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September 2016 • A Free Monthly Publication
Clinton and Trump: Energy Policies Election 2016
IN THIS ISSUE: GAS/OIL EMERGENCY HOTLINE
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Table of Contents SEPTEMBER 2016
4
A Look Ahead Gas & Oil Events
5
Farm Bureau Organizes Pipeline Meetings
7
Nexus Pipeline Alternative Route Could Hit Stark and Wayne Counties with Force
8
Sweeney Joins Bricker & Eckler Gas & Oil Team
2
Andrew S. Dix ASDix@dixcom.com
10
Ohio Oil and Gas Association Honors Tom Stewart
12
Governor Kasich Creates Hotline for Gas/Oil Emergencies
14
Clinton Ties Energy Plan to Climate Change
16
Trump Puts ‘America First’ in Energy Plan
19
Ohio Natural-Gas-Fired Plant Is on Schedule
After Nearly 40 Years, Beck Energy Is Still Drilling
26
Natural Gas-Fueled Vehicles in Ohio
OhioGas&Oil
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
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29
PUBLISHERS
Asset Protection and Its Connection to Estate Planning
Erica Peterson EPeterson@dixcom.com Cathryn Stanley CStanley@dixcom.com Niki Wolfe NWolfe@dixcom.com
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Table of Contents SEPTEMBER 2016
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ADVER TISING Kim Brenning Cambridge, Ohio Office KBrenning@dixcom.com 740-439-3531
What Is Fair Payment for a Pipeline Easement?
Kelly Gearhart Wooster & Holmes, Ohio Offices KGearhart@the-daily-record.com 330-287-1653 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
L AYOUT D E SIG NE R
On The Cover:
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kwalter@times-gazette.com ‘Generations of Amish Craftwork with Modern, Professional Site Management’
GasandOilMag.com
September 2016 • A Free Monthly
Publication
Clinton and Trump: Energy Policies Election 2016
AL-10479462
“Gas & Oil” is a monthly publication jointly produced by Dix Communications. Copyright 2016. GasandOilMag.com
ENCY HOTLINE IN THIS ISSUE: GAS/OIL EMERG
The United States is poised to make its decision on who will be in the White House for the next four years. Whoever is elected will have an impact on policies governing the gas and oil industry. Where do Hillary Clinton and Donald Trump stand on energy policy? See more on Page 14 and Page 16.
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A Look Ahead
Ohio’s Gas & Oil Events • September 15, 2016 • October 22-23, 2016 SOOGA Annual Trade Show, Washington County OOGEEP October Firefighter Workshop, Apple Creek, Fairgrounds, Marietta, Ohio Ohio. Visit http://oogeep.org/event/oogeep-october2016-firefighter-workshop/ for more information. • September 17-18, 2016 OOGEEP September Firefighter Workshop, Apple Creek, • October 30-November 1, 2016 Ohio. Visit http://oogeep.org/event/oogeep-septemberNARO Appalachia Convention, White Sulphur Springs, 2016-firefighter-workshop/ for more information. West Virginia. Visit http://www.naro-us.org/ for more • September 25-27, 2016 information. Eastern Section, American Association of Petroleum Geologists (ES-AAPG), Lexington, Kentucky • October 14, 2016 SOOGA Fall Clay Shoot, Hilltop Sports, Whipple, Ohio
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Farm Bureau Organizes
Pipeline Meetings Bobby Warren • Dix Communications
W
ayne County is now on the clock.
The phrase is overused as it relates to the NFL’s rookie draft, but it was essentially the message from a Farm Bureau official to residents and elected officials throughout Wayne County during a series of meetings regarding the NEXUS pipeline project. Because of the possibility the NEXUS pipeline could be rerouted from the northeastern corner of the county to the southern and western portions of Wayne, the Wayne County Farm Bureau has been organizing these meetings led by Dale Arnold, director of energy for the Ohio Farm Bureau Federation based in Columbus. Arnold has been talking to farmers, property owners, concerned citizens and elected officials to stress how important it is for them to share comments with the Federal Energy Regulatory Commission. To the Chippewa Township trustees and residents in and around Doylestown, the NEXUS pipeline is nothing new. They have been battling its potential construction on Arnold encouraged everyone to let FERC staffers and every front. As Trustee Lenny Broome said, he and his commission members understand that they only had a month colleagues want to see it rerouted and moved out of the to investigate and respond to the matter. township. Cletzer also wanted to know why FERC would not inform Some north of Wayne County have been dealing with the elected officials along the proposed study corridor. If it were issue for about two years, Arnold said. However, FERC not for the Wayne County commissioners and Farm Bureau, released a draft environmental impact statement July 27, and they would not have known, he added. the document pointed out there is something called the city of Green reroute alternative. This potential rerouting would The meetings have beeb an opportunity for the farmers, shift the pipeline to the southern and western portions of property owners and elected officials to share their concerns. Wayne County. He did go over seven areas people should consider Congress Township Trustee Bill Cletzer wanted to know who commenting on to FERC: Geology and soils on the farm; set the timeline because one month is not enough time to what kinds of water resources and wetlands are on the understand the full scope of the 108-mile reroute alternative. property; if there are any threatened vegetation, water fowl, Story continued on page 6
GasandOilMag.com
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Story continued from page 5
Indiana bats or endangered species; any socioeonomic impacts; what cultural resources there are (rumored Indian burial grounds, family cemeteries, legacy trees, historical churches); how it will affect air quality and noise; and public safety concerns. People should not try to raise all seven points in their testimonies before FERC, rather they should focus on two or three issues in which they have the most knowledge, Arnold said. For those who cannot make one of the three relatively local meetings in Wadsworth, Elyria in Uniontown, Arnold recommended they write letters and submit the written testimony. That will also be considered by FERC staffers and commission members. While the farmers can talk about how their individual farms might be harmed in the process, Arnold told township trustees and county commissioners Ann Obrecht, Scott Wiggam and Sue Smail as elected officials they could not advocate on behalf of individual property owners. They could, however, advocate for the community as a whole. They can talk about how they would like to see any tax money used. They could talk about what type of training would be required in order for first responders to be properly
trained to handle any type of pipeline accident. They also should consider whether the project requires public safety departments to purchase any type of specialized equipment. Who will pay for any needed equipment? Though FERC is a large, independent federal governmental entity, the comments really do mean something, Arnold said. He noted some changes that were made for the betterment of farmers along the ET Rover pipeline. Those changes came about because local people provided comments at local meetings and they submitted written testimony. Arnold stressed the reroute alternative is not etched in stone, but it is something FERC wants to explore. The Associated Press has reported the project will cost about $2 billion; NEXUS Gas Transmission hopes to have the pipeline built and ready to transport gas from the Marcellus and Utica shale fields by November 2017. It will be 255 miles of 36-inch pipeline that will travel through Ohio and Michigan into Ontario, Canada. Reporter Bobby Warren can be reached at 330-287-1639 or bwarren@the-daily-record.com. He is @BobbyWarrenTDR on Twitter.
