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August 2016 • A Free Monthly Publication

Gas Prices Up or Down? Anti-Fracking


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Table of Contents AUGUST 2016



A Look Ahead Gas & Oil Events


Battalion Energy to Broker Natural Gas Liquids


Stark State College Creates New Welding Program to Feed Gas and Oil Industry

Andrew S. Dix


Teaching Teachers About Oil and Gas


Shale Gas Creating Jobs and Energizing Economy in Appalachian Basin


Utopia Pipeline Update


Gas Prices Still Fluctuating

G.C. Dix II David Dix



The Battle of Munroe Falls


What You Need to Know to Make Sure Your Wealth, Including Your Oil and Gas Interests, are Protected, For Many Years to Come!

Roger DiPaolo Rob Todor Lance White



University’s Study Shows Anti-Fracking Bias


SHALE INSIGHT™ Conference September 21-22 in Pittsburgh


Conotton Valley Union Local School District Benefits From Community



Erica Peterson Cathryn Stanley Niki Wolfe

Table of Contents AUGUST 2016 ADVER TISING Kim Brenning Cambridge, Ohio Office 740-439-3531 Kelly Gearhart Wooster & Holmes, Ohio Offices 330-287-1653 Jeff Kaplan Alliance & Minerva, Ohio Offices 330-821-1200 Mark Kraker Ashland, Ohio Office 419-281-0581


Ohio EPA Seeks More Information for EnerGreen Project


Court Rules Against Curtailing Drilling


Environmentalists Again Take Aim at TransCanada Pipeline


Ohio Oil and Gas Association Summer Meeting Aug. 15-16

Diane K Ringer Kent, Ohio Office 330-298-2002 Janice Wyatt National Major Accounts Sales Manager 330-541-9450

On The Cover:

L AYOUT D E SIG NE R Kassandra Walter

August 2016 • A Free Monthly Publication

Gas Prices Up or Down? Anti-Fracking

“Gas & Oil” is a monthly publication jointly produced by Dix Communications. Copyright 2016.



Our August cover stories highlight two hot topics - the price of gas and the impact of fracking on the environment. See page 16 to learn about local and global issues that can cause the price fluctuations we see at the pump. On page 24 read about the recently retracted study produced by the University of Cincinnati that touched off alarmist headlines purporting environmental concerns due to fracking. OhioGas&Oil


A Look Ahead

Ohio’s Gas & Oil Events • August 19, 2016 • September 25-27, 2016 SOOGA Summer Golf Outing, Woodridge Golf Club, Eastern Section, American Association of Petroleum Mineral Wells, West Virginia Geologists (ES-AAPG), Lexington, Kentucky • October 14, 2016 • August 25, 2016 SOOGA Fall Clay Shoot, Hilltop Sports, Whipple, Ohio PIOGA’s Divot Diggers Golf Outing, Tam O’Shanter Golf Club, Hermitage, Pennsylvania • October 22-23, 2016 OOGEEP October Firefighter Workshop, Apple Creek, • September 15, 2016 Ohio. Visit Annual Trade Show, Washington County 2016-firefighter-workshop/ for more information. Fairgrounds, Marietta, Ohio • October 30-November 1, 2016 • September 17-18, 2016 NARO Appalachia Convention, White Sulphur Springs, OOGEEP September Firefighter Workshop, Apple Creek, West Virginia. Visit for more Ohio. Visit 2016-firefighter-workshop/ for more information.


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Stark State College Creates New Welding Program To Feed Gas and Oil Industry


Chelsea Shar • Dix Communications tark State College program apart, Schweitzer said. has made a $650,000 investment in a “You can teach everything about welding, new program the but a lot of learning is muscle memory. institution believes will help There’s no substitute for getting people Northeast Ohioans gain training to meet behind the work piece,” he said. a serious lack in the job market for a highAfter two semesters of classes a student earning occupation — welding. can become a certified welder. Schweitzer Stark State College recently created a said some students don’t even complete welding program that will be offered the program because they receive first at the Alliance satellite campus. job offers before they complete both The program will include hands-on semesters, making around $20 per hour. experience and the ability to gain national Welders to feed gas and oil certification after two semesters of classes. infrastructure “For anything new construction and the (building of the) oil and gas infrastructure With the oil and gas market in the Utica we need welders and there is a dearth of region anticipated to grow Schweitzer welders right now,” said Dan Schweitzer, said jobs welding infrastructure for the regional hub coordinator for ShaleNET natural gas pipelines and cracker plants will only increase. Northern Hub at Stark State.

Chamber of Commerce, was at the open house and went through the trailer, complete with 12 welding stalls. He said the facility is a good fit for Alliance. “It’s very nice and it’s very much-needed. There is a huge shortage of welders in this area,” he said. He said local companies like MAC Trailer are always looking for skilled laborers which are often hard to come by, a similar theme that can be heard throughout the state. Welding on wheels

A Stark State welding program exists at the Barberton satellite campus, but Schweitzer said he saw the need to expand the capacity of the program to other Stark State campuses as well and a The program can hold 12 students who can Alliance area residents seemed to mobile trailer was the best way to do that. take classes four days per week, including understand that when Stark State held an a lab in the trailer. That lab is what sets the open house with the welding trailer on “We decided the mobile way to bring the site on July 12. lab to people who need it would be the best way to build our capacity,” he said. Ad m i n i s t rat or s weren’t sure if they The trailer is the length of a semi-trailer could fill a class and has 12 welding work benches. It is this fall, but in the handicap accessible and while a little first 15 minutes of cramped inside, Schweitzer said it is the the open house half most affordable way to bring a practice lab a dozen interested to Stark State students in Alliance without applicants came for building a multi-million-dollar classroom. a tour and to sign up for the program. Tom Pukys, president of Alliance Area The new Stark State College Mobile Training Center trailer was Development, is one of the collaborators on display in Canton Monday. The Center consists of 12 welding Mark Locke, who has been working on getting such a work stations and is also handicap accessible. The unit costs President of the program in Alliance for years and said he approximately $650,000. Alliance Area doesn’t think there will be any trouble in Photo Credit: Michael Skolosh 6


filling the class this fall. He said there is a demand locally and across the region for welders and hopes Alliance will become a supplier of professionals for the jobs.

