Jackie Stewart of Energy in Depth Ohio, and “Energy Education and Scholarships for Energy Careers,” presented by Rhonda Reda of the Ohio Oil and Gas Energy Education Program. Additionally, there will be three panels: “Opportunities in Manufacturing & Skilled Trades,” featuring representatives from the International Union of Operating Engineers Local 18, Plumbers and Pipefitters Local 495 and Detroit Diesel. “Opportunities in STEM and Energy Careers,” featuring representatives from Eclipse Resources, MarkWest Energy Partners, Council of Smaller Enterprises, and American Petroleum Institute Ohio; and “Recruiting Women for Today’s Energy Careers,” featuring representatives from OhioMeansJobs and the Cambridge City School District. All panels will be moderated by the event’s emcee, Jo Sexton, president and CEO of the Cambridge Area Chamber of Commerce. “Over the past few years, I’ve become increasingly optimistic about the countless opportunities coming our way through the harvesting of our own natural resources here in Eastern

and Southeastern Ohio — opportunities that are here for us now, and opportunities that will be available to our children and grandchildren,” said Bill Johnson. “I have met with hundreds of companies involved in the energy field, both directly and indirectly. These businesses, both large and small, continue to tell me the same thing, that we need to start talking to young women about opportunities for careers in energy.” Johnson added, “In response to this continual feedback, and building on the success of last year’s event in Mahoning County, I am hosting this summit in Cambridge. I felt it was very important to have a similar event in another area of Ohio that is seeing a major upswing in energy development. We need to let women know that there are opportunities for them in the energy sector. It’s a conversation we need to begin now, in schools and around our dinner tables. I am pleased to facilitate this effort to bring leading women in the energy field here to speak to our community leaders, students, and educators about the important career opportunities women have.” The summit will feature women working in various energy related careers: manufacturing, trades, engineering, and at the executive level. This event is free and open to the public; however, reservations are required. To RSVP for the event, attendees may contact Congressman Johnson’s Salem District Office at 330337-6951 or online by visiting his website at: http://billjohnson. house.gov/ The 2015 “Women in Energy Summit” will be at Zane State College, Cambridge Campus, Epic Center Community Room; 9900 Brick Church Road.

Jonathan Fahey AP Energy Writer

EW YORK (AP) — OPEC and lower global oil prices delivered a one-two punch to the drillers in North Dakota and Texas who brought the U.S. one of the biggest booms in the history of the global oil industry. Now they are fighting back. Companies are leaning on new techniques and technology to get more oil out of every well they drill, and furiously cutting costs in an effort to keep U.S. oil competitive with much lower-cost oil flowing out of the Middle East, Russia and elsewhere. “Everybody gets a little more imaginative, because they need to,” says Hans-Christian Freitag, vice president of technology for the drilling services company Baker Hughes. Spurred by rising global oil prices U.S. drillers learned to tap crude trapped in shale starting in the middle of last decade and brought about a surprising boom that made the U.S. the biggest oil and gas producer in the world. The increase alone in daily U.S. production since 2008 — nearly 4.5 million barrels per day — is more than any OPEC country produces other than Saudi Arabia.

But as oil flowed out and revenue poured in, costs weren’t the main concern. Drilling in shale, also known as “tight rock,” is expensive because the rock must be fractured with high-pressure water and chemicals to get oil to flow. It became more expensive as the drilling frenzy pushed up costs for labor, material, equipment and services. In a dash to get to oil quickly, drillers didn’t always take the time to use the best technology to analyze each well. When oil collapsed from $100 to below $50, once-profitable projects turned into money losers. OPEC added to the pressure by keeping production high, saying it didn’t want to lose customers to U.S. shale drillers. OPEC nations can still make good profits at low oil prices because their crude costs $10 or less per barrel to produce. Now drillers and service companies are laying off tens of thousands of workers, smaller companies are looking for larger, more stable companies to buy them, and fears are rising of widespread loan defaults. OPEC said in a recent report that it expects U.S. production to begin to fall later this year, echoing the prediction of the U.S. Energy Department.

To compete, drillers have to find ways to get more oil out of each well, pushing down the cost for each barrel. Experts estimate that shale drillers pull up just 5 percent to 8 percent of the oil in place. “We’re leaving behind a large amount of hydrocarbons, and that’s quite unacceptable,” Freitag says. “It requires different thinking now.” Engineers have adapted some of the best sensor technology and mathematical models, developed first for deep offshore drilling, to see into the rock better. As they drill, they use imaging technology to find natural cracks in the rock that they can then use as a target when they fracture the rock, to leverage natural highways for oil and gas. After they fracture the rock, they can map the new cracks. That way they can know how close they can drill another well to target more oil without sapping production from the first well. EOG Resources, one of the pioneers of shale oil drilling, has reduced the space between wells in an area called the Leonard Shale, in Texas, to 560 feet from 1,030 in 2012. Drillers are finding they can back into wells drilled only a few years ago to re-frack them or inject specially tailored fluids to get oil flowing again. That can return a well in some cases to peak output, without the expense of drilling a new well. The companies are also getting much faster. Exxon says it has cut the time it takes to drill a well in North Dakota’s Bakken formation by one-third over the past four years. It has also cut by half the cost of fracturing the rock and preparing the well for production. Exxon will run 13 rigs in the Bakken this year, the same number it did last year, despite the low prices. Companies will save money in the coming months because service companies, rig operators and other suppliers to the industry will lower rates to keep business. Oil companies have been telling investors in recent weeks they expect to see cost reductions of 10 percent to 40 percent, depending on location and type of service. Drillers are also focusing on the wells in the parts of formations that they know to be the most prolific, and cutting back drilling in places where they aren’t quite sure what’s below. That reduces overall spending without dramatically decreasing production. U.S. shale drillers will never push costs as low as OPEC countries. But the U.S. industry may be able to survive — or even thrive — if drillers can learn to quickly adapt. “There is a significant portion of this that is competitive on a global basis,” says Exxon Mobil CEO Rex Tillerson at an annual investor meeting earlier this month. “North American tight oil supply is more resilient than some people think it is.” Jonathan Fahey can be reached at http://twitter.com/JonathanFahey .