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Nexus Pipeline Alternative Route Could Hit Stark and Wayne
Counties with Force
O
David J. Wigham • Attorney ver the past month, hundreds of Wayne County, Stark County, and Medina County landowners received a package from the Federal Energy Regulatory Commission (or “FERC”) informing them that they may be in the path of another large interstate pipeline project known as the NEXUS Gas Transmission system. The NEXUS Gas Transmission system (or the ‚“NEXUS Pipeline” for short) is a proposed pipeline system sponsored by NEXUS Gas Transmission, LLC (or “NEXUS”, a joint venture between Spectra Energy DTE Energy, and Enbridge, Inc.). The NEXUS Pipeline, as proposed, would transport up to 1.5 billion cubic feet per day of natural gas through approximately 255.9 miles of newly installed pipeline starting from access points in eastern Ohio to potential interconnects with Ohio markets and with an existing pipeline grid in southeastern Michigan. Once connected into the Michigan grid, the transported natural gas then could be directed to markets in the United States or Canada.
To many Stark and Wayne County residents already familiar with the Rover and Utopia Pipeline projects, this pipeline project probably sounds like more of the same. What makes the NEXUS Pipeline project unique, however, is that these recent notices from NEXUS and FERC were not issued at an early stage of the FERC approval process, but only after the approval process for this project was already well underway. The original proposal for the NEXUS Pipeline project had a very limited effect on Wayne County landowners since the proposed route only crossed the very northeastern corner of Wayne County. During the very early stages of the project approval process, specifically on March 23, 2015, the City of Green, in Summit County, Ohio, filed an objection to the NEXUS Pipeline project. In its objection, the City of Green proposed an alternative route (the “City of Green Alternative”) which would replace nearly 96.8 miles of the proposed route with an alternative 102.9 mile route that would avoid Summit GasandOilMag.com
County entirely by routing the majority of the first twofifths of the pipeline system through Stark and Wayne Counties. While FERC has not endorsed or approved the City of Green Alternative, it has asked NEXUS to evaluate the City of Green Alternative and provide FERC with a site-specific plan showing the location and effects of this proposed route. A pipeline re-route of this size and scope, particularly in the later stages of the regulatory process, is somewhat unusual. Landowners in the proposed alternative route were only informed of this development after FERC issued its Draft Environmental Impact Study on the NEXUS Pipeline project. As a result, landowners who would normally have years to file written objections to the proposed pipeline route now have until August 29, 2016. Even more unusual, if the City of Green Alternative is approved by FERC, affected landowners could only have a few months in which to negotiate a settlement with NEXUS prior to being condemned if an extension is not granted. As with any potential pipeline agreement, landowners should retain experienced pipeline lawyers to assist in navigating through the legal thicket associated with this pipeline. Landowners should be particularly wary of fee arrangements based on a percentage of the “increase” in compensation over an initial offer as NEXUS negotiations on the original portions of the route have already displayed the dramatic increase in compensation NEXUS is willing to provide. Considering the severely restricted timeframes involved, landowners impacted by the City of Green Alternative route are strongly encouraged to begin evaluating their options, including retaining legal counsel, well in advance of receiving a final confirmation that they will be in the final NEXUS Pipeline route. David J. Wigham is a second-generation oil and gas attorney at the firm of Roetzel & Andress, with more than 25 years of experience in the industry. He maintains offices in Akron and Wooster, Ohio, and can be reached at 330-762-7969.
OhioGas&Oil
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Sweeney Joins Bricker & Eckler
Gas & Oil Team
B
ricker & Eckler is growing its Southeast Ohio legal team in reflection of its increasing client base and opportunities in the region.
“Craig Sweeney is passionate about the immense economic growth of this region and the people who call it home,” says Chris Slagle, partner in charge of the firm’s Marietta and Barnesville offices. “We know our clients will respond to his knowledge of the region and his commitment to his neighbors.” A resident of the state’s southeast region and a practicing attorney in Woodsfield and southeastern Ohio since law school, Craig will be a member of the firm’s Oil and Gas group. He comes to the firm with extensive experience drafting and negotiating oil and gas leases, mineral sale agreements and surface use agreements. He also represents individuals and businesses in title curative litigation. Additionally,
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Craig has assisted a variety of clients in estate planning and business succession planning. “Bricker has a strong practice in the region, and I look forward to the opportunity to serve my existing clients as well as clients in the broader Southeast Ohio region,” Craig shared. “I am thrilled to become involved in Bricker’s efforts to help promote the success of the area.”
FILL UP
He attended DePauw University in Greencastle, Indiana, and earned an undergraduate degree in political science. Craig then came to the Buckeye State and was accepted into Ohio Northern University’s Claude W. Pettit College of Law, where he earned his J.D. in 2011.
HERE!
Craig will spend time in both the firm’s Marietta and Barnesville offices, serving clients throughout Washington, Belmont, Monroe and surrounding counties. “Craig will be a valuable asset to our ever-growing practice and development in Southeastern Ohio as he continues to assist clients throughout the region from both the Marietta and Barnesville offices,” says Aaron Bruggeman, Bricker & Eckler attorney in the firm’s Barnesville office. “His relationships and experience will help us broaden our service to the region.”
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Shawn Bennett, l, executive director of the Ohio Oil & Gas Association, presents the Oilfield Patriot Award to Tom Stewart, former executive vice president of OOGA.
Ohio Oil and Gas Association
Honors Tom Stewart
D
uring an August 15 ceremony, the Ohio Oil and Gas Association (OOGA) presented Tom Stewart, former executive vice president of the OOGA and principal at Oilfield Policy Advisors with the Oilfield Patriot Award, an annual honor bestowed by the trade association.
