Ohio Gas & Oil Magazine August 2018 by Gannett NEO

August 2018

A Free Monthly Publication

NATURAL-GAS PRODUCTION GROWING IN EASTERN OHIO, DESPITE LOW PRICES

CABOT GAS RIG UP

AT ASHLAND COUNTY SITE IN THIS ISSUE: ASCENT RESOURCES ANNOUNCES MULTIPLE UTICA ACQUISITIONS, SUCCESSFUL CAPITAL RAISE

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OhioGas&Oil

Table of Contents AUGUST 2018

A Look Ahead Gas & Oil Events

G ROUP PUBLISHER

Cabot gas rig is up at Ashland County site

Ascent Resources Multiple Utica Acquisitions, Successful Capital Raise

Farm Sues NEXUS Over Soil Erosion

Bill Albrecht

EXECUTIVE EDITORS Ray Booth rbooth@daily-jeff.com Ted Daniels tdaniels@the-daily-record.com

Ascent Resources Hosts Training for Local First Responders

Fracking Opponents Blast Loudonville’s Sale of Water to Cabot

Philpott to Move West Virginia Operation to Aurora /Utica Shale Production Report Released for Ohio

Replacing U.S. Route 250 rail bridge would eliminate ‘energy choke point’

US Expected to Become World’s Top Oil Producer Next Year

Group Expresses Health Concerns Related To Fracking

Natural-Gas Production Growing in Eastern Ohio, Despite Low Prices

Ohio Well Activity

Horizontal Drilling Activity Graph

CONTENT CO ORDINATOR Emily Rumes

erumes@the-daily-record.com

AUGUST 2018 ADVER TISING John Kridelbaugh Cambridge, Ohio Office jkridelbaugh@daily-jeff.com 740-439-3531 Kelly Gearhart Wooster & Holmes, and Ashland, Ohio Offices kgearhart@the-daily-record.com 330-287-1653 419-281-0581 Mindy Cannon Alliance & Minerva, Ohio Offices mcannon@the-review.com 330-821-1200 Kim Brenning Kent, Ohio Office kbrenning@recordpub.com 330-298-2012

L AYOUT DESIG NER Phil Luks

pluks@recordpub.com

On The Cover:

August 2018

A Free Monthly Publication

NATURAL-GAS PRODUCTION

GROWING IN EASTERN OHIO, DESPITE LOW PRICES

CABOT GAS RIG UP

AT ASHLAND COUNTY SITE

OhioGas&Oil

ANNOUNCES IN THIS ISSUE: ASCENT RESOURCES CAPITAL RAISE MULTIPLE UTICA ACQUISITIONS, SUCCESSFUL

The Cabot Gas rig is the first of five exploratory wells that Cabot has planned for the Ashland, Holmes, Wayne and Richland county areas. The rig nearing completion means the well is that much closer to reaching the drilling phase of Cabot’s exploration to find either oil or gas as they descend more than 8,000 feet below the surface.

A Division of GateHouse Media Ohio 212 E. Liberty St. Wooster, OH 44691 330-264-1125 editor@spectrumpubs.com. AUGUST 2018

A Look Ahead

Gas & Oil Events August 6 & 7, 2018 OOGA SUMMER MEETING Save the date! Zanesville Country Club, 1300 Country Club Dr., Zanesville, Ohio. Online registration will be available soon. https://www. ooga.org/events

August 6, 2018 OOGA OILFIELD PATRIOT AWARD EVENT Zanesville Country Club, 1300 Country Club Dr., Zanesville, Ohio. 5pm-7:30pm https://www.ooga. org/events

September 16-18, 2018 NARO APPALACHIA 2018 ANNUAL CONFERENCE

The Oglebay Resort, Wheeling, West Virginia. More info at: http:// www.naro-us.org/page-1863713

September 20, 2018 SOOGA FALL TRADE SHOW Washington County Fairgrounds, Marietta, Ohio. More info at: http:// sooga.org/upcoming-events.aspx

October 23-25, 2018 REGISTER NOW FOR SHALE INSIGHT™ 2018

for 2018, SHALE INSIGHT™ will integrate all exhibit hall activities with the general session main stage and breakout session presentations to create one dynamic show floor and networking experience! As the nations leading industry forum, SHALE INSIGHT™ 2018 will return to Pittsburgh’s David L. Lawrence Convention Center. Register today at www.ShaleInsight.com

Celebrating its 8th year, SHALE INSIGHT™ 2018 continues the strategic partnership between the Marcellus Shale Coalition (MSC), Ohio Oil and Gas Association (OOGA) and West Virginia Oil and Natural Gas Association (WVONGA). New

