SEPTEMBER 2015 • A FREE MONTHLY PUBLICATION
Safe and Secure? Industry responding Back to energy school for Ohio educators New power plant in Carrollton Recovering Pipeline Land
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September 2015
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Gas & Oil
September 2015
Ohio Edition
Table of Contents 5
ENERGY AGENCY EXPANDS COVERAGE AREA
6
‘CREEK GEEKS’ STUDY WATER DISTURBANCE
9
THE MYTHS ABOUT FRACKING ARE MANY AND DAMAGING
10
OLDS RECEIVES OOGA’S ‘PATRIOT AWARD’
11
STONEBRIDGE TO OPEN BARNESVILLE YARD
PUBLISHERS Andrew S. Dix ASDix@dixcom.com G.C. Dix II GCDixII@dixcom.com David Dix DEDix@dixcom.com
EXECUTIVE EDITORS
12
THE LANDMAN LEGACY
13
OHIO SEC. OF STATE INVALIDATES BALLOT PROPOSALS
Rob Todor RTodor@dixcom.com Lance White LWhite@dixcom.com
15
NEXUS LAWSUIT CONTINUES; RESTRAINING ORDER ISSUED
16
API CALLS ON CANDIDATES TO OUTLINE ENERGY OUTLOOK
17
OHIO PANEL SUSPENDS INJECTION WELL ACTIVITY NEAR SITE OF EARTHQUAKE
18
PIPELINE TO CROSS FIVE COUNTIES: THE OHIO PIPELINE ENERGY NETWORK IS UNDER CONSTRUCTION.
20
TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY
22
Ray Booth RBooth@dixcom.com
SEVEN RULES FOR OIL AND GAS ASSET PROTECTION PLANNING
Roger DiPaolo RDipaolo@dixcom.com
REGIONAL EDITORS Cathryn Stanley CStanley@dixcom.com Niki Wolfe NWolfe@dixcom.com Judie Perkowski JPerkowski@dixcom.com Erica Peterson EPeterson@dixcom.com
Gas & Oil
www.GasandOilMag.com
ADVERTISING Kim Brenning Cambridge, Ohio Office KBrenning@dixcom.com 740-439-3531 Jeff Kaplan Alliance & Minerva, Ohio Office JKaplan@dixcom.com 330-821-1200 Kelly Gearhart Wooster & Holmes, Ohio Offices KGearhart@the-daily-record.com 330-287-1653 Janice Wyatt National Major Accounts Sales Manager JWyatt@dixcom.com 330-541-9450 Diane K Ringer Kent, Ohio Offices DRinger@recordpub.com 330-298-2002 Jeff Pezzano VP Advertising Sales & Marketing Kent Ohio Office JPezzano@dixcom.com 330-541-9455
September 2015
23
HOCKING COLLEGE ADDS TECHNOLOGY PROGRAM
24
BARNESVILLE WATER ARGUMENT CONTINUES
26
1 DOWN, 4 TO GO: IMPORTANT OIL AND GAS CASES BEFORE THE OHIO SUPREME COURT
28
NEW POWER PLANT IN CARROLLTON
31
SAFE AND SECURE? INDUSTRY RESPONDING
32
BOY SCOUTS COMPLETE OOGEEP SUMMER PROGRAM
34
BACK TO ENERGY SCHOOL FOR OHIO EDUCATORS
39
RECOVERING PIPELINE LAND
40
COLUMBIA GAS UNVEILS DIGGER DOG
41
GULFPORT ENERGY FUNDS SCHOLARSHIPS
42
OFFICIAL SAYS EPA’S NEW OZONE REGULATIONS ‘UNREASONABLE’
45
UPCOMING EVENTS
46
ENERGY BRIEFS
DIGITAL MEDIA MANAGER
Brad Tansey BTansey@dixcom.com
LAYOUT DESIGNER Elizabeth Horne
EHorne@the-daily-record.com
“Gas & Oil” is a monthly publication jointly produced by Dix Communications. Copyright 2015.
The story in the August issue of the GAS & OIL magazine, "New Construction Rules Go Into Effect” on page 51, was written by Judie Perkowski of Dix Communications, not Jackie Stewart of Energy in Depth.
3
Gas & Oil
Ohio Edition
September 2015
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Gas & Oil
September 2015
5
Energy agency expands coverage area
T
he U.S. Energy Information Administration is expanding its reporting of monthly natural gas production by 10 additional states. The addition of these states — Arkansas, California, Colorado, Kansas, Montana, North Dakota, Ohio, Pennsylvania, Utah, and West Virginia — significantly enhances EIA’s monthly coverage, which was previously limited to Alaska, Louisiana, New Mexico, Oklahoma, Texas, Wyoming, and the Federal Gulf of Mexico. Accompanying EIA’s expanded coverage is a new webpage, Monthly Crude Oil and Natural Gas Production, which replaces the Monthly Natural Gas Gross Production Report. As suggested by the title of the new webpage, EIA will also be using it to report survey-based estimates for monthly crude oil production (including lease condensate) from the states covered by the new EIA-914 survey later this summer, followed by production data categorized by API gravity, an important measure of crude oil quality. Monthly natural gas production estimates for 15 states, the Federal Gulf of Mexico, and the rest of the country (aggregated and reported as “Other States”) are provided for January through April 2015. These estimates are based on data collected from a sample of U.S. operators on the expanded Form EIA-914 survey, with the exception of Alaska, which directly reports its volumes. Monthly production estimates for the expansion states, as with the original individually surveyed states and areas, are available with only a two-month lag; for example, the June release includes production estimates for April 2015. Previously, estimates for these 10 states were delayed by as much as two years. The expanded geographic scope of the EIA914 survey is in response to significant increases in U.S. natural gas production over the past several years, as well as important changes in production sources over this period. For example, the original EIA-914 survey, which was initiated in 2005, did not offer individual coverage for states such as Pennsylvania that have undergone transformative natural gas production growth, or for other states that may soon experience significant near-term production increases. EIA is now reporting data for individual states that represented nearly 90 percent of total U.S. natural gas production in 2014. Previously, the survey’s “Other States” grouping combined natural gas production from 27 states and the Federal Offshore Pacific. This grouping of states accounted for only 17 percent of total U.S. nat-
ural gas gross withdrawals in 2005. That share rose to more than a third (35 percent) by 2014. Within this group, the 10 expansion states represented 13 percent of total U.S. natural gas gross withdrawals in 2005 and more than twice that share (32%) in 2014. Production data from these 10 states will now be individually listed in the report. The remaining 18 states/areas that now make up the aggregated “Other States” grouping (Alabama, Arizona, Florida, Illinois, Indiana, Kentucky, Maryland, Michigan, Mississippi, Missouri, Nebraska, Nevada, New York, Oregon, South Dakota, Tennessee, Virginia, and Federal Pacific) consistently accounted for less than 5 percent of U.S. natural gas production from 2005 through 2014. Natural gas production data collected on the EIA-914 survey are used as inputs to several EIA products, including the Natural Gas Monthly and EIA forecasts such as the ShortTerm Energy Outlook and the Annual Energy Outlook. The product described in this press release was prepared by the U.S. Energy Information Administration, the statistical and analytical agency within the U.S. Department of Energy. By law, EIA’s data, analysis, and forecasts are independent of approval by any other officer or employee of the United States Government. The views in the product and press release therefore should not be construed as representing those of the Department of Energy or other federal agencies.
6
Gas & Oil
September 2015
Ohio Edition
CREEK GEEKS study water disturbance
www.GasandOilMag.com
Gas & Oil
September 2015
7
From Marcellus.com
S
ince 2011, the Appalachian Research Initiative for Environmental Science (ARIES) has supported more than 60 academic researchers in energy and the environment and over 75 student researchers at Pennsylvania State University, the University of Pittsburgh, Virginia Tech, West Virginia University, the University of Kentucky, Ohio State University, the Edward Via College of Osteopathic Medicine, and a team of graduate researchers at Marshall University, who call themselves the “Creek Geeks.” Advised by Mindy Armstead, an associate professor of integrated science and technology at Marshall who also has many years’ experience in the energy sector, the Creek Geeks conduct ongoing evaluations of the effects of watershed disturbance on aquatic ecosystems. Although one main use of their research is to alert the energy industry to potentials for stream or watershed disruption, the Creek Geeks also indicate their research is useful for individual landowners or other industries such as construction. To evaluate how changes may effect a stream, for example, the Creek Geeks locate an undisturbed “creek” and evaluate its health. They then create a small disturbance upstream on this same creek, measure the changes and evaluate those changes as positive, negative, neutral, etc. At the upcoming ARIES Environmental Considerations in Energy Production Conference (ECEP) Sunday, September 20 – Wednesday, September 23, 2015 at the Omni William Penn Hotel in Pittsburgh, PA, the Creek Geeks will present peer-reviewed research on watershed disturbance and also on the development of culturing methods for native Mayfly Taxa for use in laboratory toxicity testing. At the ECEP, energy and environmental researchers from all of ARIES’s supported universities will present peer-reviewed research on topics ranging from Carbon Management to Shale Gas and the Environment to the Health Impacts of Energy Development.
In addition to ARIES’s affiliated researchers, additional presentations include Carl Carlson of Range Resources on Technical Challenges and Shale Gas Regulation, Lee Fuller of the IPAA on Shale Gas and Science, Gary Slagel of Steptoe and Johnson on Environmental Challenges in Oil and Gas, and many more. The full ECEP conference agenda and registration details are available at http://www.ariesvents.org.
