Ohio Gas & Oil Magazine January 2018

January 2018

A Free Monthly Publication

Ohio Constitutional Amendment Petition Appeals Court Freezes Pipeline Construction In Green

Bill Johnson Introduces Two Pieces of Important Liquefied Natural Gas Legislation IN THIS ISSUE: ROVER WATER WELL MONITORING

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Table of Contents JANUARY 2018

3

A Look Ahead Gas & Oil Events

4

Appeals Court Freezes Pipeline Construction in Green

Bill Albrecht

5

OOGA Christmas Toy Drive With Toys for Tots

EXECUTIVE EDITORS

6

Big Shale Turns OPEC Ally With Focus on Oil Returns

7

U.S. Employers Add 228K Jobs, Unemployment Rate Stays 4.1%

8

CELDF’s Ohio Constitutional Amendment Petition

9

Bill Johnson Introduces Two Pieces of Important Liquefied Natural Gas Legislation

G ROUP PUBLISHER

Ray Booth rbooth@daily-jeff.com Rob Todor rtodor@the-review.com Ted Daniels tdaniels@the-daily-record.com

CONTENT CO ORDINATOR Emily Rumes

erumes@the-daily-record.com

“Ohio Gas & Oil” is a monthly publication.

Copyright 2018.

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Ohio Drilling Making Big Impact on Roads

12

Rover Water Well Monitoring Continues After April Spill; Water Deemed Safe

14

NEXUS Pipeline Crews Cutting Trees, Preparing Construction Sites

15

Australian Leader Seeks G&O Answers in Cambridge

16

Utica Shale Helps Fund Road Repairs

JANUARY 2018 ADVER TISING Kim Brenning Cambridge, Ohio Office kim@daily-jeff.com 740-439-3531 Kelly Gearhart Wooster & Holmes, and Ashland, Ohio Offices kgearhart@the-daily-record.com 330-287-1653 419-281-0581 Mindy Cannon Alliance & Minerva, Ohio Offices mcannon@the-review.com 330-821-1200 Diane K Ringer Kent, Ohio Office dringer@recordpub.com 330-298-2002 Janice Wyatt National Major Accounts Sales Manager jwyatt@recordpub.com 330-541-9450

L AYOUT DESIG NER Kassandra Walter

19

Ohio Well Activity

20

Horizontal Drilling Activity Graph

kwalter@times-gazette.com

A Division of GateHouse Media 212 E. Liberty St. Wooster, OH 44691 330-264-1125 editor@spectrumpubs.com.

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A Look Ahead to 2018

Gas & Oil Events • January 23 & 24, 2018

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Appeals Court Freezes Pipeline Construction in Green A Shane Hoover • GateHouse Ohio Media federal appeals court in Cincinnati has temporarily frozen construction of the NEXUS Gas Transmission pipeline in the city of Green.

A panel of the 6th Circuit Court of Appeals voted 2-1 to halt construction on an 8-mile segment of the pipeline within the city’s borders.

“Needless to say, we are pleased with the decision the 6th Circuit Court has made,” said Valerie Wolford, city spokeswoman.

NEXUS was evaluating the decision, but a spokesman said he wouldn’t comment

on a pending court case.

Detroit-based DTE Energy and Enbridge, a Canadian company, are partners in the pipeline.

that was unreliable and insufficient. As a result, the city would suffer damage to 28 wetlands, as well as aesthetic, recreational and economic injuries if the Construction work can pipeline was built per the continue on parts of the permit. pipeline outside of Green.

The appeal’s court said the city showed a strong Legal challenge likelihood of success with its The court’s order related argument and would suffer to Green’s challenge of a irreparable harm if NEXUS permit issued by the Ohio proceeded with construction Environmental Protection while the case is pending.

Agency for the interstate In an email, Ohio EPA natural gas pipeline. spokesman James Lee said The city argues in court the agency disagreed with filings that Ohio EPA ignored the decision. alternate pipeline routes and relied on NEXUS-supplied “In fact, Ohio EPA made information about wetlands a sound and reasonable determination of the wetlands’ quality and that Ohio’s water quality standards will be protected,” Lee wrote. “We look forward to further defending our conclusions as the court more fully considers the case on the merits.”

