March 2020
A Free Monthly Publication
BLM-EASTERN STATES TO HOLD ONLINE OIL AND GAS LEASE SALE MARCH 19, 2020
DESPITE THE U.S. BECOMING
A NET PETROLEUM EXPORTER, MOST REGIONS ARE STILL NET IMPORTERS IN THIS ISSUE: STAND ON OUR OWN TWO FEET - GUEST EDITORIAL
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NEWS. BUSINESS. TECHNOLOGY. ALLIANCE Mindy Cannon 330.821.1200
CAMBRIDGE Paul Reynolds 740.439.3531
OHIO’S GAS & OIL INDUSTRY RAVENNA Jim Williams 330.298.2002
WOOSTER Aaron Bass 330.264.1125
CALL YOUR LOCAL OHIO GAS & OIL SALES REP. TODAY
Table of Contents MARCH 2020 G ROUP PUBLISHER Bill Albrecht
EXECUTIVE EDITOR Beth Bailey bbailey@daily-jeff.com
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A Look Ahead Gas & Oil Events
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BLM-Eastern States to hold Online Oil and Gas Lease Sale
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Despite the U.S. Becoming a Net Petroleum Exporter, Most Regions are still Net Importers
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Member Spotlight: Christopher Halvorson
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Stand on Your Own 2 Feet - Guest Editorial
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Three Key Things to Know About Rolling Stone’s Latest Oil, Natural Gas Hit Piece on TENORM
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Shale Crescent USA Earns Marketing Effectiveness Award
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Ohio Supreme Court to Decide Whether the Ohio Marketable Title Act Applies to Severed Oil and Gas Interests
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Ohio Well Activity
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Horizontal Drilling Activity Graph
On The Cover:
The BLM manages more than 245 million acres of public land located primarily in 12 Western states, including Alaska. The BLM also administers 700 million acres of sub-surface mineral estate throughout the nation. In fiscal year 2018, the diverse activities authorized on BLM-managed lands generated $105 billion in economic output across the country. This economic activity supported 471,000 jobs and contributed substantial revenue to the U.S. Treasury and state governments, mostly through royalties on minerals MARCH 2020
MARCH 2020 ADVER TISING Paul Reynolds Cambridge, Ohio Office preynolds@gatehousemedia.com 740-439-3531 Aaron Bass Wooster & Holmes, and Ashland, Ohio Offices abass@gatehousemedia.com 330-264-1125 419-281-0581 Mindy Cannon Alliance & Minerva, Ohio Offices mcannon@the-review.com 330-821-1200 Jim Williams Kent, Ohio Office jim.williams@recordpub.com 330-298-2002
L AYOUT DESIG NER Phil Luks
pluks@recordpub.com
212 E. Liberty St. Wooster, OH 44691 330-264-1125 “Ohio Gas & Oil” is a monthly publication. © GANNETT Co. Inc. 2020
OhioGas&Oil
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A Look Ahead
Gas & Oil Events MARCH 4-6, 2020
OHIO OIL AND GAS ASSOCIATION’S 2020 ANNUAL MEETING
Hilton Columbus at Easton 3900 Chagrin Dr Columbus, Ohio 43219 Save the Date! More info regarding the event coming soon. LODGING A block of rooms has been reserved at the Hilton Columbus at Easton for March 3, 2020 - March 6, 2020. Event attendees calling for reservations should indicate that they are attending the 2020 OOGA Annual Meeting or mention code “OOG” to receive the reduced rate.