One of 12 individual welding work stations is shown. Each station is equipped with 1 mig and 1 tig type welder. The vents in the work bench and back wall are part of a downward draw ventilation air filtering system. Photo Credit: Michael Skolosh

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“The more we can increase our welders or that occupation the stronger it will make Alliance as far as retaining companies and helping them grow. It will also help us to attract companies as well,” he said.

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Dennis Trenger, director of academic outreach at Stark State, said the program will collaborate with Alliance area schools, including the welding programs at the Alliance Career Center and Timken High School, Marlington’s Gas and Oil Technology Program and the University of Mount Union. Story continued on page 8


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Trenger and Jessica Grimes, coordinator at the Alliance Satellite Center, will be working on a marketing campaign through the rest of the summer to let people know about the new welding program that will begin this fall. Christopher Voshel visited the open house as a prospective student. Voshel graduated from Alliance High School in 2015 and had completed the auto body vocation program. He said he has had trouble finding full-time, local work in auto body shops who seem to not be hiring so he was interested in gaining more training that could get him a job. “This program will get me more hands-on experience in welding,” he said. Voshel applied for the program on Tuesday. As for a job, Voshel said he will go wherever the money takes him.

A view from inside the new Stark State College Mobile Training Center trailer. A walkway runs down the center. The red plastic to the left separates the welding work stations and is made of a special material that blocks the light frequency that the mig and tig type welders emit and helps to protect the vision of people passing by. Photo Credit: Michael Skolosh

For more information on Stark State’s welding program contact Jessica Grimes at 330-494-6170 ext. 4672.


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Teaching Teachers

About Oil and Gas By Linda Hall • Dix Communications


il and gas may seem like a stodgy subject; but when it comes to relating the topics to everyday life and STEM (science, technology, engineering and math) education, along with creating an entertaining way to learn about it, OOGEEP literally wrote the book and gave it a local connection.

Teachers from all 88 counties have taken the workshop; and companies, including local ones, such as J.R. Smail, Ken Miller Supply, Buckeye Oil and Cedar Valley Energy, are helping to pick up the tab.

“We spend about $500 per teacher,” said Rhonda Reda, executive director of OOGEEP, adding, “It’s everybody’s The Ohio Oil and Gas Energy Education Program is job to be part of it.” getting its curriculum into schools by teaching it to the teachers first. In fact,  “For every barrel of oil (companies) produce in Ohio, they give us a nickel,” she said, and for every 1,000 “All of our curriculum meets state science standards,” cubic feet of natural gas, a penny.” said  Sarah Tipka, an OOGEEP board member. In Canton on Tuesday, teachers from around Ohio It’s an offer teachers across Ohio haven’t been able to pass conducted experiments outlined in the curriculum and up; it’s free, it provides continuing education credits, practiced presenting the lessons by instructing their and they leave with supplies for classroom experiments peers in how to do them. as part of the package.

When it comes to oil and gas issues, you want a top-ranked law firm.

Krugliak, Wilkins, Griffiths & Dougherty is located in the heart of Ohio’s Utica Shale play. With more than eight decades of combined natural resource legal experience, our oil and gas attorneys know current market conditions, as well as prices and lease terms that should be negotiated with interested companies. We offer counsel and advice to oil and gas lease owners and mineral owners for their mineral rights. Contact any of the attorneys below toll free at 877.876.9958 to discuss your case: 4775 Munson Street NW | Canton, Ohio 44718 | 877.876.9958 | 330.497.0700 Offices in Canton, Akron, Alliance, New Philadelphia and Sugarcreek 10 OhioGas&Oil


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The best way to learn is by active participation, Tipka said. “Oil and gas has been a vital part of the economy for more than 100 years,” Tipka said, and its impact on future career options is invaluable. With at least 75 possible occupations related to the industry, the local connection once again comes into play. OOGEEP material pinpoints where each kind of training can be obtained, including the Wayne County Schools Career Center and The College of Wooster. According to OOGEEP, 40 percent of all future careers contain some element of STEM. Sarah Tipka (foreground), an OOGEEP board member, points out to a teacher participating in a workshop materials to use for an oil and gas, STEM-related classroom project. Many local teachers have attended OOGEEP workshops.

Reporter Linda Hall can be reached at 330-264-1125, Ext. 2230 or She is @lindahallTDR on Twitter.

Joseph Shalala, a fourth-grade teacher from Lincoln Elementary School in Wadsworth, and his teammates worked on a PVC pipe simulation of the pipeline, following specifications laid out for them, but also tweaking them to ease the movement of a ping pong ball through the piping. “This is what we do in the classroom,” he said. “I give (students) a list of constraints and a pile of supplies,” then tell them, “You solve the problem.”


“That’s what we’re doing,” Shalala said. “We’re using everything we can get our hands on to make it work.” For a seventh-grade student, for example, said Mark Bruce, OOGEEP’s communication director. “Can you imagine how much fun this is?” Byesville, OH 2 BD 1-½ BA Handicap Friendly

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Shale Gas Creating Jobs And Energizing Economy In Appalachian Basin David Spigelmyer • President of the Pennsylvania based in Marcellus Shale Coalition Shawn Bennett • Executive Vice President of the Ohio Oil and Gas Association Corky DeMarco • Executive Director of the West Virginia Oil and Natural Gas Association


xperts agree: The United States has emerged as the world’s leading oil and natural gas producer while reducing its carbon emissions more than any other nation.

true than right here in our region. Just last week, Royal Dutch Shell announced they will invest $6-$7 billion in the tristate area building a world class petrochemical facility to leverage the bounty of clean-burning natural gas and natural gas liquids that underlies much of Ohio, Pennsylvania and This significant achievement is thanks to shale development, West Virginia. led largely by producers throughout the Appalachian region. Through the responsible development of our abundant What’s more, thanks to affordable and reliable natural gas shale resources, America will continue to make these supplies, local manufacturers have a competitive edge achievements, becoming more energy secure, strengthening and an “energy advantage” in the global marketplace the environment, and supporting hundreds-of-thousands of that’s driving expansions and job creation, according to a good-paying jobs. recent IHS study. In fact, the American Chemistry Council concluded in a 2016 analysis that industry investment In this political campaign season, that’s an energy policy linked to shale development has reached $164 billion and that both Republicans and Democrats can – and should could support 738,000 permanent new jobs across the U.S. – rally around as policies aimed at expanding natural gas economy by 2023. production and use will further boost the economy, help middle class families and strengthen the environment. Consumers, too, are directly benefitting from shale’s energy savings. Thanks to shale development, average Throughout our region, shale development supports annual household energy expenditures have fallen 14.1 hundreds of thousands of direct and indirect jobs, including percent nationwide, including 25.1 percent for natural gas, many for shale’s supply chain small businesses and building according to the U.S. Energy Information Administration. trades union members. And according to a 2015 Harvard Business School report, shale represents the “single largest opportunity to improve trajectory of U.S. economy.”

