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May 17, 2012
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Ohio Senate passes shale drilling rules
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Ohio senators approved new horizontal drilling regulations on Tuesday with bipartisan support and a 27-6 vote, the Tribune Chronicle reports. The energy bill, which adjusts Ohio's renewable energy standard to include waste heat in its definition and expands chemical disclosure and water testing requirements, will now go to the Ohio House of Representatives, the article said. For more, read the full story here and check back for a detailed summary of the bill once it passes the House.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 17, 2012
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Ohio's tax rates are the lowest of any major shale state
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A new analysis by the accounting firm Ernst & Young shows that Ohio's overall effective tax rate is "80 percent below the average for the other top seven states for a well producing dry natural gas and natural gas liquids" and is 65 percent below the average for a well producing dry natural gas and oil, The Columbus Dispatch reports (See the May 14, 2012, blog – "Poll shows that Ohioans favor Gov. Kasich's shale severance tax"). Even if Gov. Kasich's severance tax passed, Ohio's overall effective tax rate would be "40 or 48 percent lower than the other states'," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 17, 2012
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Shale boom brings new era of mineral leases
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Whereas historically, oil and gas leases were negotiated between the drilling company and the landowner with virtually no provisions for environmental and health safety, the attention given to the burgeoning shale industry in Appalachia is making lease negotiations a more labor-intensive project, New York Times reporter Keith Schneider writes in his blog. What were once few-page documents that included standard royalty rates and modest bonus payments are now 24-plus pages with provisions ensuring protection of the water and land. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 17, 2012
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Waterless technique may make shale more profitable and environmentally friendly
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An unnamed company has asked Calgary-based GasFrac Energy Services to use its waterless liquid petroleum gas method to drill two Utica trial wells in Ohio, Crain's Cleveland Business reports (See the Nov 11, 2011, blog – "Emerging technology used in natural gas fracking is helping to avoid water pollution"). Although the practice is new and has its share of critics, Chevron did use LPG in Colorado recently, noting that it "significantly increases production while minimizing water usage," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 17, 2012
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Wayne National Forest officials may try to lease land for drilling again
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After a wave of protests prevented the leasing of more than 3,300 acres of Wayne National Forest to the federal government for the purpose of horizontal drilling last year, forest officials are renewing their efforts, The Marietta Times reports (See the Nov 16, 2011, blog – "Environmental concerns over fracking delay lease auction of Wayne National Forest"). Upon the completion of a review of new information (RONI) in Mid-June, a decision will be made regarding whether the land will be leased. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 16, 2012
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Midstream services plant to be located in Columbiana County
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Utica East Ohio Midstream LLC, a subsidiary of M3 Midstream, purchased 117 acres by Route 644 in Columbiana County for $400 million to construct a "collection and compression site for natural gas," The Review reports. As part of a joint venture with Chesapeake Midstream and EV Energy Partners, this M3 Midstream facility will extract natural gas liquids from the shale gas, then send the NGLs to a gas storage and transfer hub in Carroll County that MarkWest Energy Partners is currently constructing, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 16, 2012
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Shale industry has jobs for women, too
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Although the oil-and-gas drilling industry is primarily dominated by men, women can "do any job on the rig with proper training," WTOV9 reports. There are "at least three indirect jobs" created for each job at a well site and more women are seeking out these accounting, administrative and engineering jobs, in addition to the well site positions, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 16, 2012
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Unknowns in shale industry complicate risk pricing for insurers
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Lawsuits and U.S. Environmental Protection Agency findings regarding how the shale drilling industry affects environmental and human health are still in their infancy and proving inconsistent, 4-traders.com reports. Such uncertainty is making it difficult for insurance companies to "price the risk of the oil and gas production technique" known as hydraulic fracturing, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
| Permalink
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May 15, 2012
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Auto accidents in Carroll rise with the truck traffic
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Compared with last year, the New Philadelphia post of the Ohio Highway Patrol has handled 42 percent more road crashes, while the Carroll County Sheriff's Department has handled 46 percent more, according to The Times-Reporter. Although these statistics do not track whether the wrecks involving trucks were affiliated with oil-and-gas companies, officers are proactively attending Chesapeake's monthly safety meetings in Canton to communicate residents' concerns and discuss best practices, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 15, 2012
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Judge rules that pipeline company can survey private property in Steubenville
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A common pleas court judge ruled on Friday that Houston-based Enterprise Liquids Pipeline can do survey work on property despite the landowner's desire to prevent such work from occurring, The Herald-Star reports. The proposed pipeline, which would "transport liquid ethane produced from the Marcellus and Utica shale formations in Pennsylvania and Ohio westward across Ohio to ethylene manufacturing plants in Texas and Louisiana," was ruled to be a utility pipeline with "eminent domain powers under Ohio law," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 14, 2012
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Gov. Kasich wants Ohio to be standard bearer for shale regulatory framework
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With more than 127 shale-related bills having been considered across 24 states in 2012 alone, Gov. John Kasich said that he hopes Ohio's regulatory standards become the "standard bearer for other states to follow," according to the Hannah Report. Although Ohio is among the states that are actively working to "move forward in developing a natural gas industry," Gov. Kasich has been adamant that environmental regulations and public safety must not be sidelined.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 14, 2012
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Poll shows that Ohioans favor Gov. Kasich's shale severance tax
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In a Columbus Dispatch op-ed piece, a Quinnipiac poll indicates strong bipartisan support for Gov. Kasich's proposal to raise taxes on hydraulic fracturing and give a tax break to Ohioans (See the Apr 20, 2012, blog – "Columbus Dispatch editorial board supports Gov. Kasich's severance tax"). The editorial board argues that lawmakers should consider the constituents they represent and not the oil-and-gas or anti-tax lobbies. For more, read the full op-ed here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 14, 2012
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Weatherford International subsidiary to bring 150 jobs to Youngstown
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As reported earlier, Houston-based Weatherford Artificial Lift Systems Inc., a subsidiary of Switzerland-based Weatherford International Ltd., plans to build a multipurpose oil-and-gas operations facility in Youngstown (See the May 03, 2012, blog "Oil-and-gas company buys two parcels in Youngstown"). The facility, which is scheduled to start operating in late September, will train and employ about 150 people – 75 percent hourly and the rest salaried management, the Tribune Chronicle reports. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 10, 2012
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Forbes contributor argues for the environmental benefits of shale
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Tim Worstall, a contributor for Forbes, wrote a piece last week arguing that the shale gas revolution is beneficial to the environment because the low price of natural gas is forcing pollution-heavy coal plants to close. He wrote that gas creates more electricity per BTU than coal and is therefore more efficient; that compared to coal-fired generation, average emissions rates in the United States for natural gas-fired generation are half as much carbon dioxide, a third as much nitrogen oxides and one percent as much sulphur oxides; and that the process for cleaning natural gas is easier than the process for cleaning coal. For more, read the full story here.