MARCH 11-13, 2020 OHIO SAFETY CONGRESS & EXPO
Greater Columbus Convention Center Columbus, Ohio The Ohio Safety Congress & Expo, now in its 90th year, is the secondlargest occupational safety, health, and workers’ compensation event in the U.S. Last year’s event attracted more than 8,000 attendees from Ohio businesses and government, and more than 300 exhibitors. For three days, OSC 2020 provides world-class workplace safety and health education, in-depth workshops, live demonstrations and much more. The Expo Marketplace, with more than 300 exhibitors on hand, will be abuzz with energy throughout the event. www. ohiosafetycongress.com
vide you with the knowledge you – More than 40 years experience in need to succeed in these changing emergency response and fire edutimes for our business. cation Other Instructors: Includes a team of 15+ state certified fire instructors, emergency reSOOGA - 2020 SPRING MEMsponders and industry experts with BERSHIP MEETING more than 500 years of combined Marietta Shrine Club experience in the oil and gas indusMarietta, OH 45750 try and/ or fire service. TRAINING LOCATION Wayne County Fire & Rescue ReOOGEEP RESPONDING TO OILgional Training Facility FIELD EMERGENCIES TRAINING 2311 South Millborne Road, Apple INSTRUCTORS Creek, OH 44606 Lead Fire Instructor: www.oogeep.org Chief Brent Gates, New Concord Fire Department – Ohio Certified Fire Instructor SOOGA - 2020 2020 SPRING – Adjunct Instructor Ohio Fire AcadGOLF emy Lakeside Golf Course – Board of Directors, Ohio Fire Beverly, OH Chiefs’ Association – President, Southeast Fire Chiefs’ Association
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PIOGA - 2020 SPRING MEETING
Rivers Casino, Pittsburgh, PA Save the Date! Plan to join us on Wednesday, April 1, at Rivers Casino on Pittsburgh’s North Shore as we explore oil and gas industry hot topics that will pro-
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MARCH 2020
BLM-Eastern States
to hold Online Oil and Gas Lease Sale March 19, 2020 Bureau of Land Management
In keeping with the Administration’s goal of strengthening America’s energy independence, the Eastern States State Office announces a quarterly online oil and gas lease sale to be held March 19, 2020. The sale will include 1,126.03 acres located in Amite and Smith Counties, Mississippi; and Monroe County, Ohio. The online auction will begin at 8 a.m. Eastern Time on www.energynet.com. Each parcel will have its own unique open bidding period with start and stop times clearly identified on the auction website. The open bidding period for each parcel will run for three hours from start to finish, and bids will be accepted only during a parcel’s open bidding period. The auction website is open to everyone; however, you must register as a bidder on the EnergyNet site before the sale in order to submit bids for any individual parcel. The public may protest any of the parcels being offered in the sale until February 13, 2020. Protests may be submitted via U.S. Postal Service, postmarked by the due date, addressed to: BLM Eastern States, Attention: State Director, 20 M Street SE, Suite 950, Washington, D.C. 20003; or by fax to: 202-912-7798. Protests may not be emailed nor hand-delivered. The sale notice, environmental assessments, maps of the parcels, and the attached stipulations are linked at the BLM Eastern States State Office website here: https:// www.blm.gov/programs/energy-and-minerals/oiland-gas/leasing/regional-lease-sales/eastern-states. Oil and gas leases sales support domestic energy production and American energy independence. The BLM’s energy program follows an all-of-the-above approach that includes oil and gas, coal, strategic minerals and renewable sources, all of which can be developed on public lands. A lease issued as a result of this sale will have a primary term of ten years. It will continue beyond its primary term as long as oil or gas in paying quantities is produced on or for the benefit of the lease. The Federal government receives a royalty of 12 and one-half percent of the value of production. Each state government receives a 25 percent minimum share of the bonus bid and the royalty revenue from each lease issued in that state. MARCH 2020
About BLM The BLM manages more than 245 million acres of public land located primarily in 12 Western states, including Alaska. The BLM also administers 700 million acres of sub-surface mineral estate throughout the nation. In fiscal year 2018, the diverse activities authorized on BLM-managed lands generated $105 billion in economic output across the country. This economic activity supported 471,000 jobs and contributed substantial revenue to the U.S. Treasury and state governments, mostly through royalties on minerals.
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Despite the U.S. Becoming
a Net Petroleum Exporter,
Most Regions are still Net Importers U.S. Energy Information Administration
XXXXXXXX
Source: U.S. Energy Information Administration, Petroleum Supply Monthly
In November 2019, the United States exported 772,000 barrels per day (b/d) more petroleum (crude oil and petroleum products) than it imported, marking the third consecutive month in which the United States was a net petroleum exporter. Although the United States is a net petroleum exporter as a whole, most regions other than the U.S. Gulf Coast region remain net petroleum importers. Net petroleum trade is calculated as the total imports of crude oil and petroleum products minus the total exports of crude oil and petroleum products. In September 2019, the United States became a net petroleum exporter for the first time since monthly records began in 1973. The United States is a net importer of crude oil. In November 2019, the latest monthly data, it imported 5.8 million b/d of crude oil and exported 3.0 million b/d of crude oil. The United States is a net exporter of petroleum products (such as distillate fuel, motor gasoline, and jet fuel). In November 2019, the United States exported 5.8 million b/d of petroleum products and imported 2.2 million b/d of petroleum products.
