The Ohio Department of Natural Resources has issued a new horizontal drilling
permit to CNX Gas Co. LLC, a subsidiary of Consol Energy Corp., for a new gas
well in Mahoning County.
According to ODNR records, ODNR issued the permit Sept. 17 for CNX to drill
on the Cadle property in Jackson Township.
This is the second well CNX has permitted for the Cadle property. Another
well on the site is now being drilled, state records show.
CNX has also drilled a third well at the Hendricks Farm in Ellsworth Township
in Mahoning County.
Fourteen horizontal wells have been permitted in Mahoning County since last
year. All except the three CNX wells are permitted for Chesapeake Exploration
LLC, the most active energy company exploring for oil and gas in the Utica shale
region of eastern Ohio.
No permits were issued to Chesapeake last week.
ODNR also awarded permits to Gulfport Energy for two horizontal wells in
Harrison County, and three permits to Mountaineer Keystone LLC for drilling
rights on land in Portage County. Another energy company, Hall Drilling LLC, was
issued a permit to drill in Monroe County.
Wednesday, September 26, 2012
Tuesday, September 25, 2012
Conservancy district approves sale of water to drillers
Is it in our best long term interest to sell our most valuable resource, the life blood of our communities in a year of low rain fall to help pay for road damage by the oil and gas industry?
Robin
The Muskingum Watershed Conservancy District intends to sell water from two reservoirs in eastern Ohio to natural gas drillers, despite an earlier plan to suspend sales until a water availability study was completed.
The district said it will sell water from Clendening Lake in Harrison County and Piedmont Lake, mostly in Belmont County, during the fall drawdown, when lakes are lowered for the winter.
The U.S. Army Corps of Engineers, which manages the dams, typically lowers the lakes by several feet in the fall to allow them to refill over the winter with rain and melted snow.
The district’s governing board approved the sales from the two lakes at a meeting Friday and the district announced the plan Monday.
The district said water requests from drillers near Clendening and Piedmont “have increased sharply” in recent weeks.
Any water sales from the two lakes would reduce the wear and tear on local roads —and thus save taxpayers money — by cutting the number of tankers hauling water to new natural gas wells to be hydraulically fractured, or fracked, the district said in announcing the proposed sales.
Earlier this month, the Ohio Township Association’s board of directors had endorsed water sales to drillers from the winter drawdowns.
The volume of water and the price would still have to be negotiated, officials said.
Drillers have told the district they intend to begin drilling soon and will need water. Each well that is fracked typically takes 5 million to 10 million gallons of water.
“At drawdown, billions of gallons of water are released from the lakes, making this the optimum time to supply excess from the lakes to the oil and gas industry without any negative impacts on recreational activities of these two lakes, including boating,” said Sean Logan, the district’s chief of conservation.
An estimated 6 billion gallons of water from the two reservoirs would have been released this fall under normal operations, the district said.
“We do not need a study to verify that excess water is being released from the lakes during the drawdown period, which occurs each fall and winter,” Logan said.
Earlier in the year, the district, based in New Philadelphia, had approved the sale of up to 11 million gallons of water from Clendening Lake to Gulfport Energy Co. In June, however, the district said it was suspending sales to oil and gas companies pending a water availability study by the U.S. Geological Survey at three reservoirs: Atwood, Clendening and Leesville. Results from those studies are expected in December.
A vocal grass-roots group led the push to stop the water sales to drillers.
The district also has approved a new water availability study at Seneca Lake.
The district has three long-term contracts for water sales: with Cadiz for water from Tappan Lake, with Cambridge for backup drinking water from Seneca Lake and with Carroll County for water from Atwood Lake for Atwood Lake Resort.
The district and the U.S. Army Corps of Engineers oversee 16 reservoirs and dams in eastern Ohio to control flooding.
Robin
The Muskingum Watershed Conservancy District intends to sell water from two reservoirs in eastern Ohio to natural gas drillers, despite an earlier plan to suspend sales until a water availability study was completed.
The district said it will sell water from Clendening Lake in Harrison County and Piedmont Lake, mostly in Belmont County, during the fall drawdown, when lakes are lowered for the winter.
The U.S. Army Corps of Engineers, which manages the dams, typically lowers the lakes by several feet in the fall to allow them to refill over the winter with rain and melted snow.
The district’s governing board approved the sales from the two lakes at a meeting Friday and the district announced the plan Monday.