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Posted by
M. Warnock in
United States
| Permalink
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May 10, 2012
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Marathon Oil to buy Paloma Partners for $750 million
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Paloma Partners II LLC announced yesterday that Marathon Oil will purchase the privately held exploration and production company for $750 million cash in a deal expected to close this fall, The Associated Press reports. Paloma owns about 17,000 net acres in the Eagle Ford shale in Texas, which produce approximately 7,000 barrels of oil per day, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
| Permalink
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May 08, 2012
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MarkWest Energy acquires Keystone Midstream Services
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Yesterday, MarkWest Energy Partners, L.P. announced that it was purchasing Keystone Midstream Services, LLC for $512 million, Business Wire reports. Keystone's assets, located in Butler County, Pennsylvania, include "two cryogenic gas processing plants totaling 90 million cubic feet per day (MMcfd) of capacity, a gas gathering system and associated field compression," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
| Permalink
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May 08, 2012
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Top Chesapeake Energy investor wants the company to consider selling itself whole
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O. Mason Hawkins, chairman and chief executive officer of Southeastern Asset Management Inc. and the largest Chesapeake Energy shareholder, wrote a letter to the energy giant's board urging them to consider selling the whole company, Bloomberg reports. Record low natural gas prices and the recent disclosure of a potential conflict between Chesapeake CEO Aubrey McClendon's personal financial transactions and professional duties have rocked the company in recent weeks (See the May 07, 2012, blog – "Oversupply of natural gas is forcing production to a halt" and the May 01, 2012, blog – "Aubrey McClendon to step down as chairman of Chesapeake Energy"). For more, read the full story here.
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Posted by
M. Warnock in
United States
| Permalink
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May 07, 2012
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Landowners sue to have old gas storage leases terminated to make way for new leasing deals
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Three property owners have filed lawsuits in Columbiana County Common Pleas Court requesting that leases with Columbia Gas Transmission LLC dating back to the 1940s, 1950s and 1960s be terminated so that they can file leases with Chesapeake Energy, the Morning Journal News reports. The property owners allege that the contracts have expired, that no drilling has taken or is taking place on the properties and that rental prices for the leases have not been paid recently, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 07, 2012
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ODNR seeks tougher regulations on the construction of oil and gas wells
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The Ohio Department of Natural Resources submitted stricter regulations on the construction of oil and gas wells to the Joint Committee on Agency Rules Review, who are expected to rule on the filing today, according to the Hannah Report. The proposed changes, which mirror those included in Gov. Kasich's Mid-Biennium Review, include "rules on field standards, drilling fluids and annular pressure monitoring," the article said. Check back for updates.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 07, 2012
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Oversupply of natural gas is forcing production to a halt
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With natural gas facilities in the United States expected to reach capacity this summer, the price per thousand cubic feet of natural gas has unexpectedly dropped from $4 last year to around $2 now, Crain's Cleveland Business reports. As energy companies cut production in an effort to drive up the price, landowners are having to wait longer for their royalties – as are states for their tax revenue – from the sale of the gas, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
| Permalink
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May 04, 2012
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Chesapeake Energy's CEO ran $200 million hedge fund from within the company
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In addition to taking a more than $1 billion loan "against his stakes in Chesapeake oil and gas wells," Chesapeake Energy Corp. CEO Aubrey McClendon also operated from within the company a $200 million hedge fund that "traded in the same commodities Chesapeake produces," a Reuters investigation reveals. Although no evidence of misused inside knowledge has come to light, some experts are expressing concerns that this arrangement indicates a potential conflict of interest wherein McClendon would have to choose between a decision that would benefit Chesapeake's shareholders versus a decision that would benefit his hedge fund – known as Heritage Management Company LLC – the article said. Additionally, such an arrangement would have enabled McClendon to buy or sell a commodity based on privileged information of a move that Chesapeake was going to make that would affect the market, which could in turn "raise costs for the company," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
| Permalink
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May 04, 2012
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Ohio House Democrats introduce auditing standards legislation for oil and gas wells
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Reps. John Carney (D-Columbus) and Mark Okey (D-Carrollton) introduced legislation (HB 528) on Wednesday that would require oil and gas drilling companies to "send monthly production reports to all landowners with whom they are contracted" to help ensure that property owners receive accurate compensation based on their royalty agreements, WKBN reports. For more, read the full story here or read the text of House Bill 528 here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 04, 2012
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Rules for hydraulic fracturing on federal land released
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Today, the U.S. Department of the Interior released new environmental-safety rules for hydraulic fracturing on federal land that are expected to set a standard for future state regulations, The Wall Street Journal reports. Tests to ensure that wells are properly cemented and guidelines regarding the treatment of wastewater were included. The focal point of the draft rule was a requirement that energy companies disclose the chemicals used in hydraulic fracturing; however, they are allowed to wait until after the chemicals have been injected in the ground so as to protect "proprietary information," a press release from the department said. For more, read The Wall Street Journal article here, a press release from the Interior Department here and the full text of the draft rule here.
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Posted by
M. Warnock in
United States
| Permalink
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May 03, 2012
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Booming shale and auto industries reinvigorate Ohio's steel sector
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The anticipated rebounding of auto manufacturing in the United States is causing Ohio's steel industry, which – as the nation's second-largest behind Indiana – was operating at a snail's pace during the last few years, to expand rapidly to meet demand, The New York Times reports. The oil and gas drilling boom, however, was a more surprising growth factor that has caused the "swift rise in the market for steel pipes and oil field equipment," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 03, 2012
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Consortium of energy producers releases recommended practices for oil and gas exploration
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The Appalachian Shale Recommended Practices Group – a consortium of eleven energy producers that includes Anadarko Petrolum, Chevron, Chesapeake Energy Corp., Cabot Oil & Gas, Royal Dutch Shell and Exxon Mobil – released a set of recommended standards and practices "for oil and gas exploration in the Appalachian region," Fox Business News reports. For more, read the full story here or view the recommended standards and practices here.
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Posted by
M. Warnock in
Ohio
Pennsylvania
West Virginia
| Permalink
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May 03, 2012
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Energy producers scale back natural gas production amid abundant supply
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With a significant oversupply of natural gas causing prices to drop to their lowest level in more than a decade, energy producers are beginning to scale back production, The Wall Street Journal reports. The recent cutback in production coincided with a surge in demand from consumers looking to capitalize on the record-low prices, which resulted in natural gas prices jumping on Wednesday, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
| Permalink
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May 03, 2012
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NiSource enters into Utica drilling venture
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Indiana-based NiSource is partnering with a company that will engage in oil and gas exploration and production in eastern Ohio, Bloomberg reports. With mineral rights to between 100,000 and 200,000 acres in the Utica play, NiSource will primarily deal with gathering and transporting the fuel, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 03, 2012
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Ohio Senate nixes disposal well fee increase
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Today, an Ohio Senate panel struck the proposed fee increase for deep injection wells from Gov. John Kasich's energy policy proposal, Gongwer reports. Amendments addressing chemical disclosure regulations regarding the oil and gas industry are expected on Monday, the article said. Check back for updates.