“Shale has become a new economic engine for our state, supporting energy infrastructure projects that have brought new opportunity to thousands of residents.”

Just as shale development continues to generate meaningful economic benefits, it’s directly strengthening our environment, as well. In fact, greater natural gas production and use have largely driven U.S. CO2 emissions to a 25-year low, according to U.S. Environmental Protection Agency data, helping the United States achieve meaningful climate progress.

—Dennis Martire That’s why our nation’s top environmental regulator, EPA Laborers’ International Union of North America administrator Gina McCarthy, has made clear that “natural

gas is an important part of our work to curb climate change.” Natural gas development’s crown jewel, however, is sparking a regional manufacturing renaissance. Nowhere is this more The facts are clear: America’s shale revolution is boosting

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hard working, middle class families, driving a manufacturing renaissance, and strengthening America’s air quality. And with the right policies in place – that encourage responsible production, expanded pipeline infrastructure, and greater end use, especially among our manufacturers and power generators – we can continue to experience shale’s economic and environmental opportunities.

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Pipeline Update David J. Wigham • Attorney


he Utica Shale boom has transformed Ohio from a net importer to a net exporter of oil and gas. Unfortunately, Ohio currently lacks the pipeline infrastructure necessary to transport the massive amounts of fluids and gases to market in other states. Consequently, the Utica Shale boom has itself spawned a pipeline boom affecting the property rights of thousands of Ohio landowners. This article will provide a brief update on one of many such projects, the Utopia Pipeline Project, to be built and managed by Kinder Morgan. At this point, many landowners in Ohio are familiar with the Utopia Pipeline Project. Sponsored by Kinder Morgan, this pipeline system will consist of 240 miles of new, 12-inch diameter pipeline transporting natural gas liquids (primarily ethane and ethane-propane mixtures) from Harrison County, Ohio, to Kinder Morgan’s existing pipeline and facilities in Fulton County, Ohio. The liquids will then be moved through existing pipeline systems to their ultimate destination in Windsor, Ontario, Canada.

Pipeline Project and Nexus Pipeline Project began their respective regulatory processes, Kinder Morgan has been able to advance its project so quickly that it has even begun filing waves of condemnation proceedings against unrepresented landowners who refuse to sign easements. As a result, dozens of Ohio landowners in may counties throughout Ohiohave been caught off guard by receiving a summons and complaint to appear for condemnation proceedings. These landowners, many of whom were not represented by an attorney in pipeline negotiations, are now faced with the question of how to proceed. To many, the only path forward appears to be engaging an attorney to litigate the condemnation proceedings. These attorneys, several of whom timed sending their informational brochures to arrive at the same time the summons for condemnation, typically charge a contingency fee of one-quarter to one-third of the total court award or settlement. While these fees appear reasonable to some, for the average landowner who has refused to engage counsel up to this point for fear of paying a much lower contingency fee, one-third could

Since it is a “liquids line” (a pipeline that transports liquid petroleum products), the Utopia Pipeline Project is not subject to the same federal regulatory approval as other large intrastate or interstate pipeline projects, such as the Rover Pipeline Project, Leech Xpress Project, and the Texas Eastern Pipelin Project. Not surprisingly, this has allowed Kinder Morgan to move through the regulatory process at a faster pace. Despite beginning the regulatory process after the Rover

14 OhioGas&Oil

be excessive. Faced with the alternative of losing their property rights by default, however, many landowners feel they have no remaining alternative. Fortunately, other, less costly avenues exist and are available, but landowners facing suit must act quickly. For one, a condemnation filing does not necessarily mean that negotiations must cease. In fact, I have found that several pipeline companies, including Kinder Morgan, are willing to temporarily stay or hold off on eminent domain proceedings to negotiate a pipeline easement with a previously unrepresented landowner. By doing so, I have been able to engage these recently condemned landowners as clients at a much lower contingency rate than those attorneys who proceed with the condemnation proceedings without further negotiations.

In the meantime, Ohio landowners faced with a condemnation filing are urged to evaluate all of their litigation and negotiation options before retaining counsel. These landowners are also urged to act promptly. By investigating both of these potential routes, a landowner may ultimately save up to 23% of the final compensation paid by a pipeline company for an easement over that landowner ’s property. This could result in thousands of dollars in savings to the landowner, and in some cases, could even save tens of thousands of dollars. For many Ohio landowners, the amount saved in attorney’s fees can spell the difference between actually obtaining full compensation for an easement and having only partial compensation once the trial attorney’s fees are deducted. David J. Wigham is a second-generation oil and gas attorney at the firm of Roetzel & Andress, with more than 25 years of experience in the industry. He maintains offices in Akron and Wooster, Ohio, and can be reached at 330-762-7969.


Of course, this option may not work for everyone. In order to agree to stay the condemnation proceedings, the pipeline company must typically believe that something has changed (or will change) that will cause negotiations to succeed. In the example above, by engaging counsel that Kinder Morgan believed would and can successfully negotiate an easement, the landowners would have demonstrated that circumstances had changed so that negotiations were likely to succeed. Furthermore, the

example above occurred relatively early in eminent domain proceedings and would be more difficult to obtain the longer the condemnation proceedings had remained pending.