Gas & Oil
Ohio Edition
September 2015
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Gas & Oil
September 2015
9
The Myths About Fracking Are Many And
Merrill Matthews
F
racking media coverage is a confused mess. One day there's a news story implying that fracking is causing earthquakes or groundwater contamination; the next day there's a different story asserting there's no clear connection. No wonder the Gallup Polling Co. recently found that an equal number, 40 percent, supported and opposed fracking. One problem is that people, and especially reporters, frequently confuse fracking with wastewater injection. Hydraulic fracturing, or "fracking," has been around for decades. It's a process whereby water, mixed largely with sand and a small amount of chemicals, is forced into shale rock located miles underground. The mixture breaks up the shale and allows the trapped oil and natural gas to be extracted. Drillers then recapture that wastewater mixture and dispose of it deep in the ground, sometimes in a previously existing well, known as wastewater injection wells. Whenever an earthquake happens, the public and the media immediately want to blame fracking. But there is no evidence that fracking causes earthquakes. During a spate of relatively minor earthquakes in Irving, Texas last winter, the media and public immediately assumed fracking was to blame. Only there was no active fracking close by. Moreover, fracking usually occurs at depths of 6,000 to 10,000 feet, while seismology tests conducted by federal agencies estimated the earthquakes' origins at 18,000 feet deep or deeper. Lately, some scientists have published a few studies suggesting that wastewater injection wells might have been the cause of some of the earthquakes in North Texas and other places. The speculation is that wastewater injected near a fault line could cause the tectonic plates to slip resulting in a minor earthquake. The media immediately published unhelpful stories claiming fracking caused the quakes, and in one case the study
authors felt compelled to make a statement that they were investigating wastewater injection, not fracking. But it appears these earthquakes are also originating 16,000 to 18,000 feet deep, and yet injection wells usually only go a third of that distance. So while you can't rule out injection wells as the cause, they aren't the most likely culprit. Incidentally, both Connecticut and Alabama have been experiencing numerous earthquakes recently, and there is no fracking or wastewater injection in those states. The other issue that has captured headlines over the past several years is that fracking is contaminating drinking water. In response to these concerns, Congress required the Environmental Protection Agency to study the situation. After four years, the EPA just released its report, concluding: "We did not find evidence that these mechanisms (fracking and other drilling processes) have led to widespread, systemic impacts on drinking water resources in the United States." The EPA's finding makes perfect sense, although it upset many in the environmental community. Groundwater and aquifers tend to be a few hundred feet below the surface, while fracked and injection wells are thousands of feet deep-well below the bedrock that would keep chemicals from rising to groundwater levels. There have been some examples of the cement casings that surround a well's borehole leaking small amounts of oil, gas or chemicals. But as the EPA study indicates, those are isolated incidents and are easily fixed. Moreover, these are wellbore integrity and maintenance issues and are not limited to fracked wells. Some environmentalists may not be happy with the science, but everyone else should be because it means that the energy boom that has spurred the U.S. economy for several years can and should proceed unhampered by erroneous attacks. Matthews is a resident scholar with the Institute for Policy Innovation in Dallas.
10 8
Gas & Oil
Ohio Edition
September August 20152015
Olds receives OOGA’s ‘Patriot Award’ Z Arts & Crafts 34th Annual Celebration
2015
Judie Perkowski - Dix Communications ANESVILLE — During a July 27 cer- Association. “There’s no denying that Jerry exemony at the Zanesville Country Club, emplifies the spirit of an Oilfield Patriot.” the Ohio Oil and Gas Association A resident of Worthington, Olds founded Solid presented Jerry Olds, founder and president of Rock in 1981. The company produces crude oil Solid Rock Energy, Inc., with the Oilfield Patriot and natural gas in Ohio. He is a past president Award, an annual honor bestowed by the trade of OOGA and is currently a member of the association. American Association of Petroleum Geologists. The impressive bronze trophy of a soaring Past Oilfield Patriots include William G. Batchor (2014), William Kinney (2013), Rhonda eagle personifies the true meaning of the award. elder Established in 2006, the award recognizes Reda (2012), Steven L. Grose (2011), David R. Toll Free individuals who have made significant con- Hill (2010), James R. Smail (2009), W. Jonathan tributions to protect, promote and advance Airey (2008), Sarah Tipka (2007) and Jerry James the common interests of those engaged in all (2006). aspects of Ohio’s crude oil and natural gas About the Ohio Oil and Gas Association CRAFTS OF DISTINCTION industry. Olds was honored for being a longThe Ohio Oil and Gas Association is a trade At Great Trail Festival Grounds • State Route 43 noise/dust reduction time influenceInstant and advocate for the industry, association with more than 3,300 members in12 month privacy forgeologic your sites and as a trailblazer, by drilling in new volved in the exploration, production and devel★resources Two Big Weekends ★ formations inCall the Appalachian Basin. opment of crude oil and natural gas for a planting quote today! “For the past several decades, Jerry has con- within the state of Ohio. Aug. 29, 30 and tributed immensely to the oil and gas industry, For more information, visit www.ooga.org. www.smithevergreen.com Sept. 5, 6 & 7 our members and the state of Ohio,” said DaRight: Jerry Olds, founder and president of Solid Rock smithevergreen@neo.rr.com vid R. Hill, president of the Ohio Oil and Gas Energy, Inc., poses with the 2015 Oilfield Patriot Award.
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Gas & Oil
September 2015
11
Stonebridge to open Barnesville yard
B
ARNESVILLE -- Stonebridge Oilfield Services, whose corporate office is located in Marietta, Ohio, is expanding its footprint to Belmont County with a new yard being added in Barnesville. The new Barnesville yard is being leased by Stonebridge for a minimum of five years and the goal will be to establish higher visibility in the “core of the core” of the Utica Play in Ohio and to better service existing customers by locating operations nearer to their current drilling and well sites. The new yard is located in Kirkwood Township just south of I-70 at Exit 202, Barnesville/Dennison OH 800. Currently, the land is approximately four acres of farm field. Initially, Stonebridge will complete basic improvements to the property including: filling and levelling the lot with a proper sediment, adding drainage and erosion control systems, stoning high traffic and parking areas, and installing septic system, electricity, water, and broadband internet. A mobile camp structure will be constructed and will include four sections modified to provide office, shop, employee changing room, and storage. This mobile camp will be the model for every new location Stonebridge adds in the future. Eventually, there will be a permanent building at the Barnesville yard location. Future plans also include installation of a lot lighting and electrical system, construction of access control including gates, and evaluation of requirements for additional site access monitoring and control, such
as a security system and perimeter fencing. “We are constantly looking for ways to improve the quality of our services for existing customers and for new opportunities to add to the companies, basins, and plays we serve,” said Stonebridge CEO/Founder Eddy Biehl. “The Barnesville yard also allows us to grow our employment by first adding attendants and then service teams as business grows. We are proud to expand into Belmont County and we look forward to a successful and vibrant future in the county and beyond.” Built on over four decades of industry experience and four generations of oilfield wisdom, Stonebridge Oilfield Services has been solving oilfield problems on well sites for 35 years and worked on more than 2,500 wells in the Appalachian Basin. They offer customized drilling, completion, and production solutions tailored to address their customers’ unique oilfield challenges. They have provided services, from fishing to final restoration, for over 500 Utica wells and thousands of vertical wells. In addition, they have laid containment for drilling operations on more than 60 multi-well pads without a single failure. With locations in Marietta, Uhrichsville, Fleming, and now, Barnesville, they have been an Appalachian Ohio based company for more than 35 years. For more information on Stonebridge, visit: www.stonebridgeoilfieldservices.com or call 740-373-6134.
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Gas & Oil
Ohio Edition
September 2015
The Landman Legacy Judie Perkowski - Dix Communications cause or are likely to cause death or serious injury. Exposures to hazards present in the oil and gas well drilling, servicing, and storage industry are addressed in specific standards for general industry. Hanks started Beta Land Services in 2003 in Lafayette, Louisiana and now has offices in Texas, Pennsylvania and most recently in Cambridge. “The Beta Way is a combination of the latest industry tools and technology applied with old-school work ethic and a mindset that delivers industry-leading accuracy, quality and results,” said Hanks. “Building relationships with excellent customer service leads to long-term relationships. To sum it up, we work as a team.” JPerkowski@dixcom.com
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AMBRIDGE -- Bryan Hanks, president and owner of Beta Land Services, knows a thing or two about building relationships with clients, he has been a certified professional landman for 34 years. Hanks was introduced at the recent Buckeye STEPS (Service, Transmission, Exploration, Production Safety Network) meeting at Zane State College by Joe Greco, president of the organization. The STEPS Network promotes safety, health and environmental improvement in the exploration and production of oil and gas in the United States through alternating monthly meetings in Canton and Cambridge. Hanks PowerPoint presentation addressed issues about how building long-term relationships helps landowners feel secure that they have made the right decisions in regards to their encounters with representatives of the gas and oil industry, whether the land is for drilling operations or pipelines. He says his “extensive knowledge and background in the gas and oil industry are exceeded only by his passion for providing the best land services in the industry — on every job, for every client, every day. “A good land relationship is built on trust and open communication that outlines goals and objectives clearly, and is specific to the client’s needs and wants. A Beta landman does his homework. He has all the facts, figures, and options for agreements. “A landman is a go-between the landowner and the company he represents. He is also a problem-solver. He has to find out why the landowner has a problem or objection to any part of an agreement. Clients must understand all phases of the project, there should be no surprises. Hanks said pipeline activity that has just begun in Ohio is expected to ramp up in 2016 bringing approximately 400 people to work on just one project: beginning with surveyors and engineers, then construction management and crews, office workers, pipefitters, welders, pipeline maintenance, inspectors and landscapers for the final clean-up and property restoration. The Department of Transportation also requires public education about the project that includes landowners and support agencies. The company or companies involved in any phase of the project must also adhere to strict guidelines from the Occupational Safety and Health Administration. The General Duty Clause of the OSH Act (the law that created OSHA) requires employers to provide workers with a safe workplace that does not have any recognized hazards that
Gas & Oil
www.GasandOilMag.com
September 2015
13
Ohio Sec. of State invalidates ballot proposals C
OLUMBUS – Ohio Secretary of State Jon Husted has ruled on protests filed with his office that questioned the validity of county charter ballot proposals in Athens, Fulton and Medina Counties. In all three counties, the Secretary upheld the protests by invalidating the charter proposals and certifying that they would not receive a place on the November 3, 2015 General Election ballot. As part of his decision, the Secretary found that the proposed provisions in each of the charters relating to oil and gas exploration represented an attempt to circumvent state law in a manner the courts have already found to be in violation of the Ohio Constitution. “The issue of whether local communities can get around state laws on fracking has already been litigated,” Secretary Husted said. “Allowing these proposals to proceed will only serve a false promise that wastes taxpayer’s time and money and will eventually end in sending the charters to certain death
in the courts.” Under the Ohio Revised Code, the Secretary, in his role as the chief elections officer, is required to determine the validity of both the proposal and the petitions submitted and rule on whether or not the petition should qualify for the ballot. Furthermore, the Secretary insisted that the proposed ballot initiatives fail to properly establish an “alternative form of county government” as prescribed by Section 301 and 302 of the Ohio Revised Code. “Having carefully reviewed the law, court decisions and the materials submitted in connection with the protests, I find that the… petitions violate… provisions of statutory and Ohio constitutional law,” wrote the Secretary. A copy of the Secretary’s decision has been transmitted to the Commissioners and Board of Elections members in each county.