The district said water requests from drillers near Clendening and Piedmont “have increased sharply” in recent weeks.
Any water sales from the two lakes would reduce the wear and tear on local roads —and thus save taxpayers money — by cutting the number of tankers hauling water to new natural gas wells to be hydraulically fractured, or fracked, the district said in announcing the proposed sales.
Earlier this month, the Ohio Township Association’s board of directors had endorsed water sales to drillers from the winter drawdowns.
The volume of water and the price would still have to be negotiated, officials said.
Drillers have told the district they intend to begin drilling soon and will need water. Each well that is fracked typically takes 5 million to 10 million gallons of water.
“At drawdown, billions of gallons of water are released from the lakes, making this the optimum time to supply excess from the lakes to the oil and gas industry without any negative impacts on recreational activities of these two lakes, including boating,” said Sean Logan, the district’s chief of conservation.
An estimated 6 billion gallons of water from the two reservoirs would have been released this fall under normal operations, the district said.
“We do not need a study to verify that excess water is being released from the lakes during the drawdown period, which occurs each fall and winter,” Logan said.
Earlier in the year, the district, based in New Philadelphia, had approved the sale of up to 11 million gallons of water from Clendening Lake to Gulfport Energy Co. In June, however, the district said it was suspending sales to oil and gas companies pending a water availability study by the U.S. Geological Survey at three reservoirs: Atwood, Clendening and Leesville. Results from those studies are expected in December.
A vocal grass-roots group led the push to stop the water sales to drillers.
The district also has approved a new water availability study at Seneca Lake.
The district has three long-term contracts for water sales: with Cadiz for water from Tappan Lake, with Cambridge for backup drinking water from Seneca Lake and with Carroll County for water from Atwood Lake for Atwood Lake Resort.
The district and the U.S. Army Corps of Engineers oversee 16 reservoirs and dams in eastern Ohio to control flooding.
Drillers in Ohio face tighter regulations, relaxed taxes
Ohio has some fairly strict regulations, but very low taxes, when it comes to how it's handling the growing shale gas industry in comparison to other states, a recent report finds.
But all states are not the same in terms of their geology, the need to protect local populations and the way they approach and justify their tax environments, say the report's author and a representative of the Ohio Oil and Gas Association. “Conditions are different in different states,” said Nathan Richardson, a lawyer and resident scholar at the Washington, D.C.-based nonprofit Resources for the Future, and one of the authors of the July report. “Let's say you are looking at how deep a well casing has to go to protect groundwater — what you might be looking at could just reflect how deep the groundwater is in different states.”
Mr. Richardson and his colleagues set out to compare taxes and regulations across the states, with an emphasis on those that are participating in the nation's so-called shale gas boom. They released their initial findings in July, updating them at the end of that month to include the provisions of Ohio's latest legislation on oil and gas drilling, Senate Bill 315, which took effect Aug. 1.
Geological variations aside, the report shows that Ohio has caught up with many other major gas-producing states, at least in terms of its regulations. For example, Ohio joined many other producing states by requiring that groundwater be tested for methane and other contaminants, the report finds.
In some areas, Ohio appears to have adopted even more stringent regulations than some other states. For instance, while nearly all states require that drillers encase their well bores in steel and cement near the surface and down through freshwater aquifers, Ohio also requires that drillers use casings on their well bores for 1,000 feet at the bottom of the well. That's twice as much as the 500 feet of casing required in Pennsylvania, Louisiana or California, the report finds.
Also, in the area of disclosure, Ohio is one of only five states that require drillers to disclose both the volume and the concentrations of chemicals they use in their fracking fluid — the mixture of water, sand and chemicals that drillers pump at high pressure into a well to fracture the shale and release its natural gas, oil and other valuable resources.
“If you think disclosure is a good idea, then Ohio is ahead of most other states,” Mr. Richardson said.
Ohio also has among the lowest number of wells per state inspector. Each Ohio inspector is responsible for overseeing between 31 and 140 wells. In some other producing states, such as Texas and Oklahoma, one inspector monitor more than 1,000 wells, the report stated.
That's not just because Ohio has yet to really begin drilling its new shale gas wells in earnest, either, Mr. Richardson said. The study counts all of Ohio's wells, even conventional wells that have been drilled in Ohio for about the last 100 years. Including those in the mix, Ohio already has nearly 35,000 wells to monitor, the report found.