OhioGas&Oil 15

Gas Prices

Still Fluctuating Jacob Runnels • Dix Communications


ummer is a time where many road trips are conducted, so expectedly this would also be a time where gas prices are higher.

However, according to the U.S. Department of Energy, average gasoline prices— which as of the time of this writing (July, 2016) is $2.28 per gallon— are lower compared to average price last July, which was $2.79 per gallon, which is more than an 18 percent decrease in price. This price change, as well as the dip in price since the U.S. great recession— which the national average price was $3.26 per gallon in 2008, reached its highest price at $3.61 in 2012 and dipping to $2.1 in 2016— were subject to a price fluctuation, mainly caused by a global oil glut. “We’re basically producing more oil a day more than we’re consuming it,” said Michael Green, director of public relations for AAA.  “That has created a glut of crude oil, an abundance in supplies.” A quick search on the internet will yield many articles about how the oil glut— a large contributor to the lower gas prices seen in the last few years— isn’t disappearing anytime soon. However, because there is an oversupply of oil, Green said gas prices will “stay relatively low” until prices are eventually balanced.

What causes a price fl uctuation? Green said prices can fluctuate based on the political affairs of oil-producing countries, or even countries like Syria, where Green said being a country in the Middle East is enough to create enough risk to provide a “threat [where] future production might be curtailed.”

“Political problems in a country can lead to increased risk,” he said. “There’s a perception that perhaps crude oil should be more expensive because oil is traded in futures and no one knows what might happen in the future.” —Michael Green Like stocks, Green said oil prices are traded in future estimates, which are predictions for what could happen in an oil-producing area, either positive or negative. He said economic or political factors in regions such as the Middle East, Venezuela or West Africa could create a higher risk for the future of that oil. “When the fighting started in Syria a few years ago, we saw crude oil prices rise even though Syria has very little crude oil production, [and] it’s because of turmoil in the Middle East,” he said. “A lot of times the cost of crude oil is affected by external factors that are really outside of everyone’s control and are impossible to predict.” He said another contributor to price fluctuations can depend on a country’s economy, specifically with the aforementioned great recession. He said the great recession made the demand “very low for petroleum products overall.” This was because“people weren’t driving as much, businesses weren’t building things and they weren’t producing as many goods.”

Gas Prices Fluctuating

16 OhioGas&Oil

Finally, he said a contributor to the price fluctuations involves seasonal patterns. He said prices can rise in the spring when oil refineries conduct maintenance, or during the summer when people have free time to take road trips. The effects of lower prices Fluctuations can be seen as ephemeral, following a boom or bust cycle when selling oil. However, the oil glut has made gas prices low for years now, which Green said consumers may have already become complacent to the price changes. “Consumers are taking advantage of cheaper gas prices today and driving at levels we’ve never seen before,” he said. “Airlines are the ones who really benefited from cheap jet fuel costs… Airlines are doing really well right now but they would struggle if petroleum prices were to rise again.” Jerry James, president of the Artex Oil Company, said a contributing factor to the lower oil prices could be related to the lower prices and increasing supply of natural gas in the United States. James said with the evolution of natural gas extraction methods— such as the switch from vertical to horizontal drilling in the natural gas-rich Marcellus and Utica shales— came an increase in supply and new interest in manufacturing facilities relying on natural gas to power their factories increased demand.

“It’s really U.S. shales that have reduced the price of oil and natural gas,” he said. “There are a lot of applications for natural gas; you just have to find the application.”

natural gas prices— and increased availability of natural gas— have lead to cheaper gasoline. However, Green doesn’t feel the same way about natural gas’s relationship with gasoline, as he said the effects of natural gas would bear a “relatively small” impact “compared to the fundamentals… of gasoline,” specifically with how much money is being saved. “The main impact of natural gas prices is that… [it] allows refineries to be more cost-efficient when they’re refining and producing fuel,” he said. “With that said, there’s no guarantee those savings are being passed onto consumers.” With a fluctuation, prices could temporarily change in

— Jerry James, president respect to what’s happening. If it’s a political or economic Artex Oil Company factor or it’s an over or under-supply of oil, consumers He said there are niche markets that have used natural gas as a method of energy over gasoline and this has created a fuel diversity. Due to this fuel diversity, he said lower

should be prepared for volatile prices and to not be complacent with paying for so little at the pump.

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September 2016 18 OhioGas&Oil

The Battle Of Munroe Falls


By Marsha Mckenna and Jeff Saunders • Dix Communications n oil and gas drilling firm Beck wants to drill on a parcel of land has filed a counterclaim owned by Sonoco. The parcel is just against this city, shortly west of Sonoco’s paper mill on the after the Summit County west side of Route 91, a little north Court of Common Pleas denied of Munroe Falls Avenue, according the city’s request for a temporary to documents filed by the city with restraining order against the the court. company. In his decision, Gallagher dismissed Ravenna-based Beck Energy is Sonoco as a party in the action, requesting in its counterclaim, filed saying the city’s complaint did not July 5, that the company be awarded “state a claim against Sonoco.” “in excess of $25,000 plus costs and attorney fees” for each of four counts The Ohio Department of Natural against the city. Resources issued a new drilling permit to Beck Energy June 16 which Meanwhile, Common Pleas Judge expires June 18, 2017. A previous Paul Gallagher denied the city’s one-year permit expired in April. request for a temporary restraining order against Beck Energy to stop According to a press release drilling within the city’s limits after from Beck Energy attorney Scott hearing testimony from both sides Zurakowski, with the approved June 30. He stated the city “failed to permit, Beck Energy “now intends to demonstrate by clear and convincing proceed with commencing drilling.” evidence” that it was entitled to the preliminary injunction. Beck Energy President Raymond Beck declined to comment on Mayor James Armstrong referred a whether the company has begun request for comment on the case to operations at the site. Law Director Thomas Kostoff.  “Clearly the city is disappointed,” said Kostoff on July 7, adding he expected to discuss the matter with Armstrong and city council during council’s July 12 regular meeting, possibly in executive session. The request for the temporary restraining order came after the city filed a complaint for declaratory judgement and request for stay May 27, naming Beck Energy Corp. and South Carolina-based Sonoco Products Co. as defendants, in connection with an oil and gas well