Construction underway The 255-mile NEXUS pipeline starts near Hanoverton in Columbiana County and

4

OhioGas&Oil

will connect to existing pipelines in Michigan.

Locally, the pipeline route crosses Washington, Nimishillen, Marlboro and Lake townships in Stark County and the city of Green in Summit County.

The Federal Energy Regulatory Commission gave NEXUS approval to start construction in October 2017.

So far, most of the activity has consisted of clearing trees, installing erosion-control devices and preparing work sites, according to NEXUS reports filed with FERC. When completed, the 36-inch diameter pipeline will carry up to 1.5 billion cubic feet of natural gas a day from the Utica and Marcellus shales to users in Ohio, Michigan and Canada.

The 6th Circuit Court of Appeals has yet to schedule a full hearing.

(Shane Hoover is a reporter for The Canton Repository)

GasandOilMag.com

OOGA Christmas Toy Drive With Toys for Tots

Photo Credit: Michael Neilson, GateHouse Ohio Media

The lives of a large number of Guernsey County children this holiday season were merrier thanks to the generosity of Ascent Resources, its vendors and contractors through the Ohio Oil and Gas Association. In it’s third year, this toy drive in conjunction with Toys for Tots, helped upwards of 100 families in the area. Ascent raised $2,500 while vendors and contractors raised nearly $15,000 to purchase a wide assortment of toys. Pictured are, left to right, Rich Webster, Ascent; Amanda Finn, Ascent; Joe Steele, Ascent; Paulie O’Sheaghans, Ascent; Deb Oberlin, Toys for Tots; Angela Wolfe, Ascent; and Mike Chadsey, Ohio Oil & Gas. Guernsey County is one of six counties that were helped.

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Big Shale Turns OPEC Ally

With Focus on Oil Returns Serene Cheong, Sharon Cho & Dan Murtaugh • Bloomberg

D

on’t expect Big Shale to rush that you’ve got to be disciplined and and fill the hole left by OPEC give visibility on spending.” in the oil market.

That’s not to say the companies won’t Executives from three of the grow. Pioneer, which drills in the biggest independent U.S. drillers say Permian Basin and Eagle Ford shale they won’t increase activity just because plays, plans to boost output from about prices rise after the Organization of 300,000 barrels of oil equivalent a day Petroleum Exporting Countries and its this quarter to more than 1 million by allies agreed to extend output curbs. 2026, Chief Financial Officer Richard The emphasis, instead, will be on Dealy said. Parsley also drills in the maintaining spending discipline and Permian, while Newfield is focused generating profits to return to investors, on the SCOOP and STACK plays in according to Pioneer Natural Resources Oklahoma.

Co., Parsley Energy Inc. and Newfield Exploration Co. The difference now is that shale drillers want to grow while generating free While crude is trading near the highest cash flow to return to investors via level in more than two years as OPEC dividends or share buy-backs, said and its partners limit supplies in a bid Shawn Reynolds, Van Eck’s portfolio to drain a global glut, investors have manager for hard assets. In years past, been concerned stronger prices would companies routinely outspent their cash encourage U.S. drilling and undermine flow by 20 to 30 percent in an attempt to those efforts. The biggest oil crash in grow production as fast as possible. a generation began in 2014 as a boom in American shale output spawned a “I hope they are more disciplined this race for market share between global time around,” Pioneer’s Dealy said. “If producers. oil prices are higher, that means our cash flow may turn positive that much “Higher oil prices can bring in more sooner, but no real change in activity cash to the balance sheet, and you can level.” enjoy that cushion, but there’s no need to chase additional activity,” Matt The recent decision by OPEC and Gallagher, Parsley’s chief operating its partners including Russia could officer, told Bloomberg on the sidelines potentially harm shale, Van Eck’s of Van Eck Associates Corp.’s U.S. Shale Reynolds said. While companies with Forum in Singapore. “It’s paramount the most efficient operations and richest acreage can profit at an oil price of $50 a barrel, rising prices may mean hundreds of other small independent drillers with lower-quality sites could begin to break even on production and start drilling again, increasing costs for everyone.

operating officer for Newfield, said in an interview. “Inefficiences get bred into this industry at high commodity prices, and I think we have built efficiencies within the unconventional space to deliver exciting returns for our shareholders in a $50 environment.”

