October 2014 Gas & Oil Magazine-Pennsylvania edition by Gannett NEO

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PUBLISHER Andrew S. Dix

EXECUTIVE EDITOR Ray Booth

CONTRIBUTING EDITOR

ADVERTISING Rhonda Geer

Christy Penland

Ed Archibald

DIGITAL CONTENT MNGR Brad Tansey

ART DIRECTOR Pete Kiko

LAYOUT DESIGNER Elizabeth Horne

Table of Contents 4

Rex Energy Donates $30,000

Cautions Against New Taxes or Fees

GE to give Penn State $10M

Get That Industry Job!

Key to Energy & Economy

Study: Want Lower Gas Prices

Go East, Young Man!

Building a Stronger Pennsylvania

American Refining Group Breaks Ground

Energy Briefs

Sara Klein Dix Communications

ARROLLTON, OH – Rex Energy, based in Pennsylvania, presented a combined $30,000 in donations to Caritas House Domestic Violence Shelter and the Carroll County Volunteer Fire Department at check presentation ceremonies Aug. 18. Dave Rogers, senior director of land for the oil-and-gas company’s Appalachian regional division, presented a check for $25,000 to Syndy Willen, Caritas House executive director; Peggie Conner, program director; and Board Vice President Suzy Burns. In a separate ceremony, Rogers presented a check for $5,000 to Matt Nicholas, who serves as treasurer for the Carroll County Volunteer Fire Department. Each year Rex Energy selects local organizations to receive donations as part of its charitable giving program, according to information the company released prior to the Aug. 18 presentations. Willen said the donation for Caritas House is funding security upgrades, a remodeling of the shelter’s kitchen and the purchase of equipment and other resources to help residents at the shelter. “All of us at Caritas House wish to express our sincere thanks to Rex Energy for their generous donation,” Willen stated. “This gift will enable us to take a major step in reaching our goal of providing a local hub for safety from violence and promoting awareness and opportunities for victims,” she added. The 13-bed shelter for victims of domestic violence and abuse is the only one of its kind in Carroll County, according

to Willen, who commented that the Rex Energy donation was “a game-changer” and “as much of an emotional boost as a financial boost.” Speaking on behalf of the Carroll County Volunteer Fire Department, Nicholas said the $5,000 contribution from Rex Energy will fund the purchase a new rescue truck to replace the department’s outdated 1980 model. “We’re in desperate need of a new rescue truck,” stated Nicholas, noting that the department has been raising funds to purchase the truck over the past two years. Carroll County Fire Chief Jack Swinehart explained that the department is seeking to purchase a truck with specialized equipment that can help first-responders extricate accident victims from automobiles. The new truck would also carry equipment used to refill oxygen units for breathing as well as equipment used to contain hazardous materials involved in spills. “Rex’s continued support of organizations shows their commitment to give back to local communities.” Swinehart commented. “We do appreciate Rex Energy’s support and commitment to help us do our job in serving and protecting the community we call home.”

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CAUTIONS AGAINST NEW

TAXES OR FEES Lou D’Amico President and Executive Director Pennsylvania Independent Oil and Gas Assn.

olitical leaders from gubernatorial candidate Tom Wolf and state row officers, as well as some members of the General Assembly from both parties, have announced a range of punitive and misguided initiatives on energy producers in Pennsylvania that have the potential to dismantle the unprecedented growth of natural gas production in the Commonwealth. From severance tax proposals of between five and 10 percent to legislation to retroactively impose a $3 million per well “fee” for every well that has been drilled on state forest land, it appears that some elected officials want to scrap the effective policies and regulations that have allowed Pennsylvania to become the second largest natural gas producer in the United States in five short years. The fact is that our industry is investing billions of dollars of private capital and leading the Commonwealth’s economic resurgence, benefiting manufacturers, local governments and consumers. The calls for a severance tax ignore the huge infusion of revenue being paid by natural gas producers and service companies to the state’s tax base. Pennsylvania’s natural gas industry is paying more than its fair share of taxes, including an estimated $2 billion in state and local taxes since 2007 and more than $630 million in impact fees in just the past three years, with much of that money being directed to rural communities that have long been neglected by Harrisburg lawmakers. The fact is that if any other sector of our economy was moving into the Commonwealth with that level of investment and accompanying tax payments, policy makers would be throwing incentives and tax holidays at their feet, not looking for new ways to tax them in new ways or at a higher rate than every