“The only comment I’m going to make is real short and sweet,” Beck told the Stow Sentry July 7. “We’re going to do whatever we’re going to do within the law.” —Raymond Beck, president Beck Energy

Beck Energy attorney Aletha Carver, also on July 7, said, “They do have the state permit and they can start drilling at any time.” In the May 27 complaint, the city asked that the court “declare whether Munroe Falls has the right to enforce its zoning ordinances relative to oil and gas wells within its municipal jurisdiction; to declare whether Beck is required to obtain a zoning certificate and/or a zoning variance from Munroe Falls prior to drilling the Sonoco well, and further requests a stay of all drilling activities by Beck until” the court reaches a decision. The city argues that while state law gives the ODNR authority to regulate oil and gas production in the state, the law “does not expressly prohibit the enforcement of local zoning ordinances.” However, Zurakowski states a February 2015 decision by the Ohio Supreme Court “held the Ohio Department of Natural Resources has the ‘sole and exclusive authority to regulate the permitting, location and spacing of oil and gas wells and production operations’ within Ohio,” to the “exclusion of local governments.” Differing views on water supply concerns The city also has cited concerns about a “municipal water field” operated by Cuyahoga Falls about a half mile to the west of the proposed well site, saying that if the “integrity” of the field is “compromised” by the well, Story continued on page 20 OhioGas&Oil 19

Story continued from page 19

“the communities of Munroe Falls, Cuyahoga Falls, and Silver Lake would be without an immediate water supply source.”

construction of the well to protect ground water.

In the city’s June 17 request for the TRO, the city claimed that “Failure to enjoin Beck from drilling until the court makes its determination could irreparably harm Munroe Falls and other communities since the drilling would occur near the fresh water source for the City of Munroe Falls, City of Cuyahoga Falls and the Village of Silver Lake and potentially cause a situation analogous to that which recently occurred in Flint, Michigan.”

In a June 9 letter from Zurakowski to Kostoff, the city was given a warning that if the May 27 complaint was not dismissed, “Beck Energy will seek appropriate sanctions” against Kostoff and the city.

Zurakowski disputed that claim in an opposition filed with the court to the TRO request, stating “The hypothetical threat of water contamination has absolutely nothing to do with the legal issue of whether Munroe Falls can enforce its requirement of a zoning certificate for all oil and gas wells.” He also noted that the location of the water source “is well in excess of the distance required by State statute” of no closer than 50 feet of a body of water. In addition, court filings by Beck Energy state that the ODNR permit includes specific requirements in the

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Beck counterclaim includes four counts

The four allegations made against the city in Beck Energy’s July 5 counterclaim include: • The city’s actions constitute an “interference with business relationship” by being “wholly without justification and were committed willfully and with the malicious intent of interfering and/or preventing... Beck Energy, from commencing a well on...Sonoco’s property.” • The city “acted to deprive...Beck energy, of all economically beneficial use of its protected private rights and interests in its private property mineral interests under the Sonoco lease” in violation of both the U.S. and Ohio constitutions’ prohibitions against doing so without “just compensation.” • The city failed to provide “procedural due process” under the U.S. Constitution and state law by not providing “notice of the proposed taking [of property] at a meaningful and legal time and in a meaningful and legal manner, the right to answer and oppose the taking, the right to a trial by jury on the issue of compensation prior to the taking, as well as the right to appeal.” • The city failed to provide “substantive due process” by “enforcing the City of Munroe Falls’ zoning ordinance in a manner that is arbitrary, capricious, in bad faith, in direct contradiction” to the Ohio Supreme Court decision. “We’re just waiting for the trial court to rule on the matter for summary judgement and, of course, we have our pending counterclaims,” said Carver, who declined to make further comment. Kostoff said he had only just received the counterclaim and had not had time to review it. He said the city is allowed “to file a reply to their counterclaim, which I intend to do.” In the letter, Zurakowski states that information from the city from a Freedom of Information Act request last summer shows more than $250,000 in legal fees with the prior law director, Jack Morrison, from the time

the case was filed until the Supreme Court made its decision.

“Now, Munroe Falls has started down yet an identical path that will cost it and its taxpayers additional money that could be used for employee raises and/ or the hiring of additional safety forcers, rather than attempting to rehash issues already decided by the Ohio Supreme Court.”

Armstrong, who took office at the beginning of the year, said, “I know [the city] paid a decent amount of money” prior to Kostoff replacing Morrison this past Feb. 1. Under Kostoff’s one-year agreement with the city, he will be paid $36,000 in base pay, but litigation is paid at an additional rate of $175 per hour. “I’m keeping a close eye on [costs],” said Armstrong. Kostoff said he has not yet submitted any invoices to the city and “would not even want to guess” the amount “at this point.”

—Scott Zurakowski Information from the city regarding costs to the city in fighting its various legal battles against Beck energy, which go back to 2011, were not available before press time.

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OhioGas&Oil 21

What You Need to Know to Make Sure Your Wealth, Including Your Oil and Gas Interests,

Are Protected, for Many Years to Come!


Frank McClure • Attorney

t is important to “plan while you can”! In other words, if you put off planning and don’t do it, many things can happen to your oil and gas interests which planning would have protected. Let’s look at this planning from the prospective of how we can protect your wealth, preserve it and make it grow.

Let us first look at what makes it difficult for someone to preserve wealth. One cause of asset erosion is the federal estate tax. The estate tax used to be more of a factor for many Americans than today, as the amount you can pass on at death free of tax is now $5.45 million per person. Ohio did away with its estate tax for people dying after January 1, 2013. If you have a net worth in the $5.45 million range or greater, congratulations but the bad news is that the government is Wealth can be difficult to accumulate, and really even harder waiting to collect their share of the excess over that sum. to preserve. This type of planning can be called legacy wealth planning because it describes the things we need to think Income taxes can be another great risk to inherited wealth. about to preserve your wealth from risks when passing it on Baby Boomers received billions of dollars of inherited wealth to your loved ones at the time of your death. The philosophy in the form of IRAs and 401k’s and annuities. They will pass of this approach is not just about how much is left for your on more billions of retirement accounts when they die. In loved ones, but the meaning, impact and use of the inherited addition to the estate tax, income taxes (federal and state) wealth later for them. will erode that wealth either immediately or each and every year as money is withdrawn. Another risk to accumulated wealth and its protection are lawsuits. In 2007 there were approximately 300 million Americans and they filed over 107 million lawsuits! People who have been able to accumulate wealth are prime targets for those who are litigation minded by nature or who have scams to run. The elderly are well known targets for such scam artists.

