June 2017 â€¢ A Free Monthly Publication
Supreme Court to Make Ruling
Rover Pipeline In the News
Museum Covers Gas & Oil Industry IN THIS ISSUE: OHIO & PENNSYLVANIA LEAD INCREASE
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Table of Contents JUNE 2017
A Look Ahead Gas & Oil Events
Museum Showcases History of Gas & Oil Industry
G ROUP PUBLISHER Bill Albrecht
Fireﬁghter Pursuing Chemical Disclosure Law
Training Exercise Held in Belmont County
Rob Todor RTodor@dixcom.com Lance White LWhite@dixcom.com
OH & PA Lead States in Production Increases
County Officials Plead Case for Energy Taxes
Ray Booth RBooth@dixcom.com
RE G IO NAL E DIT O RS
Record Keeping Essential to Prove Lack of Production in Paying Quantities
Target the sweet spots of the local gas & oil industry by advertising in the Ohio Gas & Oil Magazine.
Scott Shriner email@example.com Cathryn Stanley CStanley@dixcom.com
CO NTE NT CO O RDINAT O R Emily Rumes
OHIO’S GAS & OIL INDUSTRY NEWS. BUSINESS. TECHNOLOGY.
CALL YOUR LOCAL OHIO GAS & OIL SALES REP. TODAY SEE PAGE 3 FOR MORE INFO 2
“Gas & Oil” is a monthly publication. Copyright 2017. GasandOilMag.com
Table of Contents JUNE 2017 ADVER TISING
Rover Pipeline Responds Historic Preservation Report
Kim Brenning Cambridge, Ohio Office firstname.lastname@example.org 740-439-3531
Spill Results in Delay on Rover Pipeline
Supreme Court to Rule on Free Gas vs. Lease Argument
Green Council Opposes Current NEXUS Pipeline Route
Ohio Well Activity Graph
NEXUS Provides $50,000 Scholarship
Horizontal Drilling Activity Graph
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 email@example.com 330-821-1200 Diane K Ringer Kent, Ohio Office DRinger@recordpub.com 330-298-2002 Janice Wyatt National Major Accounts Sales Manager firstname.lastname@example.org 330-541-9450
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Supreme Court to Make Ruling
Rover Pipeline In the News
Museum Covers Gas & Oil Indust
LVANIA LEAD INCREASE IN THIS ISSUE: OHIO & PENNSY
Miles of pipeline sit at the Republic Short Line Railroad yard in Massillon. The pipes are being used for the Rover Pipeline project, which had all new drilling work halted by the Federal Energy Regulatory Commission in May. The FERC stated that new drilling st independent third must stop until rkWean n, Ma sion o h t party the company’s ra investigates xpan Ma Eye E drilling plans and practices and makes recommendations to assure that all the proper precautions are being taken. OhioGas&Oil
A Look Ahead
Gas & Oil Events • June 5, 2017
PIOGA Summer Picnic and Golf Outing at the Wanango Golf Club in Reno, Pennsylvania. To learn more or register, go to www.pioga.org, News/Events, PIOGA Events
• June 16, 2017
SOOGA Spring Clay Shoot at the Lakeside Golf Course in Beverly, Ohio. To register, contact SOOGA directly at: (740) 374-3203 or firstname.lastname@example.org. Visit http://sooga.org/ for more info.
• June 28, 2017
PIOGA Pig Roast, Product & Equipment Roundup and Technical Conference at the 7 Springs Mountain Resort in Champion, Pennsylvania. To learn more or register, go to www.pioga.org, News/Events, PIOGA Events
• July 13-17, 2017
Mark your calendars and plan to join us for the 2017 Ohio Fire & Rescue Officer Development Conference, July 13-17, 2017, at the Columbus Hilton at Easton. The theme for this year’s conference is Leading Tomorrow’s Leaders Today. The always popular and educational conference draws 500+ attendees and company representatives showcasing 100+ vendors annually. More information at: www.ohiofirechiefs. org/aws/OFCA/pt/sp/conference
• August 7, 2017
OOGA Summer Meeting and Patriot Award Event. Online registration is available until August 2nd. 1300 Country Club Drive, Zanesville, Ohio
At your location or ours, we’ve got you covered. AultWorks Occupational Medicine specializes in treating work-related injuries and illnesses. We are certified by the Ohio Bureau of Workers’ Compensation. Our services include: • • • • • •
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History of Gas & Oil Industry
he Ken Miller Supply Oil, Gas, Car, Truck and Agriculture Museum, located at 7920 Shreve Road just north of Shreve and south of Wooster on SR 226 will open this Spring.