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Source: U.S. Energy Information Administration, Petroleum Supply Monthly
Regional petroleum trade patterns are still determined by geographical factors, existing infrastructure, regional balances of supply and demand, and other constraints—factors that often change slowly. In recent years, significant growth in crude oil output and infrastructure changes to refineries, pipelines, and terminals in the U.S. Gulf Coast region have led to most of the changes in U.S. petroleum trade patterns. Exporter continued on page 5
MARCH 2020
Exporter continued from page 4
FOR LEASE:
Source: U.S. Energy Information Administration, Petroleum Supply Monthly
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Of the five regions (also referred to as Petroleum Administration for Defense Districts), only the U.S. Gulf Coast currently exports more crude oil than it imports: 2.9 million b/d of exports compared with 1.2 million b/d of imports in November. The Gulf Coast continues to import primarily heavy, high-sulfur crude oil, which most Gulf Coast refineries are configured to process. Imports from Mexico and Canada are nearly tied as the largest sources of Gulf Coast crude oil imports. Canada is also the largest source of crude oil imports for the Midwest, which is now the largest crude oil importing region; crude oil net imports totaled 2.5 million b/d in November. In other regions, crude oil trade patterns are relatively unchanged.
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Target the sweet spots of the local gas & oil industry by advertising in the Ohio Gas & Oil Magazine. Source: U.S. Energy Information Administration, Petroleum Supply Monthly
Similar regional differences exist for petroleum products as well. The United States has been a net exporter of motor gasoline on an annual basis since 2016; motor gasoline exports—mostly from the U.S. Gulf Coast— have more than offset motor gasoline imports, especially to the U.S. East Coast. The U.S. Energy Information Administration’s (EIA) January 2020 Short-Term Energy Outlook forecasts that U.S. petroleum net exports will average 0.8 million b/d in 2020 and 1.4 million b/d in 2021. If these forecasts are realized, the United States would be a net petroleum exporter for the first time on an annual basis in EIA’s data series that dates back to 1949. EIA forecasts that the United States will remain a net importer of crude oil in both years, importing a net 3.9 million b/d of crude oil in 2020 and 2.9 million b/d in 2021.
MARCH 2020
MAGAZINE OHIO’S GAS & OIL INDUSTRY NEWS. BUSINESS. TECHNOLOGY.
CALL YOUR LOCAL OHIO GAS & OIL SALES REP. TODAY SEE PAGE 1 FOR MORE INFO OhioGas&Oil
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MEMBER SPOTLIGHT:
CHRISTOPHER HALVORSON BRAD MILLER | Membership Director, Ohio Oil & Gas Association When Christopher Halvorson grada private-equity-backed portfolio uated from Indiana University at company that focused primarily on South Bend in 1998, it wasn’t obvious horizontal Marcellus development in that he would ever become involved Marshall County, West Virginia. in the oil and gas industry, much less As the Chief Financial Officer at AB become the CEO of a company of Resources, Halvorson led all aspects about 30 employees and more than of the company’s financial manage700 producing wells across the Apment and oversaw its gas marketing palachian Basin. function, which included procuring Both of his parents came from access into pipeline systems and the large farming families in Madison, control of gas purchase agreements, Wisconsin, which is where most of as well as employing a commodity his extended family remains. So his price risk management plan. parents’ decision to move to South Nine years later, in March 2015, Bend, Indiana, just a mile from Notre Halvorson co-founded Pin Oak EnDame’s campus, is something that ergy Partners, which is based in Akstands out. ron and currently operates over 700 “We were the black sheep by movwells, holds 178,000 net deep acres ing out of the area and by not being and owns 125 miles of midstream dyed-in-the-wool Badgers and Packgathering assets, primarily in Ohio ers fans,” Halvorson said. and Pennsylvania. The company has Before attaining a Bachelor’s deacquired both conventional and ungree in Accounting and Finance at conventional wells, and it is lookChristopher Halvorson, IU, he attended the University of Toing to expand its midstream assets. CEO, Pin Oak Energy Partners ledo, where he also played baseball “That’s a section of the business that and eventually met his wife. Once all we intend to grow as quickly as we’ve of his schooling was complete, he and his wife moved grown on the E&P side,” Halvorson said. to the Cleveland area, where he began his professional “The way we view the world is that, where we are career as a CPA with the accounting firm Hausser + now coming out of this boom period in the AppalaTaylor, LLP. chian Basin, you have a lot of companies that came From there, it didn’t take long for him to develop a into the Basin that now have assets that are non-core keen interest in the oil and gas sector. Early on in his to either their Appalachian footprint or are non-core public accounting career, he began to focus on energy to their entire domestic footprint,” he said. “From our clients for which Hausser + Taylor provided services. standpoint, those type of assets make attractive acqui“Once you develop a niche in public accounting— sition targets.” whether in health care, non-profits, energy, manufacOne thing Halvorson finds beneficial is the wealth turing—you start to gain more clients in that area be- of information and knowledge that the industry has cause of your expertise,” he said. “So I had a lot of gained since the early phase of unconventional develexpertise in both the audit side of oil and gas, as well opment, when the Marcellus and Utica were still in their as on the tax side of things.” infancy. “What we understand today about both geoloOne of those clients was northeast Ohio-based North gy and completion technique can inform our decisions Coast Energy, which hired him as an assistant control- about where we think there is still a lot of good rock ler in 2001. A few years later, he and some other key remaining,” he said. members of North Coast Energy sold the company As CEO, Halvorson said his primary role is to make to EXCO Resources, Inc. out of Dallas, Texas. In 2006, sure Pin Oak is looking at opportunities—either Halvorson became one of the founding members of through acquisitions or development—that make the Appalachian Basin Resources, LLC (or AB Resources), most sense on a risk-adjusted return basis. To accomMember continued on page 7 6
OhioGas&Oil
MARCH 2020
Member continued from page 6