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AUGUST 2018

OhioGas&Oil

Cabot Gas Rig Is Up

at Ashland County Site Neighbors worry that Cabot exploratory rig will disrupt quiet roads Dylan Sams | Times-Gazette GateHouse Media Ohio Photos by Tom E. Puskar | GateHouse Media Ohio GREEN TWP. — Just one week ago, all that was visible of a well on Township Road 2375 in Ashland County was some trailers surrounding a well pad and machinery toward the back of the property. Now, Cabot Oil and Gas has built the rig for the exploratory vertical well at 1082 Township Road 2375. It is the first of five exploratory wells that Cabot has planned for the Ashland, Holmes, Wayne and Richland county areas. The rig nearing completion means the well is that much closer to reaching the drilling phase of Cabot’s exploration to find either oil or gas as they descend more than 8,000 feet below the surface. While the extensive work for the well is beginning, some neighbors on Ohio 511 close to Township Road 2375 are concerned about the influx of traffic sure to come as Cabot begins to bring water from a pumping station on Ohio 39 to the site at TR 2375. Two neighbors, George and Janet Ebenhoh and John and Wendy Reskof, who live on Ohio 511, have said they have already noticed increased traffic. Both families live less than a mile from the Green Township well, and have previously visited the Ashland County Commissioners to voice their concerns about blind spots and traffic on 511 turning onto Township Road 2375. George Ebenhoh said he was concerned that the winding terrain of Ohio 511 and steep turn onto TR 2375 was an “accident waiting to happen,” despite the new layer of pavement on 2375. “I don’t want to see it happen, but it just seems to be inevitable that there

OhioGas&Oil

is some kind of an oops,” he said. The Ebenhohs have lived at their home on Ohio 511, which tucked into a green area, since 1977. They moved there because of its natural beauty, they said. Over the last week, Janet Ebenhoh noticed an increase in truck traffic as pieces for the rig were brought to the well pad. “We were having a pizza party outside and had these enormous trucks with these big cranes one after another after another,” she said. And the Reskofs said they were concerned for their children, who are either learning to drive or are young drivers. John Reskof said his family is “afraid on multiple levels” about the project. “We’re afraid for each other (the Ebenhohs), we’re afraid for the people who go up and down this road, we’re afraid the property values are going to drop more and we’re afraid that the quality of life is going to decline,” he said. And Wendy Reskof said she was concerned about the volume of traffic, which she said is already higher on 511 and by their home. “It has beautiful scenery, beautiful natural resources around us that we can appreciate and that our children can go out and appreciate,” she said. “The quiet is going to be destroyed by this traffic volume.” Dylan Sams can be reached at 419In the past week, Cabot Oil and Gas 281-0581, ext. 240, and dsams@timeshas built the rig for the exploratory gazette.com. Follow him on Twitter @ vertical well at 1082 Township Road dylan__sams. 2375.

AUGUST 2018

Ascent Resources Multiple Utica Acquisitions, Successful Capital Raise Anne Pearson | Dennard Lascar Investor Relations

Ascent Resources, LLC (together with its subsidiaries, the “Company”) announced today that it has entered into definitive agreements to acquire certain natural gas and oil properties from Hess Corporation, CNX Resources, Utica Minerals Development, and a fourth undisclosed seller (together, the “Acquisitions”) for a combined purchase price of approximately $1.5 billion. The Acquisitions are expected to close in the third quarter of 2018, and will be funded with a combination of at least $965 million in common equity of the Company and no more than $535 million of borrowings under the Company’s revolving credit facility. Acquisition Highlights (cumulative for all transactions contemplated): • Approximately 113,400 net leasehold acres, and royalty interests on approximately 69,400 fee mineral acres, spanning all three hydrocarbon windows in the over- pressured core of the Utica Shale • 93 operated wells and net production of approximately 216 MMcfe/d (19% liquids) • More than 380 gross incremental horizontal well locations and an increased working interest in more than 900 gross horizontal well locations • Proved reserves and total resources of approximately 1.1 Tcfe and 5.6 Tcfe, respectively, with meaningful upside achievable through development optimization • Complements existing assets, supports extended lateral lengths, further improves capital efficiency and increases the Company’s exposure to liquids

Jeff Fisher, Ascent’s Chairman and Chief Executive Officer, commented “The combination of these accretive bolt-on acquisitions is a milestone for the Company and has been made possible by our outstanding operational success in the Utica Shale. We continue to consistently deliver basin-leading well results through our best-in-

Jeff Fisher, Ascent’s Chairman and Chief Executive Officer

Ascent continued on page 6

“The combination of these accretive bolt-on acquisitions is a milestone for the Company and has been made possible by our outstanding operational success in the Utica Shale.” ~ Jeff Fisher, Ascent’s Chairman and Chief Executive Officer