By DAN SHINGLER
4:30 am, September 25, 2012
The question is; what have we done about zoning regulations. Our current law required driller to hide well heads, storage tanks and related equipment to a distance of 500' from public roads. Current laws also allow wells and starage tanks to be 200' and 150' respectively, from any dwelling. THIS IS NOT SUFFICIENT! Equipment should be 100' from a dwelling and we need to place people in positions that will fight for those changes. IS ODNR REALLY ON OUR SIDE?
Debris left over from vertical drilling over the last 50 years is now littering our landscape and our farmers fields with machinery and storage tanks that still hold hazardous fluids left by irresponsible driller. Abandoned wells should be PLUGGED!
Robin L Brower
Trumbull Township
Board of Zoning Appeals
Mr. Richardson and his colleagues set out to compare taxes and regulations across the states, with an emphasis on those that are participating in the nation's so-called shale gas boom. They released their initial findings in July, updating them at the end of that month to include the provisions of Ohio's latest legislation on oil and gas drilling, Senate Bill 315, which took effect Aug. 1.
Geological variations aside, the report shows that Ohio has caught up with many other major gas-producing states, at least in terms of its regulations. For example, Ohio joined many other producing states by requiring that groundwater be tested for methane and other contaminants, the report finds.
In some areas, Ohio appears to have adopted even more stringent regulations than some other states. For instance, while nearly all states require that drillers encase their well bores in steel and cement near the surface and down through freshwater aquifers, Ohio also requires that drillers use casings on their well bores for 1,000 feet at the bottom of the well. That's twice as much as the 500 feet of casing required in Pennsylvania, Louisiana or California, the report finds.
Also, in the area of disclosure, Ohio is one of only five states that require drillers to disclose both the volume and the concentrations of chemicals they use in their fracking fluid — the mixture of water, sand and chemicals that drillers pump at high pressure into a well to fracture the shale and release its natural gas, oil and other valuable resources.
“If you think disclosure is a good idea, then Ohio is ahead of most other states,” Mr. Richardson said.
Ohio also has among the lowest number of wells per state inspector. Each Ohio inspector is responsible for overseeing between 31 and 140 wells. In some other producing states, such as Texas and Oklahoma, one inspector monitor more than 1,000 wells, the report stated.
That's not just because Ohio has yet to really begin drilling its new shale gas wells in earnest, either, Mr. Richardson said. The study counts all of Ohio's wells, even conventional wells that have been drilled in Ohio for about the last 100 years. Including those in the mix, Ohio already has nearly 35,000 wells to monitor, the report found.
By DAN SHINGLER
4:30 am, September 25, 2012
The question is; what have we done about zoning regulations. Our current law required driller to hide well heads, storage tanks and related equipment to a distance of 500' from public roads. Current laws also allow wells and starage tanks to be 200' and 150' respectively, from any dwelling. THIS IS NOT SUFFICIENT! Equipment should be 100' from a dwelling and we need to place people in positions that will fight for those changes. IS ODNR REALLY ON OUR SIDE?
Debris left over from vertical drilling over the last 50 years is now littering our landscape and our farmers fields with machinery and storage tanks that still hold hazardous fluids left by irresponsible driller. Abandoned wells should be PLUGGED!
Robin L Brower
Trumbull Township
Board of Zoning Appeals
Friday, September 21, 2012
Ohio not ready for ‘fracking’?
A new report by an environmental-advocacy group warns that Ohio is unprepared to
shoulder the costs of a coming shale-drilling boom and should take steps to make
sure oil and gas companies, not taxpayers, pay to protect the state.
Other studies have warned about the pollution and health risks of shale drilling and “fracking,” but Environment Ohio’s “Cost of Fracking” report defines them in terms of dollars and cents.
The report highlights a $265 million estimate to repair Pennsylvania roads damaged by drillers’ trucks and $300,000 that one oil company paid to replace and filter contaminated well water for 14 homes around Dimock, Pa.
The road-repair figure came from the Pennsylvania Department of Transportation. “Look at what’s happening in other states,” said Julian Boggs, a policy advocate for Environment Ohio. “We want to get out in front of this thing.”
State and drilling-industry officials said steps have been taken to make sure Ohioans are protected.
“Everyone recognizes that we need to make sure we have adequate regulations in place,” said Tom Stewart, vice president of the Ohio Oil and Gas Association.
Drilling Ohio’s Utica shale is expected to mirror activity in Pennsylvania, where thousands of wells have been drilled into Marcellus shale.