As U.S. output increased, OPEC in late 2014 decided to pump at will to defend market share, exacerbating the price collapse that sent several shale companies into bankruptcy.

U.S. production has rebounded since OPEC reversed course in 2016 and decided to cut output to force the world to burn through a glut of global inventories. Thursday’s extension, which will prolong curbs from March 31 to the end of 2018, will allow American firms to raise supplies even more and steal market share from OPEC in places like China, Barclays analysts Michael Cohen and Warren Russell said in a Nov. 30, 2017 report.

That idea is tied to the past, though, Newfield’s Packer said. The shale industry of old was able to generate phenomenal growth at the expense of providing sound financial returns. The focus now is on the bottom line.

“What we’re hearing today from our investors is they want to see more discipline,” he said. “If investor behaviors change and they start rewarding production growth again, it can be a different outcome, but that’s not the narrative that we have today.”

“I don’t like $27 oil, but I don’t like $80 oil either,” Gary Packer, chief 6

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U.S. Employers Add 228K Jobs,

Unemployment Rate Stays 4.1 % Christopher Rugaber • The Associated Press

Auto sales rose 1.3 percent in November compared with a year earlier, to 1.4 million, according to Autodata Corp.

In October 2017, newly built homes sold at their fastest pace in a decade, and existing homes sold at their quickest rate since June.

Businesses are spending more, too: Orders for such longlasting items as industrial machinery, computers and oildrilling equipment rose for the third straight month in October.

In this photo, a recruiter from a driller in the shale gas industry, left, speaks with an attendee at a job fair in Cheswick, PA. (AP Photo/Keith Srakocic)

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.S. employers added a robust 228,000 jobs in November 2017, a sign of the job market’s enduring strength in its ninth year of economic recovery.

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The unemployment rate remained at a 17-year low of 4.1 percent, the Labor Department reported.

The economy is expanding at a healthy pace, and in many cases employers are scrambling to hire enough qualified workers.

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CELDF’s Ohio Constitutional

Amendment Petition A

Jackie Stewart • Energy In Depth-Ohio f t e r website. Notably, more than 50 m o re percent of efforts that clear the t h a n Ohio Attorney General’s first t w o two steps do not make it to the dozen failures ballot. at the local level in Ohio, the Pennsylvania-based What do the petitions say?

Community Environmental The Ohio Community Rights Legal Defense Fund (CELDF) Amendment initiative petition recently announced plans to states as follows: launch a statewide initiative petition for two Ohio Summary constitutional amendments.

This amendment secures the right of local, community selfThe ultimate goal is to alter government for the people of state law to allow local Ohio by guaranteeing local fracking bans. The proposed authority to enact laws to “Ohio Community Rights protect unalienable rights and Amendment” and the the health, safety and welfare “Initiative and Referendum of community members and Amendment for Counties and natural ecosystems, free from Townships” garnered 1,000 state preemption or corporate signatures and were certified interference. This right includes by the Ohio’s Attorney General. the power of each Ohioan to The road to a statewide ballot act collectively through his or measure also includes passing her local government to alter, muster with the Ohio Ballot amend or abolish systems of Board and would require law and government when at least 305,591 Ohio voter they fail to protect or when they signatures to qualify. directly or indirectly violate the unalienable rights and With that said, here are the the health, safety and welfare facts of the matter (to date): of community members and natural ecosystems.

When was the petition submitted and certifi ed?