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Ohio Edition
September 2015
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September 2015
15
NEXUS lawsuit continues; restraining order issued Thomas Doohan - Dix Communications However, he said, court action was needed in these two cases as repeated efforts yielded no results and the information developers were trying to ascertain is necessary for future operations. He said surveys provide developers with information necessary to determine feasibility, environmental impacts, concerns of the landowner and to satisfy the requirements of the regulatory agencies reviewing the project. Ohio Farm Bureau Director of Energy, Utility and Local Government Policy Dale Arnold said the law governing surveying and others like it have provided for companies in the business of natural gas transmission to survey proposed routes crossing private land. “I feel for those land owners,” he said, noting he would be concerned about someone coming onto his property, too. However, Arnold explained, while the law allowing developers on the land is useful for NEXUS, it also is aimed at assisting the landowner. “If there is something on the property that warrants a change in the pipeline, they need to see it,” he said. Reporter Thomas Doohan can be reached at 330-287-1635 or tdoohan@the-daily-record.com.
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HIPPEWA TWP. — The developers of the NEXUS Gas Transmission pipeline will be permitted to survey two properties owned by residents who previously denied the company access to the land. The restraining order issued Aug. 10 by Wayne County Common Pleas Judge Mark K. Wiest forces landowners Thomas Srock, 1586 Eastern Road, and Kevin and Darcy Rodgers, 14967 Clinton Road, to grant surveyors access to their properties. According to the complaint filed with the courts July 29, the Rodgerses were asked multiple times to grant NEXUS surveyors access to their property, but repeatedly refused. Srock initially permitted surveys on his property, but subsequently asked them to leave. The same document states Srock and the Rodgerses are the only residents in Wayne County who denied surveys access. “As property owners, we are disappointed in the judge’s ruling,” Darcy Rodgers said. She said representatives from NEXUS contacted her family and asked to survey the property, but she and her husband decided against doing so. Rodgers said she felt the couple’s action was justified. “I think any homeowner would not want to have this right beside their house,” she said. Srock said he initially allowed surveyors on the property. However, he said, the trust was broken when surveyors put up a maker beside his spring. “I told them they cannot come on here,” Srock said. “I don’t want them ruining my spring.” “We agree with the Court’s recognition of our right to conduct survey activities under state law,” Arthur Diestel, stakeholder outreach manager for Spectra Energy, one of NEXUS’ parent companies, said in an email. Court assistance is a last resort action for NEXUS, he explained, noting it only happens when negotiations are unsuccessful. Diestel said, “We remain committed to working with landowners to obtain voluntary permission in order to perform these necessary surveys.”
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Gas & Oil
Ohio Edition
September 2015
API calls on candidates to outline energy outlook W
ASHINGTON - The American Petroleum Insitute is urging candidates at upcoming presidential debates to outline their vision for harnessing the economic and national security opportunities created by America’s energy revolution. “We can pursue an American future of energy abundance, self-determination and global leadership or take a step back to an era of scarcity, dependence and uncertainty,” said API President and CEO Jack Gerard during a conference call with reporters. “We’re calling on candidates – Republican and Democrat alike – to share with voters their vision for harnessing this American energy moment. “Make no mistake – America’s role as an energy superpower is not ensured. We’ve seen the mission creep of federal agencies on full display under this administration. Thousands of pages of new roadblocks and mandates are making their way through the regulatory pipeline. We cannot afford for our
next president to be blinded to the opportunities in front of us by a stale mindset of ‘70s-era scarcity. That is why those who seek to represent us must go beyond the talking points and outline a clear vision for energy that will advance our nation’s economy, security and standard of living.” API is the only national trade association representing all facets of the oil and natural gas industry, which supports 9.8 million U.S. jobs and 8 percent of the U.S. economy. API’s more than 625 members include large integrated companies, as well as exploration and production, refining, marketing, pipeline, and marine businesses, and service and supply firms. They provide most of the nation’s energy and are backed by a growing grassroots movement of more than 25 million Americans. See more at: http://www.americanpetroleuminstitute.com/ news-and-media/news/newsitems/2015/august-2015/api-callson-candidates-to-outline-their-vision-for-americas-energyfuture#sthash.eQUSBXLE.dpuf
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September 2015
17
Ohio panel suspends injection well activity near site of earthquake Marc Kovac - Dix Capital Bureau
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OLUMBUS — A state panel has upheld the Ohio Department of Natural Resources' decision to suspend operations at a Trumbull County injection well following seismic activity near the site last year. The Ohio Oil and Gas Commission decision, released Wednesday afternoon, noted the earlier suspension orders for American Water Management Services' Weathersfield Township facility were not "unlawful and/or unreasonable." "It is clear that the division has regulatory authority over injection operations," according to the decision. "It is also clear that the division is taking a proactive approach to developing a meaningful regulatory program relative to injection-induced seismicity." ODNR voiced its support for the decision Wednesday. "We are committed to the safety of the public and the environment and will review all evidence thoroughly before a decision is made," spokesman Eric Heis said in a released statement. "ODNR continues to take a proactive approach in researching and identifying occurrences of induced seismicity and has been very proactive in installing seismometers throughout eastern Ohio to better analyze seismic data as it relates to oil and gas activity. If the data shows a probable correlation to an event, ODNR takes the appropriate steps necessary to ensure public health and safety." The company has 30 days to appeal the decision, through Franklin County Common Pleas Court. AWMS invested $5 million-plus and spent more than two years seeking the appropriate permits, drilling and preparing
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two injections wells in Weathersfield Township. Those wells began operating last year, one injecting into a shallower formation, one in a deeper one. A few months later, seismic activity occurred in the vicinity, with a magnitude 1.7 event in late July and 2.1 about 30 days later. In September, the state ordered the company to cease injections at the wells, pending further investigation. According to documents, evidence "did not reveal any citizen complaints or property damage associated with these events. Nonetheless, the division was concerned with the escalating trend relative to these events and believed that continued injections ... could result in additional and more intense seismic events." A subsequent study by Miami University seismologists noted that the quake's epicenter was "almost directly beneath" the deeper injection well, with seismic activity dwindling after operations there ceased. The state later allowed the company to resume operations at the shallower well, which AWMS officials said accounted for a small fraction of the company's total revenues. The company appealed the suspension, seeking to restart oilfield waste injections at the deeper well, though at a lower rate and with increased seismic monitoring. The Oil and Gas Commission has been considering the matter for months, following a March hearing that stretched more than eight hours.
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Gas & Oil
September 2015
Ohio Edition
Pipeline to cross five counties
The Ohio Pipeline Energy Network is under construction.
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he pipeline will travel through Columbiana, Carroll, Jefferson, Belmont and Monroe counties in Ohio. The Project is approximately 76 miles of new 30-inch diameter mainline pipeline and associated pipeline support facilities in Ohio, including a new compressor station in Colerain Township, and reverse flow modifications at existing compressor stations along Texas Eastern’s existing mainline in Ohio, Kentucky, Mississippi and Louisiana. Approximately 35 miles (49 percent) of the proposed pipeline facilities will be either within or adjacent to existing transmission line or pipeline right-of-way. Ownership: 100 percent Texas Eastern Transmission, LP; Project completion date: Fourth quarter of 2015. Federal Energy Regulatory Commission docket number: CP14-68-000. The project is designed to provide pipeline transportation
capacity to deliver new incremental production from the emerging Utica Shale and Marcellus Shale plays to growing and diverse markets in the Midwest, Southeast and Gulf Coast. The rapidly emerging Appalachian production area, including the Utica Shale play, has created new opportunities to increase supply diversity for growing domestic natural gas markets. The Utica Shale play is proving to hold impressive quantities of natural gas, oil and natural gas liquids. The Ohio Pipeline Energy Network (OPEN) Project will transport newly emerging natural gas supplies to markets. The project capacity is fully subscribed with long term agreements by four Appalachian producers. The project will transport supplies of Utica and Marcellus Shale gas via the mainline extension located in Columbiana, Carroll, Jefferson, Belmont and Monroe Counties in Ohio, and the existing Texas Eastern system in western Pennsylvania in Zone M2, to delivery points at Egan Hub in Louisiana, and the eastern boundary of the Gillis, Louisiana compressor station. Since December 2011, Texas Eastern has been contacting landowners and surveying the project areas. Texas Eastern notified FERC of its intent to proceed with the project in June 2013. The FERC “pre-file” process was initiated to conduct a series of activities prior to filing the formal application for project approval. On June 21, 2013, the OPEN Project was assigned pre-file docket number PF1315-000. In July 2013, Texas Eastern hosted Open House meetings in the areas of the proposed work. Landowners and community members were able to see maps and ask questions about the timing, scope, approval process, and impact of the project. Texas Eastern submitted a formal application to the FERC
on Jan. 31, 2014, and was assigned docket number CP14-68000. On Aug. 22, 2014, FERC issued the environmental assessment for the OPEN Project. On Dec. 2, 2014, FERC issued the OPEN Project Certificate order. On April 13, 2015, FERC issued the Notice to Proceed with all construction activities associated with the OPEN Project. FERC exclusively authorizes the construction of new interstate natural gas facilities. FERC is also the lead federal agency responsible for conducting environmental reviews of interstate natural gas projects in compliance with the National Environmental Policy Act. Visit FERC’s website at www.FERC.gov and enter the docket number to follow the project. The OPEN pipeline is slated to be in service by the fourth quarter of 2015. For more information about the OPEN Project, call the landowner hotline toll-free at 1(855) 355-6736 or email acdiestel@spectraenergy.com. * Open season: A procedure for demonstrating to a regulator that capacity is offered on a transparent basis. It is used principally where pipelines are required by regulation to offer only transportation services, for example in North America and the Southern cone of South America. It is also being used elsewhere as a means of gathering information about potential interest in a pipeline, LNG, storage, etc., project to help the sponsors decide how and when to size the project.
