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May 2016 • A Free Monthly Publication
Industry 'Cautious Optimism'
Pipeline
Safety New Look at OPEC IN THIS ISSUE: A GEOLOGICAL PERSPECTIVE
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Table of Contents MAY 2016
4
A Look Ahead Gas & Oil Events
5
Capitol Waste/Recycling Buys Buckeye Water Co.
6
Pipeline Safety
8
Plans Unveiled for Cornerstone Pipeline & Utica Build-Out Projects
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Do I Need More Than Insurance to Protect My Oil and Gas Interests?
14
Ohio Geological Society Offers Unique Perspective on Industry
16
Utica Experts Discuss Potential of Ohio in Utica Production
23
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Andrew S. Dix ASDix@dixcom.com
New Pipeline Project in Ashland County
20
Cautious Optimism at the Utica Upstream Conference With Iran Absent, Oil Meeting at Qatar Collapses Without Freeze
26
ODNR Can Help Determine “Paying Quantities” for Leases
28
Power Plant to be Built in Guernsey Co.
OhioGas&Oil
PUBLISHERS
G.C. Dix II GCDixII@dixcom.com David Dix DEDix@dixcom.com
EXECUTIVE EDITORS Ray Booth RBooth@dixcom.com Roger DiPaolo RDipaolo@dixcom.com Rob Todor RTodor@dixcom.com Lance White LWhite@dixcom.com
RE G IO NAL E DIT O RS Judie Perkowski JPerkowski@dixcom.com Erica Peterson EPeterson@dixcom.com Cathryn Stanley CStanley@dixcom.com Niki Wolfe NWolfe@dixcom.com
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Table of Contents MAY 2016 ADVER TISING Kim Brenning Cambridge, Ohio Office KBrenning@dixcom.com 740-439-3531 Kelly Gearhart Wooster & Holmes, Ohio Offices KGearhart@the-daily-record.com 330-287-1653
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Doylestown Urges NEXUS to Rethink Route
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ACI Active in Natural Gas Industry
Jeff Kaplan Alliance & Minerva, Ohio Offices JKaplan@the-review.com 330-821-1200 Mark Kraker Ashland, Ohio Office MKraker@times-gazette.com 419-281-0581 Diane K Ringer Kent, Ohio Office DRinger@recordpub.com 330-298-2002 Janice Wyatt National Major Accounts Sales Manager JWyatt@dixcom.com 330-541-9450
DIGITAL MEDIA MANAGER Brad Tansey BTansey@dixcom.com
L AYOUT D E SIG NE R Kassandra Walter
kwalter@times-gazette.com
“Gas & Oil” is a monthly publication jointly produced by Dix Communications. Copyright 2016. GasandOilMag.com
On The Cover: Pipeline Safety
Representatives of the gas and oil industry met at the Pritchard Laughlin Civic Center in Cambridge to hear discussion about pipeline safety. Pipelines are the safest and most economical mode of transporting gas and oil but there are legitimate concerns.
OhioGas&Oil
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A Look Ahead
Ohio’s Gas & Oil Events • May 14, 2016 • August 25, 2016 State Science Day, Ohio State. Visit http://www.ohiosci. PIOGA’s Divot Diggers Golf Outing, Tam O’Shanter Golf Club, Hermitage, Pennsylvania org/state-science-day/ for more information. • September 15, 2016 • May 20, 2016 SOOGA Spring Golf Outing, Lakeside Golf Course, SOOGA Annual Trade Show, Washington County Beverly, Ohio Fairgrounds, Marietta, Ohio • May 21, 2016 • September 17-18, 2016 Preservation Workshop hosted by Oil Region Alliance, OOGEEP September Firefighter Workshop, Apple Creek, Ohio. Visit http://oogeep.org/event/oogeep-septemberVenango, Pennsylvania. Visit http://www.oilregion.org/ 2016-firefighter-workshop/ for more information. event/viewevent/591 for more information. • September 25-27, 2016 • June 6, 2016 PIOGA’s Summer Golf Outing and Picnic, Wanango Eastern Section, American Association of Petroleum Golf Club, Reno, Pennsylvania Geologists (ES-AAPG), Lexington, Kentucky • June 16-17, 2016 OOGEEP STEM Teacher Workshop, Marietta, Ohio
• October 14, 2016 SOOGA Fall Clay Shoot, Hilltop Sports, Whipple, Ohio
• June 17, 2016 • October 22-23, 2016 SOOGA Summer Clay Shoot, Hilltop Sports, Whipple, OOGEEP October Firefighter Workshop, Apple Creek, Ohio Ohio. Visit http://oogeep.org/event/oogeep-october2016-firefighter-workshop/ for more information. • July 12-13, 2016 OOGEEP STEM Teacher Workshop, Canton, Ohio. Visit • October 30-November 1, 2016 NARO Appalachia Convention, White Sulphur Springs, http://oogeep.org/event/oogeep-stem-teacherWest Virginia. Visit http://www.naro-us.org/ for more workshop-canton-ohio/ for more information. information. • July 21-22, 2016 PIOGA’s Pig Roast, Equipment Show & Technical Conference, Seven Springs Mountain Resort, Champion, Pennsylvania
• August 19, 2016 SOOGA Summer Golf Outing, Woodridge Golf Club, Mineral Wells, West Virginia
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• July 29-31, 2016 Oil History Symposium, Casper, West Virginia
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Capitol Waste/Recycling Buys
Buckeye Water Co.
C
olumbus-based Capitol Waste and Recycling Services operated BWS. As a testament to this, Capitol has asked Fred LLC has acquired Buckeye Water Service Company to stay on as a consultant, for at least a year. Fred said he is of New Concord. looking forward to working with the management team of Capitol Waste. The acquisition expands Capitol’s footprint in southeastern Ohio and provides entry into the oil and gas According to the company’s website, Capitol Waste and service industry for the first time. Recycling Services is the Midwest’s leader in environmentallyfriendly waste solutions. “This acquisition provides new opportunities for Capitol to grow both in our current service offerings and in an expanded With more than 26 years of solid waste and recycling service territory,” said Capitol President Rob Smith. The experience, Robert A. Smith, president, has successfully led acquisition is projected to be immediately accretive to teams as small as 7 and as large as 1,300 to increased sales and earnings. profits, cost controls and process improvements which have resulted in consistent improvements in revenue, safety, Buckeye Water Service Company has been owned and compliance, customer service and operational efficiencies. operated by Fred and Ann Badertscher since 1978. The Badertschers are pleased that Capitol Waste conducts business For more information, contact Capitol Waste and Recycling at http:// under the same core values and principles as they have always www.capitol-waste.com/
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Pipeline Safety Judie Perkowski • Dix Communications
T
he annual meeting of gas and oil pipeline companies at the Pritchard Laughlin Civic Center in Cambridge attracted more than a hundred attendees, including firefighters, law enforcement personnel, gas and oil workers and local residents to hear John Cory talk about pipeline safety. Cory is a representative of program sponsor Paradigm Liaison Services. Pipelines are the safest and most economical mode of transporting gas and oil from Point A to Point B, wherever its destination on land or under water, but there are legitimate concerns. Cory emphatically stated, that “before you dig, call 811,” which applies to everyone who plans to dig.