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Data as of 03/21/15 Source: Ohio Department of Natural Resources

.S. Senators Pat Toomey (R-Pa.) and Dianne Fein- implementation, the price of corn will increase. According to stein (D-Calif.) are working to repeal a law that the Congressional Budget Office, that would mean as much as drives up the cost of everything from gasoline to gro- $3.5 billion each year in increased food costs. Americans living ceries. on the margins simply can’t afford that. The Toomey-Feinstein Corn Ethanol Mandate Elimina“Our infrastructure has a ceiling for the amount of corn tion Act of 2015, introduced today, abolishes the corn etha- ethanol that can be used, and we’re rapidly approaching it. nol mandate in the Renewable Fuel Standard (RFS). Sen. Jeff Companies are physically unable to blend more corn ethanol Flake (R-Ariz.) is also a cosponsor of the measure. into gasoline without causing problems for many gas stations The RFS requires annual increases in the amount of renew- and older automobiles. The mandate also pits corn ethanol able fuel that must be blended into the total volume of gaso- against other renewable fuels, which has stunted the growth line refined and consumed in the United States. However, the of environmentally-friendly advanced biofuels like biodiesel current statute effectively mandates the use of corn ethanol and cellulosic ethanol. Once the mandate for corn ethanol is at the expense of other fuels. The requirement drives up the gone, the RFS program will be able to focus on those fuels price of corn, products made from corn, livestock that feeds that best reduce greenhouse gas emissions and don’t compete on corn, and many products on grocers’ shelves and in refrig- with our food supply.” erators. Said Sen. Flake: “In 2005, Congress bought into the corn “The RFS requires fuel suppliers to blend millions of gal- ethanol mandate for billions of dollars, and taxpayers have lons of biofuels -- most often corn ethanol -- into the nation’s been stuck with a lemon ever since. Congress can no longer gasoline supplies. It drives up gas prices, increases food costs, justify a policy that props up the ethanol industry at the exdamages car engines, and is harmful to the environment,” said pense of taxpayers, consumers, the hungry, and the environSen. Toomey. ment. I am pleased to join my colleagues on both sides of the “Under government mandates, refiners -- such as ours in aisle in supporting the full and immediate repeal of the corn Trainer, Pa. -- are forced to make a choice: increase the etha- ethanol mandate.” nol content in their fuel blends or pay a penalty by purchasing Background: The Renewable Fuel Standard, first enacted in credits from energy traders. 2005, required refiners and blenders to use 18.15 billion gal“Once again, this is the government using corporate welfare lons of renewable fuel in 2014. More than 14 billion gallons of to shower money on a favored industry and then send the bill this total will be met by the use of corn ethanol, a level that to the general public. Labor leaders, businesses, and environ- will increase in subsequent years. mental groups have lined up to push back against this harmful There are two key problems with continuing to mandate the regulatory regime. consumption of more and more corn ethanol each year: “I am pleased to join with Sens. Feinstein and Flake to stop • Corn consumption: Approximately 40 percent of the U.S. the RFS before more harm is done.” corn crop is now used to produce ethanol, artificially inflating “The federal mandate for corn ethanol is both unwise and food and feed prices while damaging the environment. unworkable. Our bill addresses that with a simple, smart mod• Blend wall: As gasoline consumption declines, refiners ification to the Renewable Fuel Standard program,” said Sen. face a “blend wall” when the RFS mandate exceeds the limit Feinstein. “A significant amount of U.S. corn is currently used at which ethanol can be blended into the fuel supply, deterfor fuel. If the mandate continues to expand toward full mined to be 10 percent of total gasoline consumption.

Judie Perkowski Dix Communications

OLUMBUS — He said back in 1973 when he was a “kid,” he never thought about growing up to be anything but a “fireman.” And, without a doubt, his dedication to the admirable occupation has served him and his community well. New Concord Fire Chief Brent Gates was presented the second annual Ohio Oil and Gas Energy Education Program’s Pipeline Award at the Ohio Oil and Gas Association’s winter meeting in Columbus on March 12. The award is given “on behalf of Ohio’s oil and gas industry, recognizing an individual, not employed in the oil and gas industry, who has made a positive impact on Ohio,” said Rhonda Reda, OOGEEP executive director. “Brent has served as one of the lead instructors of OOGEEP’s firefighting training workshops since 2006. He has been instrumental in helping to train more than a thousand firefighters about the oil and gas industry, and brings real world experiences and knowledge to fire departments around the state. We are proud to call him a member of our team.” “I was very surprised and humbled to be recognized by Ohio’s oil and gas industry and OOGEEP,” said Gates. “As a fire chief, my mission is to ensure that each and every day, every firefighter returns home, safe and sound. My work with OOGEEP allows me to spread that message to men and women around the state, and I could not be prouder to do so.” Marty Miller, OOGEEP Vice Chairman and Senior Vice President of Operations for Alliance Petroleum Corp., said that Chief Gates epitomizes the image of a public servant.

“Brent’s years of experience, knowledge and his dedication to OOGEEP’s firefighting training workshop has and will save lives,” said Miller. Gates joined the New Concord Fire Department in 1978 and has served as fire chief since 1992. “I worked at a furniture store when I was a kid, which was adjacent to the fire department in New Concord where I volunteered ... I loved talking to the men,” said Gates. “I always knew that one day I would be a firefighter.” The occupation today referred to as a firefighter is a widely used term that reflects gender participation. However, the term “fireman” remains popular amongst the general public. Gates is holding his retirement cards close to his vest. He said, “retirement is in the near future,” but will not elaborate on a specific date. He said his greatest reward in regards to his job, “is the support from people in general, and people in the Village of New Concord in particular. People who appreciate what we do.” Gates serves on the Board of Directors of the Ohio Fire Chief’s Association, and holds various leadership positions with the Ohio Society of Fire Services Instructors, Southeast Ohio Fire Chief’s Association, Muskingum County Local Emergency Planning Committee and Muskingum County Planning Commission. In addition to his partnership with the Ohio Oil and Gas Energy Education Program, he is an instructor at the MidEast Career and Technology Centers and the Ohio Fire Academy. He is also a member of the International Society of Fire Service Instructors, International Association of Fire Chiefs

and the Ohio Township Association. He has been named the Ohio Fire Service Instructor of the Year and awarded the Public Service Award by the Village of New Concord. Gates and his wife, Julie, a volunteer at the New Concord Fire Dept., have a daughter, Kelsy, who is a registered nurse; and a son, Jacob, a college student and a part-time firefighter at the New Concord Fire Department, Falls Township Volunteer Fire Dept. and Turco Township Volunteer Fire Dept. The Ohio Oil and Gas energy Education program is a nonprofit organization responsible for public outreach on behalf of Ohio’s natural gas and crude oil industry. OOGEEP’s mission is to facilitate educational, scholarship and safety programs and to promote public awareness about the industry and its positive effect on the community. For more information about OOGEEP, visit www.oogeep. org. jperkowski@daily-jeff.com

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OLUMBUS — The Ohio House moved legislation on March 18 to speed up consideration of agreements by property owners who want to join together to tap oil and gas reserves on their lands. HB 8, jointly sponsored by Reps. Christina Hagan (R-Alliance) and Tim Ginter (R-Salem), passed on a vote of 96-0 and heads to the Ohio Senate for further consideration. The legislation focuses on “unitization,” a means by which landowners can combine acreage into units to allow oil and gas production. There’s already a unitization process outlined in state law, as well as application requirements and $10,000 fee. But Ohio Revised Code does not stipulate a timeframe for ODNR to review and decide on such applications. That’s led to some landowners waiting a year or more for a decision from the state. HB 8 calls for ODNR to hold hearings on landowner agreements within 45 days of receiving applications and issue final decisions 30 days thereafter. “We need to provide a reasonable timeline for this respective government-ran permitting process,” Hagan said. “We are removing uncertainty and creating clarity, we are creating certainty and uniformity where development projects have been stunted into paralysis.” She added that some Ohioans have been waiting nearly two years for decisions from ODNR on landowner agreements.

