Uphill battle agains brine injection in Niles/Weathersfield

August 24, 2012

By DAN POMPILI -

NILES - Niles city and Weathersfield Township could face an uphill battle in their opposition to the proposed drilling of brine injection wells in the city and township.

Niles City Council passed a resolution Wednesday banning injection well activity within city limits, a follow-up to Weathersfield's earlier action. Mayor Ralph Infante also sent a letter Thursday to the Ohio Department of Natural Resources Division of Oil and Gas Resources Management opposing the well permits applied for by American Water Management Services Co.
"The uncertainty of waste water and potential problems it may cause are worrisome to our communities," the letter reads.

The letter states that one of the wells would be along Route 169 next to Niles Commerce Park in northern Weathersfield Township and would be located within five blocks of the city's downtown area. Infante also is concerned that the brine will have to be transported through the city to get it to the injection well site.

Injection wells are used to store liquid byproducts from the extraction of natural gas from underground shale deposits.

According to a legal notice published in the Tribune Chronicle, the wells in question will be drilled at depths of anywhere from 4,450 feet to 9,100 feet and one will accept on average 2,200 barrels of salt water waste per day, while the other would take an average of 1,000 barrels daily.

Weathersfield trustee Steve Gerberry said Wednesday night that Niles' opposition to the wells would have "more teeth," but conceded that ODNR's denial of the well permit applications would be a first.
Heidi Hetzel-Evans, spokeswoman for ODNR's Division of Oil and Gas, said there is no difference between a city and township opposing a well. She said the permits haven't come up for consideration yet, but ODNR will deny an application if the opposing community can provide convincing evidence that health, safety or an environmental resource would be directly threatened by a well.
No permits have been approved since the state placed a moratorium new injection wells following a 4.0-magnitude earthquake in Youngstown on New Year's Eve.

Since then, changes have begun to be implemented to both the review and testing process.
The review period was extended from 45 to 60 days up to 45 to 90 days. Also, the state is now permitted to request pressure testing, geological investigations, seismic testing, and radiological testing on newly drilled wells, as well at submittal of a plan for monitoring seismic activity.
"Even after drilling the well, if we are not assured of the progress with health and safety testing, we can still shut down the well," Hetzel-Evans said. "This is a highly scrutinized and monitored program."

She added that the new laws also increased the time that public notices must run in newspapers, from one day to five consecutive days at a minimum, and that communities now have two weeks to voice their opposition and request a hearing.
Based on the state's criteria, and Gerberry said he's unsure if the city and his township can meet that burden.

"We can oppose it all we want, it's going to be very difficult to listen to or grant our opposition on those terms," he said.

The ODNR'S Joint Committee on Agency Rule Review will vote next month on whether to make the emergency rules permanent

Compressed natural gas market on the rise

Shares of Chesapeake Energy have rebounded sharply since the news in mid-May that CEO Aubrey McClendon had been mixing business with personal investments.

But even with a more than 50% jump from the lows of three months ago, the stock may still have some more room to run. Why? Just look at the pump the next time you refill your car. The price of gasoline has suddenly crept higher. And with prices getting close to $4 a gallon, conversations about gas alternatives are again making the rounds.

This should help Chesapeake (CHK, Fortune 500), which has a growing presence in compressed natural gas, a type of fuel that is expected to be used more by consumers. Chesapeake formed a relationship with General Electric (GE, Fortune 500) in March to work on more natural gas solutions in the transportation industry.

The Department of Energy is increasingly giving larger amounts of funding to organizations in major cities that support lowering emissions—something compress natural gas can deliver.

And since this type of gas costs roughly half the price for regular gas at the pump -- prospects for this fuel source seem bright. Currently, Honda (HMC) is the only major automaker that manufactures light-duty vehicles running on compressed natural gas in the US. But it may soon have more competition.

Mick Cornett, mayor of Oklahoma City, has publicly endorsed the use of compress natural gas lately. So Chesapeake, which is based in Oklahoma City, may be in the enviable position of having home-team advantage in the state as new planning and permitting go into effect.

Gaining local contracts and proving compressed natural gas is a real business will only validate it as a fuel source that this country clearly needs to offset dependence on foreign oil while also reducing emissions. This may be why 22 states are joining forces to solicit American carmakers to build compressed natural gas-powered vehicles for state fleets.