the number on the warning marker — Under Section 7 of the Natural Gas immediately — a safe distance from the Act, the Federal Energy Regulatory leak. Commission reviews applications for the construction and operation of interstate Cory said even if someone was digging natural gas pipelines. In its application to install a fence post, a call to 811 is review, the Commission ensures that the a requirement to prevent striking a applicant has certified that it will comply pipeline used to transport hazardous with U.S. Department of Transportation material. safety standards. The Commission has no jurisdiction over pipeline safety The Public Utilities Commission of or security, but actively works with Ohio enforces the regulations through a other agencies with safety and security cooperative agreement with the federal responsibilities. government. Once oil projects become operational, Ohio extended gas pipeline safety rules safety is regulated, monitored and to gathering lines used to collect gas enforced by the DOT. from the Utica and Marcellus shale fields that normally would not be subject to There are 2.5 million miles of oil and federal rules. natural gas pipelines in the lower 48 states, owned and operated by dozens The robust exploration and production of gas and oil companies. All of these of natural gas in Ohio, Pennsylvania companies must abide by the rules of the and West Virginia the last few years has flooded the market and strained storage facilities. Pipelines are desperately needed to provide a dependable, safe t ra nsportat ion system to refining facilities and end users around the world.
According to the U.S. Department of Transportation and Pipeline and Hazardous Material Safety Administration, the agencies that developed natural gas pipeline safety rules, excavation damage remains a leading cause of serious pipeline incidents that cause death, injury and property damage. In all 50 states, 811 must be called at least two days before digging, whether using a shovel or a backhoe. The call connects with the state’s call center, which in turn contacts the appropriate utility companies to mark the ground above buried utility So, wherever you lines with paint or flags. Markers must live, work, drive, be visible from the ground and the air. go to school or vacation you If something goes afoul and you detect will be standing, an order, such as gas or oil, see a sheen on sitting, laying or nearby water or a liquid on the ground, driving on at least and/or hear a hissing or roaring sound, some part of a call 911 and the pipeline company — pipeline.
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A sixty-foot section of pipe is lowered into a trench during construction of the Gulf Coast Project pipeline in Prague, Oklahoma, U.S., on Monday, March 11, 2013. The Gulf Coast Project, a 485-mile crude oil pipeline being constructed by TransCanada Corp., is part of the Keystone XL Pipeline Project and will run from Cushing, Oklahoma to Nederland, Texas. Photographer: Daniel Acker/Bloomberg via Getty Images GasandOilMag.com
states and counties where they operate. If they cross state lines from “home” operations they must also conform to federal laws. FERC’s responsibilities include: Regulation of rates and practices of oil pipeline companies engaged in interstate transportation; establishment of equal service conditions to provide shippers with equal access to pipeline transportation; and establishment of reasonable rates for transporting petroleum and petroleum products by pipeline. Ohio has 117,235 miles of gathering, transmission and distribution pipelines owned or sponsored by MarkWest, Williams Ohio Valley, Spectra Energy, Rice Energy, Olympic Midstream, Eureka Energy, Northeast Ohio Natural Gas, Spelman Pipeline, Blue Racer and Energy Transfer. There are also many other oil and gas companies who are part of a pipeline joint venture. The Ohio Power Siting Board regulates intrastate gas pipelines within the state of Ohio that are greater than 500 feet in length and nine inches in diameter. However, the OPSB does not have jurisdiction over production lines, gathering lines or liquid lines. Production lines from the well head site are under the jurisdiction of the Ohio Department of Natural Resources. Gathering lines and liquid lines and under local zoning jurisdiction. A gathering line is any pipeline upstream from a processing facility, any line carrying gas from a processing facility to a fractionation plant, and any line carrying natural gas from a processing plant to an interstate or intrastate pipeline. Interstate lines fall under FERC.
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Currently there are two major pipelines scheduled to cross through Ohio, the 255-mile NEXUS Gas Transmission pipeline. The project’s lead developers Spectra Energy and Michigan-based DTE Energy, submitted its application to FERC. Construction is not scheduled to commence until the first quarter of 2017. The ET Rover, a 711-mile Marcellus/Utica natural gas pipeline that will serve mostly U.S. customers and will cost $3.7 billion to build will run from Pennsylvania and West Virginia and eastern Ohio, through Ohio into Michigan and eventually into Canada (see ET Rover Pipeline launches new website, updated route maps).
WOOSTER
If you’re going to build a pipeline that long, you’ll need a lot of compressor stations along the pipeline’s route. Rover has just awarded a $34 million contract to Ohio-based Ariel Corporation to build 39 compressor stations for the pipeline.
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Plans Unveiled For
Cornerstone Pipeline & Utica Build-Out Projects
A
Georgette Huff summary of Marathon Pipe Line’s Cornerstone Pipeline and Utica Build-Out projects was unveiled at a media presentation held at the Carroll County District Library on April 4. Marathon Pipe Line is a subsidiary of MPLX LP. Jason Stechschulte, senior engineer commercial development, and Jake Chenevey, project manager, presented an overview of the three-phase project, which includes construction of the Cornerstone Pipeline, the Hopedale to Cornerstone Pipeline, and the Utica Buildout projects that will interconnect pipelines in eastern Ohio to existing pipelines and new construction planned for Harpster and Lima in western Ohio, creating the option for future expansion.
“They are a union company and plan to hire as many local people as possible.” —Jake Chenevey The Cornerstone Pipeline will be operational in the fourth quarter of 2016.