“Unfortunately, certain conditions have served to delay and in several instances totally blocked landowners from being able to exercise their right to benefit from the resources under their land,” Ginter said, adding later, “By addressing these issues, this bill removes barriers and delays and in doing so it maximizes potential economic opportunities, creates goodpaying jobs and assists landowners who desire to exercise their right to develop the minerals underneath their land.” HB 8 also includes provisions for the inclusion of stateowned lands in unitization applications and requirements for uniform assessments of taxes on mineral resources. Lawmakers in the House did edit language related to stateown lands to include protections for state parks and forests. “HB 8... explicitly states ... that state parks may not be included in the unitization process and that there may be no surface disruption in state forests,” said Rep. Sean O’Brien (D-Bazetta). “This will help ensure that future generations of Ohioans will continue to be able to enjoy the incredible nature areas our state has to offer while also easing the extraction of valuable oil and gas resources from our local shale plays.” Marc Kovac is the Dix Capital Bureau Chief. Email him at mkovac@dixcom.com or on Twitter at OhioCapitalBlog.

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Upcoming Events

April APRIL

OOGEEP’s April 2015 Firefighter Workshop, Wayne County Fire & Rescue Training Facility, Apple Creek

APRIL

OOGEEP Ohio Northern University Career Presentation, Ada

APRIL

EMAO 2015 Spring Conference and Vendor Show, Crowne Plaza, Columbus

APRIL

Women In Energy Summit, Zane State College-Cambridge Campus, Cambridge

APRIL

Guernsey County Farm Bureau Safety Talk

APRIL

The Energy Cooperative’s Earth and Energy Day, Geller Park, Heath

APRIL

11-12 15-16 20 26

14 17 23

28-29

SOOGS Spring Membership Meeting, Marietta Shrine Club, Marietta

Ohio Valley Oil & Gas Expo 2015, at Belmont County Carnes Center, St. Clairsville. Vist http://www.ohiovalleyoilgasexpo.com/ for more information

May MAY

OOGEEP’s May 2015 Firefighter Workshop, Wayne County Fire & Rescue Training Facility, Apple Creek

MAY

Compton Learning Center Future Fair, Canton

MAY

Eastern Gas Compression Round Table, Robert Morris University, Moon Township, Pennsylvania. Call 412-372-4301 for more information.

MAY

SOOGA Spring Golf Outing

2-3 12-14

June

May Cont.

JUNE

PIOGA Summer Picnic and Golf Outing, Wanango Golf Club, Reno, Pa.

2015 Quarterly Certification Training, Hilton Akron/Fairlawn Hotel & Suites

JUNE

SOOGA Spring Clay Shoot, Hilltop Sports, Whipple, Ohio

Country Energy Fest, Carroll County Fairgrounds, Carrollton

JUNE

OOGEEP STEM Teacher Workshop, Marietta University

MAY

State Science Day, Ohio State University, Columbus

MAY

16 20 30

1 5

18-19

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Joan Lowy Associated Press

ASHINGTON (AP) — Fiery wrecks of trains hauling crude oil have intensified pressure on the Obama administration to approve tougher standards for railroads and tank cars despite industry complaints that it could cost billions and slow freight deliveries. In February, the Transportation Department sent the White House draft rules that would require oil trains to use stronger tank cars and make other safety improvements. Nine days later a 100-car train hauling crude oil and petroleum distillates derailed and caught fire in a remote part of Ontario, Canada. Less than 48 hours later, a 109-car oil train derailed and caught fire in West Virginia, leaking oil into a Kanawha River tributary and burning a house to its foundation. As the fire spread across 19 of the cars, a nearby resident said the explosions sounded like an “atomic bomb.” Both fires burned for nearly a week. The two accidents follow a spate of other fiery oil train derailments in the U.S. and Canada over the past few years. The most serious killed 47 people and destroyed the town center of Lac Megantic in Quebec, Canada, just across the border from Maine, in 2013. The government hasn’t yet unveiled its proposed regulations. But among them are a stronger tank car design that includes thicker tank walls and electronically-controlled brakes that stop rail cars at the same time rather than sequentially, said Brigham McCown, a Washington-based consultant who was head of the federal agency responsible for safe transportation of hazardous materials during President George W. Bush’s administration.

Typically, safety regulators propose tough regulations and the Office of Management and Budget, which looks at economic and other implications of the rules, demands they be scaled back. This time, however, there may be less resistance. “The more incidents we have, the less likely the administration will be willing to listen to industry,” McCown said. “I think the railroad industry starts to lose credibility every time there is an accident.” Kevin Book, an energy industry analyst, said it has become harder to imagine the administration accommodating the industry. The oil and rail industries want thinner tank walls — half an inch thick, instead of the 9/16ths-inch that regulators propose. The thicker the shell, the less oil a tank car can hold, and with about a half-million carloads of crude hauled by rail in the U.S. and Canada last year, the cost difference could add up. The tank cars in the recent accidents were built to a voluntary standard written by industry in 2011 to answer criticism that cars used to transport flammable liquids were prone to rupture in an accident and spill their contents and ignite spectacular fires. But the two most recent accidents show that the newer cars — known as 1232s — also are prone to rupture, even at slow speeds. Both trains were traveling under 40 mph. “Those folks who were arguing that the 1232s may in fact be puncture-proof really can’t make that argument anymore,” Sen. Heidi Heitkamp, D-N.D., told reporters. A Transportation Department analysis predicts that trains hauling crude oil or ethanol will derail an average of 10 times a year over the next two decades, causing more than $4 billion

in damage and possibly killing hundreds of people if an accident happens in a densely populated part of the U.S. Chris Hart, the acting chairman of the National Transportation Safety Board, urged federal regulators in a blog post this week to act swiftly to set new tank car standards, noting that while the government deliberates over new rules, more 1232 cars are entering service. Industry officials say they need every car they can get to meet shipping demands, and it will take time for manufacturers to retool for a new design. U.S. and Canadian officials also have not agreed on a phase-out period for the train cars that regularly cross their border. Transportation Secretary Anthony Foxx told The Associated Press that administration officials understand the gravity of the issue and are committed to a “comprehensive approach” that includes better braking and slower train speeds, as well as enhancing the ability of fire departments to respond to accidents. Railroads complain that electronically-controlled brakes would cost them $12 billion to $21 billion and that lower train speeds would back up other rail traffic through much of the country, slowing freight deliveries and passenger service. Last year they agreed to reduce oil train speeds to 40 mph in highpopulation areas. Regulators have discussed turning that voluntary limit into a requirement. But former NTSB Chairman Jim Hall said that until safety is improved, oil trains shouldn’t be allowed to travel any faster than the typical school bus — about 25 mph.

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Follow Joan Lowy on Twitter at http://www.twitter.com/AP_ Joan_Lowy

Volatile fuels ride the rails Increased shipments of ethanol and crude oil on U.S. railways are raising safety concerns amid recent derailments. Ethanol

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RAIL SHIPMENTS 022715: Graphic shows crude oil and ethanol shipments by rail in U.S.; 2c x 3 inches; with BC-Oil Train Safety; KSV; ETA 3 a.m.