other business in the Commonwealth. Our industry does not demand incentives such as tax-increment financing, and relies solely on private capital to make energy development a reality. There are multiple shale plays around this country competing for capital with better tax climates than Pennsylvania, home of nation’s highest corporate net income tax. These misguided proposals will result in fewer companies coming into Pennsylvania to drill wells, and more companies looking to reduce their level of investment here. Producers in Pennsylvania are already struggling with complicated and changing state regulations that increase the cost to operate, and lower commodity prices due to a lack of pipeline infrastructure to get natural gas to market. A number of producers have cut back their drilling operations due to these substantial disadvantages, and these anti-industry measures would be another strike against our state’s ability to remain competitive. The argument often made is that the state needs money and the drilling companies can afford to pay more to help the state out of its financial problems, but the public policy question that must be asked is whether it is better for Pennsylvania’s long-term future to generate tax revenues through economic growth (new job creation, new investment, sales tax, and the local impact fee) or to make it more difficult for the natural gas industry - the industry that has played a key role in Pennsylvania’s economic turnaround - to grow and mature. We, and the 200,000 employees who work in or work with the natural gas industry, believe the choice is clear: Pennsylvania must continue to expand and become a world leader in energy development.

KEVIN BEGOS Associated Press

ITTSBURGH (AP) — Penn State University said Wednesday that General Electric Co. will give the school up to $10 million to create a new center for natural gas industry research. Penn State President Eric Barron said in a statement that the center will produce tangible benefits to the industry, to communities that are affected by drilling or related activity, and to consumers. GE said the money will support research projects, equipment, and undergraduate, graduate, and postdoctoral fellowships at The Center for Collaborative Research on Intelligent Natural Gas Supply Systems. Barron planned to speak about the center during a luncheon with GE Senior Vice President Mark Little. GE is based in Fairfield, Connecticut. The new center will include faculty from the Smeal College of Business, Earth and Mineral Sciences, Engineering, and Information Sciences and Technology.

Charles Whiteman, dean of the Smeal College, said the center opens up “great new opportunities for research” on real-world problems. Whiteman said that over time the project could lead to more efficient drilling and gas distribution, reduced pollution, and even lower prices for consumers. He said Penn State will be able to hire new faculty members for the project and that a couple of dozen teachers plus students will be involved each year. The Marcellus Shale is a gas-rich formation that lies deep under large parts of Pennsylvania and nearby states. A drilling boom that began in 2008 has made the Marcellus the most productive natural gas field in the nation, but also has led to concerns about air and water pollution, leaky pipelines, and local zoning authority. GE said the money will be donated over the next five years and earmarked for different uses. The company will also have engineers in residence to work with faculty and students.

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David Vaucher MBA, MENG, EIT ands down the question I receive the most from people is “I want to work in oil & gas but don’t have any experience or know where to start, can you please help me out?” Making such a transition is a long process that requires plenty of hard work, but as a start here are five tips to help you begin your journey. Your cover letter and resume must be “perfect”. This is the absolute bare minimum, and applies to any industry. I have “perfect” in quotes because I’m only referring to the things one can objectively measure and evaluate: consistent punctuation and spelling, clear layout, and well-formulated writing. Just remember this: in oil & gas, poor decisions can cost vast sums of money, and in the worst case can cost people their lives. If you can’t pay attention to details on something basic like a resume, how can you be trusted with some of these decisions? The content in those documents must be in some way related to oil & gas. You’ve heard the saying “talk is cheap”? Well, that applies to your job search also: why should an oil & gas company choose one person over another if they’re both equally inexperienced and don’t have any demonstrated passion for the business? You can take a class in oilfield technology, volunteer with the Society of Petroleum Engineers, or do research with the petroleum engineering department in your university, but ultimately you must have something that demonstrates interest. Still, this doesn’t mean that your past experience is meaningless. Since you can’t change your past jobs and training, you should tie your past successes into the position you’re apply-