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Posted by
C. Montgomery in
| Permalink
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May 03, 2012
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Oil-and-gas company buys two parcels in Youngstown
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Houston-based Weatherford Artificial Lift Systems Inc., a subsidiary of Switzerland-based Weatherford International Ltd., purchased two parcels in Youngstown that include a 153,708-square-foot building and 20.37 acres of land for $3.4 million, The Vindicator reports. The parent company makes products for use throughout the oil-and-gas production process, while the subsidiary specializes in systems that increase the flow of liquids from production wells. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 02, 2012
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Marcellus Shale Coalition releases first of several recommended practices for responsible natural gas development
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The Marcellus Shale Coalition, a formidable drilling industry trade group that has forty energy companies as members, released the first in a series of recommended practices that are designed to provide general guidance for various elements of natural gas development, a press release from the coalition said. The first recommended practice addresses site planning, development and restoration. For more, read the full press release here and the first recommended practice here.
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Posted by
M. Warnock in
United States
| Permalink
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May 02, 2012
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Municipalities at the center of Ohio's shale boom have little power over the industry
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In 2003, following a string of local government ordinances that effectively blocked oil and gas drilling, a state law was passed that gave the Ohio Department of Natural Resources "sole authority over issuing permits and approving location, and spacing of wells and repealed all provisions that gave local governments power to require more of oil and gas operators than the state does," the Newark Advocate reports. Some municipalities are becoming increasingly concerned over the disposal of hydraulic fracturing waste and the large amount of water used from the area's supply, with Mansfield Law Director John Spon arguing that the "home rule" in the Ohio Constitution allows municipalities and villages to reject injection wells approved by the state a year ago, the article said. For more, read this story in the Marion Star here, the Mansfield News Journal here and the Newark Advocate here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 02, 2012
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Shale boom turns sleepy eastern Ohio towns into pricey real estate locations
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The oil and gas boom sweeping eastern Ohio is transforming old steel mill towns into booming commercial real estate locations as businesses seek to repurpose older industrial buildings and purchase acreage at multiples times the asking price compared to just a few years ago, Crain's Cleveland Business reports. A Cleveland real estate broker started the website, www.uticamarcellus.com, which is "focused on news and commerial real estate listings linked to oil and gas in Ohio and Pennsylvania," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 02, 2012
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Supply chain database aims to bring shale energy buyers and suppliers together
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The Ohio Chamber of Commerce and Ohio University are working on a database at http://www.ohioshaleenergy.com/default.aspx that aims to help shale energy buyers locate regional companies that meet their needs and help suppliers locate new opportunities in the market to pursue, the Chillicothe Gazette reports. Relevant businesses are encouraged to register for inclusion in the database, which will go live on May 31st. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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May 01, 2012
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Aubrey McClendon to step down as chairman of Chesapeake Energy
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Amid demands from investors that Aubrey McClendon be replaced after it became public knowledge that he did not disclose $1.4 billion in loans that he received from a private-equity firm that had dealings with Chesapeake Energy, the company announced today that although McClendon will remain CEO, he will step down as chairman, The Wall Street Journal reports. The controversial arrangement in which McClendon was given the right to "participate and invest as a working interest owner of up to 2.5% in new wells" was also terminated 18 months early with McClendon receiving no severance compensation, the article said (See the Apr 30, 2012, blog – "Chesapeake Energy to review and change McClendon's financial arrangements"). For more, read the full story here.
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Posted by
M. Warnock in
United States
| Permalink
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May 01, 2012
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Construction underway for Halliburton site in Zanesville
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Even though the ceremonial ground breaking was just last week, more than 100 Ohioans already have been hired to work at Halliburton's estimated $35 to $50 million equipment and field service center buildings site in Zanesville, the Coshocton Tribune reports. The facility, which will provide oilfield services, is expected to create 300 jobs within three years – at least 70 percent of which are to be filled locally, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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Apr 30, 2012
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Chesapeake Energy to review and change McClendon's financial arrangements
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As Chesapeake Energy faces increasing scrutiny over the loans received by Aubrey McClendon, the company's chairman and chief executive, officials announced Thursday that the company will review McClendon's "financial relationships with outside parties" and phase out an unusual compensation plan that allowed him to "invest alongside Chesapeake in every well that it drilled, sharing in both the profits and the expenses," The New York Times reports. Meanwhile, the Securities and Exchange Commission has begun an informal inquiry into the matter while Standard & Poor's downgraded Chesapeake's debt "further into 'junk' territory," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
| Permalink
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Apr 30, 2012
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Salem-area leaders discuss infrastructure and other shale concerns with Lt. Gov. Taylor
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Last week, Lt. Gov. Mary Taylor discussed education, infrastructure and a variety of other issues related to the shale boom with leaders and residents of the Salem area, The Review reports. Multiple attendees voiced support for changing the low-priority status of the U.S. Route 30 and 62 projects in the wake of heavy truck traffic that they said is damaging not only downtown Salem streets, but buildings, also. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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Apr 25, 2012
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Houston Chronicle editorial adds up the electoral votes of oil and gas regions
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In an editorial published on Sunday, the Houston Chronicle added traditional oil and gas areas to new shale-rich areas to determine that these swaths of land are equal to 287 electoral votes, which is 17 more than what's needed to elect a president. The newspaper's editorial board encourages these areas to push congressional leaders toward adopting policies that are favorable to domestic oil and gas production. For more, read the full editorial here.