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OOSTER — Township trustees from all over Wayne County had an opportunity to hear from Energy Transfer staff and its outreach team about what to expect regarding the proposed ET Rover pipeline slated to bisect Wayne County. Jim Burns and Susan King of AECOM, a firm hired by Energy Transfer to conduct outreach, led much of the meeting at the Wayne County Administration Building on March 5. Stacy McCurdy of Energy Transfer addressed construction and logistical issues. ET Rover is seeking a certificate from the Federal Energy Regulatory Commission to build the 830-mile pipeline. Laterals from Ohio, Pennsylvania and West Virginia will feed natural gas into the pipeline. The main line will begin near Cadiz, and dual 42-inch lines will run all the way into Defiance, cutting through Wayne and Ashland counties. From Defiance, the line will go northward into Michigan and ultimately into Canada. The line is designed to transport 3.25 billion cubic feet of natural gas daily. Sixty percent of the volume will be delivered to the Midwest hub in Defiance, with the remaining 40 percent going into Michigan and Canada. The pipeline is needed because of new gas coming online from new sources, like the Marcellus and Utica shale plays, Burns said. Places, like the Gulf of Mexico, which have historically produced much of this country’s natural gas are seeing production levels drop. If ET Rover gets the go-ahead to proceed, then 15 crews will be working on 15 segments — called spreads — simultaneously, McCurdy said. The pipeline is expected to create about 10,000 jobs, most temporary, construction jobs, with 4,500-6,500 jobs in Ohio, Burns said. There could be as many as 900 laborers working in Wayne County on the spread here, and possibly another 100 or more working on a compression station. “It’s a big project,” Wayne County Engineer Roger Terrill said. He is concerned about what will happen when semis hauling 80-feet trailers with 80,000 pounds of pipe come into the county. The matter was also raised by Mike “Pineapple” Raymond, who is the road superintendent in Wooster Township. “I’m concerned about my roads,” he told the group. Pipe will primarily be staged in a yard in Massillon and be transported directly to the site, McCurdy said. The trucks have steering trailers.

If the project is approved, then ET Rover will look to get the pipe in the ground in the first quarter of 2016, but it will all depend upon the weather, McCurdy added. While under construction, the open trench for the pipe will have safety fences in residential areas. All workers, stored pipe and equipment must be within the right of way of the project, King said. Any worker who goes outside of the right of way will be terminated. Franklin Township Trustee Dale Sidle asked McCurdy how the pipeline will be installed through the wetland areas. “Very carefully,” McCurdy said. Each wetland area will be handled differently, King said. With these federal projects, the permit spells out exactly what must be done. When Energy Transfer officials first met with the county commissioners in November, Commissioner Ann Obrecht encouraged them to meet with trustees and to inform them about the project. She said Thursday she appreciated how the energy company was working with Land Stewards to look out for the property owners’ and farmers’ interests. However, drainage problems might take a while to emerge, so Obrecht said she would hope the company would have a drainage consultant available for a while. McCurdy said once the pipeline goes in, Energy Transfer will be a neighbor forever, and if its pipe causes a problem, “We own that.” Mark Wilson of Land Stewards talked about how his team will be working with property owners and assessing top soils, subsoils and drainage tiles. Even though Energy Transfer is paying his organization, he and the team are really working for the landowners.

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n Eisenbarth v. Reusser, the Seventh District Court of Appeals held by a two to one majority that, 1) an oil and gas lease constitutes a “title transaction” capable of preserving a severed mineral interest under the Ohio Dormant Mineral Act (ODMA), provided the lease was signed during the preceding twenty years; 2) for the purposes of the 1989 ODMA, the preceding twenty years refers to the period from March 23, 1969 until March 22, 1989; and 3) the owners of the minerals are entitled to share in any bonus payment in proportion to their share of the minerals, even if one of the mineral owners possesses the executive rights, i.e., the right to sign a lease on behalf of all the mineral owners. By way of background, the ODMA was originally enacted on March 22, 1989, and, after a three year grace period, became effective on March 22, 1992. The purpose of the ODMA 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 the minerals as specified in the statute during the preceding 20 years (referred to as “savings events”), the mineral interests are deemed abandoned and the title vests back to the current surface owner. The act also provided that a severed mineral interest could be preserved indefinitely by filing a claim with the county recorder at least once every twenty years, stating that the severed mineral interest owner did not intend to abandon the interest. The ODMA was amended on June 30, 2006. Eisenbarth has been a significant decision affecting claims brought under the 1989 ODMA, because the Court of Appeals decided that the reference to the “preceding twenty years” meant the twenty years before the Act was passed. A number of trial courts had determined that “preceding twenty years” meant any twenty year period without a savings event. In doing so, they pointed to the fact that the act specifically allowed for the filing of multiple preservation claims. If the Act meant to adopt a static look-back period, a single preservation claim would be sufficient to preserve the interest under the Act. Thus, these courts concluded that the act adopted a “rolling” twenty year look-back period, where any twenty year period without a savings event would lead to abandonment. The Seventh District’s decision limited the effect of the reach of the 1989 ODMA, holding that any lack of activity from during the 17 year period from 1989 until 2006 (when the Act was amended) was irrelevant. On March 11, 2015, the Ohio Supreme Court agreed to decide whether the 1989 ODMA adopted a rolling or static look back period and whether an oil and gas lease constitutes a title transaction. An interesting aspect of the Ohio Supreme

Court’s order accepting jurisdiction in Eisenbarth is that three of the seven justices voted to hold Eisenbarth for decisions in Walker v. Noon and Chesapeake v. Buell cases but were outvoted. Reading the tea leaves, one could surmise that those three justices believe that the Court’s decisions in Walker or Buell may moot the static vs. rolling look-back period issue in Eisenbarth. In Walker, the Court will decide whether the 1989 ODMA was self-enforcing, or whether a court action had to be brought to enforce the abandonment while the 1989 version of the ODMA was in effect. If the act was not self-enforcing, the Eisenbarth plaintiffs would not have a viable claim, because they filed their suit years after the Act was amended in 2006. In Buell, the Court will decide whether an oil and gas lease is a title transaction capable of serving as a savings event. If a lease is not a savings event, there was no savings event in the Eisenbarth case under either the static or the rolling. Assuming that the Ohio Supreme Court rules that surface owners may bring 1989 ODMA claims despite the 2006 amendment and that an oil and gas lease is a title transaction, the Court will then reach the issue of whether there should be a static or a rolling twenty year look-back period as addressed in Eisenbarth. Eisenbarth illustrates the volatile nature of the current state of Ohio case law interpreting the ODMA, and the risks involved when analyzing when and how to proceed with abandonment actions. Surface and mineral owners should seek counsel from experienced oil and gas attorneys who are knowledgeable and up to date on the current changes in Ohio’s oil and gas law. David J. Wigham is a second generation oil and gas attorney at the law firm of Critchfield, Critchfield & Johnston, in Wooster, Ohio, with nearly 25 years of experience in the industry. He is also the current chairman of the Natural Resources Committee of the Ohio State Bar Association.