Second-phase construction is expected to begin in the third quarter of 2016 on eight miles of 16-inch pipeline from Hopedale to Hissem Junction, a “MPLX synergistic project” that will connect the Mark West fractionator to existing MPL pipelines. The line, estimated to be in service in the first quarter of 2017, will have a capacity Currently, well output is transported by barge, of 180,000 barrels per day. truck and rail car. When all phases of the project are completed, Stechschulte explained the refining section Construction will begin in the first quarter of 2017 encompassing Ohio, Michigan, Indiana and Illinois will on Utica Build-out pipeline projects. These include be connected by pipelines. “Basically, we’re tying Utica expanding existing refined-products pipelines from Shale to the Midwest,” Stechschulte said. East Sparta west to Harpster, constructing a new 12inch pipeline from Harpster to Lima and connecting The first phase, the Cornerstone Pipeline, Stechschulte to the Maumee 22-inch pipeline at Lima. In Lima, the said, “is the backbone of MPLX’s Utica pipeline strategy.” pipeline will reverse and connect to the RIO 8-inch It will include 42 miles of 16-inch pipeline, with a pipeline, creating a connection to Marathon’s refinery daily capacity of 180,000 barrels, and will transport in Robinson, Illinois. condensate and natural gasoline from the Mark West facility in Cadiz, to the Utica East Ohio fractionator in The estimated completion date of third-phase projects Scio, and then to Marathon’s tank farm in East Sparta. is mid-2017. Eight miles of 8-inch pipeline, with a daily capacity of As he outlined the upcoming development, Stechschulte 45,000 barrels, will be constructed from East Sparta to noted the United States is now the “swing producer,” the Canton refinery. replacing the Middle East. Initial work on the Cornerstone phase has been completed, including surveying, acquiring rights of way and clearing brush, trees and rock along the pipeline route and expanding capacity at the East Sparta facility. Cornerstone project manager Jake Chenevey said construction of the pipeline will be completed by Houston-based Price Gregory, using approximately 500 laborers.
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Despite the drop in oil prices, he said, “We are confident in both the Utica and Marcellus shale plays. The Utica has held up relatively well, even in these times of low prices. In the fourth quarter of 2015, oil and gas production both increased. As a producer, you’re going to go to the plays you know are going to do the best.”
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New Pipeline Project
In Ashland County Kristi Schweitzer • Dix Communications
M
embers of Ashland Rotary Club learned about plans for a new pipeline project in Ashland County during a Rotary meeting in April. Allen Fore, vice president of Kinder Morgan, presented plans for the Utopia East Pipeline Project, a 200-mile-long pipeline that will stretch across southeastern Ohio northwest to Fulton County and connecting to an existing pipeline to Canada. When completed, the pipeline will carry ethane and ethane-propane mixtures taken from Utica Shale mined in southeastern Ohio.
Council on Historic Preservation, and state agencies such as Ohio Department of Natural Resources, Ohio Environmental Protection Agency and Ohio State Historic Preservation Office.
Forty to 50 feet will be acquired in a permanent easement and after complete, can be used for farming or Fore added that environmental any use except placing a permanent considerations are a priority for the structure or long-rooted trees on project. top of the site. The other 40 to 50 feet not above the pipeline can be for any use including structures or long-rooted trees.
“We try to find areas of avoidance. Where can we avoid impacts (we) try to go into areas where it will be least impactful for the purposes of the pipeline construction.”
“For this project, we’re taking product from the Utica shale from drillers and producers there, putting it in our pipeline, shipping —Allen Fore it to a facility that’s going to use this as a feedstock for plastic,” Fore said. Based on time frames of pipelines they’ve built in Ohio before, they Multiple types of products will be anticipate affirming approval by made up there and will then be fall this year. sold in Ohio and other parts of the country. “If that goes according to schedule, we’ll start construction later this The pipeline is anticipated to be in year in the fourth quarter of 2016 use for this product for the next 20 and then bulk of the construction to 30 years. activity in 2017, in service in 2018.” Fore said the project is in its early stages. They are in the process of gaining approval from federal agencies, including the Pipeline and Hazardous Materials Safety Administration, U.S. Army Corps of Engineers, U.S. Fish and Wildlife Service, Advisory
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The pipeline itself is 12 inches with a minimum depth of about 3 to 4 feet.
Fore showed examples of the construction process in which an area of 100 feet is cleared temporarily for construction use and a 6-foot-deep trench is dug. The pipeline is laid out and welded together on-site and then eased into the trench and backfilled.
The pipeline will travel through approximately 21 miles in Ashland County and affect approximately 114 properties and 78 landowners in the county. Fore said working with landowners and addressing their concerns is another priority Kinder Morgan considers when negotiating easement agreements. He shared the economic benefits of the pipeline. Construction for the pipeline will be done through Ohio organized labor operators and will take about three to four months to complete. The project will offer about 900 construction jobs that will be filled through local union contractors. The surplus is workers who will add to local hotel use and restaurants. Fore also anticipates Kinder Morgan’s office in Ashland will grow from 25 to 50 employees once the project starts as well. After the pipeline is complete, it will continue to help develop Utica shale as a main economic driver for
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the state.
Fore added that the pipelines are American made and are expected to last longer than 60 years, with no actual The entire pipeline will be underground and only end date on them. He said steel placed in the ground placed markers will be visible. will rust 40 years later, so they put a epoxy coating on the pipe to deter corrosion. They also use a cathodic Fore said after the product is flowing on the line, the protection system that puts an electric current onto company’s goal will be to maintain the pipeline. the line to eliminate corrosion. The pipeline will be monitored 24 hours a day, 7 days a week for leaks from its gas control center. They are able to detect if there is any impacting pressure in the line and can shut down the line immediately in the particular impact area.
“The other major piece we use is a pigging system, where they run an inspection through the line (and) do that on regular intervals,” Fore said. Kristi Schweitzer can be reached at 419-281- 0581, ext. 237, or at kschweitzer@times-gazette.com.
“We also have regular patrols on our line from an aerial and foot patrol to see if there’s an impact that might not be detected by that leak protection system that monitors for pressure loss.”
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—Allen Fore
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OhioGas&Oil 11
Do I Need More Than Insurance
To Protect My Oil And Gas Interests?