Established in 2006, the award recognizes individuals who have made significant contributions to protect, promote and advance the common interests of those engaged in all aspects of Ohio’s crude oil and natural gas industry. 10 OhioGas&Oil
Stewart was honored for his long-time advocacy on behalf of the industry, which has included working with both state and federal legislators and representing the interests of Ohio’s oil and gas producers for more than two decades. Stewart’s advocacy for producers wasn’t limited to actions before the legislature; he was also integral in negotiating a landmark agreement between producers and Dominion East Ohio that benefitted all parties. “The Oilfield Patriot Award was made for someone like Tom Stewart”, said David Hill, president of the Ohio Oil and Gas Association. “The legacy he has left behind on Ohio’s oil and gas industry has brought countless benefits to the industry and the members he represented. Simultaneously, Tom’s vision helped to establish a practical regulatory structure in Ohio and prevented onerous rules from entering our state.”
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“He has and continues to be a tireless champion for this industry and is a very deserving recipient of this prestigious award.” —David Hill A resident of Lancaster, Stewart is a third generation oilman. Beginning his career in the oilfields in the 1970s, Stewart was tapped to become executive vice president of the Association in 1991 and held that role until 2014. Stewart led the Association through numerous legislative battles, always relentlessly fighting to protect and advance the common interest of all the Association’s members. Stewart was a visionary who led the Association in embracing new producers
into the state with the development of Ohio’s shale industry. Past Oilfield Patriots include: Jerry Olds (2015), William G. Batchelder (2014), William Kinney (2013), Rhonda Reda (2012), Steven L. Grose (2011), David R. Hill (2010), James R. Smail (2009), W. Jonathan Airey (2008), Sarah Tipka (2007) and Jerry James (2006).
Tom Stewart with the 2016 Oilfield Patriot Award
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OhioGas&Oil 11
Governor Kasich Creates Hotline for Gas/Oil Emergencies Julie Carr Smyth • AP Statehouse Correspondent
O
hio Gov. John Kasich on Tuesday ordered it regulates the industry. creation of a single-call notification system for oil-and-gas emergencies and authorized two State oil and gas chief Rick Simmers said the new system state departments to start setting it up. will allow multiple state entities to coordinate better and respond more quickly. The Department of Natural The Republican governor ’s executive order followed his Resources and the Ohio Department of Commerce are veto last year of budget language he found inadequate authorized under Kasich’s order to begin making the that sought to streamline reporting of spills of oil, brine system’s rules. and other hazardous substances, fires, explosions and other emergencies. Among other things, Ohio had not Simmers said the rules are ready to go and they’re previously called for the Ohio Department of Natural tougher than federal requirements and what the oil-andResources to be alerted in cases of emergency — though gas industry had negotiated with the Legislature.
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In his July 2015 veto message, Kasich said budget language “would potentially limit essential notifications” and several provisions were “ambiguous and could result in unnecessary disputes regarding compliance.” Kasich pledged to present an executive order improving the language “given the importance of protecting public health.” The veto followed a successful push by the industry to remove Kasich’s proposed tax increase on largescale oil and gas drilling from the budget. A severance tax increase had been a priority of Kasich’s for years. He contended Ohio’s tax on oil and gas drillers is too low, and he’s wanted to use proceeds of a tax hike on hydraulic fracturing, or fracking, to help cut the state’s income-tax rate.
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Simmers said the new hotline will put other involved agencies — including the Division of State Fire Marshal, the Ohio Environmental Protection Agency and the Public Utilities Commission — in direct contact with Department of Natural Resources technical experts.
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Clinton Ties Energy Plan to Climate Change
W
hile Democratic presidential nominee Hillary Clinton does not list a specific “energy only” policy, she does discuss an energy policy that is tied to climate change.
“Climate Change is an urgent threat and a defining challenge of our time.” — Hillary Clinton ”It threatens our economy, our national security, and our children’s health and futures. We can tackle it by making America the world’s clean energy superpower and creating millions of goodpaying jobs, taking bold steps to slash carbon pollution at home and around the world, and ensuring no Americans are left out or left behind as we rapidly build a clean energy economy.” As president, Clinton said she will: •Defend, implement, and extend smart pollution and efficiency standards, including the Clean Power Plan and standards for cars, trucks, and appliances that are already helping clean our air, save families money, and fight climate change. •Launch a $60 billion Clean Energy Challenge to partner with states, cities, and rural communities to cut carbon pollution and expand clean energy, including for low-income families. •Clinton said she would initiate two nation goals that would be achievable within 10 years:
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1. The United States will have more than half a billion solar panels installed across the country by the end of Hillary Clinton’s first term.
that successfully cut the red tape that slows rooftop solar installation times and increases costs for businesses and consumers.
2. The United States will generate •Transforming the Grid: Work with enough clean renewable energy to power states, cities and rural communities to every home in America within ten years of strengthen grid reliability and resilience, Hillary Clinton taking office. increase consumer choice and improve customer value. Clinton has also said her energy plan would: •Rural Leadership: Expand the Rural Utilities Service and other successful •Cut energy waste in American homes, USDA programs to help provide clean, schools, hospitals and offices by a third reliable, and affordable energy, not just and make American manufacturing the to rural Americans but to the rest of the cleanest and most efficient in the world. country as well. •Reduce American oil consumption •As part of the Clean Energy Challenge, by a third through cleaner fuels and more Clinton said she would ensure that every efficient cars, boilers, ships, and trucks. part of the federal government is working in concert to help Americans build a clean •Hillary’s plan will deliver on the energy future. This includes: pledge President Obama made at the Paris climate conference-without relying on •Transmission Investment: Ensure the climate deniers in Congress to pass new federal government is a partner, not an legislation. She will reduce greenhouse obstacle, in getting low-cost wind and gas emissions by up to 30 percent in 2025 other renewable energy to market. relative to 2005 levels and put the country on a path to cut emissions more than 80 •Solar Access: Overcome barriers that percent by 2050. prevent low-income and other households from using solar energy to reduce their Clinton said she would launch a Clean monthly energy bills. Energy Challenge that forms a new partnership with states, cities, and rural •Tax Incentives: Fight to extend federal communities that are ready to lead on clean energy incentives and make them clean energy. more cost effective both for taxpayers and clean energy producers. She said this challenge would include: •Public Lands and Infrastructure: •Climate Action Competition: Expand renewable energy on public lands, Competitive grants and other market- federal buildings, and federally-funded based incentives to empower states to infrastructure, including an initiative exceed federal carbon pollution standards to significantly increase hydropower and accelerate clean energy deployment. generation from existing dams across the US. •Solar X-Prize: Awards for communities GasandOilMag.com
•Innovation: Increase public investment in clean energy R&D, including in storage technology, designed materials, advanced nuclear, and carbon capture and sequestration. Expand successful innovation initiatives, like ARPA-e, and cut those that fail to deliver results. •Climate change is an urgent threat and a defining challenge of our time. It threatens our economy, our national security, and our children’s health and futures. We can tackle it by making America the world’s clean energy superpower and creating millions of good-paying jobs, taking bold steps to slash carbon pollution at home and around the world, and ensuring no Americans are left out or left behind as we rapidly build a clean energy economy.