Cleveland Crains

Hilcorp Gets First Drilling Permit for Columbiana

Thursday, August 23, 2012

YOUNGSTOWN, Ohio – The Ohio Department of Natural Resources has issued a new horizontal drilling permit to Houston-based Hilcorp Energy Co. to begin oil and gas exploration in Columbiana County.

Hilcorp, a privately owned oil and gas exploration company, was issued a permit Aug. 13 to drill on the Hanover-Mountz property in Hanover Township, records show. It is the 49^th well permitted in Columbiana County since 2011, and is the first such well for Hilcorp in the county.
Hilcorp recently signed an $836,000 drilling lease with the city of Campbell; the company has approached the city of Struthers and the Lowellville school board about leasing mineral rights for the lands both entities own.

According to ODNR records, two Columbiana wells – the Sanor well in Knox Township and the Ayrview Acres well in West Township – are in production. No results have been resulted.
Chesapeake Exploration LLC, the most active energy company drilling in the Utica shale, last week was issued two permits to drill horizontal wells in Carroll County, ODNR records show.
Since 2011, Chesapeake has been issued 121 permits to drill in Carroll County, which has emerged as the focal point of Utica shale development.

No permits were issued last week for Mahoning and Trumbull counties, nor were any issued for Mercer and Lawrence counties in western Pennsylvania.

Copyright 2012 The Business Journal, Youngstown, Ohio.

Storage Field area and your Mineral Rights - A must read

Monday, August 20, 2012

By Dan O'Brien

YOUNGSTOWN, Ohio -- Natural gas storage fields beneath tens of thousands of acres in Ohio have become the flash point of the latest legal battle over drilling rights across the state.

At issue is whether landowners within these fields own the deep drilling rights to their land, an especially sensitive issue since major energy companies are stepping up oil and gas exploration in the Utica shale and paying generous bonuses and royalties to residents.

"It's going on all over the state," says Dale Arnold, director of energy policy for the Ohio Farm Bureau. "This issue comes up in every storage field in Ohio."

Natural gas storage fields came into prominence shortly after World War II, Arnold says. These fields are areas of the Clinton sandstone strata between 3,000 and 6,000 feet below the earth where energy companies once drilled, some as far back as the 1930s. Once a particular region of the sandstone was drilled dry, these companies converted the acreage into storage areas connected to major pipeline networks that pump natural gas to and from the underground fields.

Ohio is home to 16 such storage fields.

The premise is for natural gas companies to keep a reserve for the winter months where it can be tapped when demand increases. "There's an injection season and a withdrawal season," Arnold says.

Natural gas is purchased and transported into the storage fields between April 1 and Oct. 31 each year, Arnold explains. That reserve is then drawn down between November and March, demand being highest during the colder months. "They're designed to address at least three to four cold snaps or adverse winter climate," he says.

The main legal question before courts in northeastern Ohio is whether those who own land within a designated storage field also own the mineral rights, Arnold says.

During the 1940s and ‘50s, energy companies negotiated many leases with landowners that specifically awarded these companies the rights to storage, Arnold says. However, drilling companies exploring the Clinton formation would often cut into the storage field and extract gas from the reserve.

After that, the language in these leases was changed to include not only storage rights, but also mineral and production rights of any potential drilling on or even near the land, Arnold notes. "They wanted to protect the storage field," he says. "Depending on how your lease is worded, it could mean any new gas coming out underneath the field," such as gas drilled from the Utica shale.

Fast forward to today. It's these leases that are complicating matters for thousands of landowners as an entirely new phase of development and billions of dollars of investment from the oil and gas industry take root in eastern Ohio.

Today, two of these storage fields – the Brinker Storage Field in Columbiana County owned by Columbia Gas, and the North Canton Storage Field owned by Dominion – are the subject of a legal fight over these leases.

Landowners outside these storage fields have signed lucrative land deals with energy giants such as Chesapeake Energy Corp. – some of them commanding bonuses of $5,800 an acre and 20% royalties. But many of those within the field are being held to these decades-old leases that at most award them $200 a year for their rights to any gas produced and a 12.5% royalty on any oil found. Moreover, Columbia Gas interprets the leases to mean that royalties could be collected only if the well sits on that property.