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The remarriage of a surviving spouse that then ends in divorce or death, puts the surviving spouse’s estate at risk of claims by that spouse. This puts the children from the first marriage at risk. Also, a new spouse can exert such undue influence that the surviving spouse may end up moving the estate of the first spouse to die, thus depriving the children of their eventual inheritance. Then there are the habits of the people who will be receiving inheritances from you. Not everyone is a good money manager. Sudden, unearned wealth for those not accustomed to extra income or having “money to spare” can be too much for them to handle. Fortunes can be lost due to poor management of assets or frivolous spending. When you leave a direct inheritance to someone who doesn’t handle money well, it may go down the drain in a hurry. Some loved ones have other issues, such as special needs

due to mental or physical impairments; learning disabilities; troubled marriages; or substance abuse. If talked about these issues can be taken care of in advance. Also, the high bankruptcy rate threatens many people’s inheritances because an inheritance that vests at the wrong time is lost as part of the bankruptcy estate to be paid to the bankrupt heir’s creditors. Some things are more valuable than money. Things such as family history, lessons learned, values and virtues important to parents, grandparents, and other ancestors can be lost if not preserved and communicated in some way to your loved ones. Inherited wealth should be stewarded so as to honor and promote those values. Wealth transfer planning without thinking about the meaning of the inherited wealth to the heirs, what the heirs will do with the money, what the money will do to their lives, and how they will live their lives after the inheritances, are all affected by the manner in which an estate plan is designed.

issues are identified and the concerns understood, then there is a foundation of values upon which to build the estate plan. Skillful lawyers who are masters at trust design and other estate planning tools can help you craft a Legacy Wealth Plan that will work for you. It involves family dynamics, not just taxes and probate. Simple wills and powers of attorney can’t always meet the challenges. It’s important that you counsel with an attorney whose practice concentrates in these areas of estate planning. If you would like to learn more about protecting your assets (including oil and gas interests), I invite you to go to our website at and find out more about asset protection, legacy planning and how you can attend one of our free workshops.


Legacy wealth planning should be part of your estate planning, and can be if you take the necessary steps to identify such issues that may affect the wealth you have accumulated as you pass it on to your loved ones. Once the

OhioGas&Oil 23

University’s Study Shows Anti-Fracking Bias


he University of Cincinnati (UC) has yet to publish the results of a now year-old study that found no water contamination from hydraulic fracturing in a scienstific journal, despite scrutiny, media attention, and numerous calls from groups and elected officials to do so.

and gas activity, and assumed worst case scenarios in their cancer hazard assessments. A Carroll County landowner also informed EID that some of the highest PAH levels detected by the researchers were collected on his property, which is more than 10 miles from the nearest shale gas well. This completely refuted the researchers’ summation that high PAH levels correlated directly to close proximity to This indefinite delay is all the more interesting considering shale gas wells. that UC couldn’t wait to publish the results of its 2015 study that claimed fracking was causing significant air pollution The authors even admitted that the sample size used for their in Carroll County. That study appeared in Environmental study was too small and that the chief assumption used for Science & Technology just three months after it was their research model was “totally impractical,” according to completed. media reports. That didn’t keep several media outlets from accepting the authors’ conclusions as gospel with such headlines as: “Fracking may cause air pollution, respiratory issues” and “Fracking could increase risk of cancer, new study finds.” This is a prime example of a rushed study, designed to scapegoat fracking, that fails to fully vet the data collected — yet garners media coverage anyway. Making matters worse is the fact that the Carroll County air study was 100 percent taxpayer funded. UC’s Center for Environmental Genetics (CEG) received federal tax dollars for this study in the form of a grant from the NIH’s National Institute of Environmental Health Sciences (NIEHS) for $47,910.

But the UC researchers’ urgency has apparently come back to bite them as they have just retracted the study due to Of course, the authors of the study do not disclose whether “errors” and “incorrect” calculations: their revised calculations show much lower emissions – but considering this background and the fact that the UC’s rush to publish its air study while it dawdles for a year researchers just omit that data in their retraction, it’s difficult in publishing its groundwater study finding no harm from to imagine their corrected results show anything other than fracking is even more interesting considering the results of a repudiation of their original conclusions. Regardless, the both studies were first announced at events hosted by Carroll real problem is this: By not providing that information UC County Concerned Citizens (CCCC), a well-known anti- is not being forthcoming with data again, just as it has by fracking group. The same professor that presented the air refusing to release its groundwater study. quality study results to CCCC, study co-lead author Dr. Erin Hayes, has also participated in other anti-fracking events. Ohioans deserve a full explanation as to why a study that generated numerous alarmist headlines by promoting fear The retraction of the Carroll County air study comes as was retracted. It will also be interesting to see if the retraction no surprise to Energy In Depth, which pointed out its gets as much media attention as the flawed study generated. many flaws last May. Not only were the study participants recruited by an anti-fracking activist group, the researchers But, considering Ohioans are still waiting for UC to release did not use random testing, did not account for sources of its groundwater study (which cost taxpayers $400,000, by the Polycyclic Aromatic Hydrocarbon (PAH) other than oil way), it might not be a good idea to hold your breath on that. 24 OhioGas&Oil


September 21-22 in Pittsburgh


he Marcellus Shale Coalition (MSC), the Ohio Oil and Gas Association (OOGA) and the West Virginia Oil and Natural Gas Association (WVONGA), are announcing a joint partnership to host the sixth annual SHALE INSIGHT™ Conference. This industry-leading event will take place in the heart of the Marcellus and Utica shale gas plays on September 21 and 22 at the David L. Lawrence Convention Center in Pittsburgh, Pa. “By partnering with key regional trade groups in three of the top energy producing states in the nation, SHALE INSIGHT™ 2016 is sure to be the premier industry conference this year, and will further enhance the conference’s programming by highlighting the challenges and opportunities in the Appalachian Basin, presenting greater value to attendees,” said MSC president David Spigelmyer. “The SHALE INSIGHT™ conference has been at the forefront of showcasing emerging trends, especially related to technologies and best practices, while bringing together thought leaders, top executives as well as public officials to discuss and offer impactful analysis.”