740-255-6369

740-255-6368

John Lowe Dix Communications

versatile power system developed and According to the company’s website, “the heart of Flexpatented by a Cambridge native has Gen® Power Systems’ Solid State Generator is our proprifound a new niche out west in the etary Adaptive Control Technology. ACT monitors island gas and oil industry. With the resurgence of grid AC or DC bus voltage, current and frequency at 0.1 that industry in eastern Ohio, Doug Moorehead likely millisecond intervals and dynamically manages energy will see his innovations applied in his home territory. storage charge and discharge, improving island grid reMoorehead’s company, FlexGen® Power Systems, sponse time by 100 times to deliver desired power quality has developed a solid state generator that is proving to across the full range of rated power settings.” be a solution for power needs in a host of applications, In other words, the system is capable of adapting to the including the oil fields of the United States. The comunpredictable power demands that may be lobbed at it. pany name, FlexGen®, is a nod to its flexibility (it is a By handling the transients, FlexGen® enables customers hybrid power system) as well as to its applicability to to decrease, by significant amounts, emissions and fuel diverse venues. Not only is it suited to the gas and oil and maintenance costs. industry, the system can be found in industrial, maMoorehead was inspired to develop the FlexGen® rine, military and mining applications. system in large part by the power needs with which he A chief benefit of a FlexGen® system is its ability became familiar while serving in the military. to handle transients, that is, power surges. A chemistry major while at the U.S. Naval Academy, For example, the base load of a particular applicaMoorehead graduated from the academy in 1996 as an tion may require 250 horsepower, but the applicaofficer assigned to the Sea Air Land force. After nine tion also may need the capacity to handle a sudden years as a SEAL, he attended the Massachusetts Instidemand for power up to 1,000 or 1,100 horsepower. tute of Technology where he earned a master’s degree, The FlexGen® can smooth out the glitches that specializing in materials science and engineering. His may arise with those demand surges. thesis was on advanced lithium batteries. An operation without the ability to handle tranMoorehead and his colleagues are enthusiastic sients might experience operational delays or about applying their product to the gas and oil indusinterruptions analogous to “motorist traveling try. down Wheeling Avenue and catching every red “With all of the new development in oil and gas, it’s light,” Moorehead said. exciting,” he said. “We’re doing great.”

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OLUMBUS – Senate Minority Leader Joe Schiavoni (D-Boardman) introduced legislation to make revisions to Ohio’s Oil and Gas Law to increase penalties and revoke permits for improperly disposing brine. Senate Bill 120 was first introduced in 2013 after it was revealed that a tanker truck under the operation of D&L Energy, owned by Ben Lupo, had dumped as many as 20,000 gallons of drilling waste and brine water into a storm sewer that fed directly into the Mahoning River. “It is important that we ensure further accountability at the state level and deter future offenders,” stated Sen. Schiavoni. “While I encourage the continued exploration of oil and gas in the Mahoning Valley and throughout the state, we must have strong laws in place to protect the environment and the public.” The legislation would raise the penalties for knowingly disposing of oil-and-gas waste illegally to the levels found in the Federal Clean Water Act. Those penalties include a felony and a fine of not less than $10,000 and no more than $50,000 or imprisonment for three years, or both for the first offense, and no less than $20,000 and no more than $100,000 or imprisonment for six years on subsequent offenses. Additional components of Senate Bill 120 include the following: Require all individuals who apply for a permit to register with the Division of Oil and Gas. Authorize the Chief of the Division of Oil and Gas to suspend activities that are authorized under a permit issued by their office for drilling, injection or brine transportation if it is found that the owner or someone employed by that operation

has committed a substantial violation, and provides a timeframe for the problems to be corrected. Authorize the Chief of the Division of Oil and Gas to refuse to issue a new permit for an applicant who has failed to comply with an order to fix a substantial violation and prevents an applicant from circumventing this refusal by applying under a different name or business. The Chief of the Division of Oil and Gas will also have the power to permanently revoke any permit issued to a person found guilty, and to deny any future application by the person for a permit. “The purpose of this bill is not to hinder oil and gas exploration throughout eastern and northeastern Ohio,” stated Senator Schiavoni. “However, we must reaffirm our commitment to ensuring clean water for Ohioans and send a message that intentional disposal will not be tolerated.”

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Carroll County offers visitors many things to do while relaxing and enjoying a quiet rural atmosphere. Boating and fishing on Atwood or Leesville Lakes, Wine Tastings at Twigg or Al-Bi Wineries, Hiking, Museums, Shopping, Dining and music at the Bluebird Farm Park Amphitheater. Festivals; Country Energy Fest in May, ALIVE Christian Music Festival in June, Carroll County Fair in July, Great Trail Festival in August, Atwood Fall Festival & Algonquin Mill Fall Festival in October. Checkout the website for more information..

Judie Perkowski Dix Communications

OLUMBUS — The 68th annual Ohio Oil and Gas Association winter meeting offered all attendees an opportunity to engage in conversations with representatives of more than 80 oil and gas related businesses and organizations, in addition to business sessions throughout the day featuring speakers from major oil and gas companies, business leaders, the Ohio General Assembly, the Ohio Oil and Gas Energy Education Program, and, of course, OOGA The Association’s high-energy premier business and networking meeting was at the elegant Hilton Columbus at Easton in Columbus March 11-13. Welcoming remarks by OOGA President David R. Hill set the tone for the three-day event. Hill is an oil and gas producer operating in Ohio and West Virginia. He is past chair of the Ohio Oil and Gas Energy Education Program, and has been a member of the American Association of Petroleum Geologist for 34 years. In addition to serving currently as OOGA president, he also serves as a regional board of directors for the Independent Petroleum Association of America representing Ohio. Hill said the winter meeting was a time and place for forging new relationships and rekindling those of many years, gaining knowledge from senior oil and gas operators, while learning what is on the market to help develop a new idea, to encouraging the next generation of petroleum geologists and engineers about the tremendous opportunities that lie before them. “During its long and storied history, this event has evolved to be OOGA’s premier business and networking event. More than 2,000 industry leaders representing every aspect of the domestic oil and gas industry are on hand. The event is tailored to provide maximum opportunities to network and partner with other industry participants,” said Hill. “Whatever it is you are looking for, you will find right here. This industry excels at turning an individual’s dreams into an entrepreneurial reality.”