ing for in oil & gas. For instance, if you worked in aerospace before and played a role in improving health, safety and environment (HSE) performance, emphasize that you can apply your knowledge in your desired role as an HSE manager in the oil & gas industry. In order to gain those initial qualifications, YOU have to take the initiative. Ideally, a company would hire you and train you, but as you’ve all noticed it’s tough out there: even though the industry needs people, it doesn’t want to start completely from scratch. You could perhaps pay your way through offshore HUET training, or maybe take a community college class on oilfield operations. Some universities also offer certificate programs for those looking to do coursework without the full commitment of an extra degree. Taking such steps proves you’re taking the initiative to become trained (so you can tangibly show motivation) and a lot of companies tap those programs directly for graduates, so you have a direct line to employers in oil & gas. Field service companies are also great way to get an accelerated lesson in oilfield operations. The work is very tough: the hours in the field are long, and turnover can be quite high. Still, these companies can provide you with that very valuable first opportunity to prove yourself in the industry! Never underestimate the importance of networking. Sometimes, the difference between getting the job or not is having someone who will “champion” you within the company. Their help may involve convincing the hiring manager you’d be the best fit for the job, or just doing something as simple as walking your resume over to HR as opposed to having you submit it via the internet (aka “the Black Hole of Job Seeker Doom”). No matter how small the favor you ask, no one will do anything for you unless you’ve made a positive, personal connection with them. This is why regardless your area of expertise, I would definitely suggest finding a local chapter of an oilfieldrelated organization (there are many!), and volunteering, or at the very least attending meetings regularly and getting to know the other professionals. If you’re trying to join make a career change into the industry without experience, understand that you will not make it overnight. You have to think of this as a process similar to applying to university, where you spent time building an application which basically amounts to you making your case as to why you should be let in. Going back to my comment that “talk is cheap”, only those who make that long-term commitment to re-invent themselves will have a chance to earn the position they seek to attain. Work hard, make some great contacts, and pace yourself: you’re in this for the long haul. Good luck!

uring the 5th Law of Shale Plays conference in Pittsburgh, Pennsylvania, keynote speaker Rudy Giuliani discussed a speech he previously gave during his 2008 GOP presidential primary regarding the United States and its path to energy independence. He remembers being laughed at when he first spoke of it in 2008, but now, after almost a decade of shale development (and with the Marcellus Shale producing more than 15 billion cubic feet of natural gas per day) it appears the path towards U.S. energy independence is no laughing matter. During his speech, the former New York City Mayor, criticized the Obama administration for not doing enough to support the gas industry. He also discussed the possibility for natural gas exports in the future, touting the economic and energy benefits of expanding the global reach of our energy resources. According to Giuliani, “The promise of exporting natural gas could restore domestic prices to ‘natural’ free market

levels and be a geopolitical tool. U.S. exports could help wean European countries, such as Ukraine and Germany, from their dependence of Russia for energy supplies.” Besides bringing vast economic and energy benefits, natural gas has also been responsible for decreasing carbon emissions across the country. In Mr. Giuliani’s hometown of New York City alone, the increased use of natural gas has helped bring residents the cleanest air in the city in the last 50 years. This drastic improvement was made possible by transitioning from heating oil to natural gas, and, according to Former NYC Mayor, Michael Bloomberg, “The cleaner air is estimated to prevent as much as 800 deaths and 2,000 hospital visits due to lung and cardiovascular diseases annually.” Ironically, the state of New York, - despite having a dearth of developable shale in both the Utica and Marcellus formations still sits under a statewide moratorium of hydraulic fracturing, effectively stifling the development of the state’s natural resources.

JONATHAN FAHEY AP Energy Writer

EW YORK (AP) — Exporting more U.S. crude around the world would lower the price of gasoline for U.S. drivers and benefit the U.S. economy, according to a new study released Tuesday. While the conclusion may be counter-intuitive, the reasoning is straightforward: Exports would encourage more U.S. oil production and put that crude on the global market. That would lower the global price of oil, the price that is linked most closely to the price of gasoline in the U.S. Exports of U.S. crude oil have been banned, with few exceptions, since soon after the 1973 Arab oil embargo. Other studies have reaches similar conclusions. This latest study, released Tuesday, was conducted for the Brookings Institution by NERA Economic Consulting. The study was introduced by former Obama adviser Larry Summers, who made a forceful case for removing the export restrictions as soon as possible. Summers said the decades-old restrictions serve no purpose now and that oil exports would add jobs, improve the nation’s geopolitical standing, and generate desperately-needed economic growth. “We shouldn’t have prohibitions without a reason,” he said. “We need all the economic benefits we can get.”