The museum houses a vast collection of early gas pumps, drilling machines, tractors, trucks and cars. There is also a display of the Pennsylvania Railroad and a Shreve Industry display.
explanations are attached to the displays. There is “no other museum dedicated to the oil and gas industry to have as much on display and as well done as this unique museum.” Ken Miller Volunteers from the County Line spent most of his adult life collecting these Historical Society host the museum, which tools of the trade he served. is open the second Saturday of each month from noon to 3 p.m. Cost is $5 for adults For more information, or to make a special and children 12 and younger are free appointment for a group, call 330-496-4024. with a maximum of $15 per family. Paid members of any Historical Society will be admitted at Agricultural & Industrial Service & Repair half price. Visitors should allow at least one and a half hours for the self-guided tour with a printed “tour guide” to move you through the two buildings housing thousands of items. Printed
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Chemical Disclosure Law
Mark Kovac • GateHouse Media Y o u n g s t o w n jobs easier, not putting firefighter is barriers between them urging state and the information lawmakers to they need to protect require increased disclosure themselves and us.” to emergency responders of chemicals used in horizontal hydraulic fracturing. Melanie Houston, director of oil and gas for Sil Caggiano, deputy chief for Mahoning the Ohio Environmental County Hazmat, said a loophole in state Council, said more than law prevents firefighters and others 3 million Ohioans live responding to emergencies at fracking within half a mile of oil sites from accessing complete information and gas developments. about what they’re dealing with. Sil Caggiano, deputy chief for Mahoning County Hazmat, “For millions of our speaks during a press conference at the Statehouse, where “We are asking our first responders to neighbors, oil and gas he urged lawmakers to require increased disclosure of the respond to emergencies without key activity is a fact of life,” chemicals used in horizontal hydraulic fracturing. pieces of information to accurately assess she said. “Not requiring Natural Resources] with the authority to the situation and make the best decision fracking companies to possible to help the public ….,” he said. disclose trade secret chemicals to those obtain proprietary chemical information we entrust with our safety, even during when responding to an incident and Caggiano was one of the featured speakers a disaster, is just plain irresponsible. We allowing the ODNR full disclosure during a midday press conference at the must take responsible steps to ensure these to share this information with first responders when deemed necessary and Statehouse, then offered testimony later communities are safe and protected.” proper protocols are followed.” as part of budget deliberations in the Ohio House. Shawn Bennett, executive vice president of the Ohio Oil and Gas Association, said Marc Kovac covers the Ohio Statehouse Under current state law, companies Wednesday that emergency responders for Gatehouse Media. Contact him at aren’t required to fully disclose all of already have a way to access information email@example.com or on Twitter at the chemicals used as part of fracking about chemicals used at fracking sites, OhioCapitalBlog. activities, with some chemicals protected thanks to legislation passed several years as trade secrets, Caggiano said ago.
“First responders have a huge responsibility to the public, and they carry this responsibility bravely despite the risks,” he said in his committee testimony. “We should be striving to make their
Those law changes, “created the nation’s first combined well construction and hydraulic fracturing chemical d i s c lo s u r e r e q u i r e m e n t s ,” Bennett said in a released statement. “This law also provides the [Ohio Department of
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He asked members of the Ohio House Finance Subcommittee on Agriculture Development and Natural Resources Wednesday to include an amendment in the biennial operating budget requiring disclosure of all fracking-related chemicals to first responders.
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Held in Belmont County
scent Resources - Utica, LLC (“Ascent”) in conjunction with Cumberland Trail Fire Department hosted a Local Emergency Planning Committee (LEPC) mock exercise in May. The emergency response training exercise was held in the area of mile marker 215 on Interstate 70 west of St. Clairsville, Ohio.
A group of firefighters and emergency personnel pay attention at a briefing for the Belmont Co. Emergency Management Agency mock disaster exercise.