•Ensure safe and responsible energy production. As we transition to a clean energy economy, we must ensure that the fossil fuel production taking place today is safe and responsible and that areas too sensitive for energy production are taken off the table. •Reform leasing and expand clean energy production on public lands and waters tenfold within a decade. •Cut the billions of wasteful tax subsidies oil and gas companies have enjoyed for too long and invest in clean energy. •Cut methane emissions across the economy and put in place strong standards for reducing leaks from both new and existing sources. •Revitalize
coal
communities
by
supporting locally driven priorities and make them an engine of U.S. economic growth in the 21st century, as they have been for generations. •Make environmental justice and climate justice central priorities by setting bold national goals to eliminate lead poisoning within five years, clean up the more than 450,000 toxic brownfield sites across the country, expand solar and energy efficiency solutions in lowincome communities, and create an Environmental and Climate Justice Task Force. •Promote conservation and collaborative stewardship. Hillary will keep public lands public, strengthen protections for our natural and cultural resources, increase access to parks and public lands for all Americans, as well as harness the immense economic potential they offer through expanded renewable energy production, a high quality of life, and a thriving outdoor economy.
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GasandOilMag.com
OhioGas&Oil 15
Trump Puts ‘America First’ in Energy Plan
R
epublican presidential nominee Donald Trump presented his “America First” energy plan at a rally earlier this year in North Dakota and while the address contained its share of slams against his Democratic opponent, Hillary Clinton, and President Barack Obama, it also contained Trump’s pledges to help the gas and oil industry. In his speech, Trump said: A Trump Administration will develop an America First energy plan. Here is how this plan will make America wealthy again: • American energy dominance will be declared a strategic economic and foreign policy goal of the United States. • America has 1.5 times as much oil as the combined proven resources of all OPEC countries; we have more Natural Gas than Russia, Iran, Qatar and Saudi Arabia Combined; we have three times more coal than Russia. Our total untapped oil and gas reserves on federal lands equal an estimated $50 trillion. • We will become, and stay, totally independent of any need to import energy from the OPEC cartel or any nations hostile to our interests. • At the same time, we will work with our Gulf allies to develop a positive energy relationship as part of our antiterrorism strategy. • We will use the revenues from energy production to rebuild our roads, schools, bridges and public infrastructure. Cheaper energy will also boost American agriculture.
challenges, not phony ones: • We will reject Hillary Clinton’s poverty-expansion agenda that enriches her friends and makes everyone else poor. • We’ll solve real environmental problems in our communities like the need for clean and safe drinking water. President Obama actually tried to cut the funding for our drinking water infrastructure -- even as he pushed to increase funding for his EPA bureaucrats. • American workers will be the ones building this new infrastructure. Here is my 100-day action plan: • We’re going to rescind all the job-destroying Obama executive actions including the Climate Action Plan and the Waters of the U.S. rule. • We’re going to save the coal industry and other industries threatened by Hillary Clinton’s extremist agenda. • I’m going to ask Trans Canada to renew its permit application for the Keystone Pipeline. • We’re going to lift moratoriums on energy production in federal areas • We’re going to revoke policies that impose unwarranted restrictions on new drilling technologies. These technologies create millions of jobs with a smaller footprint than ever before.
• We will get the bureaucracy out of the way of innovation, so we can pursue all forms of energy. This includes renewable energies and the technologies of the future. It includes nuclear, wind and solar energy -- but not to the exclusion of other energy. The government should not pick winners and losers. Instead, it should remove obstacles to exploration. Any market has ups and downs, but lifting these draconian barriers will ensure that we are no longer at the mercy of global markets.
• We’re going to cancel the Paris Climate Agreement and stop all payments of U.S. tax dollars to U.N. global warming programs.
A Trump Administration will focus on real environmental
• Any future regulation will go through a simple test: is
16 OhioGas&Oil
• Any regulation that is outdated, unnecessary, bad for workers, or contrary to the national interest will be scrapped. We will also eliminate duplication, provide regulatory certainty, and trust local officials and local residents.
GasandOilMag.com
this regulation good for the American worker? If it doesn’t pass this test, the rule will not be approved. According to the Institute for Energy Research, lifting the restrictions on American energy will create a flood of new jobs: • Almost a $700 billion increase in annual economic output over the next 30 years. • More than a $30 billion increase in annual wages over the next 7 years. • Over the next four decades, more than $20 trillion in additional economic activity and $6 trillion in new tax revenue.
The oil and natural gas industry supports 10 million high-paying American jobs and can create another 400,000 new jobs per year.
This exploration will also create a resurgence in American manufacturing -- dramatically reducing both our trade deficit and our budget deficit. My agenda will be accomplished through a series of reforms that put America First: • Energy reform that creates trillions in new wealth. • Immigration reform that protects our borders and defends our workers. • Tax reform that brings millions of new jobs to America. • Regulation reform that eliminates stupid rules that send our jobs overseas. • Welfare reform that requires employers to recruit from the unemployment office -- not the immigration office. • Trade reform that brings back our manufacturing jobs and stands up to countries that cheat.
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OhioGas&Oil 17
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18 OhioGas&Oil
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Ohio Natural-Gas-Fired Plant Is on Schedule
A
Sara Klein • Staff Writer couple of miles north of Carrollton, Ohio, on what used to be a bean field just off state Route 9, construction crews have been working around the clock to build a facility that will produce 700 megawatts of electricity using a 21stcentury approach that leaves coal-based methods in the annals of the energy industry. The $900-million project is the Carroll County Energy power plant. When completed, the facility’s combined-cycle system will use not coal but natural gas to produce electricity. The system uses natural gas to heat air that turns a turbine connected to a generator, which creates electricity. Exhaust heat from the gas turbine is then used to heat water, which creates steam to turn a second turbine connected to a second generator. The result: even more electricity. The method produces power with nearly twice the efficiency of coal-fired plants while producing less than 50 percent of the carbon emissions that coal-based methods use, according to the U.S. Energy Information Administration.
experience in the Middle East, Europe and Asia, Terajewicz is no stranger to a project that would seem monumentally impossible.