"Some of these leases are worse than others, but they're all bad," says Jill McNicol of Leetonia, who lives in the Brinker field. "There is no protection for your property, and they can use your water without compensation. There's nothing good about these leases."

The Brinker Storage Field is one of the smaller fields in Ohio, encompassing 25,000 to 30,000 acres, she says. Her repeated attempts to obtain a map of the field were denied by both Columbia and the Ohio Department of Natural Resources, she relates. They cited “proprietary issues” as the reason for their denials.

McNicol and her husband, Patrick, along with five other parties, have sued Columbia Gas Transmission LLC in the Columbiana Court of Common Pleas, arguing that the company breached the terms of these leases years ago and that these leases should be rescinded or reformed.

"We have 65 acres," she says. "They say they want to live by the terms of the lease, but they haven't. I know of a lot who haven't received a penny."

Since the lawsuit was filed May 30, NiSource Gas Transmission and Storage, parent of Columbia Gas, announced a partnership with Houston-based Hillcorp Energy Corp. that calls for the construction of a $300 million processing and pipeline network in eastern Ohio.

McNicol says others toward the center of the storage area were afforded the opportunity to modify their leases during the 1980s and 1990s, but those who lived on the outer edges – such as McNicol – were not. "Those people were able to sign leases, and they're valid," she says.

However, McNicol points out, landowners with the modified leases aren't likely to have wells drilled on their properties because much of the surrounding land is leased under the older agreements. These older agreements, she says, contain language that prohibits their land from becoming part of a larger drilling unit – in some cases spanning between 300 and 600 acres.

McNicol and others are also voicing their support for a bill sponsored by state Rep. Mark Okey, D-Carrollton, that would provide minimum royalty payments of 15% to landowners.

Meantime, other landowners have filed a class action suit in Stark County that involves drilling rights in the North Canton Storage field, owned by Dominion Gas. The North Canton field extends from the east side of Wayne County into Stark County and involves as much as 60,000 acres.

"There are thousands and thousands of landowners who are affected, including the [Akron-Canton] airport," says attorney Robert Tscholl, who is representing landowners.

Tscholl says that Stark County holds the potential of becoming the heart of the Utica's oil play, and the North Canton field could be a major contributor. "This could drive the economy in Ohio for who knows how long," he suggests.

Jim Mathews, another attorney representing landowners in the dispute, says that Dominion never intended to drill in the field and used the land only for storage. "All Dominion ever wished to hold was the Clinton level for storage interests,” he says. “They had no obligation to explore.”

The lawyers argue that the deep rights and storage rights are severable, and that maintaining the storage rights does not bind them to production rights. And, they contend. since Dominion has not adhered to the terms of these leases, they should be considered expired.

Mathews also notes that similar cases arose in Pennsylvania as oil and gas exploration in the Marcellus shale accelerated. “We’ve found some cases that support our position,” where a court sided with landowners. The court ruled that the company had consideration for storage rights, but not drilling and production rights.

Alan Wenger, an attorney with Harrington, Hoppe and Mitchell in Youngstown, says that he's been dealing with landowners in the Brinker field since energy companies first began canvassing Ohio more than two years ago. Wenger has not filed a lawsuit on behalf of his clients.

"There was a lack of contemplating anything that's happening right now," Wenger says. Thus far, he knows of no drilling activity in the Brinker field, although some leases have been signed. He foresees a settlement on some level with these landowners in the near future as the appetite for drilling increases.

"I think that with or without the lawsuits, there will be some resolution," Wenger says. "We've argued many times with Columbia, and I believe the companies will come around to some sort of accommodation."

Fracking’ watchdog group to expand into Ohio

Published: August 20, 2012 - 11:45 PM | Updated: August 21, 2012 - 12:25 PM

‘Fracking’ watchdog group to expand into Ohio August 21,2012 04:25 PM GMT Bob Downing Beacon Journal Publishing Co. Copyright � 2012 Beacon Journal Publishing Co. Inc and Black Press. All Rights Reserved. Any copying, redistribution or retransmission of any of the contents of this service without the express written consent of the Akron Beacon Journal is expressly prohibited.