AUGUST 2018

OhioGas&Oil

Ascent continued from page 5

class operations and after completion of these acquisitions, we will become one of the largest privately held E&P companies in the U.S. in terms of asset size and net production. The acquired assets, more than 60% of which are fee mineral acres, further establishes the Company as a compelling Utica pure play and will significantly enhance the Company’s growth and equity value. The properties are largely contiguous with the Company’s existing acreage and will allow us to further improve capital efficiency by drilling longer laterals, capturing cost and marketing synergies, and adding premium, near-term drilling locations with a high net revenue interest. Additionally, the Acquisition solidifies the Company’s position as a low-cost producer, expands our operating margins and maintains our current expectations to achieve positive free cash flow in 2019. We are excited to announce these acquisitions and I would like to thank the entire Ascent Team for their contributions to the tremendous success of the Company.” Subject to customary closing conditions, all of the Acquisitions are expected to close by the end of the third quarter of 2018. Upon close of the Acquisitions, Ascent Resources – Utica, LLC will acquire leasehold interests on approximately 113,400 net acres, and Ascent Utica Minerals, LLC will acquire royalty interests

on approximately 69,400 fee mineral acres. Pro forma for the Acquisitions, the Company’s acreage position will total approximately 310,000 net leasehold acres and royalty interests on approximately 70,650 fee mineral acres. The Company’s proved reserves, pro forma for the Acquisitions, are projected to be approximately 5.9 Tcfe, with approximately 16.2 Tcfe of total resources and net production of approximately 1.5 Bcfe/d. Additionally, and not inclusive of the Acquisitions, the Company closed yesterday on an amendment to its revolving credit facility increasing the borrowing base to $1.4 billion and the size of the credit facility to $2.5 billion. The Company will engage its lenders to redetermine the borrowing base, inclusive of the Acquisitions, in the third quarter. About Ascent Resources: Ascent Resources is a leading private exploration and production company focused on acquiring, exploring for, developing, producing and operating natural gas and oil properties in the Utica Shale. The Company is capitalized with equity investments from various private equity sponsors, led by funds managed by The Energy & Minerals Group and First Reserve. Contact: Anne Pearson Dennard Lascar Investor Relations 210-408-6321 apearson@dennardlascar.com

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As the worldâ&#x20AC;&#x2122;s top oil and natural gas producer, Americaâ&#x20AC;&#x2122;s global energy dominance is further strengthened by world-class shale plays, like the Marcellus. Â These benefits are real, theyâ&#x20AC;&#x2122;re improving lives, especially for workingclass Americans, and theyâ&#x20AC;&#x2122;re strengthening our nationâ&#x20AC;&#x2122;s ability to compete and win in the global economy. SHALE INSIGHTTM 2018 will continue to advance this conversation in the areas of power generation distribution, pipeline capital investment, energy driven manufacturing all aiding in the effort to alleviate energy poverty. As the nationâ&#x20AC;&#x2122;s leading industry forum, SHALE INSIGHTTM 2018 will return to Pittsburghâ&#x20AC;&#x2122;s David L. Lawrence Convention Center on October 23-25 bringingÂ together influential industry executives, decision makers, environmental experts, and political officials. Â Past keynote speakers have included President Donald J. Trump,Â New York TimesÂ best-selling author, Alex Epstein, Gary R. Heminger, President and Chief Executive Officer, Marathon Petroleum Corporation as well as Fox News Co-Host of the Five, Dana Perino and former New York City Mayor, Rudy Giuliani. Continuing the tradition, SHALE INSIGHTTMÂ 2018 will once again convene innovative thought leaders and provide participants a front row seat for the most important discussion on shale development, featuring some of the most prominent industry and government leaders. Â Attendees will network with the most influential industry executives and decision makers throughout the two days of technical and public affairs insight sessions, major keynote addresses, and

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dynamic exhibit hall featuring all the major shale players. With the Appalachian Basin positioned as the centerpiece of the domestic energy revolution, the Marcellus Shale Coalition (MSC), the Ohio Oil and Gas Association (OOGA), and the West Virginia Oil and Natural Gas Association (WVONGA) remain partners for this yearâ&#x20AC;&#x2122;s SHALE INSIGHTTM conference. Become a sponsor, host an exhibit, or register for the conference today by visiting www.ShaleInsight. com and capitalize on this unique opportunity to gain unprecedented industry access. We look forward to seeing you in Pittsburgh!

Connect and showcase at the leading conference on American shale energy, industries and jobs New for 2018, SHALE INSIGHTâ&#x201E;˘ will integrate all conference exhibitors, general session keynotes and panels as well as breakout session presentations into one dynamic hall with ďŹ ve program stages to enhance every participant's experience. For a greater return on investment, everyone will receive full access to conference activities, sessions and luncheons; in addition to a unique and valuable networking opportunity to showcase capabilities, innovative technologies and products directly to decision makers from the industryâ&#x20AC;&#x2122;s largest shale developers and supply chain companies. Additionally, preconference two-hour workshops have been added for a nominal charge.