“Combined cycle power plants like this, they’re very, very familiar to me,” “We only have very limited windows he commented during an early August allowed from AEP to cut into their interview with Gas & Oil Magazine. main line because that’s a disruption,” Terajewicz said.
“It requires very good communication between the different crafts. It’s a dance, in a sense, of making sure what’s coming and what needs to go out.”
To make the system run more smoothly, CCE crews built a 345,000-volt switchyard, which was completed this summer ahead of schedule. Called the Stemple Switchyard, the site gave AEP the opportunity to cut its main transmission line and connect directly with Stemple. “That enables us to connect to that piece of work whenever we need to, and in fact we will connect to that for the power station,” he explained. Another step in the CCE project is
—Chris Terajewicz connecting to existing natural gas That figurative dance began after last summer’s groundbreaking with preparation of the site, most of which sits on just 15 acres of a 77-acre project area.
By the end of last year, excavations, Carroll County Energy is the first of three fencing, and underground gas and water plants in Ohio to use this natural-gas- pipelines had already been installed. By fired system. earlier this summer, crews had poured foundations for major equipment at the Nearly 600 workers will ultimately use site. 20 miles of pipe, 200 miles of cable, 1,600 tons of structural steel and 16,000 yards of Terajewicz said this spring and summer’s concrete to build the facility. work has focused on connecting CCE to the outside world of the power grid, Chris Terajewicz, of parent company the interstate gas pipeline system, and Advanced Power, is the project manager Carrollton’s water treatment plant. for CCE. With 40 years of experience building power plants, including CCE will send its 700 megawatts of
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electricity into the grid using a connection with power lines already installed by utility company American Electrical Power. To do this, crews are cutting into AEP’s main transmission line.
Story continued on page 20
CCE Cranes lift the first HRSG module
OhioGas&Oil 19
Story continued from page 19
early August of this year. “It’s really city water that will supply and buttress the village system,”said Te r a j e w i c z , adding that the water was a n t i c ip at e d to be up and running by the end of August.
CCE Concrete Placement Building Slab pipelines owned by Tennessee Gas Pipeline, which are located about threequarters of a mile away from the power plant. CCE workers will connect to two of the three lines that run through the area. As with connections to the outside power grid, crews had to build before they could connect. Terajewicz explained that workers have constructed a metering station to which Tennessee gas will connect. The gas company will conduct a process called a “hot tap,” which enables workers to cut into and install valves on the gas line without decreasing the line’s energy or pressure. “Once they have valves, that enables CCE to turn on the gas when we need it,” Terajewicz said. Next, crews will build a 2,500-foot-long, 12-inch underground pipeline that will carry about 120,000 cubic feet of natural gas between CCE’s metering station and the plant. Bringing water to the plant is the third element crews focused on this summer and one that Advanced Power has nearly completed with the help of Carrollton, which signed a water reservation agreement with the company last year. The village extended a waterline to the plant and built a 300,000-gallon water tank that was filled and disinfected in
20 OhioGas&Oil
He explained that the importance of the water is linked with how CCE will use heat that would otherwise go to waste. Natural gas will heat air that will turn the plant’s first turbine, but not all of the heat will be used for that first power-generating step. “That exhaust goes through what we call Heat Recovery Steam Generators. That water makes steam, and then we have a steam turbine that produces additional power. These combined cycle plants are very, very efficient,” Terajewicz explained. And this is where HRSGs, combustion turbines, steam turbines, and an airc o o l e d conden s er come in. W h i l e some crews have been finishing work to connect CCE with the outside w o r l d , other crews have been spending the summer moving
and installing the tremendous pieces of equipment needed to make the power plant work. The installation has included not only turbines and generators but also step-up transformers, which are used to create more voltage, the HRSGs, which use exhaust heat to turn the plant’s second turbine, plus 14 modules per HRSG. “That was very challenging in terms of coordination with the contractor,” Terajewicz commented. “One HRSG module was 160 tons, and then you had 14 of those per unit, so you had 28 (modules) total.” Work on the first HRSG took an entire month, but Terajewicz said the process helped him and the contractors learn how to move forward more quickly. “It paid off in a sense that, as with anything, the first unit is always more difficult than the second unit. While the first unit took one month to do, the second one took half the amount of time and took 16 days to do. That’s really the benefit of a learning curve, and that was actually expected that we’d be able to do better on one than the other,” he explained. Now that the major equipment is on site, the bulk of work now is interconnecting
CCE Pipe Welding
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the equipment and what the electrical industry calls “dressing the equipment out,” which refers to installation of auxiliaries, cooling tanks, accessory compartments, electrical compartments, and other fixtures that go with the heavy equipment.
we moved forward with the project,” he stated.
“We’re building out the kit around the big pieces that are there,” said Terajewicz, noting that crews will dress the equipment out until December.
Choreographing the multitude of people and activities taking place on the surprisingly small construction site was another challenge that Terajewicz and contractors Bechtel Power Corp. and Kenny Constructors have had to address.
Piping and cable are also parts of the process and will make up much of the activity at the CCE site until spring of next year. “We’re doing bulk installations of piping. The piping is probably the most complex thing. Welding and weld quality is very important,” Terajewicz stated. “We’re getting excellent results on the weld testing.”
“With extra hours and working on Saturdays, we were able to maintain the critical aspects of the schedule so we wouldn’t get delayed.”