A Pennsylvania-based watchdog/tracking agency for hydraulic fracturing is coming to Ohio.
FracTracker Alliance has received a two-year $130,000 grant from the Cleveland-based George Gund Foundation and intends to hire a staffer who will be based in the Warren-Youngstown area.

The nonprofit organization offers a website and interactive tool to explore data and map the impact of drilling for natural gas and oil.

“We funded FracTracker because we felt there is a real lack of transparency and understanding about all the issues surrounding shale gas drilling,” said Caitlin Johnson, a Gund Foundation spokeswoman. “FracTracker is an unbiased source of information, data and analysis. A tool like this is sorely needed as the debate around hydraulic fracturing is all too often defined by ideology instead of facts.”

The alliance is dedicated to enhancing the public’s understanding of the global shale gas industry by collecting, interpreting and sharing data and visualizations through its website: www.FracTracker.org.

The group, based in Camp Hill, Pa., said it works with citizens, organizations and institutions to provide objective, helpful information, to promote awareness and support actions that protect public health, the environment and socioeconomic well-being.

“Thanks to the George Gund Foundation, we’re very pleased to be able to strengthen our presence in Ohio and serve as a better resource to those grappling with the challenges of shale gas,” said Brook Lenker, FracTracker’s executive director.

His group largely has been funded by the Heinz Endowments and the William Penn Foundation. It was founded in 2009.

Most of its work has been in Pennsylvania in counties with Marcellus shale, he said.
His group will appear at the Sept. 6 meeting of the Carroll Concerned Citizens in Carroll County. The meeting is scheduled to begin at 7 p.m. at the Church of Christ-Christian Disciples, 353 Moody St., Carrollton. It is free and open to the public.

“I look forward to meeting citizens and elected officials at the Sept. 6 meeting, where we will kick off our new Ohio initiative, discuss our work and identify opportunities for collaboration,” Lenker said.

The Gund Foundation also awarded a $35,000 grant to the national environmental group Earthjustice to review Ohio’s rules and regulations on fracking.

Rules for injection wells far too weak, critics say

State says its proposals will protect against any ‘fracking’ waste problem

New rules intended to strengthen state oversight of “fracking” waste-disposal wells won’t do enough to protect Ohioans from man-made earthquakes and pollution, a coalition of environmental groups says.
That blanket criticism comes from comments the groups filed yesterday as the Ohio Department of Natural Resources brought its proposed regulations before a legislative committee for public review.
The rules would allow the state to demand seismic and geological tests before a disposal well could be drilled. They also would require constant monitoring of well pressures and automatic shut-off devices to help ensure that wastes won’t leak and pollute groundwater.
Thom Cmar, an attorney for the environmental advocacy group Natural Resources Defense Council, said the rules don’t actually require the seismic and geological tests. Instead, they give ODNR officials the option of ordering them.
“There are certain tests that should be required in every case,” Cmar said. “We can’t afford to have even a really small failure rate.”
Agency officials drafted the rules after a series of earthquakes that shook Youngstown late last year. The quakes, including a magnitude 4.0 temblor on Dec. 31, were linked to a disposal well that voluntarily shut down.
Rick Simmers, the chief of the agency’s oil and gas division, said the rules need to be optional so officials won’t have to order unnecessary tests. Seismic tests might not always be needed, he said, in areas where the location of underground faults is well-known and can be avoided.
“What we did was essentially create a toolbox,” Simmers said of the rules. “We’ll pull out the tools as appropriate for the site-specific application.”
The debate follows the oil and gas drilling boom that has created thousands of new Marcellus shale wells in Pennsylvania. A Utica shale boom is expected to create thousands of wells in eastern Ohio.
Drilling companies rely on fracking, a process that injects millions of gallons of water, sand and chemicals underground, to shatter the shale and release the oil and gas. Fracking fluids frequently bubble back up with the oil and gas. Many wells also continue to produce salty wastewater called brine.
Ohio’s 171 disposal wells injected 12.2 million barrels of waste last year, 53 percent of which came from Pennsylvania and West Virginia shale wells. Twenty-three new wells are in varying stages of construction and startup, and the agency has applications to create an additional 29.
Cmar said the rules also should be changed to make companies immediately report any pressure problems and shutdowns to state regulators.
Trent Dougherty, an attorney with the advocacy group Ohio Environmental Council, said the new rules also should strengthen requirements for old oil and gas wells that companies can convert to disposal wells, to safeguard against leaks.
Agency officials insist that disposal wells are safe and argue that there have been no cases in which injected brine polluted groundwater since the agency started regulating the wells in 1983.
Simmers said many of the new rules would be among the toughest in the nation. Among them is a rule that would allow the state to issue a conditional permit and order a well plugged if initial tests reveal problems.
“I challenge you to find another state with that broad of an authority,” Simmers said.
The Department of Natural Resources will take comments on the rules through Aug. 31.