plish this, he works with their engineers, geologists and pipeline experts to select the opportunities that fit company’s risk profile. The overarching challenges for the oil and gas industry are obvious, he says: Oversupply leading to low commodity prices. “We’re one of the few industries in the world that, the better we are at things, the harder it gets for us.” However, while low prices pose serious challenges for the industry, he is proud of the fact that the growth in production of oil and natural gas has resulted in an abundance of affordable energy for American industry and families, including in our neck of the woods. Achieving a more stable supply-demand equilibrium and settling into a better-known commodity price will
“What we understand today about both geology and completion technique can inform our decisions about where we think there is still a lot of good rock remaining.” strengthen the industry, he said, though he thinks that may still be five to seven years away. Getting back to 2020, however, this year marks the beginning of Halvorson’s service on the OOGA Board of Trustees, following his election last October. How did this native of Indiana with roots in Wisconsin come to serve on the Board of the Ohio Oil & Gas Association? Halvorson’s involvement and membership with OOGA dates back about 20 years as a frequent attendee at events back in his public accounting days. In addition, the aforementioned North Coast Energy and AB Resources were each members of the Association.
Halvorson believes a major part of OOGA’s purpose and success is maintaining unity among its members and emphasizing the importance of conventional and unconventional operators working together toward the common goal of strengthening the industry as a whole. And he believes Pin Oak’s perspective can play an important role in that effort. “I hope to bring to the Board the viewpoint of an unconventional producer that is based in the Appalachian Basin that wants to be in the Basin for the long term,” he said. Finally, he believes it is important that those working in the industry spread the message far and wide—from citizens to lawmakers to other industries—about the value that the oil and gas sector brings to the economy and to our way of life. “As the premier natural-gas-producing region in the world, we have to be proactive on detailing the benefits that come from our industry through working in the Statehouse and making sure that Ohioans and companies coming to Ohio achieve those benefits,” he said. The member spotlight series features OOGA members making an impact with their membership. If you would like to recommend someone to be highlighted, please contact Brad Miller at: bmiller@ooga.org
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Stand on Our
Own 2 Feet Guest Editorial
GREG KOZERA | Shale Crescent USA The MacMillan Dictionary defines the phrase, “stand on your own two feet” as; “To behave in an independent way, especially by not asking for financial help from anyone.” Or, “To do something without help.” Or, “Fend for yourself.” In my case I’m literally working to ultimately stand on my own two feet without help or support from anyone or anything. My goal is to walk again without the help of parallel bars or a walker. That is what it will take for me to once again be fully independent. I want to be able to drive again and run a half marathon by this time next year. When we hear, “stand on your own two feet” some of us may think about our children or grandchildren.
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other out. My brother never fully grew up until Mom died and the house had to be sold. It was a struggle for him. The rest of us brothers helped some initially but our goal was for him to be independent. He still needs assistance occasionally but he is now standing on this own 2 feet. He feels better about himself since he is on his own. In our businesses, we should want those who work for and with us to be able to make many decisions on their own. To stand on their own two feet, instead of running to us before they do anything. When I took over as Regional Manager in one of my former lives, the manager I replaced was a very controlling. He made all the decisions. I was shocked by all supervisors coming to me for decisions they should have been making on their own. I know I’m not the brightest bulb. I knew they could make better decisions than me in their area of expertise. It was time for them to stand on their own 2 feet. It took a few months to make the adjustment. Once the supervisors started standing on their own 2 feet, I had more time to do my job because they were Stand continued on page 9
MARCH 2020
Stand continued from page 8
making their own decisions. Our supervisors were happier being in control of their departments. Moral improved across the board. The supervisors were making better day to day decisions than I could have. As a result, our profitability soared. We all want to see job growth. We want to see more high wage jobs coming to this Region. No one is going to come riding into town on a white horse and solve all our problems. Washington DC isn’t focused on jobs or infrastructure. They were focused on and distracted by impeachment. If we are going to see job growth it is up to all of us. We have to stand on our own 2 feet and each do our part. We need to keep our attitudes positive. We can help grow our skilled workforce by encouraging young people to consider the skilled trades and technical school. We all have a network. We can share the story of our Region’s advantages. We need to understand the advantages we have that are unique. We have abundant water. We have an experienced workforce with a strong work ethic. We have abundant energy. We are close to major markets. The Shale Crescent USA is the ONLY place on the planet where a company can build on top of their energy and feed stock while being in the middle of their customers. The mission of the Shale Crescent USA organization
is to create high wage permanent jobs and to raise the standard of living of people in this Region. The Shale Crescent founders realized we couldn’t wait for government. There are many things a small non-government organization can do better with no bureaucracy and the ability to act quickly. We have been able to market the Region globally. We can work closely with companies because we are a neutral third party. We don’t promote a particular state or site. We need government for infrastructure improvements and to close deals with their sites and economic incentives. Just like coming back from my injury it takes time. We are seeing the results of everyone’s work. This is a magical time of year. Continue to believe! Thoughts to ponder. © 2019 Shale Crescent USA Greg Kozera, gkozera@shalecrescentusa.com is the Director of Marketing and Sales for Shale Crescent USA. He is a professional engineer with a Masters in Environmental Engineering who has over 40 years’ experience in the energy industry. Greg is a leadership expert and the author of four books and numerous published articles.