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Farm Sues

NEXUS Over Soil Erosion Oakway Farms of Washington Township Seeking more than $50,000 in Damages Shane Hoover | CantonRep.com staff writer A farm has sued NEXUS Gas Transmission, saying the pipeline company caused erosion that damaged crops and washed away soil. Oakway Farms filed the lawsuit July 10 in Stark County Common Pleas Court in Canton with a request for compensatory and punitive damages and attorney fees in excess of $55,000. Attorney Michael Thompson said Oakway Farms went to court to protect itself, “but we also need to have a message that NEXUS can’t just decide to do what they want to do without regard to the property owners.” A NEXUS spokesperson declined to comment on the lawsuit, citing company policy. NEXUS is building a 36-inch diameter pipeline that will carry

up to 1.5 billion cubic feet of natural gas a day from the Utica and Marcellus shales to users in Ohio, Michigan and Canada. The $2.1 billion NEXUS pipeline starts near Hanoverton in Columbiana County and will connect to existing natural gas pipelines in Michigan. Pipeline crews have been working in Washington, Nimishillen, Marlboro and Lake townships in Stark County, and the city of Green in Summit County. Lawsuit details Oakway Farms granted NEXUS a right-of-way and easement in December 2016 to construct the pipeline in a field on Cartway Street NE. Terms of the compensation NEXUS paid Oakway aren’t in the lawsuit and will be filed with the court Farm continued on page9

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under seal. Construction started early this year, and on March 29, a lawyer for Oakway Farms sent NEXUS a letter alerting the pipeline company to erosion on the farm. At the time, the damage was estimated at more than $23,000, according to the letter filed as an exhibit with the lawsuit. NEXUS failed to fix the problem and took steps that further damaged the property, according to the complaint. In June, the company started pumping thousands of gallons of water and silt from an adjoining property onto Oakway’s land outside the easement, according to the lawsuit. Work on the pipeline damaged Oakway’s crops and created a ditch that is more than 625 feet long, 12 feet to 25 feet in width and as deep as 2 feet or more, according to the lawsuit. The cost to fix the damage is in excess of $25,000, the legal threshold for filing a lawsuit in Common Pleas Court, and Oakway Farms has lost crops for this growing season and will suffer reduced crop production in the future, according to the lawsuit. The case is assigned to Judge Chryssa Hartnett Work nearly done In May, The Canton Repository visited Oakway Farms and owner Jim Royer showed where water had washed away topsoil and exposed the underlying clay. “That’s money lost,” Royer said as he surveyed the damage. “All your nutrients are in your topsoil. That’s your best part of

the ground.” A visit to Cartway Street in July showed that much of the pipeline on and around Oakway Farms had been installed and buried. Detroit-based DTE Energy and Enbridge, a Canadian company, are partners in the 255-mile pipeline. In an email, NEXUS spokesman Adam Parker said the company was Jim Royer examines an area where committed to environ- water erosion removed the topsoil mentally responsible prac- on his farm in Washington Township. tices and used best man- Topsoil normally contains the most agement practices and organic materials and mineral inspectors to protect topparticles. Plants normally obtain soil and minimize erosion most of their vital nutrients from this and sedimentation during layer of the soil. and after construction. Reach Shane at 330580-8338 or shane.hoover@cantonrep.com On Twitter: @shooverREP

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Ascent Resources Hosts Training for Local First Responders Mike Chadsey | Director of Public Relations, OOGA On July 12, Ascent Resources hosted a training exercise to assess integration of emergency response plans with the Senecaville Fire Department, Ohio EPA, Ohio DNR, County EMA, in Guernsey County. The drill was based on a fire with liquids going off the well pad. “We recognize we have a responsibility to keep people safe, and today’s activity allowed us to work with our community partners to ensure our response mechanisms are working. Today, we strengthen our relationship with those partners,” said Joe Steele, Ascent Resources’ EH&S Supervisor. The purpose of the drill was to test Ascent Resources’ employees for notification of response, incident command, resource management and overall communication. Over 15 Ascent employees were involved and played various roles from engaging with law enforcement, working with the local fire department, updating DNR and EPA. “The drill was well put together, there was really good communication between all parties, it was important to go through a real-life example of a situation that may happen on a well pad,” said Lt. Dan Webster from the Senecaville Fire Department. “The take away was that we learned there are additional resources available that could have been used if required. The biggest thing was the interaction between all parties before something happens. You don’t want to be meeting someone for the first time at 2 am when it’s raining, and something just happened.”

The verdict after debriefing was while things can always be tightened, everything went according to plan. Those involved kept to the task at hand and executed their role with precision and dedication. Days like today keep operators prepared, the community protected and allows everyone to go home safe at the end of the day. About the Ohio Oil and Gas Association The Ohio Oil and Gas Association is a trade association with members involved in all aspects of the exploration, production and development of crude oil and natural gas resources within the state of Ohio. For more information, visit www.ooga.org. Follow OOGA on Twitter, LinkedIn, Facebook, Instagram.