The Columbus Dispatch Thursday August 16, 2012 7:23 AM

Frack Waste Rally Press Prelease. Spread the Word!

Freedom from Toxic Frack Waste – National Rally Day, September 12, 2012.
 
There will be LOCAL, SIMULTANEOUS rallies throughout Ohio…and other states.  By doing so, we can effectively capitalize the power of local and national media.
 
Regardless of people’s positions on drilling, no one wants toxic fracking waste or injection wells. This rally is about educating citizens, local officials and media about the public health hazards and environmental destruction posed by the trillions of gallons of this toxic waste and disposal.
 
Attached is the Press Release and a document that outlines the specifics of the event.
 
We hope your community will be able to participate in this rally day. We look forward to hearing of the creative way you plan to express the unique concerns of your community!
 
Thanks!
 
Conveners:

NEOGAP
Frackfree America National Coalition

Important News Release and Information from NEOGAP for the Rally  

Chesapeake outlines plans for Ohio drilling

By Bob Downing
Beacon Journal staff writer
Published: August 7, 2012 - 08:17 PM

Chesapeake outlines plans for Ohio drilling August 08,2012 12:17 AM GMT Bob Downing Beacon Journal Publishing Co. Copyright � 2012 Beacon Journal Publishing Co. Inc and Black Press. All Rights Reserved. Any copying, redistribution or retransmission of any of the contents of this service without the express written consent of the Akron Beacon Journal is expressly prohibited.

Chesapeake Energy Corp. still intends to aggressively develop wells in the Utica shale formations deep underground in eastern Ohio.
The company said that area of the state remains attractive because it is producing oil and natural gas liquids, not just natural gas.
Chesapeake provided more specifics on its Ohio operations as part of its second-quarter earnings release Monday and Tuesday.
The cash-strapped company said it has completed $4.7 billion in asset sales in the first half of 2012 and expects to announce deals for another $7 billion in the third quarter to reduce debt.
Chesapeake reported a second-quarter net profit of $929 million, or $1.29 a share, up from $467 million, or 68 cents a share, in the same period a year ago. All but $3 million came from the sale of its pipeline assets and non-cash gains.
Revenue rose 2 percent to $3.4 billion, and earnings were 6 cents a share.
The company also raised 2012 production estimates, due to discoveries in Ohio and Texas. It said it is on track to close a land deal in West Texas with EnerVest Ltd. The sale price was not disclosed.
Chesapeake, the nation’s second largest producer of natural gas, has been battered by low natural gas prices and has been shifting away from that product toward oil and natural gas liquids.
“We are taking aggressive and focused actions to increase cash flow and net asset value per share, while also reducing long-term debt as we continue on ongoing transformation to a more-balanced asset base between higher-margin liquids and lower-margin natural gas,” CEO Aubrey McClendon said in a company-issued statement.
The energy giant said its production of liquids rose 65 percent, now accounting for 21 percent of total production with more than 130,000 barrels per day. It said liquids are projected to be 25 percent of total production in 2013 and 55 percent of revenue next year.
The company is projecting that liquid production will increase 32 percent in 2013, while natural gas production will drop 7 percent.
Chesapeake, based in Oklahoma, said it has drilled 87 wells in eastern Ohio, but not all are operational. Its 28 completed wells are averaging about 1,000 42-gallon barrels of oil equivalents per day.
Daily, each well is averaging about 205 barrels of oil; 150 barrels of natural gas liquids like ethane, butane and propane; and 3.8 million cubic feet of natural gas, the company said.
A volume of 6,000 cubic feet of natural gas is equal to one barrel.
Chesapeake has 11 drilling rigs operating in Ohio and expects to bring that number to 16 before Dec. 31, it said.
The company has 1.3 million acres leased in eastern Ohio and is focusing on Carroll, Harrison, Columbiana and surrounding counties. It said earlier it is trying to sell about 337,481 acres in Ohio outside that core area as part of its debt-reduction strategy.

