July 2016 â€¢ A Free Monthly Publication
Case Back in Court IN THIS ISSUE: SHELL PLANS CRACKER PLANT
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Table of Contents JULY 2016
A Look Ahead Gas & Oil Events
Rig Count Up Again
Free Classes Teach Safety in Gas/Oil Industry
Nine Energy Completes 124-Stage Well in Utica Shale
Removing Gas and Oil Leases From Your Land
Shale “INSIGHT” Conference September 21-22 in Pittsburgh
Shell Commits to PA Cracker Plant
Belmont County Commissioner Thomas Calls PA Cracker ‘Great News’
Cracker Plant Brings Potential to Northeast Ohio Plastics Companies
Munroe Falls Files Court Case Over Oil & Gas Well Authority
Andrew S. Dix ASDix@dixcom.com
Pipeline Work Progressing in Stark County
Despite Assurances Officials Still Concerned
G.C. Dix II GCDixII@dixcom.com David Dix DEDix@dixcom.com
EXECUTIVE EDITORS Ray Booth RBooth@dixcom.com Roger DiPaolo RDipaolo@dixcom.com Rob Todor RTodor@dixcom.com Lance White LWhite@dixcom.com
RE G IO NAL E DIT O RS Erica Peterson EPeterson@dixcom.com Cathryn Stanley CStanley@dixcom.com Niki Wolfe NWolfe@dixcom.com
Table of Contents JULY 2016 ADVER TISING Kim Brenning Cambridge, Ohio Office KBrenning@dixcom.com 740-439-3531 Kelly Gearhart Wooster & Holmes, Ohio Offices KGearhart@the-daily-record.com 330-287-1653 Jeff Kaplan Alliance & Minerva, Ohio Offices JKaplan@the-review.com 330-821-1200 Mark Kraker Ashland, Ohio Office MKraker@times-gazette.com 419-281-0581 Diane K Ringer Kent, Ohio Office DRinger@recordpub.com 330-298-2002
Instructor Retires from Zane State Oil/Gas Program
Doylestown Council Requests Move of Pipeline
Ohio Oil and Gas Association Summer Meeting Aug. 15-16
Wall Street Journal Calls Ohio Valley’s Natural Gas A ‘Marketing Boon’
Utica Midstream Conference Highlights Industry Growth
Janice Wyatt National Major Accounts Sales Manager JWyatt@dixcom.com 330-541-9450
Why Oil Prices Fluctuate
DIGITAL MEDIA MANAGER Brad Tansey BTansey@dixcom.com
L AYOUT D E SIG NE R Kassandra Walter
July 2016 • A Free Monthly Publication
firstname.lastname@example.org Munroe Falls
“Gas & Oil” is a monthly publication jointly produced by Dix Communications. Copyright 2016. GasandOilMag.com
Case Back in Court ER PLANT IN THIS ISSUE: SHELL PLANS CRACK
On The Cover: 124-Stage Well
Nine Energy has just completed a 124-Stage Well in Guernsey County for Eclipse Resources. This is one of the most complex ever completed by either company. All 124 stages were completed in less than month with no nonproductive time. These types of long lateral wells continue to set the stage for efficiencies in our difficult market. See page 8 for story details. OhioGas&Oil
A Look Ahead
Ohio’s Gas & Oil Events • July 12-13, 2016 • August 25, 2016 OOGEEP STEM Teacher Workshop, Canton, Ohio. Visit PIOGA’s Divot Diggers Golf Outing, Tam O’Shanter Golf Club, Hermitage, Pennsylvania http://oogeep.org/event/oogeep-stem-teacherworkshop-canton-ohio/ for more information. • September 15, 2016 SOOGA Annual Trade Show, Washington County • July 21-22, 2016 PIOGA’s Pig Roast, Equipment Show & Technical Fairgrounds, Marietta, Ohio Conference, Seven Springs Mountain Resort, Champion, • September 17-18, 2016 Pennsylvania OOGEEP September Firefighter Workshop, Apple Creek, Ohio. Visit http://oogeep.org/event/oogeep-september• July 29-31, 2016 Oil History Symposium, Casper, West Virginia 2016-firefighter-workshop/ for more information. • September 25-27, 2016 • August 19, 2016 SOOGA Summer Golf Outing, Woodridge Golf Club, Eastern Section, American Association of Petroleum Mineral Wells, West Virginia Geologists (ES-AAPG), Lexington, Kentucky FRE ConceE in Julyrt
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he number of rigs exploring for oil and natural gas in the U.S. rose by six this week to 414, the second consecutive week the count has increased after a slide that lasted months and pushed the count to record-low levels amid collapsed energy prices.
Arkansas, California, Colorado, Kansas, Louisiana, New Mexico, West Virginia and Wyoming were unchanged. The U.S. rig count peaked at 4,530 in 1981.
A year ago, 859 rigs were active.
Over a million homes... one address
Houston oilfield services company Baker Hughes Inc. said Friday 328 rigs sought oil and 85 explored for natural gas. One was listed as miscellaneous.
Among major oil- and gas-producing states, North Dakota and Texas each gained two rigs and Alaska, Ohio, Oklahoma and Utah each gained one. Pennsylvania declined by one rig.
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Safety in Gas/Oil Industry Story By: Jacob Runnels • Dix Communications
he Ohio Oil and Gas Energy Education Program (OOGEEP) is a nonprofit, nonmemberbased service funded by Ohio oil and gas producers to educate and promote safety on the job. Executive director of OOGEEP Rhonda Reda said this program is funded “100 percent by the oil and gas producers who have oil and gas production in Ohio.” This safety training — which involves firefighter, workforce and industry training as well as teacher workshops and science, technology, engineering and mathematics (STEM) education workshops — is used to teach people
Photos Courtesy Of Mark Bruce • OOGEEP
about the industry as well as promote participant who completed the workshop safety in the workplace. left with resources, such as a certificate of attendance and documentation for “We want to make sure our workers continuing education units (CEU) credit get the most up to date information hours. regarding to working safely out there with the crude oil, natural gas and Reda said some programs can have natural gas liquids that we’re drilling for “an entire day spent on a single topic,” and producing here in Ohio,” safety and which can range from teaching OSHA workforce director Charlie Dixon said. requirements or the risks of working “That’s important to us that they take our outside with the wildlife. As well as training and they continue safety as an being targeted to oil and gas producers and industry contractors, Reda said there everyday value.” are also STEM programs — targeting The OOGEEP recently held a workshop students from kindergarten to twelfth where participants would learn how to grade — which has a “curriculum that respond to oilfield emergencies, such meets both state and national science as site emergency response, emergency standards.” evaluation and response resources. Each
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“We always have trees that, through a storm or something, fall down across an access road or we have trees that we have to cut up,” Miller said. “I went through a complete step by step way of showing him exactly the same way to handle that … It was a perfect way of awareness now that many can take it from the workshop right to the job and put it into practice with my people there.”
