Category Archives: Uncategorized

Ohio will soon authorize fracking wastewater pools

Football field-sized ponds to recycle waste

By Jamison Cocklin

jcocklin@vindy.com

From the Youngstown Vindicator

http://www.vindy.com/news/2013/oct/06/oil-and-gas-drilling-ohio-set-to-ok-pits/

Ohio regulators will soon approve and permit large, exposed centralized impoundments that hold fracking flowback water.

These are used widely by oil and gas companies in other states to recycle the waste and serve multiple wells near one another .

The impoundments, or pits, which sometimes exceed the size of a football field and can hold millions of gallons of water, are now banned in Ohio.

But they’ve proved a useful asset to companies operating in other states such as Pennsylvania and West Virginia. The impoundments serve as water-transfer stations for multiple wells nearby, greatly reducing the amount of truck traffic and the water necessary to drill and frack those wells.

Existing Ohio regulations permit use of lined impoundments that hold freshwater for drilling. Flowback, or fracking wastewater, however, must be stored above ground in covered steel tanks before disposal or reuse.

But effective Jan. 1, the centralized impoundment pools will be authorized by the Ohio Department of Natural Resources as part of a regulatory change state legislators made in the biennial budget bill signed in June.

Changes to the law likely came after input from the industry. Operators consider centralized impoundments a key to further developing the Utica Shale play.

“These facilities are critical in the recycling and reuse process and help to reduce truck traffic and the need for impoundments for individual well sites,” said Matt Pitzarella, a spokesman for Texas-based Range Resources, which does not hold acreage in Ohio, but is the largest operator of impoundments in Pennsylvania, where it has extensive operations. “Impoundments have reduced tens of thousands of truck loads in Pennsylvania and have allowed companies to utilize larger sources of water like the Ohio River.”

A shale well typically requires between 1 million and 8 million gallons of water to complete. Water from the wells generally comes from nearby, either from a public water supply, pond or lake. Trucks and pipelines are required to carry the resource to the drilling site.

Last month, at an oil and gas conference in Youngstown, Harry Schurr, general manager of Utica operations for Pennsylvania-based Consol Energy, said central impoundments in Ohio would significantly aid further development here and help meet the demand for water in southern parts of the state where it’s not as abundant.

Schurr said it also would help Consol, which has drilled about 215 wells in Pennsylvania and Ohio, to recycle the vast amount of water it requires for its operations. He added that the company hoped ODNR might soon approve the impoundments and believed it would do so based on interactions the company has had with regulators.

On Wednesday, Consol spokeswoman Lynn Seay wrote in an email that “We understand the ODNR is currently reviewing a regulatory approach to allowing the use of centralized impoundments, and we look forward to that possibility.”

Mark Bruce, an ODNR spokesman, said the agency is developing rules “that will clearly define standards regarding the construction, length of use, design and other factors” of impoundments.

The move is likely to rankle oil and gas industry opponents, who three years into the play claim the state has become a dumping ground for wastewater. They’ve taken aim at Ohio’s injection wells, where the most recent ODNR data shows that 14.2 million barrels of fluid were disposed of underground in 2012.

The centralized impoundments, which are roughly 200 feet wide and 300 feet long, or larger, are likely to draw the attention of critics.

But engineers inside and outside the industry claim that when the pits are designed and built correctly, they are entirely safe.

Fracking waste includes salt, dissolved solids and light radioactive and toxic metals from its contact with underground rocks. Chemicals added to the mixture contain volatile organic compounds, such as benzene and toulene.

Pitzarella said misconceptions about the impoundments remain, despite safeguards and a closed-loop system.

After use at a well site, the water is conditioned and some salt and dissolved solids remain. It is then transported and stored at an impoundment until its next use when it is mixed with freshwater for drilling.

 

Read more: http://www.vindy.com/news/2013/oct/06/oil-and-gas-drilling-ohio-set-to-ok-pits/

Ohio landowners’ group get warning on changing leases

From the Marcellus Drilling News:

At a meeting of the uber-large Associated Landowners of the Valley (ALOV) landowner group last night in Youngstown, Ohio, lawyer Alan Wenger warned the 500 landowners in the audience that landmen are knocking on doors once again, this time asking landowners already signed to modify their leases.