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Posted by
M. Warnock in
United States
| Permalink
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Apr 25, 2012
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Mandatory pooling issue concerns some Ohio landowners
|
Some Ohio landowners are arguing that mandatory pooling, which allows drillers to drill on an objecting landowner's property so long as enough neighbors support the drilling, is tantamount to "private eminent domain," The Associated Press reports. Although landowners do get paid for the oil and gas that is taken, some argue that it is not worth the aesthetic and environmental impact, nor the infringement upon their rights, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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Apr 24, 2012
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Exporting natural gas would be costly for most in the U.S., but good for Ohio landowners
|
As an increase in supply drives down the price of natural gas domestically, oil and gas industry officials are calling for natural gas to be exported so that the price can increase on the world market, Crain's Cleveland Business reports. While this move would almost certainly raise oil and gas prices for most businesses and citizens in the United States, it would also likely cause the industry to grow in Ohio and make the hydrocarbon-rich land in Ohio more valuable to lease, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
United States
| Permalink
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Apr 24, 2012
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Muskingum Watershed Conservancy District sells water and leases mineral rights to oil and gas companies
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The Muskingum Watershed Conservancy District approved one deal to let Gulfport Energy draw up to 11 million gallons of water from Clendening Lake for $9 per 1,000 gallons and another deal to lease the mineral rights for land around Leesville Lake to Chesapeake Energy for about $21.5 million, according to an article in The Times-Reporter (See the Apr 17, 2012, blog – "Muskingum Watershed Conservancy District may sell water for hydraulic fracturing operations"). For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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Apr 24, 2012
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Ohio leaders travel to learn about Pennsylvania's shale experience
|
In an effort to reap the full benefits of the shale boom while avoiding many of its pitfalls and surprises, a Northeast Ohio delegation of community and business leaders under the direction of JobsOhio traveled to Pittsburgh to learn about shale best practices, Crain's Cleveland Business reports. A particularly important lesson was recognizing how imperative it is that Ohio's workforce be trained to do the jobs needed by the oil and gas industry soon so that the companies do not have to bring in workers from other states – a delay of which cost Pennsylvania many jobs during the beginning of its shale boom, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
Pennsylvania
| Permalink
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Apr 23, 2012
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Analysts raise concerns about Chesapeake Energy's CEO
|
After it was revealed last week that Chesapeake Energy did not disclose the size or source of a $1.4 billion loan that Aubrey K. McClendon, the company's founder and CEO, borrowed from a private-equity firm, an analyst from Argus Research told Chesapeake's investors that it would be in their best interest if the company's board and/or CEO were replaced, The Wall Street Journal reports. A Chesapeake spokesman said that McClendon's transactions were fully disclosed and did not create a conflict of interest, and that McClendon had no intention of resigning, the article said. For more, read the full story here.
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Posted by
M. Warnock in
| Permalink
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Apr 23, 2012
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Banks and wealth management firms compete for Ohio landowners' shale money
|
With landowners in eastern Ohio becoming instant millionaires by leasing their land in the Utica shale region to oil and gas companies, banks and wealth management firms are descending on rural communities to help these individuals invest their money and optimize their tax strategies in an effort to maximize their financial returns and plan their estates, Crain's Cleveland Business reports. Although associated fees are certainly a driving force behind this push, bankers and financial strategists alike are eager to help eliminate the common risks people encounter when handling a large amount of money for the first time, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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Apr 23, 2012
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Despite earthquake link, disposal well applications still flood into the ODNR
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Despite confirmation by Ohio state officials of the link between a disposal well and a series of earthquakes in Youngstown, the Ohio Department of Natural Resources is currently reviewing 19 applications for new disposal wells as companies prepare to accommodate an increasing number of Ohio Utica wells during the next few years, The Columbus Dispatch reports. With 171 disposal wells currently operating in the state and another 23 approved but not yet operating, state records show "53 percent of the 12.2 million barrels of wastewater injected in Ohio disposal wells last year came from Pennsylvania and West Virginia shale wells," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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Apr 23, 2012
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Ohio University trustees battle state for control over oil and gas leases
|
In response to a recent state law that overhauled the oil and gas leasing process and opened property at public colleges for drilling, the board of trustees at Ohio University passed a resolution last Friday giving themselves "final say on mineral-rights leasing" of university property, The Columbus Dispatch reports. The university's associate director of legal affairs said that while she thinks the board should have the power to veto any leases of the university's property brought forth by the state, she is unsure whether the state has the authority to override those vetoes, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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Apr 20, 2012
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Columbus Dispatch editorial board supports Gov. Kasich's severance tax
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The editorial in today's Columbus Dispatch criticizes Republican House leaders for shelving Gov. Kasich's severance tax proposal, arguing that Ohio's current oil and gas taxes give companies "an unjustified free pass" when compared to other states experiencing a shale boom. The editorial board dismisses claims that changing the severance tax would discourage businesses from coming to Ohio and argues that Ohioans deserve "a fair return" on the removal of a finite resource from their state. For more, read the full editorial here.
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Posted by
M. Warnock in
Ohio
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Apr 20, 2012
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ODNR to double its oil and gas oversight workforce
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With estimates from the Ohio Department of Natural Resources that the number of horizontal hydraulic fracturing wells in the state will jump from 65 currently to 2,250 by 2015, the department is working to double the number of oil and gas regulation employees who can issue permits and inspect wells, Columbus Business First reports. The ODNR has 75 employees tasked with regulating the oil and natural gas industry in Ohio and plans to use revenue from a fee and severance tax to hire another 75 by the end of the first quarter of 2013, the article said. For more, read the full story here (subscription required).
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Posted by
M. Warnock in
Ohio
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Apr 19, 2012
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Anadarko wells in Noble and Guernsey counties prove prolific
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The Anadarko Petroleum Corporation informed the Ohio Department of Natural Resources that its three wells in the Utica play are producing very well, a press release from the company said. Two wells in Guernsey County, Spencer A-1H and A-5H, have produced a combined "20,000 barrels of light-gravity crude oil and 37 million cubic feet of liquids-rich natural gas in just under two months," while Noble County's Brookfield A-3H well produced "9,500 barrels of oil and approximately 12 million cubic feet of high-BTU natural gas" after just 20 days on line, the release said. For more, read the full press release here.
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Posted by
M. Warnock in
Ohio
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Apr 19, 2012
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Chesapeake Energy shares fall nearly nine percent
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After a report yesterday that Aubrey McClendon, chief executive of Chesapeake Energy, and his company did not disclose a $1.1 billion loan that he took out using "his stake in Chesapeake's wells as collateral," shares of the corporation fell 8.7 percent to $17.45, Fox Business reports. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 19, 2012
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EPA releases first-ever hydraulic fracturing rules
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The U.S. Environmental Protection Agency released its first-ever rules on hydraulic fracturing today, The Wall Street Journal reports. The rules, which include mandated reductions in "smog-forming volatile compounds" but don't address drinking-water quality, will be phased in with full compliance required by January 2015, the article said. For more, read the full story here (subscription required).
A summary outlining key changes to the air rules can be found here.
A fact sheet providing an overview of the new rules can be found here.
The U.S. EPA website found here also has a wealth of resources related to regulatory actions involving the oil and natural gas industry.