Gas & Oil
September 2015
19
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Gas & Oil
Ohio Edition
September 2015
TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY BY NUMBER OF SITES
1. Carroll County 496 2. Harrison County 365 3. Belmont County 249 4. Monroe County 239 5. Guernsey County 185 6. Noble County 176 7. Columbiana County 131 8. Jefferson County 59 9. Mahoning County 30 10. Tuscarawas County 20 11. Washington County 18 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 08/15/15
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September 2015
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Gas & Oil
Ohio Edition
September 2015
Rules for Oil and Gas Asset Protection Planning Frank McClure - Attorney
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thought it would be appropriate to look at seven rules to follow for asset protection planning when dealing with Oil and Gas Assets or for that matter, any type of assets. There’s a gambling rule of thumb that says that you should systematically take your chips off the table as you win them, so that your potential for losses stays small. Asset protection planning is all about taking chips off the table in good times, so that you still can walk away from the table a winner no matter what happens in bad times. You don’t have to be a brain surgeon to be sued, because an average person often gets caught up in difficult situations, and thus if you have something to protect then the topic of asset protection should at least cross your mind. Therefore, here are seven rules you may want to think about:
LLCs are meant to be vehicles for commercial operations, not to act as personal piggybanks. When personal assets are placed into a business entity, the potential for the entity to be pierced by a creditor on some theory or another increases. The place to put personal assets is in its own separate entity.
5. TOO muCh CONTrOl CaN Be a BaD ThING
Good asset protection planning attempts to reach a balance between having sufficient control so that the assets do not disappear, but at the same time not so much control that a creditor can successfully argue that the debtor and the asset protection structure are effectively one-and-the-same.
6. asseT prOTeCTION plaNNING plaNNING DON’T alWaYs mIX
aND
TaX & esTaTe
Often asset protection planning and estate planning work together, but sometimes they are at odds and what might be a 1. sTarT plaNNING BeFOre a ClaIm arIses good idea for estate planning may not be such a hot idea for Many things you can do will effectively provide asset protec- asset protection. tion before a claim or liability arises, but few things will after7. IF YOu CaN’T eXplaIN IT, IT maY Never WOrk wards. That’s because what you do after a claim rises could be Asset protection plans can become so complicated that undone by what is known as a “fraudulent transfer” rule and you cannot understand and explain how the assets are held therefore the planning is ineffective. or how those assets were transferred. It is important that you 2. laTe plaNNING usuallY BaCkFIres have some understanding of what you have created and how Asset protection planning after a claim arises is apt to make it works. matters worse; think of it as getting a flu shot while you have Because of the above, you can see that you should be talking the flu, and the shot itself making you even sicker than you and working with an attorney who concentrates in the area of would have been. asset protection. Remember, the above are but seven rules 3. asseT prOTeCTION plaNNING Is NOT a suBsTITuTe you need to think about, there are more that can come into FOr INsuraNCe play. With anything that is of a legal technical nature, you can Asset protection planning should not be a substitute for li- think of it as if you are walking through a mine field not knowability insurance, but rather should supplement insurance. ing where the mines are located. It is much better to have Good insurance in fact is one of the first steps to protecting someone directing you around the mines who know where and yourself and your assets, but it may not be your last. what the mines look like. If you would like more informa4. persONal asseTs are FOr TrusTs; BusINess asseTs tion about asset protection and estate planning or to review are FOr BusINess eNTITIes my past articles concerning asset protection, please go to www. Business entities such as corporations, partnerships and fmcclurelaw.com.
www.GasandOilMag.com
Gas & Oil
September 2015
23
Hocking College adds
Petroleum technology program Andrew Bugel - Dix Communications NELSONVILLE –– Hocking College is getting geared up for the opening of its new Petroleum Technology program this fall. With a partnership from Stark State College in Canton, the program will be offered at the college’s Logan Campus. With the goal of providing students an opportunity to work in the gas and oil industry, Hocking College plans to offer students introductory to petroleum technology courses at the college. After their first year at Hocking, students will move onto Stark State to continue their education. Keith Gandor, instructor and director of Logan Campus, broke down the specifics of the first-year program. “Students would come to Hocking College for their first year and they would take their general study courses and then, on top of that, the students can complete the first year of an Associate of Applied Science degree program at Hocking,” Gandor said. “They would then move onto Stark State for their second year and further their degree.” Students can choose from one of five Petroleum Technology programs to complete at Stark State: Pipeline Technician, Instrumentation Electronics Technician, Production Technician, Industrial Process Operation or Petroleum Industrial Mechanics Technology. According to Gandor, the current gas and oil boom across the country has resulted in many more job opportunities and new interest in the industry. Dr. Betty Young is the president of Hocking College and saw a vision for providing students with an opportunity to be a part of the growing industry. Young took over the presidency at Hocking College this past May and went right to work on setting up the new program. “The petroleum industry in Ohio has a fairly long history going back to the drilling in the 1970’s and 1980’s,” Young said. “The shale industry is also growing, and I thought this would be a good opportunity to give students the chance to get jobs in the industry because of the growth in interest and need. “I thought it would be very beneficial to partner with Stark State,” she said. “It was really the matter of a simple phone call between myself and Stark State’s president. We know each other pretty well and know each other’s work so this was something that was done pretty easily.” The Ohio Department of Jobs and Family Services reports a more than 110 percent increase in pipeline construction and
well drilling jobs from the third quarter of 2011 to the third quarter of 2014. The entire staff at Hocking College is excited to see how the program will benefit students this fall. Before the decision to partner with Stark State, students did not have the opportunity to pursue a degree in petroleum technology through the college. “Petroleum is an emerging technology,” Gandor said. “It is a hot-button issue and we want to train students with the resources we have now. ... It’s an exciting time if you are interested in this field.” Transportation will be provided to shuttle students from Logan Campus to the Nelsonville Campus. Falls semester begins Aug. 26. Contact this reporter at 330-298-1123 or abugel@recordpub.com
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Gas & Oil
September 2015
Ohio Edition
Barnesville water Cathryn Stanley - Dix Communications
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ARNESVILLLE -- In July, Barnesville Village Council was addressed by Slope Creek area resident Jill Hunkler regarding a June council meeting at which Rich Sidwell, representing the Captina Conservancy and the Concerned Barnesville Area Residents addressed council urging that they include a request to not have well pads located within the Slope Creek Reservoir watershed area. Hunkler read the following statement, “In the June 29th council meeting, Rich Sidwell and Ron Preston, representing Captina Conservancy, Concerned Barnesville Area Residents, and the 2,300 individuals who signed the petition asking that no frack pads be sited within the Slope Creek Reservoir Watershed, presented suggested language to be added to the SWPP. Council was asked to make a vote on the issue, but declined stating that first a SWPP (Source Water Protection Plan) work session was needed. That meeting was held on July 21. "According to reports on that session, each council member received draft copies of the SWPP implementation plan which included several suggested wording changes and additions. After discussion, it was agreed that you would mark up the plans to indicate what you did or didn’t want included in the plan and return it to Roger Deal, Village Administrator. He would then tally the results and give them to Steve Saines of OEPA (Ohio Environmental Protection Agency) for compiling the final SWPP to be submitted to council for approval. "It would appear that this process does not allow for the public to know how each of you is voting on the suggested wording. We, the concerned residents, have a right to know who is supporting our efforts to keep well pads outside the watershed. For those not in support, we feel we deserve to be given an explanation. "We have given you scientific peer reviewed studies which clearly show risks of water contamination from leaking wells increasing dramatically at distances within a kilometer from shale wells. Dr. Anthony Ingraffea, author of one the those studies has stated that Gulfport’s proposed site plans at Slope Creek reservoir will create a likely contamination situation. There have been 259 confirmed cases of water contamination due to oil and gas drilling in Pennsylvania so far. "The Federal EPA has had three major investigations of widespread water contamination; all three have been
suspended due to industry and political pressure. However, despite political pressure, the recent water contamination study by the US EPA officially confirmed that hydraulic fracturing activities directly and irrefutably led to contamination of water resources in Pennsylvania, and Kill Deer North Dakota. This study shows that our water resources are vulnerable at every single stage of the hydraulic fracturing process. "Have you read the studies we presented to you? "If you feel that you have studies that should allay our concerns, please present them.” In response, councilman Terry McCort said, “We will review those suggestions and put in wording based on them.” “This is all part of the process. It has only been a week [since the SWPP work session].” McCort said it was the village’s responsibility to protect the water, but the plan must also be reviewed by them and others including legal counsel. “I don’t think there is a single person on council who is not in favor of protecting our water,” he said. “We are taking your suggestions seriously. It takes time and we want to make sure we’re right and the plan is solid.” Hunkler asked if village officials had specifically looked at their contract with Gulfport regarding the final well pad site agreement, pointing to Section 19 of the agreement which states, “In order not to disrupt Lessor’s current use of the leased premises as reservoirs, and to avoid operational slope drainage into the reservoirs, and to maintain the aesthetic value of the Leased Premises, in the opinion of the Lessor (the village) and before Lessee commences surface disturbing operations, the final location of well pads, access roads, pipelines, canals, ditches, ponds, levees, dams, fences, telephone and power lines, compressors, dehydration facilities, pits and waterlines shall be approved by the Lessor in writing. Said approval shall not be unreasonably withheld or delayed.” Hunkler asserted that the village therefore has final input on where the well pads are located. Village Solicitor Marlin Harper said that he believed that the village had some say in the siting of the pads, but not final say. Hunkler asked the village to have their attorneys look at that section again and determine whether or not the village does have that authority. “We leased the property in the watershed, “Harper said. “We can’t keep them [Gulfport] out completely.” Hunkler stated that a SWPP including that request would “give weight” to the village’s authority over site selection.