The OOGEEP recently held free oil and gas safety classes where participants learned how to respond to oilfield emergencies.
Reda said the OOGEEP started in 1996 with “conversations about what we can do as an industry” to “aggregate funds to create these programs,” which began with a project addressing education in schools. —Rhonda Reda “As an industry, it’s our responsibility to help support our local schools, our local teachers and obviously those students participating,” she said. “We’ve had 2,800 teachers from all 88 counties participate in the program and that’s because it truly meets their specific science standards.” “As an industry, we do feel it’s our responsibility to support education,” she said. “Since then, we have expanded in a lot more areas, thanks to the great leadership in this industry and we’ve expanded to a lot more areas then we were initially charged with.”
Miller said what sets the OOGEEP safety training workshops apart from other workshops is how they get “real time, dayto-day” subjects in “our daily work requirements that are pertinent to us.” “The difference on our part is I think we’ve got the most handson type of training there could possibly be,” he said. “We’re out there every day and our people that are looking at these issues, we’re trying to be so proactive of steering ahead of any problems that we possibly can.” Reda said the approach the OOGEEP takes is a “proactive instead of reactive” measure when addressing how proactive these workshops are at promoting safety. Miller said an example of how they’re proactive is how they train people to work on horizontal drilling wells. “We have to be proactive in knowing and seeing in advance what potential problems could develop and get it taken care of in advance,” Miller said. “It’s a changing world and everybody’s job, not just the oil and gas industry, [involves] doing new things in new ways. We’re constantly running into more… wells and higher lines of production.” According to its website, the OOGEEP scheduled two STEM teacher workshops in June and July, hosted in Marietta and Canton, respectively. There will also be an oil history symposium held in Casper, West Virginia in July.
Marty Miller, chairman of the OOGEEP board and vice president of operations for Alliance Petroleum Corporation, serves as a moderator for these safety classes. At his latest safety class, he taught people about job hazard safety where he was able to “make an application to that specific type of job,” such as working on pipelines. He said one of the most common occurring accidents he’s seen in his work involves driving safety, which he instructs workshop participants about driving safety and learning defensive driving habits. He said a moment where the “appropriate application” of the safety training came in handy when he taught a participant how to properly cut down a tree that could be in the way or has fallen on an access road.
The OOGEEP recently held free oil and gas safety classes where participants learned how to respond to oilfield emergencies. OhioGas&Oil
Nine Energy Completes 124-Stage
Well in Utica Shale
Kyle Bradford, Completions Manager for Eclipse Resources added, “Nine was the only wireline company that we considered. We knew with such a technical well, there would be a number of challenges and we needed a partner that we could rely on to execute at the wellsite and who could quickly address any In one of the most complex wells ever completed by either problems.” company, Nine’s Wireline Division worked directly with Eclipse to design the plug and perf system through Cerebus Well Modeling Ann Fox, Nine’s President and CEO stated, “In a difficult market, software, enabling more effective planning and deployment of the team at Nine continues to prove they can complete the longest cable-conveyed tools. Nine completed all 124 stages in 23.5 days laterals with conventional plug and perf, as well as recently without any non-productive time. designing and stimulating a 50-stage open hole Divert-A-Frac sleeve system in the Williston Basin. We are extremely proud of “In the current low commodity environment, operators like combining our best-in-class technology with excellent service for Eclipse are targeting their core acreage and remain focused the benefit of our customers.” on optimizing development with longer laterals and shorter spacing,” said Nick Pottmeyer, VP of Completions Technology, Nine Energy Service is an oilfield services company that offers North America for Nine. “Longer laterals are proving to be a more completion, wireline and cementing solutions throughout North effective way to develop acreage. Increased well costs to drill America. Nine is headquartered in Houston, Texas. further can be justified by the improved production ranges and return on revenue.” ine Energy Service, Inc. successfully completed 124 perforated stages in an 18,544 ft. lateral in Guernsey County for Eclipse Resources, a premier independent E&P company in the Appalachian Basin.
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Removing Gas and Oil
Leases From Your Land
Daniel L. Mathie • Attorney
s oil and gas rights have become more valuable in Ohio we are often asked several questions. Are there oil and gas leases encumbering my land? Can these leases be cancelled? If so, how do I cancel them? The answer to these questions is not simple and begins by conducting an examination of the records of the County Recorder and of the Ohio Department of Natural Resources, Division of Oil and Gas Resources Management (“ODNR”). The search of the County Recorder’s records will reveal oil and gas leases encumbering your land. The search of the ODNR records will reveal oil
and gas drilling activity on or near exclusion from coverage, the title your land and whether any wells are company may not search for or include currently producing oil and gas. oil and gas leases on your owner’s title insurance policy. You should not rely on an owner’s title insurance policy insuring your A title examination answers the first land to determine whether oil and question and reveal whether oil and gas leases encumber your land. All gas leases encumber your land. Now owner’s title insurance policies issued what, if anything, do you do about in Ohio now include the following the oil and gas leases revealed by the exclusion from coverage: “Coal, oil, title examination? There are basically natural gas, or other mineral interests three options: (1) do nothing; (2) file a and all rights incident thereto now lawsuit to have the oil and gas leases or previously conveyed, transferred, removed; or (3) attempt to remove the leased, excepted or reserved.” What oil and gas leases using what is known this means is that the title insurance as an affidavit of forfeiture. company does not insure that your land is free and clear of oil and gas Doing nothing is an option, especially leases. Because of this broad general if the search of the ODNR records does Story continued on page 10
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not reveal oil and gas drilling activity close to your land and the oil and gas leases are beyond their primary term (basically the time an oil and gas lease remains enforceable without producing oil and/or natural gas from your land). My experience is that most companies leasing land for oil and gas purposes are not concerned about leases beyond their primary term where there are no producing oil and gas wells on your land or on a drilling unit which includes your land. However, most large regional lenders get quite nervous over oil and gas leases, so taking steps to remove the oil and gas leases can still make sense, especially if you plan to develop your land in the future. Filing a lawsuit to have a court order the cancellation of the oil and gas leases encumbering your land because the oil and gas leases have terminated is an option and, depending on the history of your land, may be the only option. Another option is to attempt to remove the oil and gas leases from your land using the affidavit of forfeiture procedure provided for in Ohio Revised Code Section 5301.332 (the “Forfeiture Procedure”). The Forfeiture Procedure is a viable option when there are no producing or drilling wells on your land or on a drilling unit which includes your land and the oil and gas company has failed to perform specific promises contained in the oil and gas lease or the term of the oil and gas lease has expired. To use the Forfeiture Procedure, an attempt must be made to notify the oil and gas company by certified mail, return receipt requested, at its last known address, of your intent to declare the oil and gas lease forfeited. If service is not obtained by certified mail, then notice of intent to declare forfeiture is published at least once in a newspaper of general circulation in the county where your land is located. If the oil and gas company does not dispute your claim for forfeiture within sixty days after service of notice to declare forfeiture, the oil and gas lease can be cancelled. However, if the oil and gas company disputes your claim that the oil and gas lease has been forfeited, you will need to file a lawsuit to cancel the oil and gas lease. As seen from the above, there is more than one option for the removal of oil and gas leases encumbering your land. You should consult with an attorney with knowledge of oil and gas law to determine which option makes the most sense for you given the history of your property and your particular situation. Like most areas of the law, one answer does not fit every situation. Mr. Mathie 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.