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Posted by
M. Warnock in
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Apr 19, 2012
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Seismic testing company sues owners for access to oil and gas properties
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TSG NOPEC Geophysical Company, an outfit tasked with performing seismic tests for Chesapeake Exploration LLC, has filed suit against five landowners in Columbiana County for allegedly keeping the company off their properties, The Vindicator reports. In a case that has the potential to impact many landowners across Ohio with similar oil and gas leases, it will be determined whether older contracts that do not include language with regard to seismic testing imply such rights, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 18, 2012
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Crowd of mineral rights researchers constitutes a hazard at the Columbiana County Courthouse
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The fire safety inspector for the Lisbon Fire Department told county officials that access to offices at the Columbiana County Courthouse for mineral rights researchers must be restricted and their makeshift works stations deconstructed so as to eliminate a fire hazard that has resulted from overcrowding, The Review reports. The new restrictions immediately created a line outside of the county recorder's office and prompted calls for the microfilm and hardbound book deed information to be relocated elsewhere, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 18, 2012
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Ohio Senate Bill 328 would award environmentally conscious oil and gas companies
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Yesterday, Sen. Troy Balderson (R-Zanesville) introduced SB 328, which would establish the Governor's Award for Environmental Stewardship, Gongwer reports. The award would be given annually to a company or person related to the oil and gas industry that "best represented wise environmental stewardship" during the previous year, the article said.
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Posted by
M. Warnock in
Ohio
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Apr 17, 2012
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Akron's Firestone buildings to be repurposed for new industrial use
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Philadelphia-based Amerimar Inc., which redevelops "underperforming" properties, has an option to purchase the 100-year-old former Firestone offices, tire plant and related property from Akron for $5 million, Bloomberg Businessweek reports. The company intends to renovate the property into "office space for administrative, engineering and research jobs linked to oil and gas drilling in Ohio's Utica shale formation," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 17, 2012
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Chesapeake Energy plans to take its oilfield services unit public to raise $862.5 million
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As part of a continuing effort to raise cash and reduce debt by shedding assets, Chesapeake Energy hopes to raise "up to $862.5 million in an initial public offering of stock" from the sale of its oilfield services unit, The Wall Street Journal reports (See the Jan 26, 2012, blog – "Chesapeake's multi-faceted debt-reduction plan concerns some analysts"). The oilfield services company, of which Chesapeake will retain a controlling stake, owns "more than 100 drilling rigs, a hydraulic fracturing subsidiary, an oil field tool rental business and a fleet of trucks that ferry drilling rigs and other equipment," the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Apr 17, 2012
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Muskingum Watershed Conservancy District may sell water for hydraulic fracturing operations
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Covering 20 percent of Ohio, the Muskingum Watershed Conservancy District has been telling numerous oil and gas companies that a decision on selling water to them for hydraulic fracturing could not be decided under the summer, "per its procedures," the Coshocton Tribune reports. The district is now considering a temporary plan to sell water from Clendening Lake in Harrison County to Gulfport Energy, to whom the district leased mineral rights last summer "in exchange for $15.6 million as well as a percentage of whatever oil and gas is produced from that well pad," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 16, 2012
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Coshocton officials prepare businesses and work force for potential shale boom
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As independent contractors continue to review oil and gas leases for Coshocton County, soon exploratory operations will commence to determine whether the area is ripe for oil and gas drilling, the Coshocton Tribune reports. The Coshocton Port Authority is working with representatives from the Anadarko Energy and Petroleum Co. to ensure that welding and commercial driving positions are hired out locally, and that service industry businesses are prepared to handle the influx of customers, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 16, 2012
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President Obama creates group to oversee domestic natural gas production
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In an executive order signed last Friday, President Obama created a group consisting of representatives from several federal agencies charged with coordinating "federal oversight of natural gas production," The Associated Press reports. Headed by White House energy adviser Heather Zichal, the group's creation received praise from some industry leaders who say it will promote streamlined and consistent interaction with the government, while others dismissed the move as excessive regulation that could stymie the burgeoning industry, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Apr 16, 2012
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Shale boom creates demand for rental property in Jefferson County
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As shale industry workers move into Ohio's backcountry to begin drilling operations, local realtors in rural counties are scrambling to find rental properties to house them, WTOV9 reports. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 16, 2012
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The prolific Buell well in Jewett raises both hopes and concerns
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With data concluding that the Buell well in Jewett produced enough natural gas in 198 days to "account for 2 percent of the state's local output for an entire year from more than 64,400 wells," proponents of the shale industry are looking to the site as a symbol of hope for domestic energy independence and an economic shot for the region, The Columbus Dispatch reports. As reported earlier, the landowner – Kenneth Buell – is disappointed about the damage that has been done to his land and the treatment he received from Chesapeake, which leased the mineral rights beneath his property from a strip-mining operation that retained them when it sold the property to Buell decades ago, the article said (See the Mar 20, 2012 blog – "Property owner who lacks mineral rights bears the brunt of the shale boom"). For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 13, 2012
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Delaware County anticipates shale activity
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Ever since a map released recently by the Ohio Department of Natural Resources showed that the Utica shale formation may spread beneath most of Delaware County, county officials have been reviewing the positive and negative impacts that the shale drilling boom has had on eastern Ohio counties in preparation for the many changes that will come as a result of their county's position atop a wealth of oil and gas, The Delaware Gazette reports. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 13, 2012
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More than 500 attend the 2012 Ohio Shale Energy Conference
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The 2012 Ohio Shale Energy Conference at the Pritchard Laughlin Civic Center in Cambridge drew more than 500 attendees interested in learning about and networking within the oil and gas industry, The Daily Jeffersonian reports. In addition to speakers, the event featured panel discussions on the following topics: The Small Business Proposition: Impacts of the Industry at the Local Level; Opportunities for Large Businesses and Manufacturers in Ohio's Supply Chain; What is Ohio Doing to Grow the Shale Energy Industry?; and A Procurement Agent's Perspective on Entering the Supply Chain: Getting Your Foot in the Door, the article said. Bricker and Eckler LLP was a co-sponsor of this event. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 13, 2012
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Ohio House Republicans sideline the oil and gas severance tax proposal as they break up Gov. Kasich's mid-biennium review
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In an effort to pass as many of Gov. Kasich's mid-biennium review budget proposals as possible, Ohio Republicans in the House have divided the proposal into several different pieces of legislation, Gongwer reports. Citing outstanding concerns like "the potential impact on Ohio's oil and gas tax structure if the so-called Bush tax cuts expire" and pipeline and rights-of-way issues that would keep the House from passing the governor's proposals by the summer recess in May, Republicans chose to exclude the governor's oil and gas severance tax and accompanying income tax proposal from all 10 of the separate pieces of legislation.