“We have very little staging area. It gets congested. That’s a challenge. It gets crowded down there,” Terajewicz
Bulk electrical installation will come after piping and cable are finished. Meanwhile, structural steel is going up. Despite its many milestones, the CCE project has not been CCE Placing and forming rebar ready for concrete placement. without challenges that have required careful solutions to commented. “We’re very focused on overcome. day-to-day activities, making sure everything’s planned out every day, Terajewicz said last year’s spring and understanding who’s going to be working summer monsoon delayed the pouring there.” of foundations, which put a damper on the project’s momentum. Another strategy that has helped CCE crews work efficiently with little space, “There were a couple of months’ delays and one that Terajewicz said is important in the beginning. We were all wanting to at any construction site, is Advanced get the foundations in before the winter. Power’s approach to working with its The job had to refocus itself on looking contractors. at the schedule and really making sure we got our critical foundations in before “It’s a team effort. We as owners like
to have a very collaborative approach with our contractors,” he explained. “Everybody on the project has a role. Everybody has a contract and we respect that, but maintaining open communications is essential. We emphasize, at Advanced Power, that we have to work closely together.” Good communications must extend from Terajewicz and construction supervisors to the many workers on the site, the numbers of which have been bulked up as part of a fourth strategy to make the most use of time despite the site’s constraints. Terajewicz said the CCE project began with a day shift of workers who were at the site from 6 a.m. to 4:30 p.m., but early this August a second shift of laborers was added to work from 4:30 p.m. to 6 a.m. The night shift is anticipated to grow from 50 workers to about 150 as the project continues. “The project will keep the two shifts going six days per week. Overall we’ll have 600 to 650 people working on it,” Terajewicz said. Whether it’s the day shift or the night shift, Terajewicz said safety remains integral to making progress at CCE, especially considering the relatively small size of the construction site. As of early August, CCE had seen no lost-time accidents on the site. “That’s particularly remarkable on a small site where many heavy lifts of equipment are taking place,” Terajewicz commented. But he added that perhaps the most important contributor to CCE’s forward Story continued on page 22
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Story continued from page 21
momentum has been the project’s relationship with the surrounding community at both the state and local levels. “We’re pleased with the quality and the work ethic of the labor force. People are supportive of the job here. The unions are doing a great job here,” he said. “We’re very happy with community support we’re getting, including county and state officials, the sheriff’s office, ODOT, the county engineering, the people in Carrollton. If we have an issue, we can talk to somebody and work it out. We’re very appreciative of that.”
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As the summer winds down, CCE is still moving ahead at full steam. Testing of all its major systems is anticipated to begin this winter and conclude by the end of next year.
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A◊er Nearly 40 Years,
Beck Energy Is Still Drilling
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Jeff Saunders • Dix Communications aymond Beck’s decades-long career in the oil and gas industry began with a job that just came upon him. “A drilling contractor offered me a job [in 1967] in the winter months when I really wasn’t looking for a job, and it grew from there,” he said.
Meanwhile, said David Beck, the company very challenging,” said Raymond Beck. has grown quite a lot from that initial well “No two days are the same. Knowing it’s a very risky business, it’s very profitable, it in 1978. can be very profitable. The challenge when “We have approximately 300 wells,” said we drill a well is whether it’s really going David Beck. “A good concentration in to be productive and with the commodity Portage and Stark [counties], a handful prices of both oil and [natural] gas at a low in Summit [County] and we have a lot of point.” production in the southeast corner of the state, in Monroe, Noble and Washington Things have changed in the industry in Ohio in recent years, with technology counties.” now allowing less conventional drilling, Beck Energy contracts out the drilling pulling crude oil and gas out of shale rock with wells that can now be drilled work on its wells to others. horizontally, not just vertically. This has “We’re an oil and gas exploration and made it possible reaching product that you protecting Your when Family’s was not accessible Beck Energy production company,” said Are Raymond Oil & Gas Income...and Your started. Beck. Grandchildren’s Too?
WHY AUDIT YOUR OIL and GAS ROYALTY? ?????
He was 33 and worked “off and on” for others in the business until 1978, when he formed Beck Energy and drilled his first oil and gas well in Ravenna. Now the company has about 20 employees in two offices, the main one in Ravenna and a secondary office in Woodsfield, a village Story continued on page 24 in Monroe County. David Beck said the company sells the What about deductions, NGLs, taxes? natural gas to Beck, who is company president, works Dominion East OUR OIL & GAS PROFESSIONALS CAN with his son David, Beck Energy’s vice Ohio Gas Co., while HELP YOU! president. David Beck has a degree in the crude oil is sold journalism, but has worked at Beck to a refiner, which HartPetro Global, LLC Energy for a long time. takes it from there. Serving mineral owners in Appalachia since 1991 “I learned from my father and 30 years “We’re really proud Call us today at 877-341-3244 of sitting on a rig; rain, snow, shine and of our company,” he for information! in the middle of the night, sit down and said. “We employ get my hands dirty,” he said. “Sometimes local people. We you learn things with an education in provide a good school, and sometimes the best teacher is industry with a experience, just being out there.” good product. Are you protecting Your Family’s People can’t live Oil & Gas Income...and Your He has a brother, Tim, who works outside without oil and gas. Grandchildren’s Too? the firm, in real estate. Raymond, David Alternative energy and Tim Beck are partners together in a is important, but it What about deductions, NGLs, taxes? venture that is outside of Beck Energy, but can’t replace oil and has a connection with the company. Beck gas. People have to OUR OIL & GAS PROFESSIONALS CAN Energy had two wells at the Twin Lakes heat their homes HELP YOU! Country Club in Kent. When the golf and put gas into course closed in 2009 after more than 85 their cars.” HartPetro Global, LLC www.hartpetro.com years in operation, the Becks purchased Serving mineral in Providing Oil & Gas owners Consulting Appalachia since 1991 the property and “restored the facility Business is very for Over 25 years into a premier golf facility and first-class challenging Call us today at 877-341-3244 restaurant,” said Raymond Beck. for information! “The business is CA-10488679
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OhioGas&Oil 23
Story continued from page 23
“It’s always been a risky business,” said Raymond Beck. “That’s why some companies fall by the wayside.” David Beck added, “The oil and gas business has gone through a bit of boom and bust. We did very well in the 80s and 90s.” The boom in easier-to-reach oil and natural gas has been a mixed blessing since it has also pushed prices down. “Oil prices are off 50 percent from the high that we enjoyed some two years ago,” said Raymond Beck. “The high was at about $110 a barrel. Natural gas is so low that it is disgusting.” As of mid-August, natural gas was “way lower than $2 per mcf [thousand cubic feet],” he said and added, “We like to see $3.25 for gas.” David Beck said, “Oil needs to be in the $60 range for things to really work.” He said low prices call for some belt tightening, but it is nothing that a company that has survived for nearly 40 years in a volatile business has not seen before. “You scale back and slow down a bit and you hope to find good places to drill,” he said. “But there’s still a lot of demand for oil
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Beck Energy President and founder Raymond Beck and his son, Beck Energy Vice President David Beck, work together in the nearly 40-year-old oil and natural gas exploration and production company’s Ravenna headquarters. Photo Credit: Jeff Saunders and gas. If we continue to explore and find good wells, the prices will come back up as it has before.” Challenges include legal issues Challenges are not just economic, but also involve attorneys and the courts.