Shale “INSIGHT” Conference
September 21-22 in Pittsburgh The 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 shaleinsight.com 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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In addition to several keynote presentations, the conference will feature daily educational sessions exploring various technical and public affairs-related topics.
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Shell Commits to PA Cracker Plant
hell Chemical Appalachia LLC said June 7 that it’s in chemicals and strengthens our competitive advantage,” the building a petrochemical plant that will create up to 6,000 company said in a statement. construction jobs and 600 permanent jobs once it begins Democratic Gov. Tom Wolf, who called the project a “gameproduction early next decade. changing plant,” and other elected officials and economic Construction will begin in the next 18 months, with the goal of development agencies hailed the decision. bringing the northwestern Pennsylvania plant online early in the “The success of this project is part of a much-needed, longer-term 2020s, the company said. plan to translate our abundant resources to make Pennsylvania a The company had committed tens of millions of dollars leader in downstream production,” Wolf said. acquiring the site, a former zinc smelting operation in Potter Township, Beaver County, and other improvements, including The Allegheny Conference on Community Development helping a nearby water authority retool. Still, the company had said Shell’s announcement signals its re-entry into the North not formally committed to the project - estimated at $2 billion to American polyethylene market. $6 billion by various elected officials and experts - until Tuesday, “The plant will be one of the largest of its kind in North America when its officials declined to comment on the cost. - the largest single from-the-ground-up industrial investment in The decision, coupled with recent decisions to build chemical the Pittsburgh region in a generation,” conference CEO Dennis plants in Louisiana and China “demonstrates the growth of Shell Yablonsky said.
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“We welcome Shell’s decision to go forward with its Monaca PA ethane cracker project. This project will have a major economic benefits for Ohio and West Virginia as well. It also increases the likelihood of similar projects being built at other sites in the upper Ohio River valley.” —John Molinaro, President and CEO Appalachian Partnership for Economic Growth The plant will crack ethane gas molecules from Marcellus and Utica shale wells into base petrochemical building blocks that can be refined to create polyethylene, a plastic used in food packaging and auto parts. The plant’s location is ideal because the region is loaded with the gas wells that will feed it and because 70 percent of Shell’s
polyethylene customers are within 700 miles of it, the company said. The plant will produce about 1.6 million metric tons of polyethylene annually. Shell sells about 17 million metric tons of the plastic each year. Former Republican Gov. Tom Corbett in 2012 OK’d legislation to give Shell tax credits worth $1.7 billion over 25 years to build the plant. Shell spent nearly $4 million extending land options on the site before paying $13.5 million for the site in 2014. Shell spent about as much buying nearby properties, then committed to spending $80 million to clean up industrial contamination from the zinc plant and previous users. The state Department of Environmental Protection has approved a plan to cap the former plant site with about 6 feet of soil before roads, buildings and other facilities are built. Environmental activists have criticized the project, including some air quality permits approved by the state last year. Rich Fitzgerald, chief executive in neighboring Allegheny County, said the plan for the plant is equivalent to building 25 sports stadiums. “What a thrilling announcement today for our region,” Fitzgerald said.
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Belmont County Commissioner Thomas Calls PA Cracker ‘Great News’
elmont County Commissioner Mark Thomas and PTT Global Chemical America spokesman Dan Williamson said Royal Dutch Shell’s Tuesday decision to build an ethane cracker near Pittsburgh will not deter efforts to construct a similar facility at Dilles Bottom.
plants like this being built.”
More than four years after Shell officials said they were considering building the ethane cracker on property formerly owned by the Horsehead Corp. near Monaca, Pa. - roughly a 45-minute drive from Weirton - leaders with the firm based in the Netherlands confirmed they In fact, Thomas said the global oil giant’s commitment will process ethane in Pennsylvania. to building in Beaver County, Pa. proves just how viable massive petrochemical plants are in the Marcellus and “Shell’s decision to move forward with this worldUtica shale regions. class facility, which will put thousands to work across our region through utilizing clean-burning domestic “I think it is great news for the Ohio Valley. Shell’s natural gas for decades to come, is welcomed news, decision to build up there confirms that this region is especially given the challenging market conditions,” where a cracker needs to be,” Thomas said. “There are Travis Windle, a spokesman for the Marcellus Shale sufficient mineral resources in the ground to warrant Coalition, said. “This investment also reflects the
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fact that domestic manufacturing’s potential is near limitless thanks to our abundant and stable energy supplies from natural gas.” According to Shell, the company will begin construction in 18 months. The project will generate 6,000 temporary construction jobs, along with 600 permanent full-time jobs once it is operational, company leaders said. “Shell’s decision to move forward with its project in Pennsylvania will have no impact on our project,” Williamson said. “There are rich feedstock resources in this region of the U.S. which are closer to our project compared to projects on the Gulf Coast and other regions of the country.”