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argument continues Harper asserted that the village could include wording in the SWPP requesting that they would prefer well pads be located outside the watershed, but that would “be as binding (legally) as it gets.” Piedmont resident and CBAR member, Eric Fenster said Section 19 is “very clear” that the village has final say. He urged council to revisit the contract. “Your resistance to ask Gulfport [to relocate the well pads] is difficult for me to understand,” Fenster said. He also pointed to the fact that two/thirds of the village’s water customers reside outside the village limits. “Council is making decisions (regarding their water) for those living elsewhere,” Fenster said. He questioned the village’s liability in the event of an accident that damages the water supply. He asked council to look
at a section in two agreements (5.) regarding payment which states that “full and final payment” also serves as a “final settlement to all damage claims resulting from the Grantee’s use of the Premises, whether or not contemplated by the Parties, including, but not limited to damage to water supplies that were in use prior to the commencement of drilling operations” among others. Fenster and others in attendance felt that in the event of an accident, the burden would be on the village, and therefore the residents, not Gulfport. Harper said he did not recall a monetary limit being put on the damages and said he and Mayor Dale Bunting would review the contract again and forward the concerns brought to light by Hunkler, Fenster and others to their attorneys.
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Gas & Oil
September 2015
Ohio Edition
1 DOWN, 4 TO GO: David J. Wigham - Attorney
A
fter years of inconsistent and contradictory lower court rulings, the Ohio Supreme Court is poised to issue a series of rulings that will hopefully clarify several unanswered questions under Ohio’s Dormant Mineral Act (“ODMA”) affected literally hundreds of pending cases. To briefly summarize the ODMA, the statute was originally enacted effective March 22, 1989, and was amended on June 30, 2006. Its purpose is to eliminate “dormant” or unused mineral interests in favor of the current surface owner. The 1989 ODMA provides that where the severed mineral interest owner has not utilized its minerals as specified in the statute for a period of at least 20 years, the mineral interests are deemed abandoned and the title vests back to the current surface owner. Importantly, the 1989 ODMA is self-executing, meaning that the severed minerals in question will be automatically abandoned if no activity related to the minerals has occurred. The only subsequent action that surface owners need to take is to file a lawsuit to obtain a court order declaring the minerals to be abandoned and returned to the surface owner. Under the 2006 ODMA, surface owners must first file a serve and Notice of Abandonment on the severed mineral owners before proceeding with the lawsuit seeking abandonment. Although infrequently used previously, the ODMA has become a touchstone statute to the disposition of hundreds of lawsuits between surface owners and severed mineral interests vying for lucrative bonus payments and royalties related to Utica Shale development. On June 18, 2015, the Court issued its first of many important rulings on the ODMA in the case Dodd v. Croskey, Slip Opinion No. 2015-Ohio-2362. In Dodd, the Court noted in its ruling that there are two separate functions of a claim to preserve a mineral interest filed under the 2006 DMA. The first is as a savings event if recorded sometime within the 20 years prior to the filing of the notice of abandonment by the surface owner (R.C. 5301.56 (B)(3)(e)), and the second is to prevent the mineral interest from being deemed abandoned if filed within 60 days after service of the surface owner’s notice of abandonment (R.C. 5301.56(H)(1)(a)). The Court held that under the 2006 ODMA, even if a savings event has not occurred within the 20 years prior to the service of notice of abandonment by a surface owner, a mineral interest owner may still prevent the abandonment of the mineral interest by filing a claim to preserve within 60 days after the filing of the
notice of abandonment by the surface owner. Here is a summary of the remaining four important pending ODMA cases before the Ohio Supreme Court: COrBaN v. Chesapeake, Case NumBer 2014-0804. The Court is considering two questions of law: 1) Does the 2006 version or the 1989 version of the ODMA apply to claims asserted after 2006 alleging that the rights to oil, gas and other minerals automatically vested in the surface land prior to the 2006 amendments as a result of abandonment, and 2) is the payment of a delay rental during the primary term of an oil and gas lease a title transaction and “savings event” under the ODMA? eIseNBarTh v. reIser, Case NumBer 2014-1767. In the Seventh District Court of Appeals’ decision, the Appellate Court 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 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, i.e., it is a static, not a rolling, look back period; 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. 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. Shondrick-Nau 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. Oral arguments are scheduled to be heard on November 17, 2015.
Walker v. shONDrICk-Nau (FOrmerlY Walker v. NOON), Case NumBer 2014-0803. The Court is considering
six propositions of law: 1) is the 2006 version of the ODMA the only version of the ODMA to be applied after June 30, 2006; 2) was a surface owner required to take some action to establish abandonment of minerals under the 1989 version of the ODMA prior to June 30, 2006, in order to for the minerals under their property to be “deemed abandoned” under the
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IMPORTANT OIL AND GAS CASES BEFORE THE OHIO SUPREME COURT 1989 version; 3) to the extent the 1989 version of the ODMA remains applicable, should the 20-year look back period be calculated starting on the date a complaint is filed which first raises a claim under the 1989 version of the ODMA; 4) does a transfer of the surface that specifically references the severed mineral interest, including the recorded document creating that interest, qualify as a “title transaction”; 5) can a statute of limitations, irrespective of the savings events in the ODMA, bar a claim under the ODMA; and 6) does the 2006 version of the ODMA apply retroactively to severed mineral interests created prior to the effective date of the statute (June 30, 2006). Oral arguments were held on June 23, 2015. Chesapeake v. Buell, Case Number 2014-0067. The Court is considering two questions of law: 1) is a lease of the mineral rights (which has been recorded) a title transaction under the ODMA; and 2) is the expiration of a recorded lease and the reversion of the rights granted under that lease a title transaction, even though the reversion itself is not recorded?
A ruling by the Supreme Court could expand on instances that could be interpreted as “savings events” under the ODMA, thus favoring the rights of mineral owners. These cases illustrate the volatile nature of the current state of Ohio case law interpreting the ODMA, and the risks involved when analyzing how to proceed with abandonment actions. Once these cases are decided, the rules under the ODMA will become established law. If you have a case or a matter in which a ruling in your favor depends upon the outcome of a case currently before the Ohio Supreme Court, the time to act is now. Surface owners and mineral rights 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. 4839-4409-3990, v. 1 David J. Wigham is a second generation oil and gas attorney at the law firm of Critchfield, Critchfield & Johnston, in Wooster, Ohio, with nearly 25 years of industry experience.
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Gas & Oil
September 2015
Ohio Edition
New Power Plant in Carrollton Sara Klein
C
arroll County officials, including Carrollton Mayor Frank Leghart and the county's Board of Commissioners, joined state legislators, investors and representatives of Advanced Power on July 21 to break ground for the Carroll County Energy power plant under construction at 2022 Kensington Road N.E. north of Carrollton. The 700-megawatt, natural-gas-fired power plant will use a combined cycle mechanism consisting of two General Electric combustion turbine generators and one steam turbine generator to produce enough electricity for 750,000 households, said Jonathan Winslow, project manager for Carroll County Energy. According to information provided by Advanced Power at the groundbreaking, the design of Carroll County Electric will use 94 percent less water than traditional wet-cooled plants. Water that the plant uses will be supplied by the Village of Carrollton, which signed a water reservation agreement with CCE earlier this year. The use of natural gas to fuel the plant is expected to produce 50 percent less carbon dioxide, 90 percent less nitrogen dioxide and 99 percent less sulfur dioxide than coal-fired plants. Construction of the $899 million, 17-acre power plant is scheduled to be completed in 2017. “This is a game-changer,” stated Carroll County Commissioner Jeff Ohler in his remarks at the event. “I think this is the first of many great things coming to the county.”
Praising the location of the power plant in eastern Ohio, Congressman Bill Johnson commented, “We’ve got to have that kind of energy if we’re going to have the resurgence...of manufacturing here.” Advanced Power CEO Thomas Spang told attendees at the event that the power plant is not the only project Advanced Power is considering for Ohio. “Because of our good experience in Carroll County, Advanced Power is actively developing other projects in the state of Ohio,” said Spang, adding that the company plans to have a presence in the state for the “long-term.” Other speakers at the event included Carroll County Economic Development Director Glenn Enslen; David Mustine, senior managing director for Shale Energy and Petrochemicals at JobsOhio; and Dave Quattrochi, superintendent of Carrollton Exempted Village Schools, which partnered with CCE on a tax abatement plan that the power plant has said will enable it to fund a new school for the area. The school district is set to receive $1.3 million per year from CCE over 30 years, Quattrochi said. Carroll County Energy is owned by a consortium of equity investors including parent company Advanced Power as well as TIAA-CREF, Chubu Electric Power Company, Ullico and Prudential.