Following adoption of this On Nov. 17, CELDF submitted proposed amendment, the two petitions for state right of local community selfconstitutional amendment to government will be exercised Ohio Attorney General Mike through the adoption of DeWine, who certified the county and municipal laws signatures on Nov. 27. There either directly by the people are 26 steps remaining in the of those communities through process, leading up to the the initiative process or by their July deadline, according to local elected representatives the Ohio Secretary of State’s on behalf of the people of 8

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the community. Under this amendment, State laws won’t have the power or authority to preempt or overturn local laws enacted to protect the rights of community members and the local ecosystem. Claimed corporate “rights” will not be able to override the rights protected by the exercise of the right of local community self-government. Local laws enacted pursuant to this amendment will not be valid if they violate or diminish the rights of natural persons or ecosystems, nor will they be valid if they reduce established protections in law for natural persons or ecosystems.

The Initiative and Referendum Amendment for Counties and Townships initiative petition states as follows:

Who funds CELDF? According to their latest tax filing, CELDF has seen its fundraising increase by more than 73 percent since 2009.

Funding rose from $1.6 million in 2014 to $2.5 million in 2015.

CELDF has spent almost a million dollars on lobbying and grassroots efforts, and the group has raised more than $3.4 million over the past few years.

What does the language of the petitions mean?

The language of the petition is extremely broad, and CELDF itself said in its recent press release, “This goes beyond fossil fuel industries.” The constitutional amendment, if passed, would literally mean that a local law (on any issue) would supersede state law. In other words, local townships or cities could pass laws to prohibit certain activities that are protected by state laws.

Susan Beiersdorfer, activist and author of the amendment petitions, has said:

Summary This amendment establishes a right of initiative and referendum powers to residents of counties and townships, just as residents in Ohio municipalities have possessed since 1912.

“This is a movement about saying we, the people, in the Has a political action cities of Youngstown can committee been fi led for this decide what industries come effort? in here.”

No, not at this time.

Conclusion Who is behind this measure? As it stands right now, CELDF The Pennsylvania-based is still at the beginning of a Community Environmental long journey to implement Legal Defense Fund is behind a statewide citizens-initiated this effort. constitutional amendment.

GasandOilMag.com

Bill Johnson Introduces Two Pieces

Of Important Liquefied Natural Gas Legislation

C

ongressman Bill Johnson released the following statement after he introduced two separate, important pieces of legislation related to the importance of American liquefied natural gas (LNG) exports:

and South America look to the United States to meet their natural gas needs.

Johnson added, “The U.S. is currently the world’s largest producer of natural gas, with trillions of cubic feet of recoverable natural gas beneath our feet. We should be doing “I am proud to introduce two bills today, which will encourage all we can to take advantage of this abundant resource, and a continuing conversation regarding the importance of it is my hope that these bills will help further that goal. It’s American liquefied natural gas exports,” said Bill Johnson. critical that we take advantage of this opportunity we’ve been blessed with – there is no doubt that LNG exports are creating opportunities and improving the quality of life for hard working families in Eastern and Southeastern Ohio.”

“These bipartisan bills demonstrate support for a vibrant American natural gas export industry, designed to grow our economy domestically while strengthening ties with our allies abroad. I look forward to working with Member of Congress of both parties and the Trump Administration to encourage more natural gas exports”

— Bill Johnson

The Unlocking Our Domestic LNG Potential Act (H.R. 4605) will allow our domestic LNG suppliers to compete freely on the world market, by allowing them to export natural gas after completing the FERC review process – instead of waiting even longer for additional approval by the U.S. Department of Energy. This legislation is co-sponsored by Democrat Rep. Tim Ryan, who represents Ohio’s 13th District.

Additionally, The Ensuring Small Scale LNG Certainty and Access Act (H.R. 4606) codifies the Department of Energy’s recent efforts to encourage the exports of small volumes of natural gas, as countries in the Caribbean, Central America,

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OhioGas&Oil

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Ohio Drilling Making

Big Impact on Roads

O

Edd Pritchard • GateHouse Media Ohio il and natural gas companies have spent more than $300 million for road construction projects in eight counties since 2011, according to a review by two industry advocacy groups.