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There are now six new ethane crackers under construction in the U.S.: the Sasol ethane cracker complex at Westlake, La.; the Occidental Chemical/ Mexichem ethane cracker at Ingleside, Texas; the Formosa Plastics ethane cracker at Point Comfort, Texas; the Dow Chemical ethane cracker at Freeport, Texas; the Exxon Mobil Chemical ethane cracker at Baytown, Texas; and the Chevron Phillips Chemical ethane cracker at Baytown, Texas.
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When constructed, the cracker complex is crack the ethane into ethylene, which is used as a basis for plastics and resins contained in items such as food packaging, textiles and pharmaceuticals. Presently, most of region’s ethane is either blended into the methane stream for marketing as natural gas, or shipped to other regions for cracking via pipeline.
740-498-5400 OhioGas&Oil 15
Cracker Plant Brings
Potential to Northeast Ohio Plastics Companies
Chelsea Shar • Dix Communications s a professional in the business development world, Paul Boulier, vice president of business attraction at Team Northeast Ohio, said Ohio businesses should treat the growing ethane and oil industry in the state as a marathon rather than a sprint.
for public policy and energy David Kaminski to give his feedback on the announcement by Shell the day before.
Boulier explained he has 42 years of experience in the industry and the Shell cracker plant announcment, he said, will help the industry people and public at large to “connect the dots” in the growth of the energy market in Ohio and the On June 7th, Royal Dutch Shell announced that it will be businesses who want to benefit from it. moving forward with a multi-billion dollar cracker plant in Boulier has experience developing business attractions for Beaver County along the Ohio river. the regions core industries including metal fabrication and In the middle of the Utica Midstream conference in Canton machinery; polymers, chemicals and coatings; energy, oil & on June 8, Boulier was asked by the Chamber’s vice president gas; as well as packaging and transportation, according to the Team NEO website. Team NEO, the company he works for now, is an economic development organization and is an Ohio Means Jobs affiliate. A cracker plant in Ohio means opened opportunity for Ohio, he said. He added that many people don’t realize there are over 17,000 companies in the Northeast Ohio region that work in the plastics industry.
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“We have huge market potential. This takes us from a cost lagger to a cost leader in the country.” —Paul Boulier Boulier was talking about those 17,000 businesses being the ones that will use the ethane to create plastics, but to become the leaders, he said the region needs to treat the development of the petrochemical industry as a marathon, not a sprint. “This shell announcement is one high point. It demonstrates that the demand is strong enough to make investments here,” he said. Ohio, Western Pennsylvania and West Virginia can all
benefit from the manufacturing potential, he said. Boulier later said that people should not think of the growth of the industry as one-sided, but crude oil, natural gas and ethane products can all be used to create other products and this region could end up being the next petrochemical and plastics global hub.
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Rather than creating a system where companies ship all of the oil, gas and ethane out of the region, Boulier was suggesting companies find a way to use the product locally first to create other products. The real prize, he said, is not that oil and gas can be taken from the northeast Ohio region, but the products we can create from them. He also said he was a part of the agreement the governors’ offices of West Virginia, Pennsylvania and Ohio signed last year to cooperate in order to enhance and further grow the economic development of the Appalachian shale region.
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Munroe Falls Files Court Case
Over Oil & Gas Well Authority Jeff Saunders • Dix Communications
ive years after the city began legal battles over control of oil and gas wells within city boundaries, there is a new court case in the matter. According to Summit County Court of Common Pleas records, the city on May 27 filed a complaint for declaratory judgement and request for stay, naming Ravenna-based Beck Energy Corp. and South Carolina-based Sonoco Products Co. as defendants, in connection with an oil and gas well Beck wants to drill on a parcel of land owned by Sonoco. The parcel is just west of Sonoco’s paper mill on the west side of Route 91, a little north of Munroe Falls Avenue, according to
documents filed by the city with the court. zoning ordinances.” The city is asking 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 is arguing that while state law gives the Ohio Department of Natural Resources authority to regulate oil and gas production in the state, the law “does not expressly prohibit the enforcement of local
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Mayor James Armstrong, an attorney, told the Stow Sentry June 2 that the case is about “asking the court to answer a question of law” following a February 2015 Ohio Supreme Court decision in a case filed by the city in 2013. The 4-3 decision ruled that the state has “sole and exclusive authority” over regulation of oil and gas wells and it resulted in the city removing ordinances on its books regulating drilling operations because the decision made them unenforceable. While part of the majority on the decision, Justice Terrence O’Donnell separately wrote that the opinion does not address local land use ordinances.
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In a May 6 letter sent to Munroe Falls Service Director Jim Bowery, Beck attorney Scott Zurakowski wrote that Beck only needed a drilling permit from ODNR, according to the state high court’s decision and state law, and “Beck Energy is not required to complete a zoning application or obtain a zoning certificate prior to drilling the Sonoco well.”
The city in its complaint is citing 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, “the communities of Munroe Falls, Cuyahoga Falls, and Silver Lake would be without an immediate water supply source.”
“Mr. Zurakowski is right,” Beck Energy President Raymond Beck told the Stow Sentry June 2. “Everything pretty much has been said. We know what the law says and the law is on our side.”
According to ODNR’s website, steps are taken to ensure the protection of water supplies.
“We’ll let the attorneys hash it out.”
“During drilling, steel casings are inserted to the well bore,” states the website. “The casing makes sure that the fluid to be pumped through the well, in addition to the oil and gas collected, remains isolated from groundwater and never enters the water supply.
—Beck Energy Corp. It adds that ODNR “inspectors place a high priority on witnessing Armstrong said the city is not making any claims against Sonoco. “Sonoco is a necessary party,” he said. “The actual complaint allows them, if they have any interest or any claim, to be notified of the situation, but it’s mainly a request for the court to determine whether our zoning ordinances in light of the Supreme Court case still apply if ODNR has issued a drilling permit.” A call made to Sonoco was not returned before press time. Eric Heis, a spokesperson for the Ohio Department of Natural Resources, said June 2 that a previous one-year permit for the well expired in April and that ODNR received an application from Beck for a new permit on May 26. “We are currently reviewing a pending permit,” said Heis, adding that he could not say how long the process would take.
this critical phase to make certain of proper installation.”