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AUGUST 2018

OhioGas&Oil 11

Fracking Opponents Blast

Loudonville’s Sale of Water to Cabot Jim Brewer | Ashland Times-Gazette, GateHouse Media Ohio A dozen foes of the Cabot Gas & Oil drilling projects in the area assailed Mayor Steve Stricklen and members of Loudonville Village Council on their appearance of support for the company at the council meeting Monday. The focal point of the comments was the village’s sale of water to the company, which is drilling a horizontal deep well in northern Green Township and which has sited two other projects, one at U.S. 30 and Ohio 511 in Vermillion Township and the other south of Jeromesville in Mohican Township. Village Administrator Curt Young confirmed that to date the village has sold 650,000 gallons of water to Cabot, earning $4,358 in sales revenue. As with all water customers, Cabot is paying 0.65 cents per gallon of water, the highest amount the village will sell water for in its tiered billing process. Asked by resident Dee Hinkle if the village could refuse sale of water to Cabot, Council Member Traci Cooper said “we can’t discriminate on who we sell water to. If we sell to one entity, we have to sell to all.” The opponents to the drilling projects disagreed. “You could require a buyer to disclose how they will use the water, and refuse service for fracking projects,” Annette McCormick said. “My fear is that they will take the waste from this water, which is contaminated by chemicals used in the fracking process, and pour it in to Charles Mill Lake,” Shelly Hootman of Jeromesville said. Stricklen said “the village’s water supply would be monitored closely, and if the inventory gets critically low, we can

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halt sales, but it will have to be all sales.” Young said the village’s treats 10 to 12 million gallons of water a month, “so I seriously doubt if our levels will get critically low.” “You don’t know,” Teresa Clark said. “Estimates are that it takes 4-7 million gallons to drill a well, and supplemental water is needed for ongoing fracking operations.” Young said he had been assured by Cabot that water sold by the village has only been used in the drilling process, and not for fracking. Eric Drouhard urged council members to avail themselves of resources to learn more about the fracking process. “I think you would think twice about selling water if you were aware of the possible dangers,” he said. Clark agreed, noting “I would hope that we could count on our elected leaders to know about the issue so they will not be blindsided by this industry. I don’t want what is happening in southeast Ohio, West Virginia and Pennsylvania to happen here. We should be particularly proactive about our water supply.” She also said that some communities are fighting the well drilling epidemic. “Monroe Township, in Richland County, recently passed a landowners rights resolution protecting landowners from the excesses of the fracking industry. Stricklen said, “I’ve been educated some tonight about problems with fracking. I will work to learn more about the issue.” Law Director Thom Gilman noted that the village council has no authority regarding permitting drilling or fracking. Concerns were also voiced about increased truck traffic from trucks involved in the fracking process. The discussion on Cabot and drilling lasted for over an hour. The complainers expressed disappointment that no Cabot officials were at the meeting, with Stricklen answering, “We tried to get them to come.” This prompted Council Member Bill Welsh to suggest the village stage a public meeting with Cabot officials present for people to express their concerns to. Stricklen said he would work on arranging such a meeting. AUGUST 2018

Philpott to Move West Virginia Operation to Aurora Record-Courier Staff Report Philpott Solutions Group announced in July that it is moving its energy services subsidiary, Philpott Energy and Transportation Co., from West Virginia to its facility in Aurora. Philpott Energy operates in the Marcellus and Utica shale gas basins primarily in Ohio, Pennsylvania and West Virginia. “The dynamics of our growing energy segment in Ohio makes good sense for us to relocate our energy services company closer to our customers,” said Jim Vaughn, Philpott chief executive officer. Vaughn said Philpott provides a green polymer fluid that is used in what the exploration and production companies call the well “completion” process. During completion, which occurs just prior to placing the well into service, plugs that were placed in the horizontal section of the well during hydraulic fracturing (fracking) are drilled out and

removed. As the drilling process winds down, the fluid acts as a lubricant, suspending and carrying out sand, chemicals and plug remnants from the well. Vaughn also indicated that Philpott is developing additional products for eventual introduction into the energy market. “By locating this product development activity at our polymer parts manufacturing center in Aurora, we can leverage already existing assets to benefit the energy sector,” he said. He also said that the Aurora community and government are both business friendly and supportive. “Our decision to move to Aurora was made easier because of the positive, helpful attitude of Mayor Ann Womer Benjamin and her administration,” added Vaughn.

Utica Shale Production Report Released for Ohio Press Release During the first quarter of 2018, Ohio’s horizontal shale wells produced 3,942,251 barrels of oil and 531,291,017 Mcf (531 billion cubic feet) of natural gas, according to the figures released today by the Ohio Department of Natural Resources. Natural gas production from the first quarter of 2018 showed a 42.85 percent increase over the first quarter of 2017, while oil production decreased by 3.6 percent for the same period. 2017 Quarter 1 (Shale) 2018 Quarter 1 (Shale) Percentage Change ODNR reports 3,942,251 bbl barrels of oil were produced during the first quarter of 2018, down from 4,090,500 bbl in 2017. The natural gas production was 531,291,017 mcf, up 42.85 percent from 371,921,659 mcf a year ago. The ODNR quarterly report lists 1,949 horizontal shale wells, 1,909 of which reported oil and natural gas production during the quarter. Of the wells reporting oil and natural gas results: • The average amount of oil produced was 2,066 barrels. • The average amount of natural gas produced was 278,454 Mcf. • The average number of third quarter days in production was 86. AUGUST 2018

All horizontal production reports can be accessed at oilandgas.ohiodnr.gov/production. Ohio law does not require the separate reporting of Natural Gas Liquids or condensate. Oil and gas reporting totals listed on the report include NGLs and condensate. ODNR ensures a balance between wise use and protection of natural resources for the benefit of all. Visit the ODNR website at ohiodnr.gov for additional information.