The Ohio Oil and Gas Association and Energy in Depth Ohio released a report that reviews the impact of increased oil and gas drilling in Ohio as companies push to develop the Utica Shale formation in the southeast corner.

Earlier this year, OOGA and EID issued a report that oil and gas companies provided more that $43 million in taxes to six counties over five years.

Since 2011, more than 2,600 horizontal wells have been drilled or given permits in Ohio’s Utica Shale. Companies

A semi truck drives past the Harrison County Courthouse in Cadiz in eastern Ohio. Harrison County, a center for Utica Shale drilling in the state, has seen an increase in heavy vehicle traffic.

(Columbus Dispatch file photo by Brooke LaValley) receiving drilling permits struck road use maintenance agreements in the counties where they operate. The agreements ensure that roads leading to drilling pads are maintained to accommodate heavy equipment and increased truck traffic.

OOGA and EID used public records and information from companies to compile the amount of money spent repairing and maintaining roads in the eight Utica Shale counties where the most drilling has occurred.

Carroll County, which until this week had the most permits for Utica wells, was part of the study, but Stark and Tuscarawas counties were excluded because of low drilling activity.

WO-10432232

The road use maintenance agreements have had a positive impact on counties where drilling is occurring, said Shawn Bennett, OOGA’s executive vice president.

“We’re proud to be partners in these communities,” Bennett said during a conference call discussing the study.

10 OhioGas&Oil

Before the study, OOGA, EID and their partners were estimating the amount spent on road projects, said Jackie Stewart, state director for Energy in Depth Ohio.

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Under the agreement, oil and gas companies hired construction companies to upgrade roads leading to drilling sites. In many cases, township and county roads were widened and repaved, or bridges were rebuilt. In the eight counties, companies spent more that $302.6 million and improved more than 639 miles of roadways.

companies. Although drilling hasn’t developed in the county as some had anticipated, the early agreements have been a guide as the county creates agreements with companies building pipelines through the county, said Dave Torrence, chief deputy engineer.

It’s been a cooperative effort and there have been no major In Carroll County, 99.3 miles of roads were improved and problems with county and township roads, Torrence companies spent more than $44.7 million on the work, said. It has been good to have everything spelled out and the OOGA study shows. In 2014, companies spent more everyone working together, he said. than $12 million to improve roads in Carroll County.

The study compiled by OOGA and EID doesn’t include Amy Rutledge, executive director of the Carroll County any projects done by companies involved with pipeline Chamber of Commerce, said officials were smart to push construction or developing natural gas processing for road construction before a well was installed instead facilities. of waiting until after wells were drilled. Rutledge said roads used by drilling companies now are wider and ​Edd Pritchard is a staff writer for The Canton Repository. safer.

“Those roads were being barely kept up, as opposed to improved,” she said.

When Utica Shale development started, several wells were drilled in Stark County. Because of the early work, county officials struck road use agreements with drilling

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Rover Water Well Monitoring Continues After April Spill; Water Deemed Safe

R

Samantha Ickes • GateHouse Media Ohio over Pipeline removed diesel-contaminated slurry from quarries located near water wells used by Aqua Ohio, the Canton Water Department and private residents in April. Eight months after the spill, residents who get their drinking water from these wells may wonder if the diesel remnants seeped into the well, contaminating their water source.

According to Ohio EPA and Aqua according to the Ohio Environmental Ohio officials, the answer is no. Protection Agency.

However, said the agency, testing On Nov. 24, the state EPA announced continues to ensure safe water.

Rover Pipeline’s 19th violation of the Since Rover Pipeline launched its year. $42 billion project across 18 Ohio counties in early March, Rover One of the largest occurred in April has been cited in nearly a dozen when 2 million gallons of drilling fluid counties for violations following leaked into a wetland in Bethlehem spills or improper disposal of waste, Township as workers installed a path for one of the mainlines beneath the Tuscarawas River. This slurry, which was used for lubricating equipment, was later dumped into quarries near water wells used by Aqua Ohio, the Canton Water Department and private residences.