Wenger told landowners what energy companies like Chesapeake are asking for, and what landowners need to consider before signing:

 

Be careful when landmen knock on your door, promising more royalties from even more gas wells if you amend your mineral lease, attorney Alan Wenger told some 500 members of the Associated Landowners of the Valley gathered Monday evening at the Covelli Centre.

 

“The largest protagonist for amendments is Chesapeake,” he said. “They have such huge holdings in our area, it’s very difficult for them to drill enough wells to hold all the parcels during the primary terms of their leases.”

 

read full article: http://www.ohio.com/blogs/drilling/ohio-utica-shale-1.291290/ohio-landowners-group-get-warning-on-changing-leases-1.349857 

news release from Wayne National Forest announcing findings of a recent study

NEWS RELEASE

● Wayne National Forest ● 13700 US HWY 33

Nelsonville, Ohio 45764-9880 ● Voice (740) 753-0101●Twitter: @waynenationalfs

For Immediate Release

Contact: Gary C. Chancey, Public Affairs Staff Officer, (740) 753-0862

 

Wayne National Forest Announces Findings from Recent Study

 

NELSONVILLE, OH – Wayne National Forest Supervisor Anne Carey today (8/27/12) signed a Finding for the Supplemental Information Report that concludes that at this time, there is no need to correct or amend the 2006 Land and Resource Management Plan (Forest Plan) in order to address the surface impacts of horizontal drilling for oil or natural gas development on the Forest, nor is there a need to supplement the Environmental Impact Statement (EIS) that was prepared for the Forest Plan.

 

“I have reviewed the new information contained in the Supplemental Information Report, and determined that further environmental analysis is not needed,” said Carey.  “I believe that the existing Forest Plan direction is adequate to address the surface effects anticipated from the potential development of horizontal wells as projected by the Bureau of Land Management (BLM).”

The BLM has found that it is now economically feasible for deep well horizontal drilling using high volume hydraulic fracturing, a change from the previous projection, which said it wasn’t economically feasible. The report also explains that through 2016 that there is the potential for 13 high volume horizontal drilling well sites to be developed on the Wayne National Forest. 

Oil and natural gas development is an important component of the nation’s energy portfolio, and has the potential to advance our nation’s energy security, improve air quality, and create jobs. The responsibility of the U.S. Forest Service is to safely and responsively develop these resources in a way that ensures the well-being of surrounding communities and protects our landscapes and watersheds.

The Supplemental Information Report is available on the Forest web site at: http://www.fs.usda.gov/detail/wayne/landmanagement/planning?cid=stelprdb5387922

Learn more about Wayne National Forest oil and gas management on the Forest web site at: http://fs.usda.gov/detail/wayne/home/?cid=stelprdb5376502

Follow the Wayne National Forest on Twitter: @waynenationalfs

The mission of the USDA Forest Service is to sustain the health, diversity, and productivity of the nation’s forests and grasslands to meet the needs of present and future generations. Recreational activities on our lands contribute $14.5 billion annually to the U.S. economy. The agency manages 193 million acres of public land, provides assistance to state and private landowners, and maintains the largest forestry research organization in the world.

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New! Hydraulic Fracturing Brochure for Well Water Owners

A water-testing brochure for household water well owners living near oil and gas development and completion activities, including hydraulic fracturing, has been produced by the National Ground Water Association and the Ground Water Protection Council.

Red more or download the brochure: http://www.ngwa.org/Media-Center/news/Pages/Hydraulic-fracturing-brochure-for-water-well-owners.aspx 

CENTRAL APPALACHIA REGIONAL NETWORK RELEASES SEVERANCE TAX POLICY SCAN – SUGGESTS PERMANENT FUND

July 16, 2012 –Huntington, WV – In an effort to provide a foundation to identify severance tax best practices, and create a long-term financial legacy for Central Appalachian communities, the Central Appalachia Regional Network (CARN) has completed the Central Appalachia Severance Tax Policy Scan. The scan outlines the severance tax policies in the six states CARN serves – Kentucky, Maryland, Ohio, Tennessee, Virginia and           WestVirginia – and is the first of its kind to assess and compare these policies in each state.