I
Frank McClure • JD, AEP, Counsellor at Law have had an attorney out of your own a number pocket to cover the defense of clients costs. ask me if insurance There is a saying among is enough to protect their defendants that goes “Even real property interests and when you win, you lose.” specifically their oil and Even if you have significant gas interests. I agree that financial resources to cover insurance should be your the tens of thousands of first line of defense, but is dollars it will cost to defend it enough? In many cases the lawsuit, and even if the in order to achieve proper court enters a judgment on asset protection, insurance your behalf, it is still tens must be used in conjunction of thousands of dollars out with a proper legal entity, of your pocket. Therefore such as a Limited Liability 98% of all lawsuits filed end Company (LLC). up settling before going to court. You as the defendant The question becomes “does obviously want to minimize the insurance I have or what your loses so it often makes I can buy, sufficiently protect sense to settle because our my assets?” The problem nation’s juries are treating becomes holding title to these cases like lotteries. the property personally; any lawsuit can make you What is the answer to all personally liable. Not only of this? I would suggest is the real property interests that the answer would be, at risk but so is every other implementing a proactive asset that you own in your solution. At this point you individual name at risk as should be asking what well. Unfortunately, the the proactive solution is. legal system in our country Remember if you hold all is now viewed with a lottery of your property in your mentality and new lawsuits individual name, you have are filed at a staggering rate everything to lose in a of one new lawsuit every lawsuit. The first course 1.5 seconds. It is no wonder of action is to immediately that it takes an average of minimize risk exposure, two years from the time the which is minimized by case is filed to reach the trial transferring the titles of the date. Now that you are sued most risky properties into a personally, you have to hire business entity that provides
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liability protection. These business entities include corporations, limited partnerships and limited liability companies (LLC), with the LLC being the main choice in more and more situations. Each of these entities have different levels of protection and different tax implications depending on the type of property the entity holds, but that discussion will have to wait for another day. The purpose of using a business entity is to contain the risk exposure inside of the business entity itself. The problem with holding assets personally is that there is no legal way for you to separate yourself from your risky property; therefore, any harm associated with the property can potentially risk all of your personal assets. If a business entity is properly created and maintained, there is a layer of separation between you, the person who owns the entity, and the activities of the business or property owned by it. Courts have been extremely reluctant to allow liability exposure from a business entity to attach to the personal assets of the owner of the entity. This level of protection has
been maintained not only via state statutes but in court cases over the last two centuries. The government wants to promote businesses development and this is achieved by not making businesses owners personally liable for harms arising out of the business. There are cases where the “veil” is pierced by actions of comingling assets, fraud, gross negligence and failure to follow formalities, but as a whole the owners are well protected if the owners acted as reasonably prudent persons. So let’s try putting this all together. A business entity alone will not guarantee liability protection if the business does not operate in a reasonably prudent fashion. What is reasonably prudent for a business holding real property? First step is having adequate insurance. Just as individuals need to carry insurance, the business entity needs to also carry insurance to minimize its losses. Just as insurance is not a substitute for business entity, the business entity is not a substitute for insurance. There have been cases where the “veil” was pierced resulting in an injury on the business property because the
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business did not have insurance. You may be wondering “why even bother setting up a business entity, say an LLC, if a lawsuit can still occur?” Real property can never be protected from harms arising from the property itself. However, you the owner must be proactive to insure that the harm does not wipe out everything else that you own and have accumulated over the years. The use of a business entity in conjunction with insurance helps to insure that if the harm exceeds the insurance coverage, you the owner, only have that particular real property at risk and not all of your other personal assets as well!
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OhioGas&Oil 13
Ohio Geological Society Offers Unique
Perspective On Industry Sophie Kruse • Dix Communications
their website.
S
ince 1963, the Ohio Geological Society has been “promoting the science of geology as it relates to petroleum, natural gas and associated liquids, ground water, coal, oil shales, and other natural resources,” according to
members of the Society exclusively. According to Swinford, Fagan presented the details of what gravity and magnetics information can do for defining the subsurface geology of Ohio and the Appalachian Basin.
One of the key takeaways was that Fagan showed examples The Society is an affiliate of the American Association of Petroleum where, in relation to three-dimensional seismic surveys, “much more territory can be covered by an aerial survey at 30 percent of Geologists. the cost.” Mac Swinford, president of the Ohio Geological Society, said they have roughly 150 dues paying members, along with 150 student Through a number of examples that Fagan presented, Swinford members. Of those dues paying members, he estimates that about said that another one of his main points was that there needs to be an expert to analyze the raw data. 40 percent are people related to the oil and gas industry. The organization meets monthly through the fall, winter and An annual membership to the Society is $20. Prospective members spring for a number of different events and presentations. are able to join through the Society’s website, www.ohiogeosoc.org. “A majority are oil and gas related, because the society has generally been an oil and gas related society,” Swinford said. “But we do have general talks on the general geology of Ohio …We really want to present educational opportunities for the members.”
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Other events have been a field trip to Shale Hollow Preserve in Delaware, Ohio and a bike trip.
“You don’t have to be a geologist to be a member of the Society.”
“The 7 Threats to Your Family Security” Thursday May 12th at 1:30 p.m. Thursday May 26th at 1:30 p.m. Thursday June 9th at 1:30 p.m. Thursday June 23rd at 1:30 p.m.
— Mac Swinford There are three levels of membership: an active member, who is a geologist or someone making a living in the geological world, an associate member, who is someone who may not have a geology degree but be interested in the geology of the state, and a student member, who is a graduate or undergraduate student majoring in geology or a related field.
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Most recently, the Society hosted a workshop in Worthington on March 3 titled “Fundamentals of Gravity and Magnetics.” The workshop was presented by Joseph P. Fagan, Jr., the president of Centinnial Geoscience in Colorado. The event was put on for
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OhioGas&Oil 15
Utica Experts Discuss
Potential Of Ohio In Utica Production
T
Chelsea Shar he number of active gas and oil rigs in Ohio may have dwindled down to a few over the last year, but gas and oil experts at the Utica Upstream conference said that won’t stop the region from becoming the biggest oil producer in the country. “By 2015 the Utica region had over 12 million pounds of profit per well...Clearly Utica wells have longer laterals, more profit, they have more water so clearly completions are much more advanced here than they are in other portions of the U.S.,” said Maria Cortez, upstream analyst for Wood Mackenzie, a global energy, metals and mining research and consultancy group.
and 2013 from a lack of infrastructure to accommodate the massive production it brought. Now the infrastructure is greater than the production, costing the productions companies big.
Cleveland State University co-authored a new research report on the future of Utica economic development, supply chain opportunity and workforce needs.
Lendel said Utica region should take the While the industry is not hopeless, Cortez time of decreased drilling to build up a said it has developed over the last year workforce to accommodate the future of at a more reduced pace than what had the industry in Ohio and Pennsylvania. previously been modeled. As soon as the industry starts to rebound Delayed development timelines have the jobs needed to work on active drilling resulted in a loss of $665 million in state sites could be up to 12,000 people. taxes, and $6.5 billion in non-government She explained the economic base of Ohio, royalties over the next five year period. Pennsylvania and West Virginia and about half of the 23 adjacent states have oil Academic Perspective and gas production as an economic base Iryna Lendel, Ph.D., and economist at meaning they produce more product than
In the Utica region there are about 150250 wells that have been drilled but not completed or hydraulically fracked. She said Wood Mackenzie predicts the industry will complete those wells before they drill any more. She explained that in mid May gasoline would cost about $2 at the pump but it needs to be at about $3 to incentivise rig activity to come back. “What’s occurring in the Utica is no different than what is occurring in all the other plays in North America. Operators are cutting rigs, they are drilling less wells, they are focusing on completions,” she said. Ultimately, the U.S. saw the Utica region being held back from production in 2012 16 OhioGas&Oil
Callum Streeter, chief operating officer for EdgeMarc, spoke about how small production companies like EdgeMarc have changed since the early production days in 2012. GasandOilMag.com
Rick Stouffer, Editor of Kallanish Energy, and allinternet five day a week publication about energy, spoke about what he has covered most over the last year; bankruptcy. He discussed the major production companies who have filed bankruptcy over the last year after oil prices bottomed out. Some had debts over $1 billion. A tremendous amount of debt and equity were being spent to drill, frack and move one. Demand started to slow and prices started to drop. There was a total of $17.22 billion for various players who filed bankruptcy last year.