It was discovered on May 29 that the slurry was contaminated by diesel, according to a GateHouse Ohio Media news account.

Vicki Granado, a spokeswoman for Rover, said the bentonite clay is environmentally friendly and is often used in household products such as sunscreen, hand soap and lotion.

She did not say how the diesel traces ended up in the clay.

Rover employees and contractors clean up a Bethlehem Township wetland following the release of 2 million gallons of industrial waste (bentonite drilling mud contaminated with diesel fuel) in April. (Photo provided by Ohio EPA)

12 OhioGas&Oil

GasandOilMag.com

There is no issue with water quality as a result of our construction activities.

All groundwater results have met the regulatory standards since day one.

— Vicki Granado Tom Schwing, Aqua’s environmental compliance and safety manager, said the drilling slurry was dumped approximately 3,000 feet from the nearest water well. Various environmental factors such as the type of soil and the location of the slurry make it difficult to estimate how long a contaminant like diesel would take to reach the water supply, Schwing said.

Rover pipeline was required by Ohio EPA to create monitoring wells to ensure no diesel from the bentonite drilling mud migrated into the water supply.

(Photo provided by Ohio EPA)

Jeff LaRue, a spokesman for Aqua Ohio, said Massillon and portions of Jackson, Lawrence and Perry townships in western Stark County receive water from these wells. Rover was required to install monitoring wells as a “layer of protection and early warning system,” LaRue said.

Because the diesel-contaminated slurry was removed from the site quickly, Schwing said, there isn’t a concern of the diesel fuel migrating to the wells. He added there is a “relatively low risk” of any traces of diesel still being present near the wells.

“The material was removed, so there’s no residual there at this time,” Schwing said.

The last water sample was tested in October and showed no signs of contamination, Lee said. Rover Pipeline is required to monitor the water wells through sample wells every 90 days. The initial testing began in August 2017 and will continue for one year. Testing will then take place every 180 days for the following two years.

“It is in close proximity to sources of public drinking water, so it is necessary to monitor groundwater in those areas,” Lee said. “However, there is no indication of any affects so far.”

Samantha Ickes is a reporter at The Independent in Massillon.

WO-10590416

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OhioGas&Oil 13

NEXUS Pipeline Crews Cutting Trees,

Preparing Construction Sites

W

Shane Hoover • GateHouse Ohio Media ork crews are carving a path for the NEXUS Gas Transmission pipeline through Stark County’s fields and woods.

to the latest update filed

by NEXUS with the Federal Energy Regulatory Commission.

Tree cutting was visible in Washington Township east of Parks Avenue NE, and piles of cut trees were being collected at the corner of Beech Street and Beechwood Avenue NE last Project activities will continue until week.

Workers have cleared land on both sides of Immel the pipeline is placed into service Avenue NE in Marlboro Township for the NEXUS Gas in the third quarter of 2018, NEXUS NEXUS told FERC that Transmission pipeline. (CantonRep.com / Ray Stewart) spokesman Adam Parker wrote in an crews working on Spread When completed, the 36-inch diameter email.

1 would continue to install access pads, post signs and pipeline will carry up to 1.5 billion clear trees last week, except cubic feet of natural gas a day from the Utica and Marcellus shales to users in within the city of Green.

Ohio, Michigan and Canada.

A federal appeals court in Cincinnati stopped work Shane Hoover is a staff writer for The on an 8-mile segment of the Canton Repository. pipeline in Green on Nov. 22 while the city challenges a construction permit issued by the Ohio Workers remove heavy equipment along Gans Environmental Avenue NE in Lake Township. Clearing and prep work Protection has begun on the NEXUS Gas Transmission pipeline Agency. in Stark County. (CantonRep.com / Ray Stewart) In recent weeks, workers have cleared trees, installed signs and prepared construction areas throughout Lake, Marlboro, Nimishillen and Washington townships.

P i p e l i n e construction was most advanced along Spread 4, the part of the pipeline in Michigan, where workers had already started Work on the project is divided into welding pipe and burying four zones, or spreads. Stark is in it in the ground.