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Posted by
M. Warnock in
Ohio
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Apr 12, 2012
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BP drilling operations for Trumbull County will commence next year
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BP plans to begin its oil and gas operations for Trumbull County by 2013, Columbus Business First reports. As reported earlier, the company paid $331 million to lease 85,000 acres there with $3,900-an-acre bonuses and 17.5 percent royalties (See the Mar 27, 2012, blog – "BP to lease 85,000 acres in Trumbull County for $331 million"). For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 12, 2012
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Cheap natural gas is encouraging manufacturers, utilities and trucking fleets to convert
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As the shale boom continues to make the supply of natural gas skyrocket while forcing prices in the United States to plummet, three sectors are making significant changes to take advantage of cheap natural gas, The New York Times reports. Manufacturing outfits that had previously abandoned the United States for cheaper opportunities abroad are returning; companies are working to install natural gas fueling stations across the country in preparation for a wave of truck fleets that are being designed to run on natural gas; and utilities are converting to natural gas operations both due to its low price and to meet new emission standards, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Apr 12, 2012
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ODNR releases proposed drilling leases for state parks
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In response to a lawsuit filed by the Sierra Club's Ohio chapter, the Ohio Department of Natural Resources released an 89-page list of "best management practices" to be followed when negotiating leases for state park land with oil and gas drilling companies, The Columbus Dispatch reports (See the Apr 09, 2012, blog – "Ohio Sierra Club sues to see public park drilling plans"). Rules include that drillers are not allowed to "come within 300 feet of camping areas, fire towers, sites of 'historic or archaeological value' or 'high quality' streams and lakes"; and the state must approve the location of all drilling, processing and pipeline equipment, as well as whether drilling and waste fluids may be stored in pits, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 12, 2012
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Shale group releases promotional video about the industry's effects on Carroll County
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The pro-hydraulic fracturing group EnergyFromShale.org released a video highlighting the positive effects that the booming oil and gas industry has had on Carroll County, DailyMarkets.com reports. The video features testimony from the county's economic development director, a case manager for the county's employment and training center, and an area car dealership owner that the shale boom has revived the area. For more, watch the full video here.
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Posted by
M. Warnock in
Ohio
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Apr 10, 2012
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Three deals net Chesapeake Energy $2.6 billion
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As part of an effort to raise $10 billion in transactions to expand its campaign to focus on the more lucrative oil production and less on natural gas, Chesapeake Energy made three transactions totaling $2.6 billion, The Wall Street Journal reports. A Blackstone Group affiliate bought shares of a Chesapeake subsidiary with acreage in Oklahoma for $1.25 billion; Chesapeake sold ten years of future production from a Texas oil field to a Morgan Stanley affiliate for $745 million; and Chesapeake sold 58,400 acres in Oklahoma to an Exxon Mobil Corp. subsidiary for approximately $590 million, the article said. For more, read The Wall Street Journal story here and the press release from Chesapeake here.
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Posted by
M. Warnock in
Ohio
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Apr 09, 2012
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ODNR report fails to track "wet" gas production
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As natural gas prices fall in response to increased supply, drillers are focusing on the more valuable "wet" gas, which includes ethane and butane, Crain's Cleveland Business reports. However, unlike other gas-producing states, Ohio only requires drillers to report gas and crude oil amounts without having to separate the wet gas total, which is making it difficult to determine the actual value of the shale boom, the article said. For more, read the full story here (subscription required).
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Posted by
M. Warnock in
Ohio
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Apr 09, 2012
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Ohio Sierra Club sues to see public park drilling plans
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Today, the Ohio Sierra Club filed a suit with the Franklin County Court of Common Pleas seeking a court order to release public documents regarding "drilling in state parks and public lands," The Columbus Dispatch reports. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 09, 2012
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Trumbull County leases to be digitized at no cost to the county
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A $253,877 project that includes scanning and digitizing all of the records in the Trumbull County recorder's office is expected to be complete and the documents publically available online by June 15, 2012, The Vindicator reports. The Associated Landowners of the Ohio Valley will pay for the project, which aims to make it easier for drilling companies to search deeds, leases and mortgages for title information, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 06, 2012
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The March edition of the Shale Oil and Gas Monthly Recap has just been released
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The March edition of the Shale Oil and Gas Monthly Recap has just been released. This electronic newsletter helps you capture the latest happenings in the shale, oil and gas industries in Ohio by offering you feature articles as well as a convenient listing of our top five blogs from the past month. In this edition, we have an in-depth analysis of Senate Bill 315. If you would like to subscribe to receive this monthly e-newsletter, please sign up on our subscription page.
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Posted by
M. Warnock in
Miscellaneous
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Apr 05, 2012
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Murray Energy Corp. CEO battles with oil and gas companies over drilling in Belmont County
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Robert Murray, founder and CEO of Murray Energy Corp., objects to a plan to place natural-gas wells in the area of Century Mine in Belmont County because he is concerned that the proximity of the wells to his coal mine will pose a significant risk to the safety of his miners as well as his capital investments, The Herald-Star reports. While the Ohio Department of Natural Resources works to resolve the disagreement, the area drilling plans of Chesapeake Energy, XTO Energy, Hess Corp. and Oxford Oil Co. have been delayed, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 04, 2012
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Feds announce automation of permit process for oil and gas drilling on public lands
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The Obama administration announced yesterday that the processing of permits and leasing decisions for oil and gas drilling on federal onshore lands by the Bureau of Land Management will become automated by May 2013 so as to reduce the average waiting period for approval from 298 days to 60 days or less, The Associated Press reports. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Apr 04, 2012
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For the steel industry, the shale boom is lowering costs while increasing demand
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The shale boom is having two positive effects on the steel industry in the United States – low natural-gas prices are keeping costs down and the need for tubular goods at well sites is keeping demand for steel products up, The Wall Street Journal reports. Natural-gas prices in the United States are so comparatively low that companies abroad are considering relocating to the United States as a cost-saving measure; meanwhile, companies currently in the States are upgrading their equipment and fleets to run on natural gas, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Apr 04, 2012
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Local businesses adapt to meet the needs of the shale industry
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Linda Woggon, executive director of the Ohio Chamber of Commerce and director of the Ohio Shale Coalition, is visiting towns across Ohio to encourage local business owners to adapt to meet the needs of the burgeoning shale industry, The Review reports. By partnering with local chambers and attending shale-related events to learn about this potential new customer base, business owners can discover ways to alter their products and services so as to take full advantage of the shale industry's needs, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 03, 2012
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EPA delays natural-gas well rules aimed at curbing air pollution
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The U.S. Environmental Protection Agency announced yesterday that it will postpone the release of its first-ever rules for reducing air pollution – particularly methane and smog-forming emissions – related to the hydraulic fracturing process for two weeks so that the agency can review the more than 150,000 comments that have been submitted regarding the rules, The Wall Street Journal reports. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Apr 03, 2012
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Judge dismisses Patriot Water Treatment vs. Ohio EPA case
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The Ohio Environmental Protection Agency's request for dismissal in its case against Patriot Water Treatment LLC was granted due to "lack of subject matter jurisdiction" in the Trumbull County Court of Common Pleas on Friday, The Vindicator reports (Read the Mar 23, 2012 blog – "Commission rules against Ohio EPA's order that the city of Warren cease accepting brine water from Patriot"). Judge Andrew D. Logan found that the Environmental Review Appeals Commission, which is already set to review the renewable permits in question on April 24, 2012, is the "appropriate and exclusive jurisdiction for this dispute," according to the motion to dismiss. For more, read the full story here or view the Patriot vs. Ohio EPA motion to dismiss here.