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Three Key Things to Know About Rolling Stone’s Latest Oil, Natural Gas Hit Piece on TENORM energyindepth.org Rolling Stone author Justin Nobel has been spending a lot of time in the Appalachian Basin recently, and not because some of the biggest bands in history will be touring here this year, as one would expect from the music magazine. Instead, Nobel has been conducting a tour of his own, amplifying “Keep It In the Ground” research and messaging, and writing his latest misleading hit piece on the oil and natural gas industry. His latest article claims that the industry is knowingly exposing workers and communities to high levels of radiation through the produced water and solids that result from drilling. And while he peppers in statements from regulatory officials, the overall image he paints is a false one, of an unregulated industry, despite this being one of the most regulated industries in the country. Here are three key things to keep in mind when reading the Rolling Stone article: Fact #1: This isn’t the first time Rolling Stone or Justin Nobel have misled the public. Rolling Stone suffered “a loss of reputation, journalistic credibility and $3 million,” when it was forced to retract and admit that a story it ran in 2015 was completely made up. Similarly, Nobel’s and the magazine’s coverage on oil and natural gas – whether it was blaming infant deaths on drilling in Utah, portraying pipelines as underregulated and unsafe, or misleadingly praising a compendium full of debunked research as a “new” “authoritative study,” among others – has been high on KIITG rhetoric, but short on actual facts.
Fact #2: Multiple regulatory agencies have determined oil and natural gas activity is not a health concern. Contrary to Nobel’s claims that radon and radiation have not been well-studied, a multitude of research has been conducted on both radon and technically enhancednaturally occurring radioactive material, or TENORM. To his credit, Nobel mentions a 2015 Pennsylvania Department of Environmental Protection study that found “there is little potential for harm to workers or the public from radiation exposure due to oil and gas development.” But Nobel included criticism of the report from Marvin Resnikoff, whose own research has been intensely scrutinized, including by the U.S. Geological Survey that said Resnikoff “relied on theoretical calculations utilizing limited data from geologic analogs.” Nobel and Resnikoff criticized the PaDEP report for “ignor[ing] the well-documented risks posed by the inhalation or ingestion of radioactive dust,” but in fact, PaDEP’s study did consider inhalation in its study. Specifically as it pertains to one of Nobel’s major talking points, the spreading of brine (produced water) on roads, PaDEP found “limited potential” for people enjoying the outdoors to be exposed to radiation from this practice, explaining: “The recreationist is an appropriate exposure scenario based on the remote location of the roads. A recreationist, such as a jogger or hunter, usually spends less time on the impacted area, e.g., two hours a day, three days a week, than a resident. However, a recreationist may have a higher inhalation rate than a resident. Recreational land use addresses exposure to people who spend a limited amount of time at or near a site while playing, fishing, hunting, hiking, or engaging in other outdoor activities.” (pg. 158) Not only does the Rolling Stone article fail to include PaDEP’s findings on brine being used as a road de-icer and for dust control, but there’s also no mention of other state agencies’ findings. For instance, Ohio Department of Natural Resources has also been studying the application of brine on roads. ODNR spokesman Adam Schroeder recently told The Columbus Dispatch: “The (Ohio Department of Natural Resources Division of Oil & Gas Resources Management) has collected brine samples from both brine hauler trucks and wells. These Three continued on page 11
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samples are helping the division to establish baseline radiological data on naturally occurring radioactive material in produced brine from different geological formations.” “Recent models from both the Ohio Department of Health and the Pennsylvania Department of Environmental Protection show that controlled application of brine containing naturally occurring radioactive material offers a negligible risk to human health.” (emphasis added) Similarly, a 2015 West Virginia Department of Environmental Protection report found: “Radioactive compound levels in landfill leachate are at similar levels at both landfills that accept drill cuttings, and landfills that don’t accept drill cuttings.” “Drill cuttings from the Marcellus Shale formation contain radioactive compounds at