The Ohio Department of Natural Resources has so far approved permits for 375 Utica wells in eastern Ohio, 134 of which have been drilled. Officials estimate 2,250 wells could be completed by the end of 2015.
The fracking process injects millions of gallons of water, sand and chemicals underground to shatter the shale and free trapped oil and gas. Industry officials insist fracking is safe.
Boggs said lawmakers should strengthen state laws to require that oil and gas companies have enough money to pay for environmental cleanups and other drilling-related costs.
Natural Resources officials declined to comment on the report but said in a statement that state drilling regulations “reflect the latest science and best practices.”
Stewart said a state law enacted in May already contains several measures intended to increase protections and drilling oversight.
One measure demands that oil and gas companies obtain at least $5 million in liability insurance before they can get a shale-drilling permit. Companies must have at least $1 million to drill conventional wells.
Stewart said drillers also routinely sign agreements with county and township officials in which they promise to upgrade and repair roads as needed.
By Spencer Hunt
Other studies have warned about the pollution and health risks of shale drilling and “fracking,” but Environment Ohio’s “Cost of Fracking” report defines them in terms of dollars and cents.
The report highlights a $265 million estimate to repair Pennsylvania roads damaged by drillers’ trucks and $300,000 that one oil company paid to replace and filter contaminated well water for 14 homes around Dimock, Pa.
The road-repair figure came from the Pennsylvania Department of Transportation. “Look at what’s happening in other states,” said Julian Boggs, a policy advocate for Environment Ohio. “We want to get out in front of this thing.”
State and drilling-industry officials said steps have been taken to make sure Ohioans are protected.
“Everyone recognizes that we need to make sure we have adequate regulations in place,” said Tom Stewart, vice president of the Ohio Oil and Gas Association.
Drilling Ohio’s Utica shale is expected to mirror activity in Pennsylvania, where thousands of wells have been drilled into Marcellus shale.
The Ohio Department of Natural Resources has so far approved permits for 375 Utica wells in eastern Ohio, 134 of which have been drilled. Officials estimate 2,250 wells could be completed by the end of 2015.
The fracking process injects millions of gallons of water, sand and chemicals underground to shatter the shale and free trapped oil and gas. Industry officials insist fracking is safe.
Boggs said lawmakers should strengthen state laws to require that oil and gas companies have enough money to pay for environmental cleanups and other drilling-related costs.
Natural Resources officials declined to comment on the report but said in a statement that state drilling regulations “reflect the latest science and best practices.”
Stewart said a state law enacted in May already contains several measures intended to increase protections and drilling oversight.
One measure demands that oil and gas companies obtain at least $5 million in liability insurance before they can get a shale-drilling permit. Companies must have at least $1 million to drill conventional wells.
Stewart said drillers also routinely sign agreements with county and township officials in which they promise to upgrade and repair roads as needed.
By Spencer Hunt
Pipelines - Are they coming our way?
Spectra Energy Corp., DTE Energy and Embridge Inc. announced Sept. 4 they want
to build a 250-mile pipeline that extends from northeastern Ohio to Michigan at
a cost of $1.9 billion.
Workers operating earthmoving equipment were busy Sept. 13
clearing land atop a large hill near the intersection of state Route 644 and
Hagan Road in Hanover Township. In May, the 117-acre site sold for $1.8 million
to Utica East Midstream Ohio LLC, according to courthouse records.
“People don’t know how big this is,” said a passerby who lives
in Hanoverton, a mile north of the site. “I’ve been watching them for about a
month, and they’re moving fast.”
MarkWest has secured a major customer with Oklahoma City-based
Gulfport Energy Corp., which has also been active drilling wells in the western
portion of Harrison County,. A pipeline leading west of the MarkWest project is
directed toward gathering lines under construction related to Gulfport’s well
sites, he says.
“That pipeline is of great urgency,” Millicent says.
Last month, Gulfport announced the initial results of some of
its wells in southeastern Ohio, the most productive of which is the Wagner 1-28H
well in the northwestern corner of the county.
The Wagner well recorded a peak rate of 4,650 barrels of oil
equivalent per day, outperforming by far Chesapeake Energy Corp.’s Buell well,
also in Harrison County. By comparison, Buell registered a peak rate of 3,010
barrels of oil equivalent per day.
“Gulfport had to put a small-scale processor at that [Wagner]
well,” Millicent says, and underscores the need to finish the MarkWest complex.