Rick Stouffer, Editor of Kallanish Energy, spoke about what he has covered most over the last year, bankruptcy. the state can consume.
Producers Perspective
Those states also have the workforce and infrastructure to support the industry.
Callum Streeter, chief operating officer for EdgeMarc, an oil and gas exploration and production company working in the Utica region spoke about how small production companies like EdgeMarc have changed since the early production days in 2012.
Compared to competing oil and gas producing states such as Texas and Louisiana, Ohio can produce much more. The only thing Texas and Louisisna have over the Ohio are, is the current presence of cracker plants. Cracker plant companies are hesitant to come to Ohio, Lendel said, because of the massive investment that a cracker plant requires. To build a new plant it costs about $100 million.
With increased efficiency, he said in 2012 when the company first started drilling wells they were completing projects in 22 days. Now they can drill and finish a well in seven days that go much deeper than the initial wells. “We grew supply
quicker than demand could keep up with and as a result crashed the market,” he said. Since the market crash EdgeMarc has been focusing on dry gas production. Like the other speakers, and the themes at previous Utica conferences, Streeter said the region should focus on improving cooperation between development companies, develop better infrastructure, a skilled workforce and good relationships with government regulators. Reporter’s Perspective
“(Banks) were throwing money at oil and gas and when you get cheap money and you get people who are willing to fund you if you drill and drill, I liken it to surgeons. Surgeons are paid to do surgeries. Drillers are paid to drill,” he said. He said executors were holding on in hopes of prices turing around and they didn’t. Moving forward into 2015 and 2016 rigs ceased production by over 90 percent to keep bankruptcy at bay. Half a trillion dollars worth of projects have either been postponed or cancelled. Ultimately, the industry runs in cycles, and he said the market will turn around. Real Estate Perspective Bryce Custer, real estate agent Story continued on page 18
GasandOilMag.com
OhioGas&Oil 17
Story continued from page 17
for NAI Spring in Canton focuses on serving the needs of the Oil & Gas and related Energy Services companies capitalizing on the drilling and exploration of the Utica / Marcellus Shale in Eastern Ohio. He has been a part of the real estate boom and bust in Carroll County from 2011 until recently. He discussed the recent projects in Columbiana and Carroll Counties and what cities can do to reap the most benefits from the gas and oil companies coming to their cities. In Columbiana County Southfield Energy is building a power plant in 2017, there are six different electrical generation plants being built in Ohio currently and he said other individuals that are consumers of the oil and gas being produced here are also contacting him about building business. He said one example of how natural gas is being used in Ohio is for a gas to liquid technology where natural gas is converted to diesel fuels. “What the people are really looking for right now is redundancy,� he said. Users are looking for redundancy. Companies are looking at
18 OhioGas&Oil
facilities and looking for a source of redundant power and gas. Counties that want to take advantage of the oil and gas industry need to think about providing skilled labor, infrastructure, state government support, places to live and places to eat and shop. Steve Irwin, public information officer of the Ohio Department of Natural Resources also spoke at the conference about the regulations and cooperation of his department with the Oil and Gas production companies. Slides show presentations from each presenter are available at www.uticasummit.com/#section-upstream-2016. The Utica Upstream Conference series is conducted by the Canton Regional Chamber of Commerce. The event is geared towards business officials interested in learning about how their company can benefit from the oil and gas industry in the area. The event was sponsored by AEP Ohio, Beaver Excavating Company, Furbay Oil & Gas company and Mercy Medical Center. The next Utica Conference is a Midstream update on the infrastructure of the industry in Ohio. It will be held June 8.
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OhioGas&Oil 19
Cautious Optimism At The
Utica Upstream Conference
C
Sara Klein • Dix Communications
autious optimism for the future of the Utica shale industry and sound strategies to weather the industry’s current lull were themes of the afternoon session at the April 6 Utica Upstream Conference cosponsored by the Canton Regional Chamber of Commerce and Shale Directories. An audience of regional and municipal officials, Utica shale service providers and drilling companies heard about strategies from representatives of four companies involved in the shale industry.
Flexibility and Reinvestment Jeff Sunderland, assistant vice president of marketing and business development, began the afternoon session with a presentation about the Wheeling & Lake Erie Railway. Founded in 1871, and based in Brewster, Ohio, the railway is the largest regional railroad in Ohio and one of the largest in the county. Its fleet of 94 locomotives carries products and supplies across Ohio, north into New York, and east to Pennsylvania, West Virginia and Maryland. Sunderland said the company has had to navigate through changes in industry to remain successful. In 1990, 50 percent of WLE’s business 20 OhioGas&Oil
was based on transporting coal products, but Sunderland said half of that business disappeared within one year. After providing service to the steel industry, WLE moved to the Utica shale play industry, which now provides a major source of business to the company. Last year, WLE transported 145,000 carloads, many of which contained shale industry products such as petroleum products, aggregates, chemicals, barites, frac sand, natural gas liquids, and steel transmission pipe related to shale drilling. The company’s clients include businesses that provide supplies for shale drilling operations, such as TimkenSteel, Republic Steel, National Lime and Stone, Superior Silica Sands and Shelly Materials, as well as energy companies Marathon Petroleum and MarkWest Energy, which Marathon recently acquired. During the oil and gas boom, WLE reinvested in its personnel and facilities, a move that Sunderland indicated has kept the company viable in the face of current challenges that, as they affect the Utica shale industry, affect the industry’s service providers. In addition to increasing its train and engine workforce by 46 percent since January of 2014, the company has revved up its fleet by 50 percent since 2013; upgraded its 120,000-squarefoot locomotive and freight car repair shop, which enables WLE to perform
all of its own locomotive and car repair; and expanded Brewster Yard, the largest on WLE’s system, by 50,000 feet of track. The $8 million expansion at Brewster doubled the yard’s switching capacity, which expanded the number of days that WLE can offer transportation of its clients’ products. Sunderland said the company is now using its upgrades and expansions to offer services that many railroads cannot, a strategy that enables WLE to compete during a time when demand has slowed because of reduced operations. “Probably the biggest impact on us is the massive decrease in frac sands that we’re handling,” Sunderland explained. He added that competition from barge-to-truck transloads is also offering a challenge to WLE and other rail companies during the slowdown. “We are facing competition from a number of barge facilities along the Ohio River,” he stated, adding that barge-to-truck transfers of products at Bellaire; East Liverpool; Hannibal; Mingo Junction; Steubenville; Tiltonsville; Yorkville, Ohio; and Benwood, West Virginia directly compete with WLE’s rail service. However, service companies that stay on top of trends in the upstream GasandOilMag.com
business can also stay afloat in the business world. Sunderland said WLE has been focusing on oil and gas company EnerVest and the development potential of EnerVest’s horizontal drilling methods over the Clinton Sandstone Formation because WLE tracks pass through key locations of the formation in Carroll and surrounding Ohio counties. Sunderland added that the state of Ohio can also continue to benefit from offering the Utica shale industry the advantage of “a lot of good railroads ... Frankly, there are a lot of regions in this country that don’t have that ability of so many carriers to choose from.”