Tuesday, August 07, 2012

OKLAHOMA CITY – Big gains from the sale of its assets led Chesapeake Energy Corp. to report second-quarter net income of $972 million, or $1.29 cents a share, the company announced after the close of trading Monday. When gains from asset sales and other one-time items are excluded, Chesapeake reported adjusted net income of $3 million, or 6 cents per share.

The asset sales enabled Chesapeake to overcome greatly reduced prices natural gas -- down about 40% in the last 12 months. The company said it would lower natural gas production capacity in 2012 by 12% while increasing its liquids production by 32%.

In the first half of 2012, Chesapeake completed $4.7 billion of asset sales, and plans to announce another $7 billion in asset sales in the third quarter. Among the asset sales, Chesapeake realized a $584 million gain from selling its Chesapeake Midstream Partners, now including Access Midstream Partners LP, which is developing with its venture partners, a $900 million gas processing complex in Columbiana and Harrison counties.

Date: Tuesday, August 7, 2012

 

Chesapeake Energy Corp. could see its cash-flow gap widen to $18.6 billion by the end of 2013 if it doesn't sell off assets.

	Isn't it interesting?
	Both of these stories ran on the same day and say the opposite.   Oil and Gas; what can you believe?

Chesapeake Energy Corp.'s cash-flow gap could grow to $18.6 billion by the end of next year if the Oklahoma City-based energy company doesn't sell off some assets, including hundreds of thousands of acres it has put up for sale in Ohio,

Chesapeake (NYSE:CHK), which generates 90 percent of its production from gas and gas byproducts, has been slammed by low oil and natural gas prices this year, Bloomberg reports. The company is trying to raise up to $20.5 billion in capital by selling assets.

Earlier this year, the company put drilling rights for about 338,000 acres in Ohio on the auction block. The company's stock price has been in free fall this year after possible conflicts of interest surfaced related to CEO Aubrey McClendon's dealings and his stake in company wells.