The scan compiles data about each state’s policy, including which agencies oversee disbursement of revenues, which minerals are taxed, the rate at which they are taxed and the total annual revenue each state receives from the taxes.

A permanent trust fund should be created in each of CARN’s six states with severance tax dollars. Alaska, Montana, Wyoming, New Mexico, North Dakota and Utah have established permanent funds, some as long ago as the early 1970s. As the West Virginia Center for Budget and Policy pointed out, those states are now reaping the benefits of millions, and sometimes billions, for state programs. A permanent fund in Central Appalachia would allow a percentage of collected severance taxes to be saved. The interest on these savings could be used to fund public projects long after the mineral resources of those states have been depleted.

CARN advocates that a minimum of 1 percent of severance taxes collected be placed in these permanent funds for use by and for the communities from which the resources were extracted. If Kentucky, Maryland, Ohio, Tennessee, Virginia and West Virginia had implemented a permanent fund in 1990, it would have generated about $1.4 billion in earnings to date.

The permanent fund could contribute to sustaining Central Appalachian communities for future generations by establishing a lasting economic legacy.

To download the Central Appalachia Severance Tax Policy Scan and CARN’s policy recommendations, visit http://www.CARNnet.org.

Direct Links:

Click to access CARN_SeveranceTaxReport.pdf


Click to access CARN_SeveranceTaxPolicyRecommendations.pdf

1 dead in Bolivar well explosion – Tuscarawas County

BOLIVAR One person has died after a explosion at an oil- and gas-well site at about 9:34 a.m. today.

Capt. Marty Huth of the Bolivar Fire Department, incident commander at the scene, said it is too early to tell what caused the explosion.

The explosion occurred about two miles south of Bolivar in the vicinity of Bolivar Group Home, 10071 State Route 212. That is also near Kingwood Drive NE and Huffman Square NE in Wilkshire Hills subdivision.

Firefighters responding to the blaze told The Times-Reporter that there was one fatality from the explosion, which caused flames to shoot at least 50 feet into the air.

Dr. James Hubert, Tuscarawas County Coroner, said the death appears accidental but his investigation is continuing. Cathy Clarke, coroner’s investigator, also was on scene.

Hubert said the identity of the victim won’t be released until after family members are notified.

 

Read more: http://www.cantonrep.com/newsnow/x1062475088/1-dead-in-Bolivar-well-explosion

Fracking regulations await Ohio governor’s signature

COLUMBUS, Ohio – Rules regulating oil and gas well construction, water handling, and chemical disclosure in the fracking process are on their way to the governor’s desk for John Kasich’s signature.

The Ohio House passed the energy bill early Thursday evening in a vote of 73 to 19.

Representative Sean O’Brien from Brookfield says, “I support this bill because it’s a start in the right way.”

O’Brien’s Democratic colleagues, Ron Gerberry and Tom Letson, voted in favor of the legislation. Bob Hagan voted against. His attempt to add an amendment that would guarantee Ohioans would get 60% of the jobs was tabled.

“Drive down to Carroll County. Drive down to any of the roadways where they’re into that drilling. Drive into the hotels and motels and look at the license plates. I did. Oklahoma, Texas, not to many Ohioans,” Hagan said.

In a concurrence vote, the state Senate approved the House’s amendments to the bill in a vote of 21 to 8.

Senators Capri Cafaro and Joe Schiavoni voted against the legislation. Schiavoni also had an amendment that was tabled.

“There was nothing in the bill about the public’s ability to give feedback in the permit process. So I tried to amend the bill to have a 30 day comment period just so that the public knows where these wells are going to go and when they’re going to go in,” Schiavoni said.

Schiavoni also said the bill was stripped of its original language pertaining to injection wells. That a portion of their revenue would go toward geological research on seismic activity.