Each year Belmont County is required to complete a series of tabletop exercises, as well as functional drills, which consist of smaller training mechanisms to test a certain skill set. The training exercise that took place today was completed to meet their full-scale drill requirements. This drill is the largest the County conducts and is done at a minimum of every five years. Participants for this exercise included the following: • Ascent Resources - Utica, LLC • Belmont County 911 • Belmont County EMA • Belmont County Engineer • Belmont County Hazardous Materials Response Team • Belmont County Sheriff • Cumberland Trail Fire District (Mutual Aid Fire Departments) • East Ohio Regional Hospital
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“Assisting Belmont County with this training exercise not only enables Ascent to be better partners with the communities we operate in, but also gives us the ability to evaluate and test our own safety and operational protocols,” said Amanda Finn with Ascent. “Ascent is proud to report that in 2016, their Ohio operations employees successfully worked without a single OSHA recordable injury or reportable spill.”
The training exercise was held west of St. Clairsville, Ohio in May. • Ohio Oil and Gas Association • Ohio Emergency Management Agency
A fuel truck (PTL) and produced water truck (Wise) impact each other on the Coleman RCH BL lease road on the hill just off the pad. The water truck driver suffers from a heart attack which causes the incident. This incident will create a chain reaction of accident related events and all parties will be evaluated on the following: (1) notification of response agencies, (2) incident assessment, (3) resource management, (4) communication, and (5) population protective actions as well as other criteria.
• Ohio Department of Environmental Protection • Ohio Department of Natural Resources • Ohio Department of Transportation • Ohio State Highway Patrol • Ohio Valley Medical Center.
Ascent would like to thank Wise Trucking and Pilot Thomas Logistics for participating in this important drill, as they set the stage for the emergency response training exercise conducted today. Wise and PTL created the mock disaster as follows:
OH & PA Lead States
In Production Increases
.S. Energy Information Administration
After reaching a record high of 79 billion cubic feet per day (Bcf/d) in 2015, U.S. marketed natural gas production fell to 77 Bcf/d in 2016, the first annual decline since 2005. Texas, the state with the most natural gas production, fell by 2.5 Bcf/d, while Ohio and Pennsylvania each increased by about 1.2 Bcf/d.
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Pennsylvania and Ohio had the two largest annual natural gas production increases from 2015 to 2016, reﬂecting higher production from the Utica and Marcellus shale plays, which have accounted for 85% of the U.S. shale gas production growth since 2012. EIA measures natural gas production in three different ways. Gross withdrawals are the full volume of compounds extracted at the wellhead, which includes all natural gas plant liquids and nonhydrocarbon gases after oil, lease condensate, and water have been removed. Marketed natural gas production excludes natural gas used for repressuring the well, vented and flared gas, and any nonhydrocarbon gases. Dry natural gas production is marketed production minus natural gas plant liquids.
Production in Pennsylvania and Ohio has accounted for an increasing share of total U.S. natural gas production in recent years, growing from less than 2% in 2006 to 24% in 2016. Pennsylvania surpassed Louisiana in 2013 to become the second-highest natural gas producing state, behind Texas. Although both states had higher production in 2016, Ohio Story continued on page 12 GasandOilMag.com
Story continued from page 10
The increased productivity of natural gas wells in the Marcellus Shale and Utica Shale is a result of ongoing improvements in precision and efficiency of horizontal drilling and hydraulic fracturing occurring in these regions. surpassed West Virginia last year to become the seventhhighest natural gas-producing state. Louisiana, West Virginia, and North Dakota also increased their natural gas production in 2016. Louisiana’s increase was the first annual increase since 2011, while West Virginia and North Dakota have had 13 and 8 consecutive years of natural gas production increases, respectively.
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EIA’s Short-Term Energy Outlook projects that natural gas production will increase in both 2017 and 2018 as natural gas prices rise, resulting in higher rig activity. Spot natural gas prices at the Henry Hub, a natural gas market benchmark, fell from $2.63 per million British thermal units (MMBtu) in 2015 to $2.51/MMBtu in 2016. Henry Hub prices are expected to increase to an annual average of $3.10/MMBtu in 2017 and $3.45/MMBtu in 2018. These price increases reflect the expectation of increased natural gas consumption, increased exports, and lower average inventory levels. Principal contributors: Owen Comstock, Jeffrey Little
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County Officials Plead
Case for Energy Taxes
wo Cambridge-area officials formally voiced their support for legislation that would direct increased funding from oil and gas taxes to local governments to pay for road and other improvements.