“A number of energy producers as well as suppliers and vendors across Appalachia are active in more than one state, so this combined effort absolutely adds value for attendees,” said WVONGA executive director Corky DeMarco. “We’re very eager to contribute to the conference and look forward to working alongside our regional partner trade groups to make this year’s event worthwhile for all involved.” Registration is now open, offering special member and early bird rates. A variety of sponsorships offering comprehensive entitlements are available, including general session presentations, luncheons, networking events and other branding and marketing opportunities. Visit for conference information and registration.

The focus of this year’s conference is the next phase of the shale revolution and will emphasize end use and connecting the market place through infrastructure. The conference will feature keynote presentations, an interactive and robust exhibit floor, tailored panel discussions, the Technology Showcase and a Natural Gas Use Marketplace, which all present networking opportunities for attendees. “This is a tremendous opportunity to showcase our region, and we’re excited to be collaborating with the MSC and WVONGA this year for SHALE INSIGHT™,” said OOGA executive vice president Shawn Bennett. “While our industry continues to face significant challenges, the current and future prospects for the Appalachian Basin remain very promising. This conference creates an important forum to exchange ideas, share best practices and heighten the dialogue around common sense energy policies, and we’re glad to be part of its continued success.”

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Conotton Valley Union Local School

District Benefits From Community


he Conotton Valley Union Local School District received a major donation recently from Kinder Morgan, developer of the Utopia East Pipeline project, to support the district’s athletic programs and its “Leader in Me” curriculum for the 2016-17 school year.

empowerment based on the idea that every child can be a leader.

In addition to supporting athletic programs, the donation will help Conotton Valley add certified instructors to implement the Leader in Me program to its full capacity, adding the district to the approximately 80 schools in Allen Fore, vice president of public affairs for Kinder Ohio, and 1,924 across the United States, already enrolled Morgan, presented a check for $55,000 to Superintendent in the program. For more information, visit www. Todd Herman during the Conotton Valley High School football “Kinder Morgan is team’s practice. pleased to support the students and future “We are thrilled that leaders in the CVUL Kinder Morgan has community through the committed this support important leadership to our district,” said and life skills gained Herman. “The impact the through the Leader in Leader in Me program Me curriculum and will have on our district the positives that come and community cannot through organized be quantified. With athletic competition,” Kinder Morgan’s help said Fore. “We are proud we are able to bring Kinder Morgan VP of Public Affairs Allen Fore visits with Conotton to continue the 60-year an added dimension Valley Union Schools Superintendent Todd Herman and the varsity commitment we have to our educational football team on July 11. The company is investing $55,000 to support in partnering with local environment and the school’s athletic programs and Leader in Me curriculum, a program groups and nonprofit produce leaders in designed to develop students’ leadership and self-empowerment skills. organizations across our community for Ohio.” tomorrow.” Conotton Valley Union Local School District is comprised The Leader in Me program, based upon “The 7 Habits of of one campus housing students in preK through 12th Highly Effective People,” teaches 21st century leadership grade. and life skills to students, and creates a culture of student




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Ohio EPA Seeks More

Information for EnerGreen Project


he Ohio Environmental Protection Agency is requesting EnerGreen 360 address several issues for the proposed drilling waste treatment facility at the D.O. Hall Business Park prior to issuing the company a permit approving operations at the site between Byesville and Cambridge.

Demonstrate that buildings located within 1,000 feet of the proposed facility would not be impacted by odors, fugitive dust, noise or chemical pollutants.

If the issues are not addressed, EnerGreen 360 could not dispose of the treated materials at the proposed location and the company would be forced to ship them to a disposal site other than the proposed facility on Brick Church Road (Route 660).

EnerGreen 360 officials have described the cuttings as non-toxic fill material once treated.

Provide proof that the proposed treatment of drill cuttings would render them chemically and radioactively inert.

State the exact location of the proposed facility and provide proof that the facility would not adversely affect adjoining properties.

The fill is proposed to be used in strip mines near Route 660 to make the ground stable for future development.

Provide evidence that private and public water wells are outside of the potential migration radius of pollutants.

The ODNR approval was issued just days prior to the EPA notice.


An Ohio EPA notice dated July 14 reportedly asks EnerGreen 360 to address the following issues:

The EPA notice follows a notice by the Ohio Department of Natural Resources that it approved a permit allowing EnerGreen 360 to treat the slurry of cuttings and brine that’s a byproduct of the horizontal drilling process.

OhioGas&Oil 27

Court Rules Against

Curtailing Drilling


Clint Leibolt • Attorney any communities in Ohio have recently proposed or passed local legislation attempting to impose restrictions on oil and gas production in the community beyond the requirements imposed by the Ohio Department of Natural Resources (“ODNR”). Frequently, proponents of such legislation contend that the home rule provisions in the Ohio constitution allow for such local control. So far, the Courts have disagreed. The most recent example is Mothers Against Drilling in our Neighborhood v. State, in which the Eighth District Court of Appeals struck down a “Community Bill of Rights” passed by the City of Broadview Heights. The Court held that the ODNR has the sole and exclusive authority to regulate oil and gas drilling in Ohio, and that this exclusive authority prevents local government interference with such development. The decision should also give mineral owners and producers confidence that oil and gas development throughout Ohio will continue with comprehensive and equal rules. In 2012, Broadview Heights passed an amendment to their City Charter that made it unlawful for any person to drill any new oil and gas wells within the city’s limits. Broadview Heights argued that this City Charter was a valid exercise of the municipality’s, and the local community’s inherent right of local selfgovernment. However, the Ohio Supreme Court in Morrison v. Beck Energy, Inc., 143 Ohio St.3d 271 (2015), previously struck down a similar local city ordinance that interfered with oil and gas development. In Morrison, the court applied a three part test for determining whether a local law conflicted with state law: 1) whether the local ordinance was an exercise of a police power; 2) whether the state statute at issue was a general law; and 3) whether the local ordinance is in direct conflict with the state statute. When the local law meets this three part test in direct conflict with the state law, then the local law must be preempted by the state’s law.