Gas & Oil
www.GasandOilMag.com
September 2015
33
Photo/Sara Klein Left: Carrollton Schools Superintendent Dave Quattrochi (from left), Carroll County Energy project manager Jonathan Winslow, Congressman Bill Johnson, Advanced Power CEO Thomas Spang, Carroll Commissioner Jeffrey Ohler, Carroll County Economic Development Director Glenn Enslen and David Mustine, senior managing director at JobsOhio, broke ground for the Carroll County Energy power plant at 2022 Kensington Road.
Transforming Shale Resources Into Long-Term Financial Security Above: Congressman Bill Johnson, a featured speaker at the July 21 groundbreaking for Carroll County Energy, said the power plant was necessary to fuel a "resurgence of manufacturing� in eastern Ohio.
Above: Carroll County Board of Commissioners President Jeffrey Ohler called the Carroll County Energy power plant a "game-changer� during his remarks at the July 21 ground-breaking ceremony for the $899 million facility.
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September 2015
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Gas & Oil
September 2015
Safe And Secure?
35
Industry Responding Judie Perkowski - Dix Communications
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AMBRIDGE -- Multiple speakers at the recent Buckeye STEPS meeting talked a variety of subjects, all relating to safety in the workplace. The bi-monthly meeting at Zane State College in Cambridge attracted a large audience of primarily gas and oil producers, suppliers and service providers. Joe Greco, president of the STEPS organization, introduced each speaker. • Melissa Linton, compliance assistance specialist for the Occupational Safety and Health Administration, reported on OSHA’s new ruling on confined spaces in construction, which went into effect Aug. 3. The ruling is a comprehensive standard that includes a permit program designed to protect employees from exposure to many hazards associated with work in confined spaces, including atmospheric and physical hazards. The rule incorporates several provisions from the previously proposed rule to address construction-specific hazards, accounts for advancements in technology, and gives more clout to enforcing the rules. For more information about the rule, visit the OSHA website. • Joe Steele of Ascent Resources, spoke about Job Safety Analysis employed by his company. “It is vitally important to involve all company employees. Safety procedures contain a list of questions about what can go wrong and what can be done to identify potential danger. Procedures should be written so everyone can understand what is being said, not overly technical. “If you see something, say something. Get involved,” said Steele. Now a standalone operating company, Ascent Resources, LLC, previously known as American Energy Appalachia Holdings, LLC, was formed in January 2015 by combining the holding companies of American Energy – Utica, LLC, and American Energy – Marcellus, LLC to acquire, develop, operate and produce oil and natural gas properties in the Utica and Marcellus Shale plays.
• Rich Bereadelli, Derek Kaiser and Joe Ray a volunteer firefighter, all of Total Safety, talked about the effects of hydrogen sulfide (H2S). “H2S is more deadly than carbon monoxide,” said Beraedelli. “People who work around natural gas can encounter it on a daily basis in small concentrations. It is a colorless gas with the characteristic foul odor of rotten eggs, but its odor can be masked by other sub stances. It is heavier than air, very poisonous, corrosive, flammable, and explosive.” Hydrogen sulfide often results from the bacterial breakdown of organic matter in the absence of oxygen gas, such as in swamps and sewers, and is most commonly obtained by its separation from sour gas, which is natural gas with high content of H2S. Small amounts of hydrogen sulfide occur in crude petroleum, but natural gas can contain up to 90 percent. Other sources of hydrogen sulfide include coke ovens, paper mill, tanneries and sewerage. H2S arises from virtually anywhere where elemental sulfur comes in contact with organic material, especially at high temperatures. “You must always be aware of it. It comes from many places. Level of danger depends on concentration and frequency of exposure. It affects everyone differently. Have a plan, educate employees, be prepared, run drills frequently. Ask about H2S, especially when working around natural gas. Establish emergency procedures with continuous monitoring, respiratory protection, personal detectors. Make sure everyone knows where the equipment is and how to use it,” said Ray. OSHA’s permissible exposure to H2S is 20 parts per million. Next Buckeye STEPS meeting is 9:30 a.m. Friday, Sept. 11 at Ohio Means Jobs Building, 822 30th St., NW Canton. The objective of The Buckeye STEPS (Safety, Transmission, Exploration, Production) Network is to establish informative meeting forums for members of the Oil and Gas Industry and associated governmental agencies to actively share industry safe work and recommended work practices, safety alerts and issues, educate membership and reduce workplace injuries. Membership is open to those engaged in or supporting the Oil and Gas Exploration, Production or Transmission Industry. JPerkowski@dixcom.com
36
Gas & Oil
September 2015
Ohio Edition
Boy Scouts Complete OOGEEP Summer Program Oil and gas industry funded program primed for expansion at Camp Muskingum
Scouts from Camp Muskingum (Matt Mulholland, Johnny Shoemaker, Connor Alllison, Bryce West, Weston Burch, and Randy Echelberger) visit an MFC Drilling well located in Coshocton County.
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OSHOCTON – Boy Scouts recently attending a STEM camp at Camp Muskingum successfully completed an innovative oil and gas specific curriculum designed in partnership with the Ohio Oil and Gas Energy Education Program (OOGEEP) and the Muskingum Valley Boy Scout Council. Based on the success of this camp, and through funding provided by Ohio’s oil and gas producers, OOGEEP plans to offer a full oil and gas engineering merit badge at the camp in 2016. The merit badge is already in its third year at Camp Manatoc near Akron. The exciting program introduces scouts to the oil and gas industry through both classroom and field learning. The badge is designed to: showcase how engineering is crucial to Ohio’s oil and gas industry; explain how companies produce energy for Ohio from Ohio; allow scouts to put their engineering knowledge to work building models; give scouts a first hand looking at a working oil and gas well; and introduce engineering career paths available in the industry. “Our industry must continue to educate young people about not only what we do, but also the technology and science necessary to produce the energy we use every day,” said Rhonda
Reda, OOGEEP Executive Director. “These are some of the best and brightest young men our state has to offer and we’re so excited to help fund this learning opportunity.” “This badge will be a perfect complement to what we do at our camp and provide important information to our Scouts,” said Ed Mulholland, Executive Director of the Muskingum Valley Council of Boy Scouts of America. “Many of our young men have oil and gas activity happening where they live, so to learn about this industry and the vital role engineering plays in it, is a win for everyone.” The full merit badge will be an exciting learning opportunity for the Scouts. They will review videos explaining the process of oil and gas development in Ohio. Using iPads funded by OOGEEP, they research information then visit a working well located at the camp. They learn how engineering is used in oil and gas development, then put it into practice by building models of pipelines using PVC pipe and derricks using straws and counter weights. Scouts are also given the opportunity to interview active engineers in the industry, gaining first hand knowledge how education translates into the working world. The week ends with the young men researching careers such
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September 2015
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Above Left: Jeff Harmon from MFC Drilling explains how a pumpjack works. Above Right: Jeff Harmon from MFC Drilling explains how a well produces oil and gas
as electrical, civil, petroleum, mechanical, chemical or environmental engineers. They also take career assessments, creating career portfolios and learning about the various engineering opportunities available in the oil and gas and other industries. The full merit badge will be offered at weekly camps next summer at Camp Muskingum. More than 300 scouts have already earned engineering merit badges through the program at Camp Manatoc. OOGEEP is exploring ways to work with Girl Scout camps in Ohio.
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Gas & Oil
September 2015
Ohio Edition
Back to Energy School for Ohio Educators Sophie Kruse - Dix Communications
Y
OUNGSTOWN -- Every year, the Ohio Oil and Gas Energy Education Program hosts a number of workshops for teachers that aim to help connect science education to the industry. These workshops include two large summer sessions, along with a number of other throughout the year. The second workshop of the summer was hosted at Youngstown State University on July 27 and 28. The first day involved classroom learning and allowed teachers to try out hands-on activities taught by their peers at the workshop. The second day was a site tour of a number of different locations to show the different aspects of production. At the close of the workshop, all attendees received a box of materials so they are able to recreate their experiments and use it in their classrooms. Thirty-nine educators attended the YSU workshop. According to Mark Bruce, communications director for OOGEEP, about 100 to 125 go through the workshops a year. In total, more than 2,700 educators have gone through the workshops since their inception and have represented all 88 counties in Ohio. “I think that it has opened the teachers’ eyes to the real process,” said Sarah Tipka, educational chairperson on the
OOGEEP board. “It can be integrated in a creative way in every aspect of what people teach. It’s easy to incorporate it all.” While the conferences are geared toward science and math experiments, attendees include teachers from all disciplines, along with other Above: A group puts together materials to educators and people give out for their demonstrations. from the industry. “I’m here to learn more about STEM. I wanted to get some ideas for some experiments to do with the children,” said Jill Shaffer D’Andrea, the children’s librarian at the WarrenTrumbull County Public Library. “Some of the experiments we’ll definitely be able to use.” For the hands-on portion of the workshop, teachers broke into seven different groups and prepared a lesson to teach the rest of the attendees. Lessons include a background of the material presented, a demonstration and a group activity to allow
Gas & Oil
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Left: A group of teachers presents their presentation on drilling and well simulation.
all to have experience with each of the different sections. Attendees chose a station that they worked at for about an hour. In that hour, they were able to craft a small lesson plan, make a PowerPoint presentation and demonstrate an experiment that aimed at showing students a simplified version of the real process. Each station showed a different part of the entire drilling process: formation, migration and trapping, exploration, drilling and well simulation, producing, refining, and petrochemicals and products. Groups prepared PowerPoint presentations on provided iPads and incorporated photographs and videos taken during their demonstrations, as well as videos found online to accompany their material. One hands-on activity allowed groups to create their own version of a “pig” — a device that cleans and inspects the pipeline. Groups received pieces of PVC pipe along with an assortment of other products, including cotton balls, hair rollers, bobby pins and pipe cleaners. After watching a video of the pigging process, each team had a few minutes to assemble their own with the provided materials. Some were cleaners shaped like cylinders, surrounded by cotton, and others were spheres with pipe-cleaner ridges to do the cleaning. Another activity was “Sweet Explorations,” where attendees were able to practice drilling by extracting the most amount of filling from a snack cake with a straw. All of these activities are designed to be taken back to the classroom and used with students. Each group pointed out dif-
September 2015
39
Above: A group work on putting together their presentation.
ferent ways it could be used to teach different things, and how they could be modified to fit different ages. At the close of the workshop, all attendees received a box with a set of materials they can use to work on their own lesson plans. “I’m here to learn a lot more about the oil industry so I can take it back to the classroom,” said Jodi Haylett, who teaches 10 to 12 grade chemistry, biology, anatomy and environmental science. “It’s very interesting. I like all the hands-on activities that I can take back to the classroom.” Teachers also were able to listen to a presentation by Scott Talmage, from Northwood Energy, about geology. Below: A group of teachers practice a demonstration about drilling.