“We are cautiously optimistic that 2017 will be a better year for all.”
based exploration and production company Eclipse Resources, and Callum Streeter, CEO of EdgeMarc Energy, an exploration and production company working in the Utica, said technological improvements for drilling operations are a strategy they have used to continue operating after, in Kris’s words, “the “precipitous decline” in the Utica shale industry.
Noting his past experience as an investment banker, Kris forecasted that prices of petroleum and liquid gas would recover by the end of the year thanks to demand created by exports to Mexico and the increasing use of propane and natural gas. Companies that use cutting-edge technology to maintain production will see advantages when the price of shale play products rises.
Kris said technological advances that allow for faster drilling and production operations at well pads have enabled Eclipse to maintain a steady production of just over 200 Mcf of natural gas per day. Steady production has, in turn, enabled the company to generate the cash needed to remain liquid.
“While this is a downturn in the cycle, I think there is a light at the end of the tunnel,” Kris commented. “The reality of the situation is we’re really in the early stages of the development of this play. It’s like being in the third inning. There’s still a lot of room left to go,” he added. Streeter
noted
that
EdgeMarc has also devoted much of its energy to improving technologies to save costs, such as by developing chemical treatments that allow for more recycling of water used at oil and gas well pads, another strategy that can help keep a Utica shale company going during the lull. EdgeMarc’s operations in Butler County, Pa., recycle nearly all produced water flowback, and the company is gearing up to recycle more of its production water at its Ohio wells. Eclipse, meanwhile, recycles almost all of the water at its facilities. Reinvesting in company personnel and contractors, supporting firstresponders in communities where oil and gas facilities Story continued on page 22
— Jeff Sunderland Technology, Costsavings and Community Involvement Speakers on the Oil and Gas Producers panel echoed the cautious optimism that Sunderland expressed. Douglas Kris, vice president for investor relations at PennsyvlaniaGasandOilMag.com
Jeff Sunderland, assistant vice president of marketing and business development, spoke about the Wheeling & Lake Erie Railway. OhioGas&Oil 21
Story continued from page 21
operate, and collaborating with local schools and colleges to develop training programs for a future workforce were other strategies that Kris and Streeter discussed.
groups like the Ohio Community Rights Network are encouraging bans on fracking as well as on pipeline projects and natural-gas-fired power plants.
Communication and Public Relations
The perceived impact of fracking operations on the environment and public health is one area where oil and gas companies need to focus on their public relations, Stewart said.
Monitoring and reacting to the public’s view of the Utica shale industry was another major strategy discussed at the Utica Upstream Conference during a presentation by Jackie Stewart, Ohio director of Energy in Depth, a public relations firm that supports the industry. Stewart said industry insiders must keep tabs on, and vigilantly respond to, the public perception of their activities as a way of achieving what she called a “social license to operate.” “A social license to operate is a regulatory license to operate. If the public supports your industry, they’re going to give you permission to do your job and to create jobs,” Stewart said, adding, “This industry has, unfortunately, a tremendous amount of critics, especially right now.” While Gallup polling has found that the industry “is losing favor” with people in urban areas, community
She noted that although the results of two scientific studies — a University of Cincinnati and a University of Syracuse study — found no evidence of methane contamination at water wells caused by oil and gas drilling, the results are not well known by the public. Geology researcher Amy Townsend-Small, who led the UC study, has not released the results of the study publicly. She has cited as a reason the disappointment of funders who wanted the study to examine environmental challenges that could be caused by drilling. The Chesapeake Energy-funded study by the University of Syracuse, which found methane concentrations were caused by sources prior to drilling, has not been widely covered in the media.
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Mohammed bin Saleh al-Sada, Qatar’s energy and industry minister, addresses journalists at the end of a summit in Doha, Qatar, on Sunday, April 17, 2016. Oil-rich nations at a Qatar summit failed to reach an agreement Sunday on a production freeze, saying officials needed “more time” to make the decision as Iran stayed home and vowed to keep pumping. (AP Photos/Jon Gambrell)
With Iran Absent, Oil Meeting At Qatar
Collapses Without Freeze
A
Associated Press meeting of oil-rich countries in Qatar that had been expected to boost crude prices by freezing production fell apart Sunday as Iran stayed home and vowed to increase its output despite threats by Saudi Arabia. Oil prices, which hit a 12-year low in January by dipping under $30 a barrel, had risen above $40 in recent days, buoyed by the bullish talks surrounding the Doha summit. But instead of a quick approval of a production freeze, the meeting of 18 oil-producing nations saw hours of debate and resembled the dysfunction of an unsuccessful meeting of the Organization of the Petroleum Exporting Countries in December that sent oil prices tumbling.
However, he largely dodged the questions about whether another special summit will be called before OPEC’s next meeting in June and whether Iran had anything to do with “Prices will trade lower. Maybe sharply the breakdown of the talks. lower,” said Robert Yawger, director of energy futures at Mizuho Securities “We of course respect their position USA, noting the failure to reach and ... we still don’t know how the future will unroll but it was a sovereign agreement in Doha. decision by Iran,” said al-Sada, who He noted that other factors were is serving as OPEC’s president. “The negatively impacting prices: U.S. crude freeze could be more effective definitely oil storage remaining at all -time highs, if major producers, be it from OPEC Iran increasing production, and Libya members like Iran and others, as well looming on the horizon to boost output. as non-OPEC members, are included in the freeze.” Speaking to journalists after the summit, Mohammed bin Saleh al-Sada, Sunday’s gathering grew out a surprise Qatar’s energy and industry minister, Doha meeting in February between tried to say the lack of a decision showed Qatar, Russia, Saudi Arabia and officials believed “the fundamentals of Venezuela, in which they pledged to the market are generally improving.” cap their crude output at January levels The fact that producers couldn’t agree to a freeze, let alone a production cut, likely means oil prices will drop again as markets open Monday.