Guernsey County Engineer Paul Sherry and Commissioner Dave Wilson said in testimony to the Ohio House’s Ways and Means Committee on May 16 that House Bill 105 would provide needed funding for the communities most affected by eastern Ohio’s shale oilfields. “The impact on our roads has been substantial,” Wilson said in testimony submitted to lawmakers. “...The funds available to our county engineer and his
highway department are insufficient to totaling over $720,000 annually and the restore and improve these roadways.” nearly $400,000 in increased expense for Guernsey County’s 911 Center in order to In his testimony, Wilson stressed the comply with an unfunded mandate from importance of the bill’s passage by the State of Ohio. expressing to the committee the financial challenges faced by Guernsey County. Sherry’s comments focused on the “While we as a Board of Commissioners challenges of maintaining 400 miles of would love to supply additional roadway county roads and 313 bridges that carry funding from our county’s General Fund,” both county and township road traffic. the Commissioner President told the legislators, “we are operating under a 1.2 “Once the cost of plowing, mowing and million dollar budget deficit for the second drainage maintenance is accounted for,” straight year.” Sherry explained to the committee, “there is only $1.2 million left for capital investment Wilson pointed out two major items that in the transportation infrastructure.” could nearly double that deficit total, including the loss of sales tax revenue from Placing the cost of resurfacing a mile of Medicaid Managed Care Organizations, roadway at around $140,000 and replacing
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a simple, short bridge at near and property covered $250,000, Sherry illustrated in brown powder.” how insufficient the existing his office’s existing dollars are. HB 105 is bipartisan legislation sponsored “Grant funds are scarce, by Reps. Brian Hill competitive and require a (R-Zanesville) and shared amount of match Jack Cera (D-Bellaire) money,” said Sherry. “Many that would limit the roads and bridges do not amount of oil and gas qualify for funding and even severance taxes and having adequate resources to related permitting fees match the grant is a sizable that could be used for challenge.” regulatory and wellplugging activities. Wilson echoed the Engineer, “Roads that once had a Any funds collected solid surface from years of over $18 million Guernsey County Commissioner Dave Wilson presents testimony at the maintained chip and seal have annually would be Ohio Statehouse. regressed to gravel and stone. directed to capital by the state’s Legislative Service Noble (8.6 percent, Guernsey The increased cost of emulsion improvements, road repairs, Commission noted that more (8.6 percent), Columbiana (4.3 prohibits even basic dust fire-fighting equipment and than $52 million in such tax and percent), Jefferson (1.9 percent), control, leaving homeowners other improvements in the fee collections are expected for Mahoning (0.8 percent), – quite literally — in the dust counties and townships where the current fiscal year. Washington (0.4 percent), with homes, structures, vehicles wells are located. An analysis Tuscarawas (0.4 percent),
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House Bill 105 designates 70 percent of the excess revenue for local governments within Ohio’s “shale region.” The bill requires the Director of the Ohio Department of Natural Resources to calculate the number of producing wells in each such county as a proportion of the total number of such wells in all such counties. The director must then certify each county’s proportionate shale activity by June 15 of each year to the Office of Budget and Management and the State Fire Marshal to enable them to distribute excess Oil and Gas Well Fund revenue.
Trumbull (0.2 percent), Stark, Morgan, Coshocton, Portage, and Muskingum (0.1 percent each).
Based on calendar year 2016 production reports, the “shale region” includes 17 counties. Those counties and their respective proportionate shale activity include: Carroll (30.7 percent), Harrison (19.3 percent), Belmont (14.1 percent), Monroe (10.3 percent),
A portion of this total would also be used to provide grants to specified entities, including state agencies, counties, townships, municipal corporations and school districts to purchase or convert vehicles to use specified alternative fuels.
The bill is intended to support capital improvement projects, road construction and maintenance, and the purchase of firefighting and EMT equipment and vehicles. Also of note, over $10 million in excess revenue could be distributed annually to counties, townships and municipalities with injection wells to support capital improvement projects and supplement general funds.