40
Gas & Oil
Ohio Edition
September 2015
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Gas & Oil
Ohio Edition
September 2015
OHIO WELL ACTIVITY
by the numbers
MARCELLUS SHALE
15 1 11 0 17 0 0 44
Wells Permitted Wells Drilling Wells Drilled Not Drilled Wells Producing Inactive Plugged Total Horizontal Permits
UTICA SHALE
4 18 Wells Permitted 176 Wells Drilling 425 Wells Drilled 0 Not Drilled 9 6 9 Wells Producing 0 Inactive 0 Plugged 1988 Total Horizontal Permits
Data as of 08/15/15 Source: Ohio Department of Natural Resources
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September 2015
43
Recovering Pipeline Land Jonathan Scholles - Dix Communications
M
ARION -- As natural gas pipeline construction is in high gear throughout the state, agronomists say its vital landowners are vigilant in the process, ensuring the soil is properly restored to its original state and grass is revegetated. “Each tract of land has its own characteristics, and as a pipeline is proposed, it’s important for a landowner to be aware of what is being proposed, what are the construction practices and what aspects of the property are potentially at risk,” said Mark Wilson, owner of Land Stewards, a Marion-based agronomic and environmental firm that consults for top gas corporations. Even before the pipeline is construction, Wilson said, it would behoove landowners to plan for the process. “There are soil friendly construction practices for pipelines,” he said. “These practices boil down to uniquely separating soil layers and minimizing degree of compaction that occurs during construction. “The landowner, first, has to know what kind of soil types they have and how deep their topsoil is -- which is the most valuable part of their land,” Wilson added. In typical pipeline construction, companies strip away the top soil. It’s important, though, that only the top portion is removed, and subsoil is not mixed in, Wilson said. “You want to keep the soil characteristics separate,” he said. “The construction process is where you set the stage for the long term productivity for the land.” Minimizing compaction is also critical, said Dr. Steven Cullman, an Assistant Professor and State Specialist in Soil Fertility at Ohio State University’s School of Environmental and Natural Resources at Wooster. “If they don’t use the best strategies, in some ways, the damage has been done,” he said of the installation process. “It takes a long time to restore that back it’s original state -- up to a 100 years or more,” Cullman added. “Compaction can be one of the most common problems with pipeline installation.” Once the pipeline is installed, Wilson said, the construction companies will replace the soil in the same order it was removed. Upon resoiling, landowners can decide if they want to plant the same type of crops.
Cullman said planting deep-rooted perennials will help break up compaction, noting “it will create pore spaces again.” High biomass crops and cover crops, for example alfalfa or rye grass, also will boost long-term productivity due to their dense roots, helping to reestablish soil structure. “Although, it’s not an instantaneous process,” Wilson said. “It can take three, five or seven years -- maybe longer -- depending on how things are managed.” It can be a lengthy process, Cullman agreed, saying, “the question is: how much degradation to the soil has taken place? And what the soil is still good for?” Regardless, though, Cullman said revegetation should be done sooner than later, reducing the possibility of erosion. “With any open soil, the first thing we want to do is revegetate,” Cullman said. “So preferably having a perennial grass or grass mixture would be the best strategy to in terms of reducing soil erosion.” Depending on use of the land, building up organic matter is crucial prior to planting crops, such as corn or soybeans. “The better thing to consider is to plant deep-rooted cover crops and high biomass crops first to build up organic matter in the soil,” Wilson said. The addition of organic compounds, such as manure or compost, will spark growth, Cullman said. Gypsum, he added, may help, although, he said, it’s not tested. It’s the responsibility of the construction company to provide a vegetative growth over the entire right of way once complete, Wilson said. It’s up to the landowner, however, to specify what gets replanted and where. “The goal is, what the land was for before the pipeline went in,” Wilson said, “is roughly the same thing it will be used for after. The only thing that is prohibitive is trees or wooded areas.” Ensuring processes go smoothly and soil is restored properly, Wilson said, construction companies seek consultation from firms specializing in soil and environmental sciences. “We advise them on all the proper procedures and they in turn implement them as they build the pipeline,” he said. Reporter Jonathan Scholles can be reached at 330-287-1632 or jscholles@the-daily-record.com. He is @jonschollesTDR on Twitter.
44
Gas & Oil
Ohio Edition
September 2015
Columbia Gas unveils
C
Digger Dog
OLUMBUS — Columbia Gas of Ohio unleashed its new safety mascot, Digger Dog, recently. Digger Dog, a friendly beagle with a wagging tail, huge smile and a yellow safety vest, educates the public about the importance of calling 811 before digging, as well as what to do if you smell natural gas. “Digger Dog is the perfect ambassador for these important safety messages,” said Dan Creekmur, president of Columbia Gas of Ohio. “We’re excited to introduce him to communities throughout the state.” Since 2012, there have been more than 1,000 gas lines damaged in the state because people did not first call 811. However, Ohio law says that everyone must call 811 at least two business days before digging. 811 is the state’s free service to request that utilities mark their underground lines. “We also feel Digger Dog will be a great role model for children and have a lasting impact on them,” Creekmur said.
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“Children are the homeowners and excavators of tomorrow, so it’s important to educate them on these messages early in life.” Digger Dog will also be using his sense of smell to raise awareness about what to do if you smell gas. If the air smells like rotten eggs, if you see dying vegetation or bubbling water or hear a hissing sound, immediately leave the area and call Columbia Gas of Ohio at 1-800-344-4077 and 911. Look for Digger Dog at Ohio sporting events and festivals this summer and fall. For more information on Digger Dog®, safe digging practices or Columbia Gas of Ohio, go online www.columbiagasohio.com.
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September 2015
45
Gulfport Energy funds scholarships Judie Perkowski - Dix Communications
T
he Gulfport Energy Fund at the Foundation for Appalachian Ohio has announced its first 2015 grant recipients. During this first round, the Gulfport Energy Fund awarded nearly $35,000 to 10 projects throughout four counties, including projects benefitting local citizens in Guernsey and Belmont counties. “We are proud to invest in educational opportunities through the Gulfport Energy Fund,” said Gulfport Energy President and CEO Mike Moore. “Investing in the communities where we operate is a hallmark of our work and we appreciate the opportunity to support the efforts of these dedicated educators.” The Gulfport Energy Fund was created to support projects that create opportunities by improving quality of life, creating access to opportunities, or identifying and implementing a solution for a community need or issue in the counties where Gulfport operates. Tax-exempt organizations from Belmont, Guernsey, Harrison, and Monroe counties are eligible to apply for these grants. Recent Guernsey County recipients of the Gulfport Energy Fund: • Brook Intermediate School, part of Rolling Hills Local School District, received a $2,000 grant award. This award will support the purchase of the “We Do” Classroom Pack, which includes a story starter Lego pack. Three hundred and sixty students in grades three through five will not only be able to practice writing, but will be able to digitally and physically create stories using math skills in order to create moving objects. • Cambridge City Schools in Guernsey County received a $4,500 grant. The award will support COSI on Wheels for 982 students in kindergarten through fifth grades. The award will bring COSI on Wheels to all three elementary schools in the Cambridge City School District through an alumni and volunteer-driven project. • Cambridge Middle School received a grant award to fund the purchase of Google Chromebooks to “Make Math Fun.” The $5,000 grant award will facilitate project-based middle school math instruction, providing students the opportunity to apply math principles to real-world situations and projects. Impacting 50 students initially, the project will eventually reach 150 middle school students in Cambridge.
Grants are also available for projects and charitable organizations in Guernsey County through the Guernsey County Foundation. Recent Belmont County recipients of the Gulfport Energy Fund: • UA Local 495 Joint Apprenticeship Training Committee received a $1,500 grant award for the Plumbers and Pipefitters Accelerated Welding Program. This project, designed to meet increasing demand for qualified pipe fitters, will rapidly train 16 new students in the basics of pipefitting and welding. The 18-week course will prepare these students for apprenticeships and will help ensure long-term industry success in the region. • Belmont College received a $4,365 grant award to update its Soil Mechanics Lab. This award will allow Belmont College to purchase new soil test equipment to work with existing engineering lab equipment for a class of 20 students. For more information about the Gulfport Energy Fund or how you can support local grantmaking endeavors in Guernsey or Belmont counties, visit the Foundation for Appalachian Ohio at www. AppalachianOhio.org or call 740-753-1111. About Gulfport Energy: Gulfport Energy Corporation is an Oklahoma City-based independent oil and natural gas exploration and production company with its principal producing properties located in the Utica Shale of Eastern Ohio and along the Louisiana Gulf Coast. About the Foundation for Appalachian Ohio: The Foundation for Appalachian Ohio (FAO) is a regional community foundation serving the 32 counties of Appalachian Ohio. A 501(c)(3) public charity, the Foundation creates opportunities for Appalachian Ohio’s citizens and communities by inspiring and supporting philanthropy. For more information about FAO, visit www.AppalachianOhio.org. About the Guernsey County Foundation: The Guernsey County Foundation receives contributions and bequests of all sizes from individuals to assist in the funding of projects and charitable organizations. Through this unique collaboration with the Foundation for Appalachian Ohio, the Guernsey County Foundation extends its philanthropic efforts throughout our community. More information can be found at www.guernseycountyfoundation.org or www.AppalachianOhio.org.