Story continued on page 24 GasandOilMag.com
OhioGas&Oil 23
Story continued from page 23
if other producers did the same. The idea of a freeze and not a cut initially looked more palatable to producers already suffering after oil’s dramatic fall since the summer of 2014, when prices were above $100 a barrel. Production continues to rise as countries try to make up the difference. Ahead of Sunday’s meeting, Iraq boosted its production to record territory of over 4 million barrels a day in March, and Kuwait pumped 3 million barrels a day with homes of reaching 4 million a day by 2020. And while car owners and airlines have enjoyed the low oil prices, the plunging oil revenues have wreaked havoc on countries like Nigeria and Venezuela, both of which attended Sunday’s meeting along with non-OPEC member Russia. The biggest wild card of the talks, however, wasn’t even in the room. Iran decided to stay home late Saturday after saying the day before it would send an emissary to the meeting. Speaking to Iranian state television, Oil Minister Bijan Namdar Zangeneh said it didn’t make sense to send any representative from the Islamic Republic “as we are not part of the decision to freeze output.”
“We can’t cooperate with them to freeze our own output, and in other words impose sanctions on ourselves.” — Bijan Namdar Zangeneh With many international sanctions lifted under its nuclear deal with the U.S. and other world powers, Iran began
exporting oil into the European market again and is eager to claw back market share. It produces 3.2 million barrels of oil a day now, with hopes of increasing to 4 million by April 2017. Sunni-ruled Saudi Arabia had said it wouldn’t back any freeze if Iran, its Shiite rival, didn’t agree to it, throwing the deal into question before the meeting. The kingdom seems determined to ride out the low prices that could squeeze Tehran. The enmity between Saudi Arabia and Iran has spiked in recent months. In January, Saudi Arabia executed a prominent Shiite cleric, a move that sparked protests in Iran that saw demonstrators attack two of the kingdom’s diplomatic posts there. That broke the conflict between the two countries into the open, amid them backing opposing sides in both Syria’s civil war and the war in Yemen. Saudi Oil Minister Ali al-Naimi repeatedly declined to speak to journalists during the meeting. The dispute underscores the level of discord inside OPEC as it faces arguably its biggest challenge since the oil glut of the 1980s. Though more-costly U.S. shale oil production has dropped, it could re-enter the market if oil prices rise. And a large amount of crude already building up provides a major damper on prices, as does a generally weakened global economy, according to the U.S. Energy Information Administration. The immediate effect of the summit’s collapse likely will be seen in crude prices. Western markets were closed Sunday and not immediately affected. Stock exchanges in Saudi Arabia and Dubai closed in negative territory Sunday, with the Saudi Tadawul down 1.48 percent.
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OhioGas&Oil 25
ODNR Can Help Determine
‘Paying Quantities’ For Leases
A
Steve Shrock • Attorney n important feature of any oil and gas lease is its term. For landowners, this is the length of time the property is subject to the lease, and subject to the producer’s rights to develop the property. For producers, it is the time the company may conduct operations and make productive use of property. Because an oil and gas lease can effect land rights indefinitely (some leases in Ohio are still in effect from the 1890s), understanding the term of a lease, including how the production of oil and gas from the leased property extends the term, is key to negotiating an agreement that could impact the use of land for generations.
The term “paying quantities” has been recognized by Ohio courts to mean quantities of oil or gas sufficient to yield a profit to the producer over the producer’s operating expenses. Operating expenses do not include the drilling costs or equipping costs for establishing the well. Based on this definition, the amount of oil and gas that must be produced to retain a lease is low. On the other hand, Ohio
CA-10432355
The most common method of defining the time period over which a lease is effective is split between two terms: a primary term and a secondary term. The primary term is the number of years over which the producer is permitted to drill a well on the leased property. The primary term
may be one year, five years, or some other length of time. During this time, a producer may use the property for any permitted purpose under the lease, most of which relate to drilling a well or multiple wells. At the expiration of the primary term, the lease may remain in effect, depending on the definition of the secondary term. While the primary term is a definite period of time, the secondary term is more loosely defined, and generally corresponds to whether the producer is making productive use of the leased property. Under most leases, as long as oil and gas is produced from the property in “paying quantities”, the lease term will extend year after year.
26 OhioGas&Oil
GasandOilMag.com
courts have determined that simply providing free gas to the property owner for domestic use does not constitute production in paying quantities to extend the lease term. Oil or gas must actually be produced and sold from the property to keep the lease going. While the relatively vague phrase “paying quantities” is commonly used to define the secondary term, the parties may negotiate a better definition. It has become more common over the past several years to define “paying quantities” in the lease (as X barrels of oil per year, for example), rather than leaving the calculation open ended. Given the definition of the secondary term, for a landowner, there are two basic ways to determine whether a lease is still active. The first is easy: is the landowner consistently receiving a royalty payment? If so, the lease is mostly likely active. If no royalty is paid, the landowner should be sure that the producer has the landowner’s contact information. Land is often transferred without notice to the producer, so a telephone call or letter to the producer is necessary to direct the royalty payment to the new owner. If a landowner has notified the producer of a change in ownership, and no royalty is paid, there may
be no production from the property. The second method for determining whether a lease is active, and whether oil and gas is produced under a lease, is to review the records of the Ohio Department of Natural Resources (“ODNR”). ODNR’s website (http://oilandgas.ohiodnr. gov/well-information/oil-gas-well-locator) provides a map and property-by-property information concerning wells drilled and produced. For each well, a “well card” is available showing a substantial amount of information, including the date the well was permitted, drilled, and the amount of oil and gas production reported for the well. The ODNR’s information, including the map and well cards, is an excellent resource for landowners. Mr. Shrock is a member of Critchfield, Critchfield and Johnston, Ltd., a law firm with extensive experience in all aspects of the oil and gas industry which has been representing landowners, producers, drillers, service providers, and others in the industry for over 75 years.
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Power Plant To Be Built
In Guernsey Co.
C
ompany and Guernsey County officials have unveiled Apex has proposed connecting to those 765kV electric lines, which plans for a new power plant to be constructed in will allow power to easily flow where it will be needed most. Guernsey County to generate electricity for portions of a three-state area. Apex Managing Partner, Michael King, says that Guernsey Power Station, LLC will create “about 500 construction jobs for the twoThe Guernsey Power Station will be constructed in southern year construction period and about 25 full time positions when Guernsey County and will begin generating power within four operational.” years, according to officials of Apex Power Group LLC, which is developing the plant. Guernsey Power Station LLC has applied for electrical interconnection and will apply for Ohio Environmental Protection Powered by the very latest technology, the plant will be both clean Agency and Ohio Power Siting Board permits later this summer and efficient. It will have a projected generating capacity of 1,100 or early fall. Subject to securing financing, Guernsey Power Station megawatts. LLC expects to start construction as early as Spring 2018 and be on-line by Summer 2020.
So, what does that mean?