"Do it or else" Chesapeake's example of bait and switch

Friday, August 03, 2012

By Dan O'Brien

YOUNGSTOWN, Ohio -- The Buckeye Water District in Wellsville was enjoying a seven-month windfall of sales to the tune of $24,000 per month by selling water to energy giant Chesapeake Energy Corp. at $15 per thousand gallons. Then in May, Chesapeake approached the Buckeye board of directors with an ultimatum: either lower the price to $5 per thousand gallons, or lose the business for good.
“The board told them ‘No,’ ” says Buckeye Water District manager Al DeAngelis. “We charge our residential customers $10.17 per thousand. It wouldn’t have been fair to them.”
The board researched the prices other water districts were commanding in other regions, DeAngelis says, especially in southwestern New York and northern Pennsylvania, where they were getting $16 per thousand gallons. “We were the first guys on the block with an agreement here,” he says.
Water has become a precious, much sought commodity for energy companies as oil and gas exploration accelerates in the Utica shale in eastern Ohio. Giant energy companies such as Chesapeake require between three million and six million gallons of water to hydraulically fracture a single well.
The process involves injecting water, sand and a smattering of chemicals under pressure into the well so it can crack open tight shale formations and release natural or wet gas trapped for millions of years.
Since the Buckeye Water District stopped selling water to Chesapeake, DeAngelis says, the company has opted to secure contracts with private owners of lakes and ponds while also procuring water at no cost from streams and creeks.
“They’re running a lot of trucks,” DeAngelis observes. “Where exactly they’re getting their water from, I don’t know.”
The practice has engendered new concerns from opponents of hydraulic fracturing, who are worried that big corporations are not only poisoning water supplies with chemicals, but also depleting the resource.
Youngstown resident Lynn Anderson was dismayed to learn that a brine truck could simply pull up to a city fire hydrant, hook its hose to the coupling, and fill its tank full of city water – water that would be used for local oil and gas operations.
She was even more troubled to learn that the city had no mechanism in place to monitor just how much water was being drawn from the hydrant. For all the water department knew, Anderson says, these companies could be helping themselves to thousands of gallons more than they’re entitled to.
“The water department said that they trusted them,” Anderson says, “that they didn’t monitor it.”
Anderson, an environmental activist who lives near Mill Creek Park on the west side of Youngstown, believes the oil and gas industry poses a serious threat to the availability of clean water, especially during periods of dry weather and drought.
Not only are these companies polluting water supplies through hydraulic fracturing, she argues, they’re also consuming vast quantities of water that, as of now, is not being recycled through the ecosystem.
“There’s the danger of these companies sucking water out of our streams, lakes and creeks,” she says. “We’ve got to be vigilant and protect our water.”
Citizen activists such as Anderson fear these companies – both large and small – pose a long-term risk to the environment and are putting pressure on communities to sell them water.
One of Anderson’s friends and another woman in early July witnessed a brine truck employed by Bocor Holdings LLC of Canton filling up from a hydrant at the corner of McGuffey Road and state Route 616. The two, out scouting the McGuffey Wildlife Preserve, were disturbed when they also found out that a natural gas well was being drilled toward the back of that land.
Anderson and the others contacted the Youngstown Water Department, inquired about the city’s contracts with oil and gas companies and requested that meters be placed on the hydrants being used so that the city could better monitor water consumption.
“By Friday, July 13, the department said that those hydrants would have meters on them,” Anderson says. “We’re interested in seeing the outcome of it.”
According to records, Youngstown this year entered into two contracts with oil and gas companies allowing them to use city water directly from two hydrants. Bocor was awarded a permit to use 80,000 gallons from the McGuffey hydrant from June 20 through Aug. 20. Bocor provided a one-time payment of $481.80, documents state.
Another company, Everflow Eastern of Canfield, was granted a permit to draw 4,000 gallons of water from a hydrant at 5611 Gilbert Drive in January. It paid $136.00 for the water, records show.
These charges reflect standard bulk rates that the city bills industrial users, and these two companies have contracted with the city for decades, says Gene Leson, chief engineer at the city water department.
“We sell bulk water to a multiple of companies,” Leson relates. “If it isn’t available, we sell a fire hydrant permit.” A homeowner who wants to fill a swimming pool, for example, can obtain a permit, he says.
He says that Bocor and Everflow Eastern Partners L.P. have been doing business with the city for decades, but in light of the recent concerns about accountability, Leson thought it prudent to monitor the hydrants. “Now, it’s being metered,” he says. “We read the meter on the hydrant and then process a bill.”
Anderson and 16 others have signed a petition and have called on Youngstown Mayor Chuck Sammarone to terminate sales of city drinking water to oil and gas companies since “the pollutants they add are not able to be processed out by water treatment plants and this water is rendered ‘unrecoverable,’ ” the petition reads.
Some of the larger oil and gas companies are beginning to use new fracking techniques such as foam or propane, which reduces the quantity of water needed to hydraulically fracture a well. Moreover, Chesapeake has started to recycle water at some of its well sites, and operates a recycling station in Carroll County.
Still, most of the wastewater is disposed of in injection wells scattered across Ohio. Once the water is “stored,” it cannot be recovered.