The Ohio Supreme Court case was not the last high court case on the matter. Last June, Beck asked the court to order the city to remove zoning ordinances, namely that R-4 zoning does not allow oil and gas wells, that the city cited in ordering that Beck stop working on the planned Sonoco well. The court dismissed the case in November. Beck and the city have intermittently been fighting in court over local control of oil and gas wells since 2011, first in Summit County Court of Common Pleas, then the Ninth District Court of Appeals and finally the high court. The city has argued that the issue is one of home rule while Beck contends that it would be too onerous for drillers to have to follow numerous local ordinances. Jeff Saunders can be reached at firstname.lastname@example.org or 330-541-9431.
In his letter to Bowery, Zurakowski wrote, “...once Beck Energy receives renewal of its permit from ODNR, due to weather conditions, Beck LLC Energy intends to immediately 740-683-9495 commence drilling of the Sonoco Commercial Chainlink Specialists well.”
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According to the complaint, oil and gas wells are conditionally permitted in I-1 industrial zoning districts, which total about 32 of the city’s more than 1,700 acres. The Sunoco parcel, however, is zoned R-4 residential, which would require a zoning variance to drill a well.
www.straussfence.com OhioGas&Oil 19
Pipeline Work Progressing
In Stark County
David Hutton ompanies working on pipeline projects in Stark County continue to make progress as they move toward their completion dates. Currently, there are three pipeline projects on the drawing board in Stark County, including Marathon’s Cornerstone pipeline and Energy Transfer’s Rover pipeline. The NEXUS Gas Transmission Pipeline, which also runs through Stark County, currently doesn’t impact the southern portion of the county. According to Jason Stechschulte, senior engineer for Marathon Pipe Line LLC, Marathon’s Cornerstone Pipeline originates in Harrison County and when complete will deliver to Marathon Petroleum Company LP’s Canton refinery and to ORPL’s East Sparta tank farm. The Cornerstone Pipeline covers 42 miles and includes a 16inch diameter pipeline system with a route that provides the opportunity for connections to various Utica Shale condensate stabilization facilities, fractionator facilities, and cryogenic facilities, along with potential future gathering and storage facilities.
The pipeline and infrastructure work is a $250 million project. According to Stechschulte, the estimated in-service date for the Cornerstone Pipeline is anticipated to be late this year. “We’ve been completing site preparation work and expect to be in stark county in July,” he said. “After site preparation, there will be a trenching crew and several other crews that work on the line.” Marathon’s Cornerstone pipeline includes a 42-mile section of 16-inch diameter pipe from Cadiz to the storage facility in East Sparta. A line will then be run from the East Sparta facility to the company’s refinery in Canton. The pipeline will cover about two miles from the county line to East Sparta. Stechschulte noted that when that is completed, crews will continue to complete the eight-mile stretch from East Sparta to the Canton refinery. The line from East Sparta to the refinery will be eight-inch pipe. Stechschulte added that there will be little or no impact on area residents. The line runs east of East Sparta “The line doesn’t really run into the village at all,” he said. The Cornerstone line does pass under State Route 800 and the Nimishillen Creek, but horizontal drilling will minimize environmental impacts as well as impacts on the community. As part of the project crews have been using three horizontal-directional drills in Stark County. The Cornerstone Pipeline also will deliver volumes into the East Sparta tank farm for transportation to additional markets via the Utica build-out projects, which include new construction and utilization of existing pipelines.
Pipeline projects, including Marathon’s Cornerstone pipeline in East Sparta, are moving along throughout Stark County. 20 OhioGas&Oil
“That is why we’ve named this the Cornerstone Pipeline,” Stechschulte added. “This is the cornerstone line to GasandOilMag.com
getting these products to other markets in other regions.” Other projects
of an awaited approval from the Federal Energy Regulatory Commission on the $2 billion project.
Officials from Energy Transfer said the company plans to start work on its Rover pipeline project during the fourth quarter of this year, with major work starting early next year.
In 2015, NEXUS Gas Transmission, a unit of Spectra Energy Corp., proposed the 36-inch natural gas pipeline to the federal commission. NEXUS is seeking to begin building in the first quarter of 2017.
A company official explained that the local portion of the Rover line, a 42-inch transfer pipe, will run through southern Stark County as well as portions of Tuscarawas and Carroll counties.
According to a company spokesman, awarded the contracts early is standard in the industry in order to keep NEXUS on target for an in-service date in November 2017.
The approximate $4.2 billion pipeline will gather gas from processing plants in West Virginia, Eastern Ohio and Western Pennsylvania for delivery to the Midwest Hub near Defiance, Ohio, where roughly 68 percent of the gas will be delivered via interconnects with existing pipelines in Ohio and West Virginia for distribution to markets across the U.S.
The company awarded the four portions of the work to three contractors. Mississippi-based M.G. Dyess Inc. and Georgia-based Latex Construction Co. each was awarded one Ohio portion. Wisconsin-based Michels Corp. was awarded one portion in Ohio and one in Michigan, where the pipeline is proposed to pass through on its way from southern Ohio to a hub in Canada.
NEXUS AWARDS CONTRACTS
Company officials did not provide a dollar figure for the agreements or detail which contractor received the contract for the section that includes the proposed route through Stark County.
NEXUS has awarded four contracts for the construction of a proposed pipeline that includes a portion of the route through Stark County.
The contracts were awarded for pipeline construction only.
The awarding of the construction contracts in February for the proposed NEXUS Gas Transmission Pipeline comes in advance
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Despite Assurances Officials Still Concerned
Dan Davis • Dix Communication he Guernsey County commissioners have reiterated opposition to a planned drill cuttings treatment facility to be located in the Desmond Hall Industrial Park.
“The concerns have been varied in terms of potential contamination to ground water,” he said, “in terms of wells, in terms of the secondary or backup water source for the Village of Byesville, a concern expressed by a representative here of Colgate-Palmolive for both potential water or airborne contamination issues. “Our position hasn’t changed,” said Commissioner Dave They have been pretty much as varied as the people in Wilson, speaking on behalf of the board. “The primary attendance.” reason we had this meeting was to give the public an opportunity to hear from these people, for our state The commissioners adopted a resolution dated Oct. elected representatives ... with Senator (Troy) Balderson 14, 2015, expressing their unanimous opposition to the and Representative (Brian) Hill being here ... to be able to facility. hear the concerns here, since they would be our conduit to the OEPA and the ODNR, and those who are in control “The board feels that we (Guernsey County) are already of the permitting process.” absorbing more than our share of frack-related waste with multiple injection wells being located in our Wilson said concerns heard from residents and municipal county (which our board previously went on record and business representatives were varied. in opposition of),” reads the resolution, in part. “This untreated, radioactive material would be trucked into our community from the north, south and east, which means it would have to cross Wills Creek, which is the drinking water source for the City of Cambridge, as well as the entire Guernsey County Water Department system.” Commissioners met Monday to hear comments and concerns regarding the facility planned by EnerGreen 360, represented at the meeting by Joe Lorenz.