The study calculates that pump prices would fall 2 cents to 12 cents per gallon on average, depending on how much oil is ultimately found and when the export restrictions are lifted, because oil prices would fall. “Lifting the export ban would remove an artificial barrier to crude oil production,” the study’s authors conclude. “The result would be lower crude oil prices worldwide.” The overall U.S. economy would benefit from more oilproducing jobs, higher wages, and consumers spending the money they save on gasoline on other products, the authors conclude. Delaying a decision on the ban, the authors say, would eliminate nearly all the potential benefits. U.S. crude exports are allowed only with special federal approval, the result of restrictions put in place after the 1973 Arab oil embargo. The rules went largely unchallenged for decades because oil production in the U.S. was slipping while demand was rising, so few thought the U.S. would be in a position to export oil. The U.S. still uses far more crude oil than it produces. But domestic oil production is booming in North Dakota, Texas and elsewhere thanks to improved drilling techniques. The

oil being produced is a variety of crude that foreign refineries covet and that many U.S. refineries are not equipped to handle. Oil producers and some politicians have called for the export ban to be lifted. Opposition to exports of crude comes from U.S. refiners who benefit from lower-priced U.S. crude and some politicians. They argue that lifting the ban would raise U.S. crude prices, making it less profitable for domestic refiners to produce fuel. They would then reduce production, and U.S. gasoline prices would rise. A growing number of studies have called that into question, however. The conclusions of the Brookings report are similar to a study funded by the oil industry and performed by the research firm IHS in May and a February paper by Resources for the Future, a non-profit research group that receives funding from government and private foundations. A survey of private, corporate and academic economists conducted by the Associated Press earlier this year found overwhelming support for oil exports. Ninety percent of the 30 economists surveyed said the economy would be better off if oil exports were allowed. Jonathan Fahey can be reached at http://twitter.com/ JonathanFahey .

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hell Appalachia recently released the results of two Utica Shale wells drilled in Tioga County, Pennsylvania. The Gee and Neal wells had an initial production rate of 11.2 million and 26.5 million cubic feet, respectively, from two miles below the surface. These wells are the first Utica wells to be developed in the northeastern region, and their production indicates future exploration of the formation to be an attractive investment. Pennsylvania regulations require the disclosure of well production results after the first six months, however according to Shell, the production of the wells was not previously disclosed due to competitive reasons. The release comes on the heels of the company’s announcement that it is leaving its western and southeastern acreage and shifting its focus to the Appalachian Basin. “Last year, we refocused our resources plays strategy to select fewer plays with specific scale and economic characteristics to best suit our portfolio. The Appalachian basin is one of those areas, and these two high-pressure wells both exhibit exceptional reservoir quality,” said Marvin Odum, Shell’s Upstream Americas director said in a statement. According to the Pittsburgh Post-Gazette, Shell currently holds the rights to nearly 900,000 acres in Pennsylvania. The hot spot for developing the Utica Shale has been in Monroe County, Ohio (over 300 miles from Tioga), where operators have been able to tap in rich reserves of natural gas liquids – ethane, propane, butane – which are used in the manufacturing of everyday items. The wells drilled by Shell in are more than 100 miles east from the nearest operator, Range Resources, developing in the Utica formation in the state. According to shell: “The Gee and Neal discovery wells extend the sweet spot of the Utica formation beyond Southeast Ohio and Western Pennsylvania.”

As the “sweet spot” of the Utica shale continues to grow, so have the production results. According to Dr. Mark J. Perry, professor of economics at the Flint campus of the University of Michigan, natural gas production from the Utica Shale has increased almost sevenfold in the past two years. “Natural gas in the Utica Shale region has increased from about 200,000,000 cubic feet per day in September 2012 to 1.34 billion cubic feet per day this month based on the Environmental Information agencies latest data,” stated Dr. Perry. Shell’s well results reveal the potential of the formation as other operators are beginning to explore drilling deeper into the Utica shale below Pennsylvania.