levels higher than the overlying strata, and are likely contributing to radioactive compounds present in landfill leachate. However, radioactive compounds are found at landfills that don’t accept drill cuttings, therefore it can be expected that radioactive compounds present in landfill leachate, at landfills that accept drill cuttings, are also the result of other materials being accepted in the landfill.” ( emphasis added, 154) Further, Nobel included criticism of the Pennsylvania report for “downplay[ing] the radioactive gas radon,” but ignores the WVDEP’s findings that: “Radon levels recorded are significantly below proposed federal drinking water standards.” There is also no mention that New York Department of Environmental Conservation reached similar conclusions to PaDEP on TENORM and public health in 2013: “Based on currently available information it is anticipated that cuttings and flowback water will not contain significant levels of naturally occurring radiological materials (NORM)…. Any potential worker-health or waste-disposal impacts related to concentrated NORM are already subject to controls under existing DOH and DEC regulations…with those measures in place, potential significant adverse impacts on human health from NORM exposure are unlikely.” Separately, radon has also been studied extensively in Pennsylvania where homes historically have significant issues with the gas, including in areas well outside the Marcellus Shale region. Try watching this video on www.youtube.com, or enable JavaScript if it is disabled in your browser. In 2016, researchers at Carnegie Mellon University released a report concluding “there is no support” to back up activists’ claims about cancer risks from radon in Marcellus Shale gas. This research was supported by the PaDEP’s citizen’s guide on radon that explains: “Radon from soil gas is the main cause of radon problems” in homes in Pennsylvania. Fact #3: The oil and natural gas industry is strictly regulated, including in how it manages solid waste and produced water.
MARCH 2020
There are strict regulations on how the drill cuttings and other solids that result from shale development are tested and disposed of. In Pennsylvania, for instance, Chapter 288 of Pennsylvania’s Residual Waste Landfills regulation regulates all solid waste and includes sections of the Radiation Protection Act, which specifically regulates disposal of drill cuttings into landfills. In addition to monitoring, these regulations even dictate specific areas of the landfill that can be used for materials releasing radiation: “For noncaptive residual waste landfills, a designated area for vehicles for use in the event of the detection of waste containing radioactive material. The designated area shall, by location or shielding, protect the environment, facility staff and public from radiation originating in the vehicle. The Department’s ‘‘Guidance Document on Radioactivity Monitoring at Solid Waste Processing and Disposal Facilities,’’ Document Number 250-3100001, describes various factors to consider in determining an appropriate designated area.” Produced water is also strictly regulated and typically managed by recycling and reuse, disposal in injection wells or treated at facilities licensed to process the water. Importantly, approximately 90 percent of the brine produced in Pennsylvania is recycled and reused in the development of future natural gas wells. In Ohio, because of its more extensive network of injection wells, that is the more common form of management. Notably, this isn’t the first time that Nobel has painted an image of Ohio’s injection wells being dangerous. EID took him to task in 2017 for similar claims, and the fact remains that the state’s injection well program is one of the best in the country, and has been described as a case study on best management practices. In 2015, the U.S. Environmental Protection Agency evaluated Ohio’s compliance under the Clean Water Act, Clean Air Act, and Resource Conservation and Recovery Act, concluding that ODNR is running a “good quality program.” And the Groundwater Protection Council stated: “Ohio is at the forefront of regulating Class II injection wells and is continuously advancing regulations of the UIC program. ODNR’s ongoing efforts provide the necessary protections to help ensure that Ohio’s underground drinking water resources are safe.” Conclusion The health and safety of its workers is a top priority for the oil and natural gas industry across the country. That’s a fact that continues to be demonstrated through in-depth trainings and procedures, the sole purpose of which is to protect the people whose work fuels the world. Nobel’s latest piece is one in a long line of biased imitations of investigative journalism that push a “Keep It In the Ground” narrative, while ignoring science.