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OhioGas&Oil 13

Replacing U.S. Route 250 Rail Bridge

Would Eliminate ‘Energy Choke Point’ Jon Baker | The Times-Reporter, GateHouse Media Ohio CADIZ Area officials view a 77-year-old railroad bridge over U.S. Route 250 in Harrison County as “Ohio’s Energy Choke Point,” and they want to do something about it. The Ohio Department of Transportation, in cooperation with the Ohio Mid-Eastern Governments Association (OMEGA) and Harrison County, are applying for a Better Utilizing Investments to Leverage Development (BUILD) grant through the U.S. Department of Transportation to replace the bridge that carries the Panhandle rail line over Route 250 near the intersection of state Route 151, about five miles east of Dennison. The project is expected to cost a little more than $12.5 million. Lisa Duvall, OMEGA’S communications manager, said the bridge is 3 feet too low for current standards. “What we’ve seen with the oil and gas industry is that very large pieces of equipment simply won’t fit under the bridge,” she said. “There is no opportunity to widen it.” As a result, trucks hauling oversized loads must take a 70-mile detour, using U.S. Route 22 from Cambridge to Cadiz. Many of these trucks are associated with multi-billion investments in the oil and gas industry in Harrison County. “As the oil and gas industry matures, and now with the an-

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14 OhioGas&Oil

nouncement of a natural-gas powered electric generating plant in Cadiz, a whole lot of trucks hauling equipment for the infrastructure will be coming in, and they can’t make it under that bridge,” said Kevin Beuttner, transportation planner/development specialist for OMEGA. In addition, the rail bridge poses a safety hazard to motorists. “Aside from making travel more efficient is the safety aspect,” Duvall said. “The bridge’s proximity to state Route 151 creates poor sight lines. Driving through there, you just can’t see around the bridge. Safety is a real priority.” Beuttner said ODOT is working with the Genesee & Wyoming Railroad, which leases the Panhandle line from the state, on the project. Not only would the bridge have to be replaced, but work would have to be done to improve the grade on either side of the structure, which would have to be raised higher than it is now. Nick Homrighausen, executive director for Community & Economic Development for Harrison County, said improving the bridge is an important step in a larger goal — creating a four-lane highway to connect Columbus and Pittsburgh. Most of the route is already served by four lanes, except for the section from Newcomerstown to Cadiz and a few other small gaps. Business owners prefer to be within 5 to 10 miles of a fourlane highway, he noted. “In this global economy that eastern Ohio finds itself in with oil and gas, this road is important to Harrison County and eastern Ohio,” he said. “We want to take care of any linchpin points, where it would slow a four-lane highway from being completed. This is just one of the projects we are working on. When the time comes and the money becomes available, having this done would save on project costs and be a no-brainer. “Less than 30 percent of the Columbus-to-Pittsburgh corridor needs to be finished. We’re asking for this project to be completed. It would make it safer and easier for the transportation of goods and services.” Harrison County is also working on cleaning up an abandoned gas station just east of Tappan Lake on Route 250. “We’re applying for a grant from the state for abandoned gas station cleanup,” Honrighausen said. “That would eliminate another potential choke-hold point.” Beuttner said the federal government will announce later this year if the rail bridge project will receive funding. “If it is awarded, the design phase would begin in January,” he said. “Construction would begin in the summer of 2021 or October 2021. It would be completed in two years.” He noted that all of those dates are tentative. “Those numbers could be flexible,” he said. “For a project of this magnitude, to have it completed within a few years is fairly quick.” Reach Jon at 330-364-8415 or at jon.baker@timesreporter.com. On Twitter: @jbakerTR

AUGUST 2018

US Expected to Become

World’s Top Oil Producer Next Year David Koenig | The Associated Press

Chart shows the top oil producing countries in March 2018 as the U.S. is on pace to pass Russia and Saudi Arabia as the leading oil producing country.