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STRONGER Gov. Thomas Corbett Pennsylvania ust a few short years ago, it seemed as if every other day there was talk of the United States’ main energy sources being jeopardized by actions abroad, followed by bipartisan demands and calls for America’s energy independence. But over the course of the last few years, we have started to break through the rhetoric, becoming closer than ever to achieving that goal. Much of that can be attributed to the work we are doing here in Pennsylvania to responsibly and safely develop the resources beneath our feet in the Marcellus Shale, along with our historical presence as a major coal-producing state, and exploration into alternative energies both below and above. It’s natural gas though that has given Pennsylvania new life. The struggling rural farmer, shuttered manufacturing plants, and towns almost forgotten are being restored, while our air, water and environment have benefitted from the use of cleaner energy. Our southeast refineries – and their thousands of jobs - are back in action and the Philadelphia shipyards are booming with business again, while small towns like Williamsport have seen unprecedented growth. Pennsylvania is now a major player on the international stage, competing to bring an entire new industry to Western Pennsylvania with a world-class petrochemical plant. The Marcellus Shale has led Pennsylvania to become a net exporter and the second largest producer of natural gas in the country. A new pipeline is even powering Manhattan, despite a ban on gas development in neighboring New York. Innovative companies and public transit agencies are saving millions of

dollars by converting their fleets to natural gas, while middle class Pennsylvanians are paying nearly $1,200 less a year in energy costs than just a few years ago. Here in Pennsylvania, we know that energy equals jobs, and natural gas is putting Pennsylvanians back to work in greater numbers, with more than 240,000 Pennsylvania jobs being made more stable and secure thanks to the industry’s growth. At the same time, we’re lowering our energy costs – by nearly 40% over the past six years – making our manufacturers more competitive and helping citizens keep more of their own hardearned dollars. Farmers, once living year to year, beholden to the weather and their crops, have been able to secure a steady income from leasing parts of their property, and maybe even put a little money away to grow or send their kids off to college. Through a one-of-a-kind impact fee, we are reinvesting in communities and environmental priorities in communities all across the state. To grasp this opportunity and do so responsibly is critical to Pennsylvania’s economy rebounding from the Great Recession, balancing both our health and fortune for generations still to come. Pennsylvania has an encouraging and bright future, with an unprecedented ability to help achieve our nation’s independence from foreign energy. But only if we stay the course, committed to higher environmental standards, predictable regulation, and a recognition that we must incentivize and reward innovation and risk. That’s the American way. That’s the Pennsylvania way. We’re helping to build a stronger Pennsylvania, one in which more citizens can succeed, live, and raise families of their own.

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DUCKS in a Row

Dan Garcia Attorney ast month, I wrote an overview of the opportunities available to small business owners looking to become involved in the oil and gas industry. I addressed the slowdown in drilling and highlighted the need for more pipeline infrastructure to send gas to market. While it is important to understand the gas industry supply chain, it is equally as important to understand what your next steps should be if you are a small business owner looking to get involved in the shale gas industry. Chances are good that your small business can become part of the shale revolution. For many small businesses in western Pennsylvania, a successful entry into the Marcellus Shale requires patience, creativity, and solid relationships.

GET YOUR DUCKS IN A ROW

Every oil and gas company I have ever known has safety as a core value. Whether your company provides welders to pipeline projects, or surveyors to stake out a compressor station site, safety is absolutely paramount to any activity. Many of the oil and gas companies in the Marcellus and Utica require their vendors to become part of ISNetworld (www. isnetworld.com). ISNetworld is a subscription-based service that maintains safety, insurance, quality, and regulatory information on contractors and suppliers. Many oil and gas companies use ISNetworld to “standardize contractor management”, making the subscription a ‘must have’ for any contractor or engineering firm looking for opportunities. Having a membership in ISNetworld by no means guarantees any contract awards but it is one of the first questions asked by procurement professionals.

GETTING THE GRADE

Signing up for ISNetworld can become a daunting task for many small contractors. The subscription service can be costly and will require a number of document submissions. For example, ISNetworld will likely require an audit of your Health, Safety, and Environmental program to ensure

compliance with the company you are seeking to service. To ensure submittals are made timely, it helps to have a formal Health, Safety, and Environmental program and an established EMR. For those companies seeking opportunities in the pipeline industry, the Pipeline and Hazardous Materials Safety Administration, or PHMSA (pronounced fim-SA), has jurisdiction over what type of training contractors should have. While pipeline operators are subject to the requirements of the DOT Rules, “[i]ndividuals performing covered tasks on an operator’s pipeline facility, including its own employees, contractors, sub-contractors, original equipment manufacturer’s (OEM) representatives, temporary help, etc., must be qualified or perform covered tasks under the direct supervision of a qualified individual. Operators may require contractors which supply individuals to perform covered tasks to: a. Have their own OQ Program and provide documentation that these individuals are currently qualified to perform the assigned covered tasks. b. Belong to a Consortium which provides the required qualification evaluations and documentation, or c. Qualify those individuals under the Operator’s own OQ Program; or d. Have an independent third party evaluate their qualification and provide the required documentation. Whichever alternative is chosen, the contractor must be operating under an OQ Program that the operator has verified as being compatible with its own qualification procedures, including the recognition of and reaction to AOCs identified by the operator.” There are a number of federal and state regulations addressing the requirements for contractors, engineers, and subcontractors working in the oil and gas industry. I highly recommend a conversation with your attorney if you have any questions regarding ISNetworld and PHMSA.