“We want to bring jobs to the community.”
—Joe Lorenz The planned facility by EnerGreen 360 would transport in water-tight clamshell containers slurry — rock, shale and synthetic biodegradable oil used as a lubricant during the horizontal drilling component of hydraulic fracking operations — from gas and oil drilling sites to the Community Industrial Association-owned property south of Cambridge. There, it would be treated and converted into material used to backfill to a depth of 80 feet an area in the business center. Though used in Texas, Oklahoma and Wyoming, the
facility would be the first of its kind in Ohio, according to Lorenz.
Liability for any contamination would be shouldered through insurance and the State of Ohio.
The end result would be 36 acres of land ready for the construction of commercial buildings, Lorenz said, adding there are businesses committed to the site.
Guernsey County was chosen for the facility due to the number of local oil and gas wells providing a readily accessible source of cuttings for treatment, as well as the presence of sufficient infrastructure, Lorenz said.
Lorenz said the fill material is safe, with no chance of the leeching of any chemicals into water sources. “We’re going to provide a safer alternative to landfill,” he said. The material would be radioactive, Lorenz said. But the measurable radioactivity, measured in millrems (mRem), would slot in at less than .5 mRem, that to which a person subjected to a dental X-ray is exposed. (By comparison, the average person on an average day is exposed to 1.0 mRem of background radiation, a chest X-ray exposes a patient to 10 mRem, a mammogram 300 mRem and 3,600 mRem if smoking 30 cigarettes daily for a year.)
“It makes a lot of sense for us to be here,” he said. “I think it’s a great win-win.” Despite the risk of contamination of water sources, albeit low as indicated by Lorenz, Blanchard said his support of the facility, which could result in the creation of 200 new jobs, was not offered lightly. “There’s nothing to indicate this would happen here,” he said. “We didn’t do this without a lot of thought.” Lorenz said five permits were required for the company to proceed, one from the Ohio Department of Transportation and two each from the Ohio Environmental Protection Agency and Ohio Department of Natural Resources.
Lubricating oils extracted during the treatment process would be returned to the drilling site of origin for reuse.
“All the permits we need are in the process of securing, or have been secured,” he said.
Several attendees expressed concerns, including potential snags associated with the presence of former strip mines in the area. Lorenz said the work would proceed outside the footprint of those mines.
Lorenz said an accurate estimate of the time required to complete the site could not be provided at this time.
Safeguards would also exist to prevent off-site contamination, including those addressing as many as 30 trucks delivering cuttings to the facility daily. The facility could take in as much as 1,000 tons of cuttings per day. According to data supplied EnerGreen 360, Lorenz said, no portion of the filled property would intrude into the airspace of the nearby Cambridge Municipal Airport. However, Operations Manager Dave Mourer of the airport said they received word that a portion of one of the planned commercial buildings to be built at the site would intrude into the airspace. If true, Lorenz said, a redesign or repositioning of the building might be necessary.
“I don’t know if there is a vehicle to which the county could take any steps to prevent it,” he said. “The process is pretty well spelled out. To our understanding, this is essentially the extent to which we can voice our concern and to be a voice to the authorities.”
Studies have indicated the cuttings treatment process would not pose a substantial risk to ground or surface water sources, Lorenz said, and monitoring will be done and secondary and tertiary containment strategies adopted.
Wilson said additional opposition by the commissioners to the planned facility might not be possible.
Instructor Retires from Zane State Oil/Gas Program Judie Perkowski • Dix Communications
obert A. Stonerock, instructor for the Oil and Gas Engineering Technology program at The WillettPratt Training Center on the Zane State College campus in Cambridge, said this year’s graduating class is the “cream of the crop.” Stonerock retired from his position at the college after the May 7 graduation exercises. He said after four years as an instructor at the college he is “going to shake hands with his students and then it’s on to greener pastures ... To a new chapter in my life.” He is going home to Nashport. Stonerock stands in front of the geologic rock column, built as a capstone project last year under the guidance of OGET instructors, Robert Stonerock and Paul Pasley. The structure was “Bob’s baby,” according to students. “We have rock from formations that are more than 360 million years old,” said Stonerock. “The foundation of this column is 540 million-year-old granite. The next several layers — bottom layer to top layer — are Trenton limestone, Utica shale, Clinton sandstone, Marcellus shale and Berea sandstone. The date and project name will be cemented on the side of the structure that faces the Paul Brown EPIC Center across the road. “The geological rock column is dedicated to the oil and gas geological formations in Ohio, the gateway to the shale fields in eastern Ohio, and to gas and oil,” said Stonerock.
Stonerock has had an interesting career, 2016, and a class advisor for the student before “riding off into the sunset.” chapter of the Society of Petroleum Engineers. He joined the U.S. Army in June of 1975, committing to the 82nd Airborne In his spare time he is national historian Division at Ft. Bragg, N. Car. where he for the 82nd Airborne Division was a paratrooper. He was discharged Association, director of the 504 PIR as a Sargent E-5. Association, and treasurer of the Muskingum County Sheep Association. In 1984, he transferred as UH-1H merchanic to on-the-job training as He enjoys kayaking, gardening and a 67N on the UH-1H helicopter. In raising Texel sheep. 1985, he enlisted in the Ohio Military Academy, OSC Leadership program. From 1985-1988, he was stationed with the Ohio Air Reserve National Guard, Company B, where he trained rifle platoon on infantry tactics. May 1988 he was a mortar platoon leader for fire support operations. From 1990-1992, he was an executive officer monitoring logistical activities for the company. Also substituting for the company commander. From 1992-1994, he was a company commander of a 250 soldier unit. Military awards include basic Jump Wings, Expert Infantry badge, Good Conduct Medal. Robert earned an Associate of Applied Science in Natural Resources Conservation in 1981 from Muskingum Area Technical College; a Bachelor of Arts in History from Ohio University, and Norwich University in Vermont. He is Master of Arts candidate at Ohio University. He is a certified PEC Safeland instructor. He was an instructor at Zane State College in the Oil and Gas Engineering Technology Program, from 2012 to
Robert “Bob” Stonerock, instructor for the Oil and Gas Engineering Technology program at Zane State College retired from his position following his student’s graduation May 7. Stonerock is standing in front of last year’s graduates’ capstone project, the geologic rock column. This year’s capstone was the amazing “pig” launcher. Read associated story for explanation of the P.I.G. GasandOilMag.com
Requests Move of Pipeline
Dan Starcher • Dix Communications ouncil members passed a resolution Tuesday to Council has formally expressed opposition to the current request realignment of a proposed 36-inch gas alignment of the transmission line and the next step is to line. A resolution, drawn up by consultant George contact government agencies and officials. Smerigan, outlines the concerns council members have regarding the current route in the project proposed by Nexus Gas Transmission. “We have met with them multiple times,” said Councilwoman Kay Kerr. “We gave them proposals for rerouting the line and they (Nexus) were not in agreement with our proposals.” Resolution 2016-10 states the current, proposed path is in conflict with existing village owned water and sewer lines. The line would also be routed through the largest commercial property in the village and substantially reduce its value.