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Shale Crescent USA
Earns Marketing Effectiveness Award Shale Crescent USA, an economic development organization whose goal is to market Eastern Ohio, West Virginia and Pennsylvania’s unique competitive advantages and opportunities to leverage the area’s low-cost, abundant natural gas and natural gas liquids (NGLs) to high-energy intensive industries has been recognized as a winner of a 2019 Summit Marketing Effectiveness Award. Shale Crescent won in the category of integrated business to business campaigns. “The Summit Marketing Effectiveness Award competition is based on the premise that the goal of marketing communications it change, influence, and reinforce an audience’s knowledge, attitudes and beliefs,” stated Nathan Lord, Business Manager for Shale Crescent USA. Lord added, “The Summit International Marketing Effectiveness Award is one of the premier arbiters of marketing excellence and winning provides a validation of our efforts to attract new businesses and high
paying jobs to the region.” The Shale Crescent USA messaging has been seen and heard in The Wall Street Journal, Forbes, Bloomberg Television, Houston Chronicle, Washington Examiner, S&P Global, Yahoo Finance, Global Trade Magazine and The Economist, to name a few, generating over 300 million impressions worldwide. Summit International Awards received more than 1,400 entries from 10 countries with recognition going to only 6% of total submissions. The Summit Marketing Effectiveness Award recognizes and rewards companies for innovative and leading-edge creative work that uses strategy and results-based effectiveness to create solutions in today’s marketplace. Founded in 1994, the Summit Awards employs international panels of judges to evaluate submissions.
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Are Your Royalty Checks Correct? From preparing your year-end income tax return and conducting meetings with service providers to performing royalty audits and identifying a wealth enhancement plan that’s tailored to meet your family’s unique needs. Give us a call and find out if you could be missing out on an even bigger pay day.
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Jim Fracker
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Scott Moyer
740.630.9644 740.454.3297 jim.fracker@reacpa.com scott.moyer@reacpa.com CJ-10715920
Learn more at www.reacpa.com/ohio-oil-gas
MARCH 2020
Ohio Supreme Court to Decide Whether the Ohio Marketable Title Act Applies to Severed Oil and Gas Interests David J. Wigham | Attorney On January 21, 2020, the Supreme Court of Ohio accepted jurisdiction over West v. Bode, an appeal from the Seventh District Court of Appeals, to decide an important legal issue that should provide much-needed clarity to landowners, mineral owners, and shale producers, specifically, whether both the Marketable Title Act (“MTA”) and the Dormant Mineral Act (“DMA”) may be used to quiet title to severed oil and gas interests, or whether the two statutes conflict and the DMA provides the exclusive remedy. As a backdrop, following the Ohio Supreme Court’s decision in Corban v. Chesapeake Exploration, L.L.C., 2016-Ohio-5796—which held that the 1989 version of the DMA was not self-executing and did not allow for automatic abandonment of severed minerals and that the 2006 version of the DMA applied to the abandonment of severed minerals—many landowners began using the MTA as an alternative means to terminate severed oil and gas interests. In general, the MTA automatically extinguishes property interests created prior to a landowner’s chain of title to property if the landowner has an unbroken chain of title for more than 40 years after the prior property interest was created and there were no specific references to the prior interest in the landowner’s chain of title. Conversely, as a general matter, the 2006 DMA deems a severed mineral interest abandoned only after a surface owner serves a notice of abandonment on the mineral holders and those mineral owners do not timely respond by filing a preservation of their mineral interest. Because the MTA automatically extinguishes mineral interests whereas the DMA requires the surface owner to first give notice and provides the mineral owner with an opportunity to preserve, the MTA is viewed as more favorable for landowners.
MARCH 2020
In the West v. Bode case, landowners brought an action against severed royalty interest holders under the MTA seeking to quiet title to those severed interests in their favor. The trial court concluded that the landowners failed to state a claim under the MTA because the MTA conflicted with the DMA, and the DMA—being the more specific statutory provision—controlled. On appeal, the Seventh District disagreed, declining to find a conflict between the MTA and DMA and therefore concluding that both statutes may be utilized in quiet title litigation seeking to terminate severed oil and gas interests. West v. Bode, 2019-Ohio4092. Upon a discretionary appeal from that decision, the Supreme Court of Ohio accepted one proposition of law: “The specific statute being the Ohio Dormant Mineral Act O.R.C. Section 5301.56 supersedes and controls over the Ohio Marketable Title Act being a general statute O.R.C. 5301.47, et seq. and the two are in conflict as shown herein.” Under Ohio law, when two statutes are in conflict, the specific statute controls over the more general statute. In the context of the MTA and the DMA, many mineral owners, like those in West v. Bode, have argued that the more specific DMA should apply to the termination of severed mineral interests instead of the more general MTA, because the two statutes are in conflict. The Ohio Supreme Court’s decision in Blackstone v. Moore, 2018-Ohio-4959, added fuel to this dispute, because although that case involved interpretation of an MTA exception in a quiet title action involving a royalty interest, the Court did not explicitly hold that the MTA applied to mineral interests, and one Justice wrote a separate concurring opinion questioning the MTA’s appliOhio continued on page 14 OhioGas&Oil 13