Record Keeping Essential to Prove Lack
Of Production in Paying Quantities
Andrew P. Lycans • Attorney il and gas leases typically include l a n g u a g e indicating that the lease will remain in effect so long as the leased property continues to produce oil and gas in paying quantities. Ohio courts have long held that a well is producing in paying quantities if the revenues from the well exceed the expenses involved in maintaining the well. Unless production from the leased property has ceased in its entirety, mineral owners face an inherent disadvantage in deciding whether to argue that wells on the property are no longer producing in paying quantities and the lease has therefore terminated. Namely, the producer is the only one in possession of the records necessary to determine the revenues and expenses related to the wells on the property. A recent decision by the Seventh District Court of Appeals highlights another significant disadvantage that mineral owners may face when challenging the continued validity of a lease based upon a lack of production. In Burkhart Family Trust v. Antero Resources Corporation, the mineral owner filed suit seeking a declaration that the lease had terminated due to a lack of production. The producer admitted that he did not keep a record of his expenses and was, therefore, unable to produce records during the discovery process which would allow the mineral owner to determine from reviewing the producer’s documentation whether the expenses exceeded the revenues. The producer testified at trial that his expenses were minimal that that he was making a significant profit from the property, but the trial court found that he was not a credible witness.
had terminated based, at least in part, on the producer’s failure to maintain records regarding expenses. The Court of Appeals reversed, noting that there was no evidence in the record that expenses exceeded revenues. The Court of Appeals acknowledged that the lack of records regarding expenses was “troubling.” Nevertheless, the Court noted that plaintiffs normally bear the burden of proving that they are entitled to relief. If no evidence is introduced to prove a fact necessary to obtain relief, plaintiffs will lose by default because the burden was on them to find the evidence necessary to support their claims. This ruling creates obvious problems for mineral owners. Not only will mineral owners likely not have the documents they need to determine whether a well is producing in paying quantities when deciding whether to file a lawsuit, they now face the possibility of not being able to obtain such documents even after the lawsuit is filed. Producers now have an incentive not to track expenses relating to wells, or at least not in such a way that expenses can be associated with any particular well.
a mineral owner should be able to prevail. In fact, this approach to a producer who claims a lack of records could turn a disadvantage into an advantage. Faced with an expert conclusion that a well is not producing in paying quantities, many producers will likely claim that their expenses were less than the average identified by the expert. However, they will already have boxed themselves into a corner by admitting that they do not have any records to support their self-serving testimony about their below average expenses. Forcing a mineral owner to prove a lack of production in paying quantities where the producer failed to keep the records necessary to definitively prove whether expenses exceeded revenues might seem unfair. However, the issues created by such a lack of documents do not have to doom a lack of production in paying quantities case and can be overcome with sufficient planning and an expert witness.
Mr. Lycans is a member of Critchﬁeld, Critchﬁeld and Johnston, Ltd., a law ﬁrm with extensive experience in all aspects of the oil and gas industry which has been representing landowners, producers, drillers, service This does not create an insurmountable providers, and others in the industry for over hurdle for mineral owners, but one likely 75 years. solution will often increase the costs of bringing a lawsuit. Specifically, mineral owners can hire an MADE IN expert to testify as to what the average PENNSYLVANIA costs of operating the type of well in (844) TOP-MATS question would be. Assuming that Sales@TopMatsUSA.com the average cost of operating the well www.TopMatsUSA.com The trial court ruled in favor of the is higher than the mineral owner and found that the lease revenue generated, CA-10521736
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Rover Pipeline Responds
Historic Preservation Report
n response to conflicting reports, the Rover Pipeline the preservation of historic properties in the state of would like to provide clarity on the commitments it Ohio, and more specifically in the 18 counties through made to historic preservation in agreement with the which Rover traverses. Ohio State Historic Preservation Office. This payment also included monies that are to be allocated towards an establishment of an archeological database and a one-time payment to fund positive historic achievement outcomes throughout the state.
On Nov. 21, 2016, Rover made a more than $2.3 million-dollar contribution to the Community Historic Preservation Fund in compliance with the Memorandum of Understanding executed with the Ohio SHPO.
What remains in discussions with the Ohio SHPO office and the Federal Energy Regulatory Commission are requested contributions in addition to the more than $2.3 million the state received in 2016. We will continue to work with the FERC and the Ohio SHPO in order to resolve any outstanding issues.
That payment was part of our cooperative agreement in which counties can apply for funds to be used towards
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Spill Results in Delay on Rover Pipeline
Shane Hoover • GateHouse Ohio Media over Pipeline’s spill of 2 million gallons of drilling fluid in a local wetland led the Federal Energy Regulatory Commission on Wednesday to halt similar construction work elsewhere on the pipeline route.
On Wednesday, FERC halted similar drilling projects at eight other locations, including routes under the Ohio and Portage rivers. Rover has yet to start drilling in those areas.