Spread 1, which stretches 54 miles from Hanoverton to Doylestown in Wayne Detroit-based DTE Energy County. and Enbridge, a Canadian company, are partners in As of Dec. 15, 36 percent of Spread 1 the $2.1 billion NEXUS had been cleared of trees, according project.

The 255-mile NEXUS pipeline starts near Hanoverton in Columbiana County and will connect to existing natural gas pipelines in Michigan.

14 OhioGas&Oil

A worker makes a mat of large timbers that will allow heavy equipment to move into fields at the end of Dotwood Street NW in Lake Township. Clearing and prep work has begun on the NEXUS Gas Transmission pipeline in Stark County. (CantonRep.com / Ray Stewart)

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Australian Leader Seeks

G&O Answers in Cambridge Ray Booth • GateHouse Media Ohio

G

erry Wood, a member of the Legislative Assembly of the Northern Territory in Australia, was in Cambridge earlier this year to pursue plans to develop the gas and oil industry in his native country Wood is a member of the 13th assembly in the Northern Territory and said the gas and oil industry there faces many, if not all, of the same issues and perceptions for the industry in Ohio and the United States.

Wood said Australia has invested heavily in the gas and oil industry but faces push

back from environmental groups, even in “We’ve got to turn back the discussion the face of studies that show otherwise. into something positive and permanent,” he said. “What I want to do is to debunk “One group complained about a river some of the negativity by using the that ‘bubbles’,” Wood said. “It’s bubbled evidence already available in America.” for 40 years. People swim there.”

Wood is a former mayor of the Northern Wood was traveling throughout the state Territory shire of Litchfield, he has been with Mike Chadsey of the Ohio Oil & an independent member of the Northern Gas Association, and was visiting other Territory Legislative Assembly since gas and oil sites in the United States.

2001, representing the electorate of Nelson. One report said that as President Wood said the purpose of his visit to the of the Litchfield Shire Councilhe emerged United States was to gather information as a key figure in the fight against the that might help him “change the minds damming of the Elizabeth River and was of people in the middle” on the gas and given credit for having saved it. oil discussion.

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OhioGas&Oil 15

Utica Shale Helps

Fund Road Repairs

A

Jackie Stewart • Energy In Depth-Ohio & Shawn Bennett • OOGA new report by Energy In Depth and the Ohio Ohio’s oil and gas industry is safely producing 4.5 billion Oil and Gas Association (OOGA) finds that cubic feet of natural gas per day, and in doing so, providing oil and gas operators have paid more than real measurable economic impacts for the communities $302.6 million for road, bridge and culvert where they operate. Guernsey County alone received improvements via the Road Use Maintenance Agreement more than $50 million from RUMAs over the past several (RUMA), which is an agreement between operators and years. The county also had the greatest number of miles counties to ensure road damages by heavy equipment improved (137) since 2011 and was the second highest being moved for shale drilling and pipeline work are in road improvement costs statewide. Belmont County either prevented or repaired. The report finds that had the highest road improvement costs ($62.4 million) RUMA funds were used to improve more than 639 miles among the eight counties. Carroll County realized the of roadways from 2011-2017 in Ohio’s eight Utica Shale second greatest number of road miles improved (99.33), counties: Belmont, Carroll, Columbiana, Guernsey, and received over $12 million – three times the county Harrison, Jefferson, Monroe and Noble. The data was engineer ’s entire budget – in one year alone. provided by all eight county engineer ’s and eight oil and gas operators developing the Utica Shale.

And what’s more important is that 100 percent of the money goes right to the communities where drilling is occurring.

The same is true for property taxes paid on production, which have yielded over $45 million in tax payments to Utica Shale counties. Together, that’s $345 million from these two resources alone combined across the eight counties – and only from shale operators.

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Those impacts aren’t any less astounding at the county level. Between property taxes paid on production and road improvements combined, Guernsey County has seen $58 million, Belmont County has received $67 million, and Carroll County has realized $59.1 million.