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Beck Energy has been involved in legal battles with the Summit County city of Munroe Falls for about five years, including a case filed by the city in the Ohio Supreme Court over local control of drilling versus a state law placing control with the Ohio Department of Natural Resources. The latest case was a request for a declaratory judgement filed by the city in Summit County Court of Common Pleas in May asking the court for a decision as to whether the city could require Beck Energy to apply for a zoning certificate before it can drill on Sonoco paper mill land. Judge Paul Gallagher denied the request by the city for a temporary restraining order in late June, giving Beck Energy the go-ahead to start drilling. ODNR issued a new drilling permit to Beck Energy June 16 which expires June 18, 2017. In July, Gallagher ruled against the city, saying that state law GasandOilMag.com
granting the authority for drilling to ODNR supersedes a city ordinance requiring that Beck Energy apply for a zoning certificate. Also in July, Beck Energy filed counterclaims against the city, including claims that the city’s actions constitute an “interference with business relationship” between Beck Energy and Sonoco, “deprive Beck Energy of all economically beneficial use” of its property, and violate the U.S. and Ohio constitutions.
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David Beck said the company is only doing what the law allows it to do. “That’s four years of my life fighting to get this thing drilled and just proving, just having to prove, that we were allowed to do what the law already allowed us to do,” he said. Munroe Falls Mayor James Armstrong, who is an attorney, said the city is considering filing an appeal of Gallagher’s July ruling in the Ninth District Court of Appeals, but the common pleas case has to be completely resolved, including the counterclaims, before an appeal can be filed. A decision on the counterclaims was still pending as of press time.
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Armstrong has said he is not opposed to drilling, but believes that municipalities should have at least some control. He blames state lawmakers and “bureaucrats,” not the courts, for the situation. Meanwhile, Beck Energy is preparing the site for drilling. “We anticipate the Munroe Falls Sonoco well in mid-September,” said Raymond Beck. Future looks good The Becks say that despite the current low prices, the future of the business in Ohio is promising. “Ohio is in the middle of an area that could make the United States independent in energy,” said David Beck, adding that there is infrastructure, such as pipe lines and cracking stations in the state that did not exist even a few years ago.
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Natural Gas-Fueled
Vehicles in Ohio
What does the future of natural gas as an alternative fuel look like? Jacob Runnels • Dix Communications
W
ith natural gas prices remaining low it’s more common to see natural gas fueling stations sprout up, with Ohio having 43 natural gas fueling stations, according to AltFuelPrices.com. The city of Akron’s METRO RTA bus service opened a public alternative fueling station — which supports natural gas and electric car fueling — Aug. 31, making it the second natural gas fueling station in Akron and both Summit and Portage Counties. METRO RTA communications specialist Claire
Merrick said the public station was built so the company could make some extra revenue from their fueling stations during the day, as METRO RTA uses its private fueling station at night. “It’s an interesting idea because we as a public transportation facility will open a facility that’s going to be used to fuel personal vehicles, which is our competition,” she said. “It’s a way for us to earn some revenue with something we don’t use during the day and, in a way, it’s still helping fund the things we do.”
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Merrick said the METRO RTA fueling station will feature free electric fueling options, provided the consumer has a ChargePoint card. She said the natural gas portion will be operated by Clean Energy, so “they will be responsible for setting prices.”
fueling stations and vehicles. However, there are some hurdles natural gas technologies have to overcome before becoming a more popular option for consumers. CNG Weight Issues Natural gas fueling stations dispense compressed natural gas (CNG) and have to be compressed in a tank to
In 2013, there were around 16 natural gas fueling stations in Ohio, but now with pushes like what METRO RTA is enacting, Ohio could be introduced to more natural gas
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get the most natural gas because, unlike gasoline, it isn’t a liquid. CNG tanks are classified by type, ranging from type 1 tanks made of steel to type 4 tanks made of carbon fiber. Usually, a vehicle can be converted to burn natural gas as its fuel source. According to the U.S. Department of Energy, vehicles can be dedicated (only runs off natural gas), bi-fuel (having two separate systems for natural gas and gasoline to run on either) or dual-fuel (which require both natural gas and gasoline).
With steel tanks being heavier than carbon fiber tanks, the former ends up costing less than the latter. With steel tanks weighing more, it poses a problem for smaller vehicles that can’t hold the extra weight. Brad Couch — CNG business development manager for Ariel Corporation, which develops CNG compressors — said the technology for compressing natural gas has significantly improved over the last 10 years, but the weight of the tanks still poses a problem as there is a “weight penalty” for a vehicle that “routinely caps out at the maximum allowable weight.” However, according to NGVtoday.org, states such as Ohio, Indiana and Virginia have already enacted their own legislature for natural gas vehicles with “2,000 pound weight exceptions.” “The people who are opponents to natural gas as a fuel, they’re the ones who really talk about the ‘weight penalty’,” Couch said. “The challenge is the steel tanks are so cheap but they’re so heavy. You can use a... tank that’s 300-500 pounds lighter but they’re a lot more expensive.”
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State Incentives Couch said one of the biggest barriers for CNG vehicle development involves an economic factor. Even though natural gas is cheap, the vehicles and conversions aren’t the same case. Despite some disadvantages CNG face — such as weight Story continued on page 28
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According to the U.S. Department of Energy, “the material used to make the cylinder also affects the temperature in the tank,” which affects how much natural gas can be held in a tank. The temperature affects how much the gas can expand, which also affects how much gas can fill a tank, so “carbon fiber tanks hold heat better than steel tanks.”
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Story continued from page 27
penalties — this year, Ohio House Bill 390 was approved, which allows grants to be given for CNG conversions or vehicle purchases. The bill helps give people back 50 percent of what they spent on a conversion or vehicle, up to $400,000 for a single entity purchasing multiple vehicles. For example, a buyer who needs to pay $60,000 more for a CNG version of a vehicle will have a grant pay for $30,000 of the extra fee. Couch said Ohio has “addressed the economic difference” of CNG vehicles, as well as there being more natural gas vehicles on the roads because of this. Even though there are only 43 CNG fueling stations in Ohio, Couch said the increased amount of CNG vehicles on the road will provide an incentive for natural gas producers to build more fueling stations. According to the U.S. Department of Energy, there are 942 public CNG fueling stations in America, but America is beat by countries like China, Iran and Pakistan, which have 4,455, 2,220 and 2,997 fueling stations respectively, according to ngvexpo.com. Ngvexpo.com states the average natural gas vehicle population in China is around 4,441,000 units. “Even though from a percentage perspective, China’s set
the world on fire with their CNG sales but from the raw numbers, they’re still crushing it,” Couch said. “They’re just trying to gear up and see what’s best for both public health and public pocketbook.” In the perspective of America, Couch said the incentives provided are “paltry” and they’re “not nearly what they need to be,” compared to countries like China. He said America invests more in electric-powered cars more than there is for CNG vehicles when it should be the other way around, especially with the abundance of natural gas found in America. “If CNG vehicles would just get a fraction of what I call ‘fair play,’ in other words, the incentives that were out there for electric vehicles were made equally available to CNG, you’d see droves of people go to CNG,” he said. “It makes so much sense for North America for so many reasons. People understand there’s value in doing business locally. It is lots of people who do business with small businesses because they want their money to stay in the local economy. Couch said some of the incentives that could be directed toward CNG technologies include cash back deals when buying CNG vehicles.