The company can continue drilling projects already underway because to stop could cause boreholes to collapse Energy Transfer is building the $4.2 billion interstate and prolong environmental impacts, according to FERC’s natural gas pipeline across Ohio. Where Rover’s route letter to Rover officials. crosses highways and rivers, construction teams drill a path horizontally underground so as not to disturb surface Regular, non-drilling construction also can continue, but activity. FERC ordered Rover to double the number of environmental inspectors per construction spread. As workers drilled beneath the Tuscarawas River south of Navarre on April 13, approximately 2 million gallons of FERC told Rover to have an independent third-party fluid released and coated 6.5 acres of wetland vegetation contractor analyze all drilling activity at the Tuscarawas and soil with drill cuttings and bentonite clay, a substance River site. FERC staff will control the scope, content and used to lubricate the drill. quality of the review, according to the letter.
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Pipes for the Rover Pipeline project are being stored at the Republic Short Line Railroad yard in Massillon. “We have received the letter from the FERC,” Rover Agency) on a resolution to this matter. At this time, there spokeswoman Alexis Daniel wrote in an email. “We continue has been no change to our construction schedule.” to work with them and the (Ohio Environmental Protection FERC said it was troubled by the size of the release, its impact on the wetland, the possibility of future problems and the lack of clarity in what happened. Drilling beneath the river had been underway for three weeks, during which releases were intermittent or absent, according to the letter.
On Friday, the Ohio EPA ordered Energy Transfer to pay $431,000 for water and air pollution violations connected to Rover construction at various locations across the state.
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Supreme Court to Rule on Free Gas vs. Lease Argument
Mark Kovac • GateHouse Media he Ohio Supreme Court must decide whether the acceptance of free gas is sufficient to prevent a property owner from terminating an oil and gas lease on her property.
The Ohio Farm Bureau and its offices in Guernsey and Washington counties countered in its own filing in support of Patricia Schultheiss, the landowner: “An injustice surely would occur, if the use of property by its legal owner creates from thin air the right for someone else to possess and use it.”
Justices heard oral arguments on that issue Tuesday in a case The case focuses on land in Washington County, near pitting a Washington County landowner against an oil and Marietta, that was subject to an oil and gas lease dating back gas company, with the decision having implications for other to 1950. leases across eastern Ohio’s emerging shale gas and oilfields. The agreement at the time called for a well to be established “The appeal concerns a fundamental question that directly within 10 years, with the lease running for that time and “as and immediately affects the validity and viability of much longer as oil and gas is found in paying quantities thousands of oil and gas leases across the state,” the Ohio thereon,” according to documents. Oil and Gas Association and like-minded groups wrote in a brief supporting Heinrich Enterprises, the company involved Schultheiss owns 48 acres of the larger area covered by the lease. A well was completed on what is now her property in the suit. in 1951, and Schultheiss later agreed to exchange royalty payments for free, unlimited gas to her home.
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Between 1977 and 1981, there was no commercial sale of gas from the well on the property. And subsequent production came from a well on property that was not owned by Schultheiss but that was part of the original lease agreement, according to documents. In 2014, Schultheiss filed legal documents noting the termination of the lease, citing the periods when no “payable quantities” of oil and gas were produced from the well on her property. Heinrich, which acquired the lease in 1981, argued that Schultheiss had accepted royalties from the well — that is, free gas to her home — among reasons for keeping its lease in place. A trial court ruled in favor of the company; an appeals court sided with Schultheiss. The Ohio Supreme Court accepted the case for consideration on one issue: whether the acceptance of free gas prevented the termination of an oil and gas lease. Daniel Corcoran, legal counsel for Heinrich, argued that the royalty payments kept the lease in effect. “The production from the well and the benefit that she received, the gas in lieu of royalty, was in itself sufficient to maintain the lease,” he said in oral arguments Tuesday. “… GasandOilMag.com
The well was located on her property. A well does not produce gas over 30 years unless someone is maintaining that well, repairing it when it needs to be repaired, swabbing it periodically. She would not have received that gas over the period of time had it not been for our clients’ efforts in order to maintain the well.”
He added, “This is not a clear-cut thing. When a well goes out of production, that doesn’t mean that the lease ends. The operator can maintain the the lease anyway, as long as he’s reasonably diligent in getting back into production.”