Hill also addressed the industry’s difficult times relating to the “collapsing price of crude oil and natural gas.” He said that the industry’s revenue is under attack, while the cost of doing business is still rising. “We must all increase our efficiencies and find creative ways to reduce costs.” Wednesday was set-up day for exhibitors with an accommodating agenda of brief meetings. Dix Communications, GAS&OIL magazine, was the media sponsor for the event. A highlight of Thursday’s presentations was the announcement by Rhonda Reda, executive director of the Ohio Oil and Gas Energy Education Program, of the winner of the second annual Pipeline Award to New Concord Fire Chief Brent Gates for his commitment to training firefighters about the oil and gas industry. Reda said Gates is one of the lead instructors of OOGEEP’s firefighting training workshops since 2006. “Brent’s years of experience, knowledge and dedication to OOGEEP’s firefighting workshops has and will save lives,” said Marty Miller, OOGEEP vice chairman and senior vice president of operations for Allliance Petroleum Corp. Gates joined the New Concord Fire Department in 1978 and has served as its fire chief since 1992. Thursday afternoon’s Business Sessions were moderated by Penny Seipel, OOGA vice president of public affairs, who introduced speakers Shawn Bennett, OOGA executive vice president; Rhonda Reda, Eric Smith, OOGEEP chairman of the board; Mike Chadsey, OOGA director of public relations; Jackie Stewart of Energy in Depth; Martin Shumway of Shumway Resources and Jonathan Airey, counsel for Vorys, Sater, Seymour and Peases LLP of Colmbus and OOGA’s general counsel. The sessions also included remarks by several representatives from oil and gas companies. A roundtable discussion, moderated by Matthew Hammond, government affairs representative for Chesapeake Energy, managed to give each legislator in the session a chance

to express their opinion on several topics, including drilling waste water, endangered species, increase of restrictions for “timbering” rights of way to access roads and well pad sites. They also discussed the proposed increase in the commercial activity tax, sales tax and the severance tax. “Considering how many taxes the industry already pays, and the huge decline in the commodity [gas and oil] price, it is not a good time to talk about raising taxes on the industry,” said State Rep. Andy Thompson. “Drilling in state parks is another big issue. A lot needs to be done to ensure minimal disturbance [to the property].” State Sen. Troy Balderson, State Rep. Al Landis and State Rep. Sean O’Brien, also roundtable participants and all supporters of the gas and oil industry concurred. “We want to see people realize their dream. We want that to continue. The House [of Representatives] looks very favorable to have the severance tax remain status quo,” said Landis. Balderson said, “I compliment the House for being engaged in the process, and for their work involving the gas and oil industry ... We should treat the industry as they have treated our communities. The numerous donations to the schools, and the fire departments, the building of huge oil and gas complexes ...We are all very grateful for the industry’s investment in eastern Ohio.” “You don’t need to have a well in your backyard to benefit from the oil and gas growth,” said O’Brien. Friday’s session ended with comments by Karen Harbert, president and CEO of the U.S. Chamber of Commerce Institute for 21st Century Energy; JC watts, Jr., former U.S. Representative from Oklahoma; and a Congressional update from Ohio Congressman Bill Johnson. Johnson was elected in 2010 and has been a driving force in job creation in eastern and southeastern Ohio. Also, high on his list of priorities is improving services to veterans, defending the coal industry from “bureaucratic overreach,” and to secure American energy independence. jperkowski@daily-jeff.com

Sophie Kruse Dix Communications

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ALDWELL — As some of Noble County’s leaders met March 12 to discuss changes and progress throughout the county to the community, one topic was consistently brought up: the impact of the gas and oil industry. “We’ve been very blessed to have the oil and gas come when it did,” Gary Rossiter, Noble County commissioner said. Through leasing county land to gas and oil companies, commissioners were able to afford making updates to the Noble County Courthouse, such as installing a new roof, heating system and windows. Rossiter also noted that due to taxes on the pipelines and hotels, local schools are also receiving some much-needed funding. Recently it was reported that schools would receive 63 percent of the estimated $6.2 million in tax revenue Noble will make from the Leach Xpress Pipeline. The commissioner acknowledged that while some people may take time to adjust to the changes in Noble, it was important to support them. “We need to support things for things to happen in our community,” Rossiter said. Likewise, Caldwell Mayor David Evans mentioned some of the positive changes gas and oil has brought to the village. He explained that Art Schockling, superintendent of the village’s sewer department, had added significant funds to Caldwell by selling water to gas and oil companies. With that money, the village is able to create a $350,000 extension to the sewer building, as well as purchase three acres of land in the center of town. Evans also noted that due to the new hotels in the village, the water department is also seeing an increase in sales. Another part of the county the gas and oil industry has heavily impacted is the Noble County Emergency Management Agency. Chasity Schmelzenbach, director of the EMA, explained that since the industry boom, her office has seen an increase flood plane permitting and chemical filers. She added that permitting and filing used to be five to 10 percent of the office’s work, now that number has jumped to 50 percent. With the sharp increase in flood plane permitting, Schmelzenbach said that it’s important for the EMA to make sure that they continue to protect residents and landowners from having any additional flooding and to weigh the pros and cons of each permit. In regards to chemical filers, Noble has needed to plan for the additional hazardous facilities located in the county. Last year, approximately 30 facilities filed as hazardous or extremely hazardous.

However, Schmelzenbach explain that those companies have made sure to take advantage of the quarterly response forums, which lets the EMA know how or if emergency responders should react to any emergencies at those facilities. She added that those companies “have been very gracious in giving donations to responders, as well as gear, training and education.” Julie Mettler represented the Noble County Department of Job and Family Services at the event and noted how the gas and oil industry has made an impact on local jobs and the various industries of the county. With gas and oil extraction being the leading industry in Noble, part of the DJFS’s job is to not only find people to work for pipeline companies, but also to replace those leaving their jobs behind. One concern that the DJFS has is that the local workforce won’t have enough trained and trainable workers available for gas and oil companies to hire. The agency is trying to offset that concern by offering up to a 50 percent reimbursement of wages for workers with on-the-job training. The DJFS also works with out-of-town employers interested in expanding to Noble with property and local labor statistics. “We would rather have them here in Noble County than somewhere else,” Mettler explained. The agency, which relocated to the county’s new Multi-Agency building, has office space for employers to interview potential employees, as well as computers with Internet access for those looking for work. Mike Lloyd, extension educator for the Ohio State University Extension Office, reported on the seen and unseen impacts of gas and oil. He related unseen impacts to the county’s finances, stating that Noble’s general fund had $3.5 million in 2010, but by 2014, it increased to $5.8 million. Banking deposits in the county also increased from $150 million to $225 million in the same four-year span. With the industry’s visible impact, Lloyd noted several new businesses in the county such as new hotels to gas and oil supply stores, as well as new trucks and tractors in the county which were purchased using money Noble received from pipelines. However, Lloyd did note that while past information points toward Noble seeing more growth and financing from pipelines, it is not a guarantee. While it is difficult to determine how much gas and oil has impacted Noble County, it is clear that the community is willing to take advantage of every opportunity the industry allows.