“We need to be on the record with our opposition to the proposed route,” said Mayor Terry Linderman. “We have to let them know we aren’t happy about this.”
— Terry Linderman
A staging area is proposed at the location of an adult and Council also passed a motion to contract with Buckeye child daycare facility that would stifle its use. Sealcoating to overlay the section of Black Drive from Church Street to Frederick Street at a cost of $17,675. The path also runs through a residential subdivision where a substantial investment has been made and would render Mayor Lindeman said the village would start spraying for fourteen lots unusable for developing. A proposed 10-acre, mosquitos every Wednesday starting on June 8, weather large vehicle, staging area at this location would damage permitting. In case of inclement weather, spraying will be additional development to the area. conducted on Thursdays. The cumulative effect of the proposed line would create a Reporter Dan Starcher can be reached at 330-287-1626. He is @ severe economic loss to the village. danstarcher on Twitter. Village representatives have met with Nexus representatives on, at least, three occasions and requested alternate routes to minimize the economic and environmental impact; Nexus has chosen to ignore those requests, according to the document.
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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 oogassummermeeting.com 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.
Wall Street Journal Calls Ohio Valley’s Natural Gas A ‘Marketing Boon’
redit the Marcellus shale formation and the latest drilling technology for a new distinction for a portion of southeastern Ohio and northwestern West Virginia. Business leaders in the region claim and a prominent business publication concurs that the region is producing the least expensive natural gas — not just in Ohio nor even in the nation, but in the entire industrialized world. “We are extraordinarily pleased that the Wall Street Journal has investigated and validated our region’s claim to the cheapest natural gas in the industrialized world,” John Molinaro said. Molinaro is president and chief executive officer for the Appalachian Partnership for Economic Growth.
“This part of Appalachia has become the country’s driver of gas production as improved drilling techniques have cracked gasrich shale formations,” according to an article by Tim Puko in the June 8 issue of The Wall Street Journal. Economic development officials, in their efforts to market the region, have been quick to tap economic potential of the gas resource as a lure to manufacturers around the world. The price for natural gas mined from the region has flirted with levels 30 percent cheaper than the national benchmark. The epicenter for the natural gas production boom is the Marietta, Ohio and Parkersburg, W.Va. area.
“This provides a strong incentive for energy-intensive industries to consider locating in our region,” he said. It may well have played a role in the decision of Apex Power Group LLC to build a power plant in Guernsey County, Ohio. In early April, Apex officials announced they would establish the Guernsey Power Station, a facility capable of producing 1,100 megawatts of electricity.
So, what does that have to do with cheap natural gas? “At its core, the Guernsey Power Station will consist of two stateof-the-art, natural gas-fired combustion turbine generators,” said a spokesperson for the company. Construction of the plant is projected to produce about 500 jobs. At 25 employees to operate the plant, the permanent employee prospects are more modest, but important to the county nonetheless. About 150 miles to the northeast, however, the gas bonanza will encourage construction of a petrochemical plant near Pittsburgh. A Royal Dutch Shell PLC spokesperson said construction of the plant would involve 6,000 workers. Once completed, the plant would entail 600 permanent jobs. GasandOilMag.com
Utica Midstream Conference
Highlights Industry Growth
“T By Sara Klein
here’s a lot of money to be made here,” commented However, Nieto said, the return of Iranian and Iraqi crude to the global Frank Nieto, senior editor of Hart Energy’s Midstream market “has been muted.” Business magazine, during the afternoon session of the May 8 Utica Midstream Conference in Canton. “The good news is that the rest of the market has started to react and has begun to get some semblance of a balance,” he explained, noting Nieto, who presented conference participants with an outlook for the that the pricing ceiling for crude at the time of the conference had midstreaming industry, said although the price of WTI crude tumbled reached $50 to $60 per barrel. in late 2008 and again early this year, projects to build the infrastructure that processes and moves natural gas and oil products are likely to “Midstream continues to move,” Nieto stated. “It hasn’t been unaffected keep growing as demand for the fuels grows. by the downturn in prices, of course. There have been slowdowns...but we still see there is a lot of need for midstreaming infrastructure.” West Texas Intermediate crude, which is used to benchmark oil prices, increased from $71 per barrel in June 2007 to $151 per barrel in June He explained that “a cautious approach” to the industry suggests that 2008, but the commodity fell to $50 per barrel by the end of that same midstreaming will become lucrative if industry leaders remain on top year. of challenges and respond to the world’s growing need for oil and NG products. Although crude prices climbed over $100 per barrel in the summer of 2014, they fell again after Saudi Arabia increased its production of That approach is based on data indicating that projects to build pipelines the commodity to mitigate the impact of Iranian and Iraqi crude and and midstream facilities are unlikely to be canceled or delayed, once acquire more market share. they have been announced, as long as commodities prices do not become overly challenged. In January of this year, WTI crude brought less than $30 per barrel. “The larger a project, the less likely it is to be delayed,” said Nieto, adding that projects to gather pipelines and develop regional fractionation facilities will probably be the most attractive. Additionally, Nieto said, if Senator Bernie Sanders is not named the Democratic presidential candidate, the outcome of this November’s presidential election is unlikely to result in major energy reform as neither of the presumptive Democratic or Republican nominees have made energy a key part of their platforms. However, he cautioned that opposition from groups seeking to stop pipelines and related infrastructure, as well as a March court decision for Sabine Energy that allows bankrupt companies to back out of pipeline contracts, are headwinds that the midstream industry must consider as it endeavors to grow. Additionally, Nieto said key staff in the Environmental Protection Agency “are likely to continue to swing left” regardless of which nominee wins the presidency, which could result in more regulatory requirements for the midstream industry. Review Photo/Kevin Graff Mark James, AEP American Electric Power Vice President for Economic and Business Development, talks about AEP and the gas and oil industry on Wednesday at the Utica Midstream event at the Pro Football Hall of Fame. 28 OhioGas&Oil
“You need to stay on the right side of the public and regulatory environment,” he commented.