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Gas & Oil
September 2015
Ohio Edition
Official says EPA’s new ozone
regulations ‘unreasonable’
Judie Perkowski - Dix Communications
C
AMBRIDGE -- On Aug. 3, 2015, President Obama and the U.S. Environmental Protection Agency announced the Clean Power Plan, “a historic and important step in reducing carbon pollution from power plants that takes real action on climate change.” The new regulations proposed by the U.S. EPA in 2014 and presented publicly last week, is the agency’s attempt to tighten ozone standards without regard or input from the public, the scientific community, businesses, or even Congress, said Jackie Stewart, state director of Energy In Depth Ohio. Stewart was guest speaker at the Guernsey Energy Coalition meeting Thursday morning at the Southgate Hotel in Cambridge. “The proposed ozone standards in the Clean Power Plan are intertwined with shale development,” said Stewart. “Thirty-four of 88 counties in Ohio will not meet the 65 parts per billion ozone standard ... The EPA’s new regulations could be the most expensive issued on the American public, at a cost of $140 billion annually.” According to The Center for Regulatory Solutions, a source of information presented by Stewart, Ohio will lose 22,000 jobs and $22 billion in gross state product from 2017 to 2040 if the new EPA regulations go into effect Oct. 1. The Oct. 1, 2015, date refers only to the date the regulations would go into effect. States have until 2022 to become compliant with the new rules. “This issue has not been prominent in the media, but many companies will find their business out of compliance should this new rule move forward. It is the single biggest job killing rule from the EPA,” she said. “The new proposed regulations will make it harder to get necessary permits for manufacturing goods, new infrastructure, while increasing the cost of energy for every business and household in the state. The rule targets business of all shapes and sizes. In these targeted areas, many businesses will not be able to expand without a reduction of emissions or shutdown of operations.” Stewart urged everyone to contact local, state and national representatives asking them to stop the regulations from taking effect.
“Ohio, and all the other states, have worked very hard to cut ozone levels with great success. It is time for the EPA, a taxpayer funded agency, to allow the research community access to its ‘secret science.’ The agency has received extensive criticism for their unwillingness to share their ‘findings.’” Air pollutants have been reduced by 62 percent between 1980 and 2013 — even as vehicle miles traveled went up over 95 percent. Progress is clear, ozone concentrations under the current rules have dropped by 18 percent since 2000.” For more information about the Clean Power Plan and what it will do to Ohio’s economy, visit www.centerforregulatorusolutions.org. Contact Jackie Stewart at Jackie.Stewart@fticonsulting.com. Comments about the Clean Power Plan from national leaders and government agencies include: • Kerry Kerrigan, president and CEO of the Small Business & Entrepreneurship Council “Reviews of air quality standards should be based on scientific analysis and conclusions, but too often EPA embraces an obvious politicization of the air quality standard-setting process that could mean unnecessary cost increases for consumers, job losses for workers and less energy security for America. Our national progress on air quality has been great, and we can build on this progress without going to some of the unnecessary and potentially very damaging standards EPA has proposed in the past,” Kerry Kerrigan, president and CEO of the Small Business & Entrepreneurship Council. • Natural gas sector disappointed by federal inconsistency over CPP The Obama administration made a disappointing move when it shifted focus away from natural gas in its Clean Power Plan and changed the compliance deadline from 2020 to 2022, industry groups say. American Petroleum Institute President and CEO Jack Gerard said the plan fails to acknowledge gas, which “has brought us to a 20-year low [for greenhouse gas emissions] today.” (Up until Aug. 3, the Obama administration made it sound like it was in favor of natural gas as a power generation, then dismisses it altogether.)
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Right: Jo Sexton, l, president of the Cambridge Area Chamber of Commerce, welcomed Jackie Stewart, state director for Energy in Depth, Ohio, to the Thursday morning Guernsey Energy Coalition meeting at the Southgate Hotel. Stewart presented the latest information on the new ozone regulations proposed by the U.S. Environmental Protection Agency.
• Bill to block CPP clears Senate committee As reported in The Hill on Aug. 5, the Senate Environment and Public Works Committee on Wednesday passed a bill that would prevent the Environmental Protection Agency from implementing its Clean Power Plan. Republican members of the panel passed the legislation, which would also impose restrictions on amending the rules, after Democratic members skipped the meeting. Committee Chairman James Inhofe, ROkla., said he hopes the bill will be sent to the Senate floor after the August recess.
• States call for federal suspension of power plant rules (AP) Sixteen states, led by West Virginia, on Wednesday, urged the Environmental Protection Agency in a letter to put the carbon emissions rules for power plants on hold as they seek to file a lawsuit against the rules. The rules “will do serious harm to West Virginia and the U.S. economy. That is why we are taking quick action to bring this process to a halt,” West Virginia Attorney General Patrick Morrisey said. The states asked the agency to respond by Friday. jperkowski@daily-jeff.com
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Briefs
LOWER HEATING BILLS EXPECTED or 1.2 million homeowners in Ohio, heating bills this winter might be the lowest of the last decade. Columbia Gas of Ohio announced this week its monthly budget plan for the next year for its average customer natural gas usage, and it’s $63 compared with $80 last year. Each customer’s budget plan varies, however, based on past usage by that customer. The lower price tag on gas this coming season stems from increased access to the fuel in the market because of new pipelines and supplies, said Columbia Gas spokesman Chris Kozak. “Increased supply is always going to drag down the price,” he said, explaining that the increased supply is coming from production in western Pennsylvania and eastern Ohio at drilling spots in Utica and Marcellus shale areas. While natural gas prices for consumers were 52 cents per 100 cubic feet of gas in August, 2014, prices have dropped to 42 cents per 100 cubic feet. “It’s a pretty significant drop,” Mr. Kozak said. In the 2008-2009 season, when natural gas prices were high, the average monthly budget was a record high of $133. The utility encourages customers to join its budget plan because it spreads winter heating costs over the year, rather than having bills of perhaps $100 or $200 or more in a winter month and a bill of under $50 in summer months. When the company customizes an individual’s budget bill, it considers not only future natural-gas prices and weather forecasts for the winter, but traditional gas consumption at that household. Columbia Gas also may adjust the budgeted amount in February based on natural gas prices and usage at that point. Consumers who are not a part of the budget-billing plan will benefit from cheaper natural gas prices, and every household has some control over its bill based on usage. “If we have another winter vortex, the potential for people to use more gas could drive that bill up, or them using less will drive that bill down,” Mr. Kozak said. The (Toledo) Blade
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Ohio Edition
September 2015
MARKWEST PLANS NEW CONSTRUCTION ADIZ - Despite falling oil and natural gas prices, MarkWest Energy shows no signs of slowing down construction, as a new processing agreement with the Ascent Resources driller for gas drawn from 100,000 acres in Belmont and Jefferson counties could mean $1 billion in new construction. “The Utica shale includes some of the most productive and economic dry gas acreage in the U.S. and producers are quickly capitalizing on this tremendous opportunity,” MarkWest Chairman, President and CEO Frank Semple said. “Our system will be a critical new gathering option, and we anticipate total investment could exceed $1 billion over the next three years.” Just last month, officials with Denver-based MarkWest announced the company would become a subsidiary of Findlay, Ohio-based MPLX as part of a $20 billion transaction. MarkWest operates the Cadiz and Hopedale plants in Harrison County, the Seneca station in Noble County, the Majorsville complex in eastern Marshall County and the Mobley site in Wetzel County. The company refines gas streams for drillers by separating dry methane from natural gas liquids such as ethane, propane and butane so that all products can go to market. The new system will be designed to gather more than 2 billion cubic feet per day of gas from this highly prospective portion of the Utica’s dry gas window. It could ultimately consist of more than 250 miles of pipelines and more than 200,000 horsepower of compression. The new system will will refine gas from pumped from about 100,000 acres in northern Belmont and western Jefferson counties leased by Ascent. This firm was previously known as American Energy Appalachia, a division of American Energy Partners. Former Chesapeake Energy CEO Aubrey McClendon oversees these firms. The Times-Leader
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HUSTED NIXES ANTI NEXUS INITIATIVE group of Fulton County landowners has been dealt a serious blow in its efforts to stop the proposed 250-mile NEXUS Gas Transmission pipeline across northern Ohio and southeast Michigan. Ohio Secretary of State Jon Husted’s office announced he has nixed a citizen-led initiative for a “community bill of rights” on the Nov. 3 ballot. Husted said the proposal, undertaken by Common Sense Energy Coalition of Fulton County, violates the Ohio constitution. The rulings follow recent court decisions across northern Ohio in which NEXUS has filed legal action against property owners who have tried to assert rights against allowing company-hired surveyors on their land. Fulton County landowners are now regrouping because of two things — a judge granting NEXUS authority to survey private property throughout Fulton County and, now, Mr. Husted’s invalidation of the Fulton County ballot proposal. Common Sense Energy Coalition of Fulton County submitted more than enough signatures for a vote in late June and petitions were validated in early July.
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September 2015
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A statement from Mr. Husted’s office said that in each case, he agreed with objectors that the proposals appeared to be attempts to circumvent state law relating to oil and gas activities. Such efforts, he said, have already been found to be in violation of the Ohio Constitution. The (Toledo) Blade
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