Ohio continued from page 13
cability to mineral interests in light of its conflict with the more specific DMA. However, following the release of Blackstone on December 13, 2018, the Seventh District issued a series of decisions, including West v. Bode, in which it continued to apply the MTA to severed mineral interests. The acceptance of West v. Bode will result in an Ohio Supreme Court decision determining whether the MTA and DMA conflict and whether the MTA may be utilized as an alternative means to terminate severed mineral interests. There will be intense interest in the outcome of this case as the Court’s ruling will undoubtedly result in a large shift in ownership of valuable mineral rights. And if there was any doubt that the Supreme Court will be deciding this issue, on February 4, 2020, the Court also agreed to jurisdiction and hold the cross-appeal in Miller v. Mellott, 2019Ohio-1515, on the same issue that was accepted by the Court in West v. Bode. Ohio law regarding the termination and preservation of severed oil and gas rights is still evolving. The rights of surface owners under the MTA are now in flux given the Supreme Court’s decision to review the issue of whether the MTA even
applies to severed oil and gas interests. A ruling by the Supreme Court of Ohio that MTA does not apply would be a major defeat for landowners seeking to extinguish valuable mineral interests and a huge victory for mineral owners seeking to preserve these interests. Under either the MTA or the DMA, litigation is usually needed to “quiet title” to the disputed mineral or royalty interests before ownership of the interest will be recognized. The combined impact of continued uncertainties in the law and the need for litigation highlights the importance of retaining an experienced oil and gas attorney who can advise clients with respect to severed oil and gas interests. David J. Wigham is a second-generation oil and gas attorney at the firm of Roetzel & Andress, with more than 28 years of experience in the industry. He maintains offices in Akron and Wooster, Ohio, and can be reached at 330-762-7969 or dwigham@ralaw.com.
OHIO’S LEADING CHOICE IN
OIL AND GAS LAW Roetzel’s experienced Oil and Gas attorneys provide a wide array of legal services focused on landowner representation including: • Leasing and lease renewals, ratifications and amendments • Litigation, including: Lack of production, Dormant Mineral Act, Marketable Title Act • Pooling and unitization • Pipeline easements • Surface development • Mineral LLC’s • Royalty disputes
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For additional information, contact Dave Wigham at dwigham@ralaw.com or Tim Pettorini at tpettorini@ralaw.com.
GAS AND OIL TEAM MEMBERS: EMILY ANGLEWICZ, SARA FANNING, BEN FRAIFOGL, PATRICK HANLEY, JEREMY MARTIN AND BRET MCNAB • 222 SOUTH MAIN STREET I AKRON, OH 44308 I 330.376.2700 • 121 NORTH MARKET STREET, 6TH FLOOR I WOOSTER, OH 44691 I 330.376.2700
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MARCH 2020
OHIO WELL ACTIVITY by the numbers
UTICA SHALE
MARCELLUS SHALE 26 10 6 35
77
Wells Permitted Wells Drilling Wells Drilled Not Drilled Wells Producing Inactive Other Total Horizontal Permits
Data as of 2/1/20
478 124 128 2434
3190
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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Commercial land & building with high traffic across from Walmart, 7.5 acres, previous businesses include: Drive thru carryout, beauty salon, tanning business, storage units, great location for oil & gas business just south of I70 & I77. 30 x 80 metal building attached to office building. Building and land can also be leased separately or together. $499,900.
Call our Cambridge office @ 740-439-1111
Call our Cambridge office @ 740-439-1111
We also have just over 2 acres for sale that would make a great commercial property on Rt 209 ( 61024 SOUTHGATE) in the vicinity of Walmart. $385,000. Call our Cambridge office @ 740-439-1111
CAROL GOFF & ASSOCIATES OPERATES 13 OFFICES. COVERING 15 COUNTIES IN SOUTHEASTERN & CENTRAL OHIO We are a full service Real Estate company handling both buyers and sellers of residential, commercial, farms, acreage and investment properties. We also offer auctioneering services and appraisals. CJ-10709717 CJ-10722209
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Visit us at www.carolgoffrealestate.com OhioGas&Oil 15
TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY BY NUMBER OF SITES
1. Belmont County.........681 2. Carroll County......... 526 3. Harrison County....... 499 4. Monroe County.........494 5. Guernsey County...... 280 6. Jefferson County...... 264 7. Noble County.......... 227 8. Columbiana County...163 9. Mahoning County....... 29 10. Washington County... 21 11. Tuscarawas County.... 20 12. Portage County........ 15 Trumbull County........ 15 13. Stark County............ 12 14. Coshocton County....... 5 15. Muskingum County...... 4 Holmes County........... 3 16. Morgan County.......... 2 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 2/1/20
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