GETTING IN THE DOOR Your small business looks great. You have the right expertise and the right price point to provide your services to the Marcellus companies calling Western Pennsylvania home. Yet, despite looking great on paper, your company does not seem to gain any traction with the gas companies in the region. Much like any other industry, relationships are critical to ensuring a successful entry into oil and gas. Imagine yourself as the project manager of a major oil and gas company. Your boss is likely in Houston or Denver and is relying heavily on your judgment call to select the right engineers, the right surveyors, the right contractors, the right inspectors, etc. On a daily basis vendors of every shape and size are blowing up your desk phone, your cell phone, stopping by your office and delivering pastries…you get the idea. Contractor selection can make or break project manager’s career and there is very little room for error. Project managers will rarely issue a Master Service Agreement (MSA) on a whim. While this can be a difficult environment to sell services, there are some opportunities to ensure your company gets

noticed. First, understand that relationship development takes time and humility. Most project managers will need to have confidence in you and your company that you will deliver what he asks on time and of high quality. Second, the oil and gas industry has a very fast timeline that has broken the spirits of many a contractor. Understand that when the project manager says he needs your deliverables by 3pm on Thursday, he means 3pm on Thursday, not 3:05pm. Finally, do not take rejection personally. This industry moves incredibly fast. While your proposal did not get picked up this time around, keep maintaining your relationships with project managers and procurement specialists. This industry is heavy on relationships and warm introductions, just because someone cannot give you work does not mean you cannot help them out. Entering the oil and gas industry will require an incredible amount of sweat equity, a solid understanding of where the industry is and where it is going, and the right relationships to help you execute your market entry strategy. Dan Garcia is an attorney at Leech Tishman Fuscaldo & Lampl in Pittsburgh, PA focused on Oil and Gas, Construction, and Government Relations. If you have any questions or comments, he many be reached at dgarcia@leechtishman.com

At JMD, we feel that seeing is believing. The picture above is of our newest location in New Philadelphia, Ohio. It is one of four JMD locations in Ohio that service the Oil and Gas Industry. As you can see, we stock a full line of HDPE and woven-coated liners, geotextile fabrics, geogrids, hydromulch, HDPE pipe, safety and silt fence, compost sock, erosion matting, grass seed, and fertilizer… just to name a few. We also have one of the largest fleets of flatbed trucks of any distributor servicing the Oil and Gas Industry in Ohio.

Productivity is your business ... friendly, fast, and reliable service is ours... Call us at any one of our locations: New Philadelphia, OH Cleveland,OH Columbus, OH Cincinnati, OH 330-308-0063 330-405-6050 614-866-0452 513-539-2132 Pittsburgh, P A State College, PA Charleston, WV 412-833-7100 814-684-0916 304-766-7404

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American Made Hardwoods

Kim Lewis Dix Communications INERAL CITY, OH -- Representatives from American Refining Group Inc. (ARG) and Campbell Construction Inc. gathered Tuesday to break ground on a $1.2 million project to build a new 9,136-squarefoot facility at ARG’s Sandyville crude-oil terminal in Mineral City. When complete, the facility will enclose 4,144 square feet of office capacity and 4,992 square feet of shop space and will include a conference room equipped with state-of-the-art technology. A staff of 18 will be based there comprising drivers, administrative support and supervisory personnel. ARG’s Ohio operations also include a terminal in Randolph where five crude-truck drivers and a dispatcher are based. Between the two sites, Ohio operations supply an average of 1.35 million barrels of crude oil annually, the vast majority of which is shipped by rail, to the refinery in Bradford, Pa. “We’re (currently) in a building that was never designed for office use and we’ve outgrown it,” said Gary Welker, ARG’s manager of crude-oil operations. Because of a significant increase in available maintenanceshop space, ARG also aims to add another full-time mechanic. “We’ve had to contract a lot of our truck maintenance and repair work to third parties because there just wasn’t room,” Welker said. ARG’s refinery is situated on approximately 131 acres in the heart of McKean County and was the birthplace of the domestic oil industry more than 130 years ago. The refinery has a rated capacity of 11,000 barrels per day and processes light sweet paraffinic crude. ARG reported it partnered with Campbell Construction, a Butler builder, due in part to “shared values such as integrity, trust, excellence and quality, as well as a commitment to community and social responsibility.” According to Campbell Vice President of Business Development Jeff Stevenson, more than 50 people will work toward the project’s completion, which is expected by the end of February.