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Asset Protection and Its Connection to
Estate Planning
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Frank McClure • Attorney hen I am discussing estate planning with people, asset protection always seems to come up. In fact if you are talking with your attorney about your estate plan asset protection planning should be part of the discussion, regardless of whether asset protection is one of the goals of your estate plan.
Asset protection is planning designed to shield your assets from the claims of creditors. Your may be thinking, but I don’t have any creditors. That is the best time to do asset protection planning! Creditors can take many forms and arise from many different situations. The most obvious example that comes to mind is a creditor that arises from involvement in an auto accident when you are at fault. You may say but I have insurance. The problem is that the damages could be valued at more than your insurance coverage. Other possible creditors looming in your future could be an ex-spouse (divorce) to the government, and every creditor in between. Effective asset protection planning will make it more difficult for creditors’ to access your assets.
pockets” to get though these obstacles, but the odds of success for the creditor get longer with each additional obstacle. Hopefully this has given you some insight into asset protection and its importance in overall estate planning. One of the tenants of estate planning is distributing your assets to your loved ones. These assets may be money, real estate or personal property. Also, what if I told you that you could give these treasures to your loved ones and have them protected from your loved ones creditors and predators. This can be done through the use of a lifetime protective trust. This is something you should definitely talk to an estate planning attorney about! If any of the above has hit a cord of interest with you, you should be talking with an attorney who concentrates in the area of estate planning about asset protection and all your estate planning needs. By taking the time to plan you can protect your property and your loved ones. If you would like more information about estate planning or asset protection, please contact our office (740-432-7844) or go to our website at www.fmcclurelaw.com.
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Asset protection will not to make you “bulletproof” from creditor attack, but rather make it much more difficult and expensive for the potential creditor to gain control of your assets. In other words, if a creditor (an example being the person involved in an auto accident with you) obtains a judgment against you, and attempts to take control of your assets to pay off his claim against you, effective asset protection is designed to put you and the creditor on a more equal footing. This can stop the creditor in his tracks or at a minimum allow for negotiations to settle the amount owed at a lower level. If the creditor and his attorney know that it may take months or even years to collect the claim and that the costs to the creditor will be substantial, the creditor may settle for a lower amount or the amount of the insurance alone, in satisfaction of the claim.
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The best way to think about this situation is to try and think of your assets as treasure you wish to protect. You might put it into a chest for safe keeping. Then you might put as lock on the chest. Then you might put the chest into a vault. Then you might build a castle around your vault. Then you might put a moat around the castle. Hopefully this creates a better image of what asset protection planning is. All we are doing is adding additional barriers to protect your treasure (your assets). By using proven, simple techniques and strategies you can create different levels of protection for your assets. It may still be possible for a very determined creditor with very “deep
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What Is Fair Payment for a
Pipeline Easement?
A
Eric T. Michener • Attorney pipeline company has announced that it plans to build a pipeline that will cross your land and requests that you give it an easement, which is sometimes called a right of way. You will keep your land and the company will pay you for the privilege. The company presents you with a form or model easement setting forth the terms and conditions of the easement and an offer of payment for the property rights you will be giving up. Is the offer fair and should I accept it? Rather than viewing the proposed payment as a final offer, you should consider the initial offer as a starting point in negotiations and bargain for the best deal possible. (Although not the topic of this article, the non-monetary terms of the easement are also subject to negotiation and are equally as important, if not more so, than the monetary terms.)
consider. However, there are two constants under Ohio law in determining value. First, the value of the land used for the right of way. The value will depend on the width of the easement and the breakdown between the permanent portion of the easement and the temporary portion used for construction. Second, the payment should compensate the landowner for any decrease in the overall land’s value attributable to having a pipeline running through the property. Will the pipeline run along the property line or does it cut diagonally through the property? The damage to the “residual value” of the property is also likely dependent on the character of the general land use in the area.
The easement itself will likely cover only a small percentage of your overall property. Typically, the pipeline company will agree to pay a set dollar amount per linear foot of pipeline that will be laid on the property. This amount typically When determining just compensation for a pipeline easement amounts to what the property included in the easement each landowner’s unique circumstances are important to would sell for if the land was sold outright to the pipeline
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company. The pipeline company should also compensate the landowner for damages suffered as a result of the construction and maintenance of the pipeline. Such damages would include costs for repairing any damaged fences, repairing any damaged field tile, loss of the ability to grow crops on the land during the construction process, soil compaction and erosion, loss of timber, impact on water supply and interference with livestock, as well as for the inconvenience from the construction process.
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The landowner is entitled to fair value for both elements of damage. Courts in Ohio define fair market value to be the amount a purchaser who is willing, but not required to buy, would pay and that a seller who is willing, but not required to sell, would accept, when both are fully aware and informed of all the circumstances involving the value and use of the property.
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Often a private third-party appraisal may be desirable to assess the fair market value of what is taken and the damage to the residue. Appraisers can use a variety of methods to determine the value of your property, including comparing recent sales of comparable property and analysis of what potential buyers would pay for such property with and without a pipeline. The factors the appraisers consider can range from the predicted impacts on productivity and yields of future crops, to the impact on the price of the land because of the fear of injuries to person or property because of the pipeline. Because having a pipeline on the property may limit or prohibit commercial or residential development of the property, any appraisal should also take this into account.
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The landowner should also consider the consequences if an easement is not given voluntarily. If the pipeline company has the power of eminent domain the landowner needs to consider the cost of litigation in an effort to increase the pipeline company’s offer. What is the net value to the landowner after litigation costs and expense if negotiations break down and litigation is necessary?
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While the pipeline company’s compensation offer may seem straight forward, determining fair compensation for the property rights a landowner is surrendering can be a complicated process. So before you sign, consider talking to a professional.
CALL US TODAY!
Mr. Michener is of counsel at 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. KO-10468742
330.587.4068
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