But most water suppliers believe there’s plenty available to serve energy companies and residents, even during dry spells.
“We’re not concerned about drought or the impact of the industry,” says Tom Holloway, director of the Mahoning Valley Sanitary District. MVSD supplies treated water to the cities of Youngstown and Niles and the village of McDonald from the Meander Reservoir. The reservoir level is down just more than seven inches, not nearly enough to constitute concern.
MVSD is yet to secure an agreement with an energy company, but its board was to hear a proposal from a representative of Consol Energy Corp. July 27, Holloway reports. “It’s a matter of convenience for a lot of these drillers,” he says, many of which want to purchase water from nearby sources.
Consol is drilling a well in Ellsworth Township in Mahoning County and another in Vienna Township in Trumbull County.
Other water districts are taking time to pause before allowing the sale of water to oil and gas drillers.
One of these districts is the Muskingum Watershed Conservancy, which includes several sources in eastern Ohio such as Tappan Lake, Atwood Lake, Clendening Reservoir and Leesville Reservoir.
The watershed district has conducted one water sale to Gulfport Energy, but has placed other potential sales on hold until the U.S. Geological Survey finishes a study on how much excess water is available for use.
Others are welcoming the prospect of more business, and are taking measures to prepare for what could be a major lift for water sales in the region.
The Columbiana County Port Authority recently entered into an agreement with Aqua Terra Asset Management LLC, which would allow the company to act as an agent to sell water treated by the city of East Liverpool to energy companies at $9 per thousand gallons.
Under the agreement, East Liverpool would collect $6.46, the port authority, $1.50, and Aqua Terra $1. Drivers are able to fill their trucks at a hydrant on property where the port authority’s offices sit.
The city has an excess capacity of two million gallons per year it can sell. Should additional supply be necessary, East Liverpool could also sell untreated water directly from the Ohio River at $5 per thousand gallons, similar to an agreement the city of Steubenville has in place.
The city of Warren, also expecting to capitalize from the sale of its water to energy companies, is making preparations to accommodate the emerging shale industry.
“We’ve been approached from a couple of companies at this point,” reports Robert Davis, director of utility services for the city of Warren. “Right now, we don’t have any contracts.”
Anticipating what could become a long-term, vibrant source of business over the next several years, the city of Warren is slated to invest more than $100,000 toward expanding its fill stations at its water filtration plant in Cortland.
The improvements would include infrastructure upgrades such as road widening, and the addition of new fill stations capable of handling multiple brine trucks.
“We do have some in use,” Davis reports. “So we’re ready to sell when they’re ready to buy.”
Rates would hover between $7 and $10 per thousand gallons, Davis says, but any rate would also depend on just how much water is being used. “We think in the next couple of months, we could solidify some contracts.”
Business derived from the oil and gas industry could command as much as $300,000 a year, Davis says.
The filtration plant processes about 13 million gallons a day, and Davis expects to use an additional one million for oil and gas drillers. The plant, however, has the capacity to process 22.8 million per day, so there is excess capacity.
Warren draws its water from Mosquito Creek Reservoir, and Davis says, it is monitoring drought conditions. “Right now, we’re in a drought watch. We’re about 3 feet, 4 inches below the summer pool.”
Should the water level fall another three to four feet, a drought warning would be issued, Davis reports. “Right now we’re OK, but we do need some rain.”
Keith Fuller, director of corporate development at Chesapeake, says his company takes into consideration low water levels before submitting applications to the Ohio Department of Natural Resources for withdrawal permits. Chesapeake hauls water by truck to well sites, runs pipelines directly to the well from freshwater sources, and purchases water from municipalities, he says.
“Intervals of low river flows are an annual reality,” Fuller says. “Chesapeake performs impact analyses prior to applying for permits, and we employ multiple monitoring systems to confirm that water is withdrawn only from sites where flow rates remain above their permitted minimums.”
Fuller says these restrictions are often in place during the summer months, when water levels are low. As such, Chesapeake draws most of its water during high-flow months, and then stores that water for future use. “Preparations in expectation of these restrictions ensure Chesapeake’s operations aren’t affected and that there are no impacts on the waterways,” Fuller says.
According to data provided by ODNR, Ohio consumes 11.7 billion gallons of water per day, the vast majority used by industry, especially electric power plants.
Under Ohio law, any industry using 100,000 gallons per day must register with ODNR. Current demand is not adversely affecting the state’s water supplies, says ODNR spokeswoman Heidi Hetzel-Evans.
“Currently, there have been no new water withdrawal registrations by oil and gas operators,” Hetzel-Evans says. Provisions in SB 315, the new law signed by Gov. John Kasich that places new regulations on drilling activity, now requires operators to provide their water source, rate and flow in the permitting process, she says.
Still, these measures offer little consolation to concerned citizens such as Anderson, who have widely complained that government isn’t doing enough to protect its most valuable resources.
“The state has cut back on anything that protects the environment, but they’ve ramped up anything that harvests timber or oil and gas in the state parks,” Anderson says. “How logical is that? To me, it’s frightening.”