While the bill makes strides toward companies having to disclose what chemicals are in fracking fluid, environmentalists say it limits who can sue energy companies for chemical trade secrets.

Source: http://www.wfmj.com/story/18620965/fracking-regulations-await-ohio-governors-signature

Perry County Landowner’s Association

PERRY COUNTY LANDOWNERS’ Association

LEARN HOW TO CLEAN UP YOUR OLD OIL AND GAS LEASES

May 16th, 2012 – 6:00 pm

Somerset Elementary School

The next in the spring series of information/education meeting regarding Shale Oil and Gas Leasing in Perry County will be held at the Somerset Elementary building Wednesday May 16th , 6:00pm-8:00pm. This meeting is open to the public. This meeting is sponsored and organized by the Perry County Landowners Association (PCLA).

Jackie Hoover, Perry County Recorder will be on hand to give everyone an update on the leasing activity to date in Perry County. And answer questions from the group.  Lucinda Yinger with TCCI Laboratories Inc. in New Lexington will also present discussion on the methods and importance of water testing before, and after any drilling activity in the your area

Mr. J. Richard (Dick) Emens, legal counsel for the PCLA, will conclude the meeting with a point by point presentation on how landowners can clean up old non active oil and gas leases on their property that may still be recorded on the deed.

This meeting is free and open to the public.  Don’t miss this opportunity to gain beneficial information that can help in your understanding of this new and growing oil and gas exploration in Perry County..

Perry County Landowners Association Inc.  P.O. Box 106, Somerset, OH 43783

e-mail address is: perrylandowners@gmail.com     Steering Committee: John Reichley, John Poorman, Dave Plaisted, Dick Cotterman, John Ulmer, Tom Johnson, Ben Carpenter

Couple denied mortgage because of gas drilling

WASHINGTON COUNTY, Pa. – Brian and Amy Smith seem to be the first example in western Pennsylvania of a homeowner being denied a mortgage because of gas drilling on a next-door neighbor’s property.

The drilling goes on day and night at a new Marcellus Shale well in Daisytown, Washington County, and Brian Smith told Channel 4 Action News investigator Jim Parsons that he has no complaints — except one.

“As far as drilling and the noise and the lights in the window? No,” he said. “But when it affected the value of my home? Absolutely.”

The Smiths live across the street from the new gas well. They applied for a new mortgage on their $230,000 home and hobby farm, and Quicken Loans congratulated them on their conditional approval.

“They said all the paperwork will be done by the end of the week and we’ll be able to close,” Brian Smith said. “Somewhere in there, they called us and said, ‘Your loan got denied.’ ”

In an email, Quicken Loans told the Smiths, “Unfortunately, we are unable to move forward with this loan. It is located across the street from a gas drilling site.” Two other national lenders also turned down Brian Smith’s application.

Quicken Loans emailed the following statement to Channel 4 Action News: “While Quicken Loans makes every effort to help its clients reach their homeownership goals, like every lender, we are ultimately bound by very specific underwriting guidelines. In some cases conditions exist, such as gas wells and other structures in nearby lots, that can significantly degrade a property’s value. In these cases, we are unable to extend financing due to the unknown future marketability of the property.”

Clean Water Action said that in other parts of the country, when shale gas drilling has arrived, mortgages at nearby properties sometimes get denied. This is the first case they’ve heard in Pennsylvania.

“The banks aren’t stupid,” said Myron Arnowitt, director of Clean Water Action in Pennsylvania. “They’re going to look at that and be more cautious in terms of what they are willing to mortgage.”

“If I can’t refinance, could somebody get a loan to purchase my house? And that would be my concern. That’s definitely a worry,” Brian Smith said.

Homeowners who are denied by national lenders because of gas drilling could try local banks. First Federal in Washington, Pa., said it does not deny mortgage applications based solely on nearby drilling.

Video coverage within link.