a clear exercise of the City’s police power, because the law attempted to protect the public health and general welfare of the City. Secondly, the court found, as did the Supreme Court in Morrison, that Ohio law covering oil and gas development is a general law that clearly grants all authority to regulate oil and gas drilling to the ODNR. Lastly, the Eight District ruled that the ban on new oil and gas drilling within Broadview Heights was a direct conflict with the Ohio Department of Natural Resources statutory authority to grant drilling permits pursuant to state law. Therefore, the Eighth District struck down the Broadview Heights law as an invalid exercise of home rule authority, being in direct conflict with the state’s exclusive authority over oil and gas development and regulation. Landowners, mineral owners and producers who support oil and gas development need to pay careful attention to creative arguments and laws that local activists or local governments may use to impede oil and gas development. As the recent cases show, obtaining effective legal counsel is key to protecting the right to oil and gas development in Ohio. Mr. Leibolt 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 providers, and others in the industry for over 75 years.

The Broadview Heights law was found to meet all three tests by the Eighth District, and therefore, the law was struck down. The court found that the ban on oil and gas drilling was 28 OhioGas&Oil

Environmentalists Again Take

Aim at TransCanada Pipeline By Michael Casey • Associated Press


nvironmentalists are again taking aim at the company that proposed the Keystone XL pipeline — this time for another of its projects they fear would send hundreds of supertankers laden with crude oil down the Atlantic coast to refineries in Texas and Louisiana.

existing pipeline in Alberta, Saskatchewan, Manitoba, Eastern Ontario, Québec and New Brunswick. The Natural Resources Defense Council, Sierra Club and other environmental groups are concerned about potential spills of tar sands diluted bitumen along the route in Canada that goes over thousands of rivers, streams and lakes. They also warned a spill along the East Coast could prove devastating to communities that depend on tourism and fisheries and are not prepared to handle an event of this kind.

TransCanada is behind the Energy East Pipeline project, a 4,600-kilometer pipeline, or nearly 3,000 miles, that would carry crude oil from tar sands in Western Canada to the East Coast, where it would then be shipped to refineries along the Texas Gulf Coast. When completed, the project would carry 1.1-million barrels of crude oil The groups held a conference call on July 26 with the every day from refineries in Alberta and Saskatchewan media, in releasing a report , “Tar Sands in the Atlantic in Eastern Canada. Ocean: Transcanada’s Proposed Energy East Pipeline,” that lays out their case against the project. Plans call for converting a natural gas line for part of the route and then building a new pipeline to connect to the “What we have is a proposal to move nearly 300 super Story continued on page 30

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Story continued from page 29

tankers down the eastern seaboard, and we don’t have the techniques and technology to contain and clean a spill of tar sands diluted bitumen should one happen,” said Anthony Swift, the Canada project director for the Natural Resources Defense Council. TransCanada said that the project would adhere to stringent safety standards and that it would be the responsibility of its customers of where they ship the oil, noting that “it does not own or operate ships for the delivery of oil.” “Safety remains our top priority,” TransCanada spokesman Jonathan Abecassis said in an email to The Associated Press. He said the port in New Brunswick “will have a number of preventive safety measures” including the use of trained pilots and advanced navigational and docking technologies. “We are working in collaboration with local authorities and first responders during the development of our emergency plan to ensure that the plan is adapted to local circumstances with resources placed strategically across the route to react quickly in the unlikely event of an emergency,” he said.

Abecassis said the project is being reviewed by the National Energy Board in Canada. Environmentalists are hopeful the United States will express its opposition to the project during this review process and enact a ban on the shipment of tar sands in U.S. waters. 30 OhioGas&Oil

The project comes less than a year after President Barack Obama rejected the Keystone XL project following seven years of political wrangling, arguing it would have undercut U.S. efforts to clinch a global climate change deal. The Paris agreement last December aims to keep the global temperature rise below 2 degrees Celsius (3.6 degrees Fahrenheit) compared with preindustrial times. Environmentalists are hoping the same grassroots success they had with Keystone will bring down the Energy East project. In a sign they may use some of the same tactics, the National Resource Defense Council has already launched a petition against the project that highlights the role tar sands play in worsening global warming. “We’re here today because the threat of climate change is increasingly dire, and we have a critical but narrow window of opportunity to take action,” Sierra Club’s Cathy Collentine said. “That includes action to stop tar sands infrastructure from being built and to take action to ban the transport of tar sands in tankers that would increase the threat to our communities, environment and our climate.”

Ohio Oil and Gas Association

Summer Meeting Aug. 15-16


he Ohio Oil & Gas Association Summer Meeting is Early registration rates (through July 29) are $150 for members scheduled for Aug. 15-16 at the Zanesville Country or $250 for non-members; regular registration is $200 for members and $300 for non-members; Oilfield Patriot Award Club. Ceremony, $100; golf, $100, clay shoot, $75; and tennis, $25. Highlights for the annual event include a clay shoot, golf at the country club, a tennis tournament and the Summer Meeting registration is not required to attend the Oilfield Patriot Award Dinner and Ceremony sponsored by Oilfield Patriot Award Dinner and Ceremony. the Producers Service Corporation. The Zanesville Country Club is located at 1300 Country Summer Meeting registration includes breakfast on both Club Drive in Zanesville. days, lunch and dinner on Tuesday, complimentary ice cream and access to the beer garden on Tuesday, entertainment and Visit for additional information. entry for door prizes. Meeting registration is required to purchase and participate in the sporting events. Summer Meeting registration is not required to attend the Oilfield Patriot Award Dinner and Ceremony on Monday evening.

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‘Generations of Amish Craftwork with Modern, Professional Site Management’

Ohio Gas & Oil Magazine August 2016  

August 2016 edition of the Ohio Gas & Oil Magazine published by Dix Communications.

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