But Ethan Vessels, representing the landowner, said court precedent in Ohio and across the country has sided Corcoran argued that the landowner with landowners in comparable cases. should have moved decades ago to legally terminate the lease, if she “These wells go out of production all believed the agreement was no longer the time,” he said. “The reason why valid. the leasee will allow it to go out of production is obviously because it’s “It is inconsistent that our clients would commercially unproductive. What continue to operate this well for more they don’t want to do is, if they can than 30 years under what they believed avoid it, plug the well, because it’s very to have been a lease, because there was expensive… When these wells stop no issue ever raised back in the late ’70s producing or they stop selling the gas and early ‘80s,” he said. “They owned and the landowner’s getting free gas, the well, she would not have had the what they’ll simply do is allow the well ability to get any gas for her house to remain. It’s really just a matter of without her well.” keeping the hinges open.”
He added, “I strongly reject this contention … that the gas doesn’t belong to the leasor. Once the lease expires and terminates under its own terms, the landowner is required to do nothing… The landowner isn’t required to say anything, isn’t required to do anything, isn’t required to send a letter to the leasee saying your lease is over. Once that happens, the estate in the oil and gas reverts. It now flips back to being owned by the landowner… and it is free for them to use.” Justices have taken the case under advisement, with no timeline for a decision. Marc Kovac covers the Ohio Statehouse for Gatehouse Media. Contact him at firstname.lastname@example.org or on Twitter at OhioCapitalBlog.
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Green Council Opposes
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reen City Council unanimously approved a resolution May 2 to enter into an agreement with McMahon DeGulis, LLP, a legal services firm specializing in environmental law, to assist the City and City’s law director with a plan to continue to oppose the approval of the Nexus pipeline through the city.
The legislation authorizes the city to spend up to $100,000 for services rendered. Council President Chris Humphrey said he is confident in the abilities McMahon DeGulis, LLP, which has offices in Cleveland, Columbus and Cincinnati.
“They have a tremendous reputation not only in Ohio but nationally, and I am confident they can defend us and help The approval marks the second such piece of legislation us fight this pipeline,” he said. passed by council, having previously pledged $10,000 to the grassroots Coalition to Reroute NEXUS (CORN) group. Humphrey cited a recent study that found the pipeline project brings a potential $120 million to $150 million Council members cited both the potential negative economic economic impact on the city over the next 30 to 50 years, in and environmental impacts the proposed pipeline route addition to the potential environmental impacts. could bring. “This legislation signifies the commitment of city council, “I think, fundamentally, we are stewards of this earth and the mayor and the administration and how seriously we we owe it,” said Ward 4 Councilman Skip Summerville. (take the issue of) this pipeline coming through our city,” he “We have to stop disturbing these sensitive areas.” said. “And I hope it sends a message to Nexus to reconsider the route and take the route of common sense, the southern route the city has proposed.” Councilman At-large Stephen Dyer concurred that it is the city’s hope to not only oppose the pipeline through the city, but to work with Nexus on ways to realize that better pipeline route. “I support not just keeping the pipeline out of town, but helping to reroute it,” he said.
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EXUS Gas Transmission has presented Stark State College with a $50,000 scholarship donation that will be used to benefit students pursuing careers in the oil and gas industry.
The proposed pipeline has been under the Federal Energy Regulatory Commission’s review and permitting process since 2015. A decision on the Project’s Application for Certificate of Public Convenience and Necessity is pending.
Stark State is located near the proposed NEXUS route and According to a news release from the college, construction offers training for careers in the oil and gas industry. of the NEXUS project is estimated to support 6,800 jobs, more than $650 million in wages and $830 million in total The college executed a memorandum of understanding economic activity. In its first five years of operation, NEXUS with NEXUS to ensure funds are allocated to directly benefit will generate an estimated cumulative tax revenue of $412 students specializing in training for the oil and gas industry. million, of which approximately $116 million will go directly If dollars are allocated for a student scholarship, Stark State to local school districts in Ohio. officials will select the recipient and determine how the funds will be distributed. To learn more about NEXUS Gas Transmission and the proposed pipeline, visitwww.nexusgastransmission.com. More information The NEXUS Project is a proposed 255-mile natural gas about Stark State’s Oil and Gas programs can be found at https:// pipeline that would run from eastern Ohio to existing www.starkstate.edu/oilandgas. pipeline system interconnects in southeastern Michigan.
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June 2017 edition of the Ohio Gas & Oil Magazine published by GateHouse Media.