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But that’s not all— Ohio’s oil and gas industry also supports local communities and the state of Ohio both directly and indirectly through: sales taxes, commercial activity tax, severance tax, income tax, and fuel use tax. In other words, additional tax revenues and road improvements made by pipeline companies and gas power plants, for example, are in addition to these figures.

Having this provision as part of the permit process has been a job creator, as well. Hundreds of millions GasandOilMag.com

of dollars spent on road improvements has translated real money going directly back into Appalachia and it’s into thousands of construction jobs and work hours to coming as a direct result of oil and natural gas producers. improve more than 639 miles of roads in these eight Ohio counties.

What’s exciting about the investment in roads and infrastructure, in particular, is that this is a benefit But what exactly is a RUMA? Many people don’t realize for everyone. It’s a tax-free, long-term infrastructure that back in 2011 there was a collaborative effort to improvement that provides the pathways for growth, establish a RUMA process. The proposal ultimately increased economic development and safer transportation ended up in Columbus and was put into law as part of of people and goods in southeast Ohio. the rules and regulations around shale development. In fact, oil and gas operators are unable to receive a permit to drill in Ohio without first putting a good faith effort into entering an agreement to make sure the roads are going to be left in a better condition than how they were found.

This year the Ohio Department of Transportation, and Ohio’s Research Initiative for Locals (ORIL) issued a report entitled, “Best Practices of Road User Maintenance Agreements Amongst Local Government Agencies in Ohio”, which found, “The proactive approach by ODOT, ODNR, and CEAO to address the horizontal oil and gas well drilling and hydraulic fracturing in eastern Ohio has worked well in addressing development activity which places an unanticipated burden on the local roadway system.... A regional task force composed of state and local agencies as well as the industry was organized to promote communication and uniformity in application of the law. A model RUMA was developed which is used as is or in modified form by more than 70% of local agencies in Ohio surveyed for this research.”

Shortly after the ODOT study came out, Ohio University published their own report, “Governing Public Infrastructure in Ohio’s Shale Play: Impacts and Management,” which found, “almost all interviewees stated that county roads under the purview of a RoadUse Maintenance Agreement (RUMA) were left in better condition than they were before the introduction of the industry. Increases in tax revenue from the industry led to infrastructure expansion like water and sewer upgrades, railroad revitalization, and new police vehicles. And, a majority of interviewees stated that the industry was good to work with; private industry often paid up-front costs for infrastructure improvements that benefited both their own industry operations and the local community.”

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As drilling and production of oil and natural gas continues to tick up, we can expect more monies going toward tax revenues and road improvements where Utica Shale development is occurring. Frankly, it’s about time that southeastern Ohio receive some added support. That’s why we started this Utica Shale Local Support Series in the first place—to make sure people know that there’s

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TOP COUNTIES WITH HORIZONTAL DRILLING ACTIVITY

BY NUMBER OF SITES

1. Belmont County 538 2. Carroll County 526 3. Monroe County 411 4. Harrison County 404 5. Noble County 219 6. Guernsey County 215 7. Columbiana County 151 8. Jefferson County 146 9. Mahoning County 30 10. Washington County 22 11. Tuscarawas County 20 12. Portage County 15 Trumbull County 15 13. Stark County 13 14. Coshocton County 5 15. Morgan County 3 Muskingum County 3 Holmes County 3 16. Knox County 2 17. Ashland County 1 Astabula County 1 Geauga County 1 Medina County 1 Wayne County 1 WE L SIT WELL SITES ITES IIN N VAR V VARIOUS A OU AR US SS STA STAGES: T GES GES: PERMITTED, PERMITTED E M T ED D, D DRILLING DRILLING, LLING, DRILLED, D I LE LED, ED D, COM COMPLETED, PLETED PL LET ETED PRODU PRODUCING PRODUCING, PR RODUCING O UCING I G PLUGGED LUGG SOUR SOURCE: S OUR RCEE O OHIO H O DEP DEPARTMENT RTMENT O OF NA NATURAL URAL RESOURCES S U E A AS SO OF 1 12/2/17 12/

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