The Guernsey County commissioners have met with Apex representatives and, so far, are impressed with what they have Guernsey Power Station, LLC will provide enough power to serve both seen and heard. roughly a million, average-size homes, company officials said. “When you consider future property and sales tax revenues, At its core, the plant will consist of two, state-of-the-art, natural this is a huge benefit for not only Rolling Hills Schools but also gas-fired, combustion turbine generators and one steam turbine for Valley Township and all of Guernsey County,” said Dave Saft, generator. The steam turbine generator will be fired by heat commission president. “And that doesn’t even include the positive recovered from the combustion turbines, resulting in improved economic impact on businesses supporting the power station.” electric-generating efficiency and reliability for Ohio. Apex Power Group, LLC was formed in 2007 after the principals The planned construction will be in Valley Township alongside had worked together on the successful development of Panoche Interstate 77, approximately six miles south of Interstate 70. Energy Center in Fresno County, California. More recently, Apex developed the Pio Pico Energy Center, a 300 MW peaking facility The project is designed to support both current and future electrical in San Diego County, California, which is under construction and demand in areas of Ohio, Pennsylvania and West Virginia, as all will achieve commercial operations in September of this year. three states are serviced by regional transmission operator PJM Interconnection. In addition to employing the latest technologies, Guernsey Power Station, LLC is the result of a project targeted to the generating plant will benefit from the abundance of local bring efficient clean power to the Midwest by Apex Power Group, natural gas from the Utica and Marcellus shale, providing clean, the successful developer of two competitive projects which were environmentally-friendly power at a competitive price, officials permitted in one of the toughest regulatory climates in the United States. said. Norm Blanchard, Executive Director of the Community Apex Power Group, LLC will hold public meetings in Guernsey Improvement Corporation (CIC), said he is delighted by the County later this spring to present the project to the community, as required by the Ohio Power Siting Board. announcement. “We think it’s great that Apex Power Group recognized the Anyone who would like more information about this topic, can visit the potential here in Guernsey County,” Blanchard said. “Having the Apex website at www.apexpowergroup.com; contact Mary King at (317) Rockies Express interstate gas pipeline bisect their proposed site, 447-4513; or email her at mary@apexpowergroup.com. along with 765kV electric lines overhead, has made this the perfect location for the project.”
28 OhioGas&Oil
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ouncil turned its focus to the NEXUS Gas Transmission pipeline in April, discussing where the pipeline is projected to go and efforts to get the developer to rethink its placement.
The NEXUS officials did not have additional news for the village, but agreed to look at what other options are available, Kerr said. The pipeline developers will come back to the village later in the month and present their views of the alternative routes.
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As the plans stand, the pipeline is slated to go through the village on its east side, passing through the Woods at Silver Creek, a housing allotment owned by Edward Shondel. The allotment sits south of state Route 585, along Silver Creek Drive, which is just off of Calaboone Road.
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Not all of the allotments have been developed, Mayor Terry Lindeman said, and the development of the pipeline “would disrupt a lot of that allotment.” This comes after council’s action to permit further development of the Woods at Silver
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Creek allotment. When they met March 16, the group passed an ordinance approving the property developer to move forward with Phase 5.
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Lindeman said the pipeline has the ability to impact the other areas slated for development. After crossing through the Woods at Silver Creek, the pipeline is projected to continue east and pass into Gates Street. It would enter into a property owned by A R Lockhart Development. He said the pipeline could cause complications for developing this area as well.
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Kerr said that phase represents five allotments.
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ACI Active In
Natural Gas Industry Judie Perkowski • Dix Communications
P
resenting the eRCM training session at ACI Services, Inc. makes perfect sense. ACI Services are reciprocating compressor experts, and compressors are a vital part of the gas and oil industry, which happens to be right in ACI’s backyard.
name a few.” Topics covered during the eRCM sessions include compressor performance, required modeling data, generating reports, tuning compressors, control issues and adding eRCM Express modeling software.
recent change that allows ACI customers from various energy companies to come together to not only collectively learn about ACI’s software, but to share their compression experiences and goals with peers and counterparts.
“The natural gas industry has experienced a workforce increase over the last few years, due in part to increased natural The training sessions were at ACI Services gas production from various shale gas main facilities in Cambridge April 19-21. fields. New and current employees and employers both benefit from ongoing “ACI is very active in conducting training technical training and skill advancements. and educational programs for the natural ACI software allows end-users to me gas industry, including participation accurately model and control their large reciprocating compressors (from 200 to in training programs. Our location in 15,000 horsepower). This is important, as southeast Ohio provides many benefits accurate compressor models are then used to ACI. In particular, Cambridge is an to drive safer operating environments, excellent location for servicing and provide better use of resources, lead to providing training to energy companies lower emissions, reduce the number of such as EQT, Columbia Pipeline Group, National Fuel Gas, Consumers Energy, DTE “The training session was originally unscheduled shut downs and lead to Energy, Dominion, Tallgrass, Crestwood planned as a one-day event, but because of increasing natural gas flow rates through and more,” said Dwayne Hickman, ACI the overwhelming response two additional pipelines,” he said. vice president of compressor performance days were added to the program,” said Kerri McMullen, ACI creative marketing Hickman added that “the last item technology, and program instructor. designer. “Attendees came from Ohio, (pipelines) expands U.S. natural gas “ACI’s Houston, Texas connection provides West Virginia, Virginia, Pennsylvania, exports, helps to eliminate dependencies these resources to Exxon/Mobile, Conoco Illinois and Michigan.” on foreign energy sources and creates a Phillips, Air Liquid, GE Oil & Gas, more balanced trade between the U.S. and Williams, Chevron and Kinder Morgan to Hickman said that generally, technical other nations.” software t r a i n i n g ACI Services, Inc. 125 Steubenville Ave., is done at Cambridge, Ohio, has specialized in c u s t o m e r designing reliability and operational sites, which solutions for reciprocating compressors for include both more than 50 years. And, although ACI’s domestic and primary focus is designing and building international compressors, the company’s expertise l o c a t i o n s . includes research and development, P r o v i d i n g mechanical field services, spare parts t r a i n i n g resources and reconditioning services. sessions in For more information, call (740) 435-0240, or Ohio and Dwayne A. Hickman, vice president of ACI compressor performance technology, visit www.ACIServicesInc.com. Texas is a educates attendees on reciprocating compressor performance at ACI Services, Inc. “The “e” preceding the Reciprocating Compressor Modeling was originally added for “electronic” since we had successfully moved compressor performance from the static printed page to interactive commercial software back in 1995 with eCurves®. However, today the “e” means “everywhere” in that customers want the same eRCM™ models to be used everywhere in their enterprise: Operations, automation, gas control, procurement, facilities planning, monitoring and diagnostics, etc.,” said Hickman.
eRCM training sessions last month. Photo by Kerri B. McMullen / ACI Services, Inc.
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