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Posted by
M. Warnock in
Ohio
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Apr 02, 2012
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Bill of rights would give Mansfield city council regulatory authority over injection wells
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The city law director for Mansfield presented a "bill of rights" proposal to the Mansfield Charter Review Commission last week that would make it "unlawful for any person, corporation or government entity to inject, deposit, store or transport waste water or other types of waste from natural gas drilling in shale formations through the city without legislative approval," the Mansfield News Journal reports. Although Preferred Fluids Management already obtained permits from the Ohio Department of Natural Resources to construct two injection wells within Mansfield, this new proposal would require the city council's consent before "any license or permit issued by any state or federal agency, commission or board" is considered valid, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 02, 2012
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Landowners urged to exercise caution with newly acquired wealth from oil and gas leases
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As signing bonuses and royalty payments cause many landowners to quickly acquire vast sums of money for the first time in their lives, financial experts are urging these individuals to remember their obligation to pay taxes on such new sources of income, The Marietta Times reports. Because some wells may never produce, landowners must recognize that the initial signing bonus could be the only money to ever come from the lease and therefore should not be spent carelessly, the article said. For more, including tips to help landowners reduce their tax rates, read the full story here.
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Posted by
M. Warnock in
Ohio
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Apr 02, 2012
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ODNR releases production statistics from Chesapeake's Utica shale wells in Ohio
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On April 2, 2012, the Ohio Department of Natural Resources released production statistics for the five (5) Utica shale wells in commercial production. For the production statistics reported by Chesapeake, click here. An article in Columbus Business First explained that the "[e]arly returns from oil and natural gas wells drilled by Chesapeake Energy Corp. (NYSE:CHK) in Ohio’s Utica shale play look promising, especially for 'wet gases' such as ethane, propane and butane." For more, read the article here.
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Posted by
M. Warnock in
Ohio
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Mar 30, 2012
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Consol Energy to build field office in Leetonia
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The Columbia County Port Authority announced yesterday that 10,000 square feet of office space at the industrial park in Leetonia will be leased to Consol Energy's gas division, CNX Gas Co., as a field office for the company's Utica shale operations, The Review reports. Although Consol sold half of its shale development rights in Ohio to Hess Corp. last December, the company still retains control over 120,000 acres located in Mahoning, Tuscarawas, Portage and Noble Counties, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Mar 30, 2012
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Ohio representative proposes new brine recycling fee to benefit local governments
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Yesterday, Ohio Representative Ronald V. Gerberry (D-Austintown) introduced House Bill 500, which proposes a new fee designed to offset the "costs to a county and to a municipal corporation or township resulting from the location and operation of a facility that recycles brine from oil and gas operations." Unlike existing disposal fees that only exist at the state level, this proposal would allow a county, township or municipality to levy a fee of 17.5 cents per barrel of brine "recycled" in their community. A copy of the proposed legislation can be found here.
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Posted by
C. Montgomery in
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Mar 30, 2012
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Part of Ponderosa Park is sold for $700,000
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A 68.37-acre section of Ponderosa Park in Goshen was sold for $700,000 at a sheriff's sale this week – a price tag nearly five times greater than the property's appraised value, The Vindicator reports. Although not confirmed, it is possible that the high bidder, who is also the mortgage holder, will receive the mineral rights to the property as part of the deal, the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Mar 30, 2012
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The effect of Ohio's Commercial Activity Tax on Landowners
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Landowners receiving lease and royalty payments from oil and gas companies may be in for a surprise. The Ohio commercial activity tax ("CAT") applies to all gross receipts that contribute to the production of gross income. The CAT is imposed upon persons with taxable gross receipts in excess of $150,000 annually. The tax is $150 on the first $1 million in gross receipts, and is imposed at a rate of $150 plus 0.26% of gross receipts in excess of $1 million.
Individuals and entities such as pass-through entities may be subject to the CAT if their annual lease and royalty payments, plus other receipts from business activities, exceed $150,000. Persons entering into leases with gas and oil companies may want to consult with their tax advisor in order to determine whether they will incur CAT as a result of the lease. For more information, read a recent article in Farm & Dairy about the Commercial Activity Tax here.
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Posted by
M. Warnock in
Ohio
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Mar 29, 2012
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ODNR director testifies before Ohio Senate committee on SB 315
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Yesterday, Ohio Department of Natural Resources Director Jim Zehringer testified before the Ohio Senate Energy and Public Utilities Committee in support of SB 315 – a bill focusing on regulatory issues related to the shale industry that were not fully addressed in SB 165 (See the Mar 28, 2012, blog – "Governor Kasich releases energy bill -- Senate Bill 315"). In his written testimony, Zehringer differentiates between regulations proposed for the drilling process and those proposed for the injection process, outlining key provisions of both in layman's terms. For more, read the full testimony here.
Zehringer also provided supplementary materials, including a regulatory gap analysis that can be found here; a comparison of Ohio's well construction standards to those of states with similar drilling operations that can be found here; and a graphic detailing a drilling well's construction that can be found here.
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Posted by
M. Warnock in
Ohio
| Permalink
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Mar 28, 2012
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Governor Kasich releases energy bill -- Senate Bill 315
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On March 22, 2012, Governor John Kasich released an energy bill, Senate Bill 315 (SB 315), which focuses primarily on regulatory issues relating to the shale industry. SB 315 addresses, among other things, Ohio’s oil and gas statutes, regulatory jurisdiction over natural gas pipelines, and the treatment of co-generation facilities under existing law. A copy of the bill can be found at: http://www.legislature.state.oh.us/bills.cfm?ID=129_SB_315. For more, read this article which summarizes SB 315’s key provisions.
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Posted by
M. Warnock in
Ohio
| Permalink
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Mar 27, 2012
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"Truth in Leasing" bill introduced to deter deceptive practices by the oil and gas industry
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Ohio Rep. Mark D. Okey (D-Carrollton) introduced the "Truth in Leasing" bill yesterday, which outlines a number of provisions intended to "protect Ohio's landowners against fraud, abuse, and deceptive practices by the oil and gas industry," WTRF reports. The bill would create a licensing system for landmen, establish minimum royalty payments, require regular auditing of royalty payments as well as testing of the local water supplies before and after drilling – both at the company's expense, and require the company to issue "public notification of any accidents or incidents related to drilling that may result in property damage or health risks," the article said. For more, read the full story here or read the full text of the bill here.