AUGUST 2018

to ease production caps that had contributed to the run-up in prices. President Donald Trump has urged the Saudis to pump more oil to contain rising prices. He tweeted on June 30 that King Salman agreed to boost production “maybe up to 2,000,000 barrels.” The White House later clarified that the king said his country has a reserve of 2 million barrels a day that could be tapped “if and when necessary.” The idea that the U.S. could ever again become the world’s top oil producer once seemed preposterous. “A decade ago the only question was how fast would U.S. production go down,” said Daniel Yergin, author Oil continued on page 16

WO-10432232

The U.S. has nosed ahead of Saudi Arabia and is on pace to surpass Russia to become the world’s biggest oil producer for the first time in more than four decades. The latest forecast from the U.S. Energy Information Administration predicts that U.S. output will grow next year to 11.8 million barrels a day. “If the forecast holds, that would make the U.S. the world’s leading producer of crude,” says Linda Capuano, who heads the agency, a part of the Energy Department. Saudi Arabia and Russia could upend that forecast by boosting their own production. In the face of rising global oil prices, members of the OPEC cartel and a few non-members including Russia agreed last month

OhioGas&Oil 15

Oil continued from page 15

of several books about the oil industry including a history, “The Prize.” The rebound of U.S. output “has made a huge difference. If this had not happened, we would have had a severe shortage of world oil,” he said. The United States led the world in oil production for much of the 20th century, but the Soviet Union surpassed America in 1974, and Saudi Arabia did the same in 1976, according to Energy Department figures. By the end of the 1970s the USSR was producing one-third more oil than the U.S.; by the end of the 1980s, Soviet output was nearly double that of the U.S. The last decade or so has seen a revolution in American energy production, however, led by techniques including hydraulic fracturing, or fracking, and horizontal drilling. Those innovations ” and the breakup of the Soviet Union ” helped the U.S. narrow the gap. Last year, Russia produced more than 10.3 million barrels a day, Saudi Arabia pumped just under 10 million, and the U.S. came in under 9.4 million barrels a day, according to U.S. government figures. The U.S. has been pumping more than 10 million barrels a day on average since February, and probably pumped about 10.9 million barrels a day in June,

up from 10.8 million in May, the energy agency said Tuesday in its latest short-term outlook. According to the Energy Department, the U.S. edged ahead of Saudi Arabia in February and stayed there in March; both trailed Russia. Capuano’s agency forecast that U.S. crude output will average 10.8 million barrels a day for all of 2018 and 11.8 million barrels a day in 2019. The current U.S. record for a full year is 9.6 million barrels a day in 1970. The trend of rising U.S. output prompted Fatih Birol, executive director of the International Energy Agency, to predict this spring that the U.S. would leapfrog Russia and become the world’s largest producer by next year ” if not sooner. One potential obstacle for U.S. drillers is a bottleneck of pipeline capacity to ship oil from the Permian Basin of Texas and New Mexico to ports and refineries. “They are growing the production but they can’t get it out of the area fast enough because of pipeline constraints,” said Jim Rittersbusch, a consultant to oil traders. Some analysts believe that Permian production could decline, or at least grow more slowly, in 2019 or 2020 as energy companies move from their best acreage to more marginal areas.

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Related to Fracking Dylan Sams | Times-Gazette Staff Writer Several people appeared at the Community Shelter House at Kendig Park in July to discuss possible health effects that could stem from oil and gas production and the hydraulic fracturing or fracking process. The event was hosted by the Hayesville Community on Fracked Gas, a group that formed in response to Cabot Oil & Gas’ exploration for gas and oil in the area. The Houston-based company has said they will drill five exploratory wells in the Ashland, Holmes, Knox, Wayne and Richland County area. Cabot has one well fully constructed with a rig operating in Green Township on Township Road 2375. About 10 people attended the meeting and listened to presentations from Sharon Kissel from Medina County, Dr. Debbie Cowden of Loudonville, and Ashland resident Pam Uhler. Cowden’s presentation echoed concerns of the use of chemicals during the hydraulic fracturing process and whether any chemicals could come up

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and affect the water aquifers that sit near the surface. She cited a survey from the University of Colorado School of Public Health in 2012 that indicated after three years of research that potentially toxic hydrocarbons can go into the air near wells, which includes benzene, toluene and xylene. According to the study, benzene could be a major contributor in increased cancer risk. Cowden expressed concern because emissions can be difficult to detect. “You may not be able to see this pollution, and you may not be able to smell it, but it doesn’t mean something is not happening,” Cowden said. Cowden is a co-founder of the Ohio Health Registry, a private group that is asking volunteers baseline health questions to gain an understanding on how people’s health may change around wells. The group is sponsored by FACT (Faith Communities Together for a sustainable Future), a 501c3 nonprofit. “The Ohio Health Registry will register persons who agree to fill out an initial comprehensive health assessment form with the help of OHR registrars in facilities within a reasonable distance of homes,” a brochure provided by the registry said. Kiesel, who was first to present, spoke on the risks of chemicals that might be associated with the hydraulic fracturing process, including the mix of 99 percent water and a small amount of chemicals used to help break rocks underground. Uhler spoke about Neolife nutritional supplement products. The Hayesville Community on Fracked Gas group has another meeting planned for Aug. 20 at the Kendig Park Community Shelter House. The group will also be hosting a screening of the film “Gasland Part II” in August and other movies throughout the month. Tanner said the group is also planning a march that will start at the River Room in Loudonville and will extend to Mohican State Forest on a bike path. That will begin at 11 a.m. on Aug. 29. In addition to the Green Township location Cabot has two other well pads under construction on 2277 Township Road 257 in Mohican Township and just north of Ohio 30 on 511 in Vermillion Township. Dylan Sams can be reached at 419-281-0581, ext. 240, and dsams@times-gazette.com. Follow him on Twitter @dylan__sams.