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TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY BY NUMBER OF SITES

1. Carroll County 476 2. Harrison County 333 3. Belmont County 238 4. Monroe County 205 5. Guernsey County 176 6. Noble County 164 7. Columbiana County 131 8. Jefferson County 54 9. Mahoning County 30 10. Tuscarawas County 20 11. Washington County 17 12. Portage County 15 Trumbull County 15 13. Stark County 13 14. Coshocton County 5 15. Holmes County 3 Morgan County 3 Muskingum County 3 16. Knox County 2 17. 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 3/21/15

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Judie Perkowski Dix Communications

ITTSBURGH — Every entrepreneur wants to build the better mousetrap. And, sometimes someone actually does. Tom Tonkins formed a new company in April 2014, Well Control Technologies, to manufacture two patented systems; a Well Management Center and a Down-hole Liquid Level Control system to operate primarily with conventional and coal bed methane wells. Two innovative systems proven to “manage and maximize gas and oil yield,” according to Tonkins. “The Well Management Center separates production fluids and gas at the surface in one contained area, reducing the risk of methane and gas emissions and preventing freezing of production fluids, well packing and valves. Vapor extraction from fluids is also an integral part of the system, recovering gas that would normally be vented from production fluid storage tanks. The Well Management Center will eventually be used on horizontal wells, it is also possible, that with a modification of the technology, the Downhole Liquid Level Control system could operate with horizontal wells also,” he said. The DLLC is a simple, patented two float system that controls production fluid in a gas well. The upper float mechanism is installed below the lowest gas seam, the lower float mechanism, just above the tubing fluid intake. They are typically spaced 30-50 feet apart. This system provides direct real time control of production fluid levels. The same principle can also be applied to low producing oil wells. The DLLC can be retrofitted during a routine service of the well. After three years of collecting data from prototype systems installed in CBM wells in Western Pennsylvania, the fledgling company is celebrating its first anniversary with its sales of its systems to CONSOL Energy. Both products can be used separately or together on conventional wells, CBM wells and low-producing oil wells,

controlling well fluids in real time with vapor extraction from production fluids. Tonkins added that as technology matures, both units could be utilized in deeper horizontal wells. Data collected from CBM wells have shown significant improvement in gas yield. One of the test wells operating for four years showed an increase in gas yield after the DLLC was installed, from 40 Mcf/day to more than 200 Mcf/day. “Both systems are environmentally friendly, the Well Management Center prevents gas from being released into the atmosphere when vapor extraction is incorporated. The DLLC prevents gas from entering the production fluid tubing down well, that can eventually collect in storage tanks and be released to atmosphere. In addition to significant cost-savings which can be realized from less maintenance and service visits, with a return on investment in less than two to four years for both systems,” he said. “There is a lot of room for improvement to increase gas and oil recovery from existing wells,” said Tonkins. “Our systems take the guess work out of well production fluid management, improve yield and reduce ongoing maintenance and service costs.” WCT acquired the patents for the systems when Tonkins was involved in market research for CONSOL Energy, who originally owned the patents. “I liked what I saw, basically made them an offer for the two sets of patents and raised private equity to buy them. The systems offer more effective well management for maximizing gas or oil recovery while greatly reducing emissions and spillages.” For more information about Well Control Technologies, visit wellcontroltech.com, email tct@wellcontroltech.com, or call 412.310.1449. JPerkowski@dixcom.com

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IRAN PRODUCING MORE NATURAL GAS FROM FIELD SHARED WITH QATAR EHRAN, Iran (AP) — Iran said it began producing more natural gas from a giant field shared with Qatar as part of efforts to expand gas production and alleviate setbacks caused by international sanctions. The additional production from the South Pars field — known as North Dome in Qatar — will add 81 million cubic meters of gas to Iran’s total production, currently at about 600 million cubic meters per day, most of which is consumed domestically, the state TV reported. During a mid-March ceremony marking inauguration of the expansion project, President Hassan Rouhani claimed the increased gas production proved Western sanctions, imposed over Iran’s s disputed nuclear program, were ineffective. “We succeeded in finalizing huge projects during the sanctions,” said Rouhani. “By inaugurating this project, we announce to the world that the era of pressures ... is over.” The expanded production at South Pars will also yield some 120 thousand barrels of liquid gas and 750 metric tons (827 tons) of sulfur per day. Tehran invested more than $ 7 billion in the phase.

SURVEY OF GW NATIONAL FOREST FOR PIPELINE WINS US OK OANOKE, Va. (AP) — The builders of a proposed natural gas pipeline from West Virginia to North Carolina have the green light to survey a 12.6-mile slice of the George Washington National Forest. The Forest Service announced in March it is issuing a temporary special use permit for the survey. The survey will assess soils, federally listed threatened and endangered plants and animals and cultural resources. The Forest Service stressed that the survey approval does not clear the way for construction of the Atlantic Coast Pipeline. Dominion Resources is partnering with other energy companies to build the $5 billion, 550-mile pipeline. It would deliver natural gas from Ohio, West Virginia and Pennsylvania to the Southeast. Dominion said the survey is key to finding the best pipeline route with the least environmental impact.

CONSOL ENERGY CUTS SPENDING AS OIL PRICES FALL EW YORK (AP) — Consol Energy is trimming the amount of money it spends on buying and developing land for oil production, joining other energy companies that are reducing spending due to falling oil prices. The natural gas and coal producer said in March that it lowered its capital spending budget to $920 million, down $80 million from its previously announced budget of $1 billion. Consol also said it plans to reduce its operational costs, but didn’t say by how much. Several energy companies, including Chevron Corp. and Exxon Mobil Corp., have trimmed their spending after oil prices plunged. Oil prices have fallen as production in the U.S. increased, outweighing demand.

JUDGE RULES SHALE GAS PIPELINE CAN CROSS HOLDOUT PROPERTIES CRANTON, Pa. (AP) — The companies backing a 124mile pipeline designed to ferry cheap Marcellus Shale natural gas to New York and New England can build across seven northeastern Pennsylvania properties whose owners had not agreed to it, a judge ruled. U.S. District Judge Malachy Mannion ruled that the Constitution Pipeline has the necessary permits from the Federal Energy Regulatory Commission and that it serves the public interest by providing additional natural gas pipeline capacity. Mannion also wrote in the Tuesday ruling that the Susquehanna County landowners stand to gain adequate compensation from the pipeline’s owners. Some of the defendants did not respond to the lawsuits seeking access to their land. The lead partners in the Constitution Pipeline are Tulsa, Oklahoma-based Williams Partners LP and Houston-based Cabot Oil & Gas Corp. Construction on the seven properties can begin after the partner companies posts a $1.6 million bond to ensure there is money to pay the landowners once a judge approves the final compensation.

Judie Perkowski Dix Communications

AMBRIDGE, OH -- In spite of the inclement weather in early March, the Guernsey Energy Coalition drew a large crowd of people interested in what former Ohio Representative and Senator Jimmy Stewart and local oil producer David Hill had to say about the current status of the gas and oil industry, specifically in southeastern Ohio. The meeting was sponsored by the Cambridge Area Chamber of Commerce at the Southgate Hotel Thursday. Stewart is currently the president of the Ohio Gas Association, a natural gas trade organization that monitors and reports on legislative, regulatory and compliance activities. Hill is president of the Ohio Oil and Gas Association, a trade association involved in all aspects of the exploration, production and development of crude oil and natural gas resources. Both speakers talked about the impact of increased natural gas production in the U.S. in terms of prices and global competitive advantage as well as the need for natural gas transportation infrastructure — namely pipelines. They both agreed that the downturn in production is a direct result of Saudi Arabia’s vendetta against the U.S. for our country’s dramatic increase in gas and oil production in the past three years, causing an equally dramatic downward spiral of the previously $100-plus barrel of oil to less than $50 a barrel. And, although technology has been the biggest contributor to the gas and oil industry’s bottom line, far ahead of any other country in the world, most drillers in this country cannot compete with the Saudi Arabia’s stranglehold on the industry. The Saudis produce about 10 billion barrels of oil per day, the U.S. was right behind them with about nine billion. The Saudi’s have refused to cut their production, saying they are not the reason for the price drop. “All they want to do is shut down U.S. oil production, and they are doing a pretty good job of that,” said Hill. “We are in the cross-hairs of the Saudis ... They are going to make it hard for us to make a profit so they can go back to the $100-plus barrel of oil.” The U.S. rig count has plummeted from 1,900 to 1,300, a 32 percent decrease by the end of 2014. In 2012 there were 59 rigs in Ohio, now there are 39.