Source: WTAE

Cunningham Energy offers new deal to fund its test-drilling plans in Athens County

Photo Credits: Map courtesy ODNR.
Photo Caption: Attorney John Lavelle, in his letter Friday to landowners who signed his oil and gas leases blamed the lack of big investors in Cunningham Energy’s drilling plans on a new map that shows Athens County well outside the expected “core play area” for developing deep-shale resources in Ohio

Another chapter has opened in the drama that began last fall when a West Virginia oil and gas company came into Athens and started throwing theoretical money around.

A local attorney who has negotiated a lease for deep-shale drilling for hundreds of Athens County landowners with Cunningham Energy of Charleston has informed his remaining clients that the company is now proposing a significantly less lucrative lease.

The new, scaled-down lease deal, according to attorney John Lavelle of Athens, will enable Cunningham (and/or an as-yet-unnamed venture partner) to drill five test wells in different parts of Athens County. Without test wells showing promise, no oil and gas development will occur in Athens County.

The company apparently doesn’t have the financial wherewithal to drill the test wells as well as honor the $2,500 per acre signing bonuses with numerous Athens County property owners. Moreover, it can’t find a joint partner to fund those leases at the $2,500 amount.

The new lease terms, Lavelle wrote in a letter to landowners who had extended their leases with him in March, are based partly on a state geology report indicating that Athens County lies to the south of the prime Utica shale play.

Under the newly proposed lease terms, Lavelle wrote, Cunningham Energy, LLC, is ready to commit to drilling five vertical test wells into the Utica shale formation in Athens County by the end of January 2014. If the wells don’t show that the deep-underground Utica shale layer will be productive here, Cunningham (or whatever company it’s working with) won’t proceed with production wells.

In the meantime, Cunningham Energy is willing to pay landowners a nominal sum to keep their leasing options alive, with a much bigger payout years in the future if the company’s wells become productive.

Rather than paying the $2,500 per acre signing bonus it had earlier been willing to pay, according to a letter Lavelle sent to his clients Friday, the company is now willing to pay the far more modest amount of $125 per acre to keep the already-signed landowners under contract while the company investigates the geology of the county.

The property owners, according to Lavelle, will get the initial reduced payment even if Cunningham doesn’t put together a joint venture to drill. If the project does come to fruition, the leases will pay off $5,700 per acre over the life of the lease – though this will be more of a “back-end” than an up-front payment, and a landowner won’t get this full amount if his or her land goes into oil and gas production and royalty provisions start kicking in. As the amendment states, “The likelihood of that many vertical wells being drilled and finding oil and gas in commercial quantities to hold the leases by production within the time frames in question is very unlikely and highly doubtful so if the results are good, you will likely get most of the bonus rental payment until your property is drilled.”

The higher payment is contingent on the Utica actually producing here, and Cunningham and/or its venture partner drilling production wells. (This prospect also depends on the company’s finding a new investment partner, which according to Lavelle it’s in the process of locating.)

Lavelle said the decision by Cunningham Energy appears to be based in part on information released by state geologists, indicating that Athens County is outside of the richest part of the Utica shale formation for oil and/or natural gas. (He also suggested, however, that the presence of “an outspoken minority group opposed to all hydrocarbon development” may be making Athens County less attractive to investors than other Ohio counties.)

After the Ohio Department of Natural Resources’ state geologist released a map indicating that Athens County may be 20-30 miles south of the high-potential part of the shale play, Lavelle said, a number of Fortune 500-sized industry players dropped their interest in investing in drilling here.

“The big companies are using that map as a bludgeon,” he said. “Basically, they just left the table.”

 

OTHER SOURCES, HOWEVER, HAVE POINTED out that the big companies have their own geology reports, much more sophisticated and complete than anything Ohio’s state geologist has to go by. As a result, the big companies weren’t likely to have been discouraged by the state’s geology report, since they already have their own better information.

In fact, in an interview with The Athens NEWS in late March, state Geologist Larry Wickstrom readily conceded that the newest report is just a semi-informed prediction about where deep-shale drilling will bear fruit in Ohio. The report depends on scanty test-bore evidence, especially in our area, he said, also agreeing that the big oil companies have much better and more valuable information.