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Posted by
M. Warnock in
Ohio
| Permalink
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Mar 27, 2012
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BP to lease 85,000 acres in Trumbull County for $331 million
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The London-based oil and gas company BP confirmed that it will lease approximately 85,000 acres in Trumbull County for Utica Shale exploration, The Vindicator reports. With up-front bonus payments of $3,900 per acre, the deal will infuse "more than $331 million into the Valley economy," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
| Permalink
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Mar 27, 2012
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Contractual obligations will likely keep drillers in Ohio regardless of severance tax hike
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Mineral rights experts are confident that oil and gas companies have leased so much acreage in Ohio that it is unlikely Gov. Kasich's proposed severance tax hike will deter drilling activities, Crain's Cleveland Business reports. Because most mineral rights leases "require drillers to begin production on each property in three to five years," oil and gas companies risk either losing the leases completely or having to renew them for a significant cash bonus if they attempt to avoid or delay drilling in Ohio, the article said. For more, read the full story here (subscription required).
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Posted by
M. Warnock in
Ohio
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Mar 27, 2012
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Natural gas industry leaders and environmentalists debate hydraulic fracturing
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During The Wall Street Journal-sponsored 2012 ECO:nomics conference last week, Aubrey K. McClendon, chairman and CEO of Chesapeake Energy, and Edward E. Cohen, president and CEO of Atlas Energy, were interviewed by Russell Gold, an energy reporter for The Wall Street Journal, on the subject of whether the feat of developing hydraulic fracturing as a technology has been overshadowed by the industry's loss in the public relations war. While McClendon touted natural gas as the "only scalable, affordable alternative" for those concerned about global warming's connection with coal consumption, Paul Gallay, president of the nonprofit advocacy group Riverkeeper, derided McClendon's use of operations in Fort Worth as proof that hydraulic fracturing is environmentally safe. For more, read an excerpt from the discussion here.
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Posted by
M. Warnock in
United States
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Mar 26, 2012
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Gov. Kasich signs multi-state agreement to encourage natural-gas vehicle production
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Gov. Kasich recently signed a memorandum of understanding designed to "encourage manufacturers to start making more vehicles that burn compressed natural gas," Gongwer reports. As Ohio becomes the eleventh state to sign on, the hope is that multi-state cooperation produces "enough demand to drive down the cost of CNG vehicles to stimulate a market," the article said.
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Posted by
M. Warnock in
Ohio
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Mar 26, 2012
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Gov. Kasich's proposed energy bill would change Ohio state rules to track how and where oil and drilling operations get their water
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With concerns that the growing demand for water needed in the hydraulic fracturing process could "threaten wildlife and public drinking water supplies," a bill was introduced in the Senate last week that would "change state rules to better track where drilling operations get their water," The Columbus Dispatch reports. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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Mar 26, 2012
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Growing consensus that faulty wells are to blame for water contamination around drilling sites
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"Some energy companies, state regulators, academics and environmentalists" are reaching the same conclusion that it is not the act of hydraulic fracturing that is responsible for cases of water contamination, but rather the culprits are improperly sealed wells that "create a path for contaminants to migrate upward and leach into shallow porous rocks that hold drinking water," The Wall Street Journal reports. So many contamination cases, including the Deepwater Horizon disaster in April 2010, have been linked back to "failure of the integrity of the well" – usually as part of the cement job – that states are beginning to adopt new well-construction standards. Ohio is expected to issue new such rules this week, the article said. For more, read the full story here.
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Posted by
M. Warnock in
United States
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Mar 26, 2012
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ODNR report puts Athens outside of oil and gas play
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As hundreds of local property owners with "more than 100,000 acres of mineral rights" in Athens County agreed to lease those rights for oil and gas development, maps included in a new report from the Ohio Department of Natural Resources Geological Survey put Athens County "well outside the 'carbon productive area' for total organic carbon and other telling measurements of the source rock's potential to generate hydrocarbons," The Athens NEWS reports. For more, read the full story here, view the full ODNR report here or visit the ODNR shale data page here.
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Posted by
M. Warnock in
Ohio
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Mar 23, 2012
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Commission rules against Ohio EPA's order that the city of Warren cease accepting brine water from Patriot
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The Ohio Environmental Review Appeals Commission ruled earlier this week that Ohio EPA director Scott Nally did not "substantially support his stance regarding the revocation of permits to the city of Warren and Patriot Water Treatment LLC" when he enacted new permits on Monday that "don't allow Warren to accept Patriot's wastewater," The Vindicator reports. While state officials claim that the wastewater produced from hydraulic fracturing can only be disposed of "via brine-injection wells, as dust or ice control on roads, or any other method approved by the director," representatives for Patriot claim that there is no "evidence of water-quality changes" to warrant the new restrictions since the Ohio EPA granted the initial permits in 2010, the article said (See the Feb. 01, 2012, blog – "Warren will continue to dispose of treated brine water into the Mahoning River"). For more, read the full story here.
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Posted by
R. James in
Ohio
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Mar 23, 2012
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EPA will retest Wyoming water for contamination related to hydraulic fracturing
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Amid complaints that the U.S. Environmental Protection Agency rushed the results of initial tests that found hydraulic fracturing operations in Pavillion, Wyoming, responsible for contaminating the region's water supply, the agency announced recently that it plans to work with the U.S. Geological Survey and Wyoming officials to retest the water in an effort to "clarify questions about the initial monitoring results," The Wall Street Journal reports. For more, read the full story here.
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Posted by
L. McAlister in
United States
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Mar 23, 2012
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Gov. Kasich's energy bill introduced into the Ohio Senate
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Senate Majority Whip Shannon Jones (R-Springboro) introduced Gov. Kasich's energy bill to the floor of the Ohio Senate yesterday. An in-depth post on the bill is forthcoming. Read the full text of the bill here.
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Posted by
M. Warnock in
Ohio
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Mar 23, 2012
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Sardis, Ohio, mineral rights owners profiled in New York Times reporter's blog
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The mineral rights owners of Sardis, Ohio, were recently profiled in New York Times reporter Keith Schneider's blog. Schneider details how the shale boom is breathing life into towns along the Ohio River between Marietta and Pittsburgh that have been hurting over the last few decades due to the decline of the American industrial sector. As residents have become more aware of just how profitable and damaging the shale industry can be for their communities, a unified group of Sardis mineral owners worked with the Southeastern Ohio Landowner Association to develop and sign oil and gas leases that include "protections for the region's water, safeguards to the land, and substantial returns for valley residents fortunate enough to own their minerals," the article said. For more, read the full story here.
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Posted by
M. Warnock in
Ohio
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