OhioGas&Oil 17

Natural-Gas Production Growing in Eastern Ohio, Despite Low Prices Mark Williams | The Columbus Dispatch Natural-gas production from shale deposits in eastern Ohio is surging, helped by the increase in pipelines in the area that get the gas to markets, and by greater efficiency by producers. Production from the Utica shale region jumped 43 percent from the first three months of 2018 from the same period of 2017, with production totaling 531.3 million cubic feet, according to Ohio Department of Natural Resources data released this week. The jump follows a 38 percent increase in production in the final three months of 2017. The jump in production comes even as prices for natural gas remain low. “There are more and more advances in technology and efficiencies,” said Jackie Stewart, state director of Energy In Depth, a research and education organization financed by the oil and gas industry. “That’s really the name of the game.” At the same time, producers are learning more about the region and where the best resources are, Stewart

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said. “There is some good data and core sampling,” she said. “There is a better handle of the geography.” When the Utica was first being developed, the region didn’t have the pipeline capacity to handle the growing production. In the several years since, the pipeline system in the region has expanded as demand for gas has grown. Power companies are depending more on gas to generate electricity, and more gas-fired power plants are being developed in the state to use that gas. Last month, the Ohio Power Siting Board approved construction of a natural-gas plant in Cadiz in eastern Ohio. Construction by Harrison Power is expected to start in October, with operation to begin by June 2021. It is the 10th natural-gas power plant approved by the board in the past five years. “Here in Ohio, (gas) producers can access multiple different markets,” said Matthew Hammond, executive vice president of the Ohio Oil and Gas Association. In addition to the natural-gas power plants coming on board, producers anticipate more demand for gas from the Shell chemical plant being built in western Pennsylvania. Also, Thai chemical company PTT Global Chemical is considering building a similar plant in Belmont County in eastern Ohio. Word on whether PTT and its South Korean partner, Daelim Industrial Co., will go ahead with the project is expected this year. Those plants will depend more on natural-gas liquids being produced in the Utica. “There are going to be huge end-users of the product,” Stewart said. The growth in production in Ohio tracks a surge in production nationwide. It is expected to average 81.3 billion cubic feet a day in 2018, according to a U.S. government forecast this week. That would be a record. Production is expected to rise by 3.1 billion cubic feet a day next year. Oil production in the Utica is a different story, though. It was down 3.6 percent in the first quarter from the same period in 2017, totaling 3.9 million barrels. The region is best known for natural gas and naturalgas liquids, although there still is potential for oil production to grow, depending on how the technology continues to develop, Hammond said. For now, Hammond said, he expects natural-gas production to continue to exceed 2017 levels through the rest of the year. “Rig counts are relatively steady,” he said. “More wells are being drilled. Production continues to grow.” mawilliams@dispatch.com @BizMarkWilliams AUGUST 2018

OHIO WELL ACTIVITY by the numbers

UTICA SHALE

MARCELLUS SHALE 16 6 7

Wells Permitted Wells Drilling Wells Drilled Not Drilled Wells Producing Inactive Plugged Total Horizontal Permits

Data as of 7/14/18

471 157 286 1929

2843

Wells Permitted Wells Drilling Wells Drilled Not Drilled Wells Producing Inactive Plugged Total Horizontal Permits

Source: Ohio Department of Natural Resources

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TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY BY NUMBER OF SITES

1. Belmont County........ 584 2. Carroll County......... 526 3. Monroe County........ 440 4. Harrison County........421 5. Guernsey County.......231 6. Noble County.......... 222 7. Jefferson County........181 8. Columbiana County...154 9. Mahoning County....... 30 10. Washington County... 22 11. Tuscarawas County.... 20 12. Portage County........ 15 Trumbull County........ 15 13. Stark County............ 13 14. Coshocton County....... 5 15. Morgan County.......... 3 Muskingum County...... 3 Holmes County........... 3 16. Knox County.............. 2 17. Ashland County.......... 1 Astabula County......... 1 Geauga County.......... 1 Medina County........... 1 Wayne County............ 1 I VARIOUS SSTAGES: PERMITTED DRILLING, ,D WELL SITESS IN PLETED PRODUCING, PRODUCINGPLUGGED, PLUGGED DRILLED, COMPLETED, SOURCE: OHIO DEPARTMENT OF NATURAL RESOURCES AS OF D L A 7/14/18

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