Wickstrom made special pains to point out that being placed outside the best-case Utica map doesn’t necessarily mean successful oil and gas development can’t happen in Athens County.

In the interview, Wickstrom emphasized that his agency “fully expects people to go outside that core area and explore, and we hope they do.”

He said he agreed with an oil and gas expert at Marietta College, who March 21 advised not to “abandon the ship” just yet on the oil and gas potential in the Athens area. “My feeling all along is that the most southeastern part of Ohio is on the marginal end, at best, of the Utica-Point Pleasant shale play,” Robert Chase, chair and professor in Marietta College’s Department of Petroleum Engineering and Geology, told The NEWS. “However, until someone gets bold enough to drill something in the area, I don’t think we can conclude there’s nothing here.”

As the drilling inches farther south in search of oil and liquid natural gas, production in nearby areas will have more bearing on what happens here. So far the closest oil and gas deep-shale wells are in Noble and Muskingum counties, but plans are afoot for wells in Morgan and Washington counties, two counties adjoining Athens to the north and east.

Another source familiar with the oil and gas industry and market noted that Cunningham’s difficulty in finding a venture partner may be because the big players in the oil and gas industry are busy developing deep-shale prospects elsewhere. With fully committed materials and crews, they can’t commit too early to an uncertain play, since most leases have a five-year production window.

This point is actually made in Lavelle’s letter to lease-holding landowners on Friday. In explaining why Cunningham has had difficulty finding a Fortune 500 venture partner, Lavelle writes, “The onset of thousands upon thousands of other Utica shale acres available on the market in proven geological counties in eastern Ohio has further exasperated (sic) marketing efforts of our leaseholds. The risk involved with a dearth of information pales against the known quantities elsewhere.”

 

CUNNINGHAM HAD SIGNED LEASE options with many local landowners agreeing to pay a $2,500-per-acre signing bonus, plus 16 percent royalties on any oil or gas drilled from their land. The company reportedly has options on around 100,000 acres in the county, about 36,000 of them using the Lavelle lease terms. They originally had signed property owners representing 42,000 acres, though some apparently didn’t renew after being offered an extension in mid-March.

Lavelle said Friday that with the current uncertainty about whether drilling in Athens County will be profitable, he felt the best move for his landowner clients was to work out a deal to keep their drilling leases with Cunningham viable, and get the company to commit to gathering some hard scientific data.

“It’s basically allowing us to keep our landowner-friendly leases alive,” the attorney explained. The reduced per-acre payment, he said, “is basically pocket change (landowners can collect) while they’re drilling the wells.”

Lavelle, who will still receive $25 per acre for providing “landowner-friendly” leases to his clients (with the potential for an additional $25 an acre later, if the play proves out), said Cunningham is now aiming to put together about 40,000 acres in Athens County to drill. That $25 fee means the initial payment to property owners will be $100 an acre.

The attorney said that in addition to letting landowners keep their involvement alive in the potential payoff of local oil-and-gas development, the new lease terms will help provide the hard test data on the shale play here that up till now has been difficult to come by.

“We felt this was the only way we could ever get those five vertical test wells drilled,” he explained.

In his letter, Lavelle stressed that while the new development may seem like taking one step back to later take two steps forward, he remains confident that Cunningham does want to drill here, though the drilling may be the more traditional vertical type rather than horizontal.

“It is my belief that Cunningham Energy remains committed to proving the viability of the Utica play in our area,” he assured his clients.

 

ONE PROPERTY OWNER WHO originally signed Lavelle’s Cunningham lease, and then signed the extension in March, told The NEWS Sunday that he doesn’t intend to sign the new offer. “I am not going to sign the extension,” said the property owner, who asked that his name not be used because of the sensitivity of the issue. “I think it would be silly to put a well on my property for $150 an acre more or less, and if nothing comes up, then I got a mess to deal with. If they drill somewhere and they hit good, then I can sit back and wait for the offers.”

 

Source: http://www.athensnews.com/ohio/article-36820-cunningham-energy-offers-new-deal-to-fund-its-test-drilling-plans-in-athens-county.html