Nieto indicated that midstream industry leaders who can pilot their companies through these headwinds will be poised to take advantage of needs for NG and related products, particularly in New York state, New England and the southeastern United States. Additionally, the market for exported shale products continues to grow in Western Europe, Mexico, and Asia, especially China, India, South Korea and Japan, Nieto stated. Noting changes over the past decade, Nieto said, “the U.S. is quickly becoming a major force on the global market,” as it continues its transformation from an oil-importing country to an oil-exporting country. Liquified petroleum gas exports are key to the propane and butane markets, while liquefied natural gas exports can alleviate the downward pressure that the sale of commodity stocks puts on prices, said Nieto. He added that condensate and ethanol export terminals, although niche markets today, are also growing. Market data specifically point to the increasing importance of the Marcellus and Utica shales, according to Nieto, who said that although the Gulf Coast remains the chief producer of the U.S. petrochemical industry, the Utica in particular has the supply needed to support a petrochemical hub in the northeastern region of the country.
“The Utica is the one play that has grown this year,” stated Nieto, adding, “One of the things my grandpa used to say is, ‘You don’t have to make the most money. You just have to make enough.’”
Review Photo/Kevin Graff Aaron Fleming, of EnLink Midstream, talks at the Utica Midstream Gas and Oil event on Wednesday at the Pro Football Hall of Fame. Examples include Shell Chemical Appalachia’s purchase of land in Beaver County, Pa., for its proposed, $4-billion ethane “cracker” facility and a decision by PTT Global Chemical and Marubeni Corporation to build a $5.7 billion cracker in Belmont, Ohio, that Nieto said “is still likely to proceed” even though the project’s start date has been pushed back. “Already it does seem as though there is good news, and we expect there to be more announcements,” Nieto remarked. “I would definitely bank on more announcements, not just crackers but other infrastructure.” He said Appalachia has seen especially notable developments for the midstream industry: a $3.3 billion backlog of growth projects by EQT Midstream Partners, including the $1.8 billion Mountain Valley Pipeline; Columbia Pipeline’s $2.7 billion Mountaineer Xpress and Gulf Xpress pipelines, which will move 2.7 billion cubic feet (Bcf) per day of Marcellus and Utica production on the Columbia Gulf and Gas transmission lines to the Gulf Coast; and Energy Transfer Partners’ Rover Pipeline, which would move Marcellus and Utica products to the Midwest, Gulf Coast, northeast United States and Canada.
—Frank Nieto Rover Pipeline was highlighted during the afternoon session of the Indications are that the Marcellus and Utica shales will result in two hubs in the northeastern U.S. that Nieto said could become “major players” in the energy industry. One possible hub is Philadelphia, home to Sonoco Logistic’s Marcus Hook and Mariner East facilities, which Nieto said open access to domestic and foreign markets. The second location for a possible hub is Pittsburgh’s Dominion South Point, which he said “might become one of the industry’s most important benchmarks.” In addition, a number of other midstream projects continue to move forward in the Marcellus and Utica regions.
Utica Midstream Conference when Joey Colton, senior director for commercial optimization for ETP’s Panhandle Eastern Pipe Line system, presented details about the project. Texas-based Energy Transfer Partners has a total of four business divisions involved in oil and gas transportation and delivery infrastructure, including Sonoco L.P., which Colton said provides about five percent of U.S. retail gas sales and is considered a leading non-refining gas distributor in the U.S. Midstreaming and the interstate and intrastate movement of NG and oil products account for about 50 percent of the company’s operations, according to Colton. Story continued on page 30
Story continued from page 29
“The thing we’ve been focusing on is growth, growth, growth. The company has grown at a massive pace,” Colton remarked, noting that about 11 ETP projects are nearing completion or have begun operating. The company has increased its pipeline system from 200 miles originating in Texas to more than 71,000 miles of pipe, which Colton said move NG and petroleum products from Texas west to California, north to Michigan and south to Florida with nexus points in several states including Ohio.
Colton explained that the Rover Pipeline project has come out of a need to move abundant resources from the Marcellus and Utica shale regions to domestic and global markets.
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Estimates are that oil and gas production in these regions will reach more than 40 Bcf per day over the next decade. Colton said although some pipes in the regions have been modified to transport these products out, they are not enough. “The Marcellus and Utica shales have been identified as a very hot play. Ultimately that’s where we see Rover coming into play,” he stated. The proposed Rover system will use 713 miles of pipe with an initial forward haul capacity of 3.25 Bcf per day to move shale products through six delivery points, 12 receipt points and 10 compressor stations. Ohio will host much of the Rover Pipeline’s infrastructure. Seven compressors, as well as all of the system’s supply lateral pipes, will be located in Ohio.
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The project will represent a $4.2 billion investment for ETP with $3 billion slated to go to Ohio.
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Additionally, after construction is completed, the pipeline will become an asset of ETP’s Midwest Division, which includes Ohio, and a new area office responsible for the pipeline will be opened in Canton, Ohio, by early 2017. The project includes two major sections: a section from ETP’s Seneca, Ohio, facility northwest to its Defiance, Ohio, facility will be in service by June 2017, while ETP’s Midwest Hub, going from its Defiance facility to Michigan and its Dawn Hub, near Canada, is expected to be completed by November of that same year.
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Colton said ETP anticipates that work to build compressor stations and other infrastructure will begin in the last three months of this year, and major pipeline work will begin in the first quarter of 2017 after the company receives a Final Environmental Impact Statement, which is scheduled for issuance on July 29 of this year.
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