Several oil and gas companies have “laid down their rigs,” including some that folks in Guernsey County have become quite familiar, such as Carrizo, PDC and Chevron, who have suspended operations until the price recovers to the point of making it profitable to operate. Others have exited the state altogether: BP, Anadarko, EQT, Shell, Devon and Halcon. Both Stewart and Hill said those companies could come back, if the governor’s legislation on the proposed 6.5 percent severance tax increase doesn’t run them out of the state, or in the case of those who have left, keep them from returning. According to statistics from the Ohio Department of Taxation, the oil and gas industry pays six separate taxes: Income, commercial activity tax (CAT), an annual tax imposed on the privilege of doing business in Ohio; sales, severance, fuel (diesel) and ad valorem, a property tax that goes back to local governments. Hill said most people think the oil and gas industry’s revenues are “off the charts,” meaning they make money hand over fist. In the U.S. Census list of industries and their rank of profitability, computer companies are number one with a 21.7 percent profit margin. Oil and gas are ranked 10th with a profit margin of 8.9 percent. A map Hill provided showing the coverage area of the Utica Shale demonstrates the reason the formation will continue to be a magnet for future development: There are still millions of Ohio Utica shale acres yet to be developed. “We have so much natural gas we cannot get it out fast enough, primarily because we don’t have the pipelines in place to get the gas from point A to point B,” said Hill. “And, most drillers have come to the conclusion that the Utica shale is mostly natural gas, not oil as first suspected. Which means, the only way to safely transport natural gas is through pipelines. Stewart backed up Hill’s statement by adding that there are many pipelines still in the planning stages. Several big name companies have been forming joint ventures to share the expense and knowledge of midstream operations. “It is a tedious, rigorous process, from start to finish,” said Stewart. “What everyone should think about is, the environment is inherently dangerous, we make it safe with the help of fossil fuels,” said Hill. “We have made our planet cleaner and more livable.” jperkowski@daily-jeff.com

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uring the fourth quarter of 2014, Ohio’s horizontal shale wells produced 3,558,836 barrels of oil and 164,815,008 Mcf (164 billion cubic feet) of natural gas, according to figures released today by the Ohio Department of Natural Resources. Oil increased by more than 545,000 barrels and gas by more than 33 billion cubic feet compared to the third quarter of 2014. By comparison, 352 horizontal shale wells in the fourth quarter of 2013 produced 1,439,209 barrels of oil and 43,124,516 Mcf (43 billion cubic feet) of natural gas. Comparing the last two years in Ohio, there has been a 200 percent increase in oil production and a 350 percent increase in gas production. The new report lists 828 wells, 779 of which reported production, resulting in a 15 percent increase in wells for the fourth quarter. Forty-seven wells reported no production as they are waiting on pipeline infrastructure. Of the 779 wells reporting production results: • The average amount of oil produced was 4,568 barrels. • The average amount of gas produced was 211,573 Mcf. • The average number of days in production was 80. All horizontal production reports can be accessed at oilandgas. ohiodnr.gov/production Ohio law does not require the separate reporting of Natural Gas Liquids. Gas reporting totals listed on the report include NGLs. ODNR ensures a balance between wise use and protection of our natural resources for the benefit of all. Visit the ODNR website at ohiodnr.gov.

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When you give honest An anti-drug group in New York distributed free out the door. pencils to school kids with the anti-drug message: 30 Cool Juneto1,Do 2011 Phone 330-276-6508 The Ve Too Drugs. 30 June 1, 2011 Phone 330-276-6508 The V group in New York distribute It started out okay, but got worse and worse An anti-drug Here’s what Dave Barr An anti-drug group in New York distribu pencils to school kids with the anti-drug me when the kids actually used the pencils. As the penpencils school kidsfell withasleep the anti-drug someone at a mem Too Cooltoto Do Drugs. cils were worn down and sharpened, the message TooIt Cool to Do Drugs. started out okay,everybody but got worse and “Have leave changed to:OLUMBUS, Cool to Do Drugs. Then:(AP) Do Drugs. Ohio — Oil Itproduction started okay, has butmore worseAsand when the kids out actually used thegot pencils. th group of total strangers, frt when thetripled kids usedsharpened, the pencils.theAsm than doubled and natural gascils has in and Ohio in were wornactually down cils were worn down and sharpened, the and have them sit around t changed to: Cool to Do Drugs. Then: Do Drum When you honest have one of foot onegive year, theadvice, Department Natural Resources said changed to: Cool to Do Drugs. Then: Do Dr stare at him until he wakes out the door. Wednesday. When you give honest advice, have on them say3.5 tomillion him, in have a ver Statistics released by the state showedWhen more than you give honest advice, on out the door. Here’s of what says hecubic wouldfeet do out ifofthe barrels oilDave and Barry 164 billion natural pro-very risk door. your gas planwere is very, someone asleepthe at a last meeting: duced fell during three months of 2014. During Here’s no what Dave the Barry choice but same tosaystryheit.would I on what Dave quarter in 2013, leave Ohiothewells 1.4 million barrels of says oil he woul “Have everybody room,produced then collectsomeone a Here’s fell asleep at a Barry meeting: that you know what . .. someone asleep atleave a meeting: “Have fell everybody the room, then co and 43 cubic feet natural group of billion total strangers, from of right off thegas. street “Have everybody leave the room, then into.’ Then they group of total strangers, fromshould right offfile thec was fueled by a building boom of wells. and The have increase them sit around the sleeping person and group of total strangers, from right off th and have them sit around the sleeping perso report produced least some oil or gas stareThe at him until showed he wakes779 up. wells Then have one stare of athave and them pers at him untilsithearound wakesthe up.sleeping Then have out of 828 wells drilled in Ohio’s shale toward theThenvoice, them saythe to him, in a very somber voice, ‘Bob, stareformations at until in he have them sayhim to him, awakes very up. somber them say is to very, him, very in a risky, very somber voice endplan of 2014. compared to the 352 wells producing oil and your is very,That’s very risky, but you’ve given us your plan but you’ve giv your plan but is very, but you’ve g no choice to tryvery it. I risky, only hope, for your gastointry theit.same before. nonatural choice but I onlyperiod hope, fora year your sake, no choice but to try it. Iquarter only hope, for you that you know what . . . you’re getting yo Forty-seven wells reported no production in the fourth that you know what . . . you’re getting yourself that you what . file . . quietly you’re from getting into.’ Thenknow they should the yr of 2014 they waiting onroom.” pipeline infrastructure. into.’ Thenbecause they should file are quietly from the into.’ Then they should file quietly from the

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