“This is a complete turn-key, design-build project. We handle all design, engineering, permitting and construction,” Stevenson said. ARG President and Chief Operating Officer Jeannine Schoenecker said, “We are pleased to be able to make this major investment in our Ohio operations, which will also enable us to better serve our crude suppliers now and far into the future. “The crude oil we gather in Ohio is crucial to our refinery’s operations,” Schoenecker explained, “and this expanded, improved facility will only become more critical to our growth and success there.”

Report: Water shortages crimp China shale gas plan

EIJING (AP) - A research group says more than 60 percent of China's vast shale gas deposits are in regions with scarce water resources, complicating plans by the energyhungry country to tap the natural gas. The World Resources Institute says China has the world's largest reserves of natural gas trapped in deep shale rock. Commonly known as fracking, shale gas mining requires pumping large quantities of water mixed with chemicals into deep wells to break apart shale rock. The U.S.-based institute said in a report issued Tuesday that 38 percent of the world's shale gas is in areas with scarce water. China, Argentina and Algeria have the world's biggest shale GE opens fuel cell facility in upstate New York ALTA, N.Y. (AP) - General Electric Co. is opening a new gas deposits. facility north of Albany devoted to the development of Trans Energy to restore W.Va. streams in agreement fuel cells. HARLESTON, W.Va. (AP) - Oil and gas company Trans The facility in Malta opening on Tuesday will be devoted Energy Inc. has agreed to restore portions of streams and to the development of high-efficiency fuel cells that take in natural gas. GE believes these so-called oxide fuel cells could wetlands in West Virginia that were damaged by natural gas extraction activities. generate from one to 10 megawatts of power. The U.S. Department of Justice says the restoration is The company says it has reached a deal with Hudson Valley Community College to install and operate a smaller, 50 part of a settlement with the U.S. Environmental Protection kilowatt fuel cell generator. GE officials say the installation Agency and the West Virginia Department of Environmental at the community college brings their low-emission fuel cell Protection. Federal officials say the 15 sites in West Virginia were technology a step closer to the commercial market. Hudson Valley college officials say the deal will open the polluted by Trans Energy's unauthorized discharge of dredge or fill material. The company also will pay a $3 million to be door to new career fields for the students. divided by state and federal governments. Officials allege that the company impounded streams and Gas conversion project in Pike Co. gets tax breaks OUISVILLE, Ky. (AP) - A project to build a facility that discharged sand, dirt, rocks and other materials into streams would convert natural gas to synthetic diesel and other and wetlands without a federal permit. The agreement would resolve both federal and state products in Pike County has received approval for $18 million violations. It is subject to court approval. in state tax incentives. RCC Big Shoal seeks to build a plant that would use natural Texas has more than 100 natural gas fueling sites gas to create synthetic fuel, base oils and lubricants. USTIN, Texas (AP) - Drivers who rely on natural gas to Several local officials including Kentucky House Speaker power their vehicles have more places to fill up in Texas. Greg Stumbo and Pike County Judge-Executive Wayne The Texas Railroad Commission on Monday announced the Rutherford attended an announcement of the tax incentives state has 104 refueling stations, compared to 69 a year ago. Thursday in Louisville. Commission officials say the 60 public fueling stations and Rutherford says the planned project is good news for a 44 private stations serve more than 7,100 natural gas vehicles. county where coal production continues to decline. The plant would draw natural gas extracted from Pike County and other Authorities also say Texas has more vehicles running on natural gas than on any other alternative fuel. nearby sources. Nearly 70 additional natural gas fueling stations are The first phase of the project would cost nearly $200 million expected to open next year across Texas. and employ about 30 people upon completion.

OCTOBER 2014 • www.GasandOilMag.com

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