“They wanted to get it into production as quickly as possible. The other wells
are just waiting for the pipeline to get there.”
There are four major oil and gas companies active in Harrison
County, the most prolific leaseholder being Chesapeake. Gulfport owns a sizeable
lease position in the western and southern portions of the county, Hess Energy,
under a joint venture with Pittsburgh-based Consol Energy, has acreage mostly in
the eastern part of Harrison, while Chevron is drilling its first well in the
west.
“They’re all still trying to figure it out,” Millicent
remarks, “but there seems to be a notion that Harrison County is blessed to be
right in the fairway of the wet gas play.”
The county, home to just 15,000 people and two working
stoplights, was at one time a bustling coal-mining region. Just outside Cadiz,
the largest strip mine in Ohio, owned by Oxford Resource Partners, sits on land
just north of the MarkWest project.
Youngstown Business Journal
Thursday, September 13, 2012
Activists Protest Fracking, Regional Chamber Responds
Thursday, September 13, 2012
YOUNGSTOWN, Ohio – Activists concerned about the impact and consequences of
oil and gas operations in the Mahoning Valley say their rights as citizens have
been stripped from them, and demand that local communities be given the power to
regulate an industry that they say has grown all too powerful.
"It's about health, safety and welfare," said Doug Shields, a former president of Pittsburgh City Council who successfully led the charge to ban drilling within that city's limits in 2010. "In Pennsylvania, like Ohio, you have no zoning authority anymore and when an operation wants to come into a residential area, they do."
Shields spoke to a crowd of about 30 Wednesday afternoon at the First Unitarian Universalist Church, where the group was shown an 18-minute film, The Sky is Pink, by Josh Fox, who also produced Gasland, a scathing examination of the use of hydraulic fracturing in the oil and gas industry.
The group then marched to the steps of Stambaugh Auditorium and then to City Hall.
The event coincided with similar protests in several states across the country as part of "Freedom From Toxic Frack Waste: National Rally Day," organized by Frackfree America National Coalition and the Network for Oil & Gas Accountability & Protection.
Shields said the oil and gas industry is the only industry exempt from local zoning laws, which grants it an unfair advantage over other businesses. "How can that be?" he questioned.
He added that communities find it difficult to plan ahead as long as the oil and gas industry dangles incentives and bonus payments before landowners and local governments, which see a windfall of money in return for leasing their land.
Moreover, Shields said local governments have ignored the potential health risks and hazards that the industry poses.
"No one's looked at the health, welfare and safety issues, or the diversion of assets," that a community would require such as firefighter training to support a single industry, he said.
Shields said he was able to convince Pittsburgh City Council to ban drilling simply because he was able to present a solid case based on factual evidence.
"We brought science, law and industry before the council and at the end of the day, the council's assessment was that this is not safe," he said.
Oil and gas companies use a process called hydraulic fracturing and horizontal drilling to crack open tightly packed shale rock that holds trapped natural gas. Hydraulic fracturing, or "fracking," calls for injecting water, sand and chemicals under high pressure to break apart the shale and unleash the gas. The wastewater is contaminated, and is often stored in injection wells across the state of Ohio.
An injection well in Youngstown was tied to a series of earthquakes in the Mahoning Valley last year.
Shields emphasized his concerns that these chemicals -- some of them known carcinogens -- used in the fracking process can migrate through cement casings in the well shaft and poison water supplies.
"What happens to my water in my well, for other uses such as recreation? What happens to my health?" Shields said. "There are no answers for this." "This is something that has a profound lasting effect to everything in our community. Why would we not want to do our due diligence?" he asked.
Liberty Towsnhip Trustee Jodi Stoyak said that she's tried to pass a measure, to no avail, that would call for the township to investigate how it could attain more control over the oil and gas industry and drilling activity there.
"They tabled it," she said. "They didn't want to have anything to do with it." Stoyak also attempted to put a similar measure before the Ohio Township Association, but that, too was squelched when the local township association refused to endorse it.
"I don't know that they're all educated on this," she said. "My immediate concern is that we have no local control."
Ohio Rep. Robert Hagan, D-60 Youngstown, said in a statement that the national protest demonstrates a high-level of concern related to hydraulic fracturing and the threat it poses to the environment. "Today, in Youngstown and all across the country, people concerned about the dangers of fracking and injection wells are coming together to stand up to the big-money oil and gas industry," he said.
Hagan has supported a moratorium on new injection wells throughout the state, and contends that the oil and gas industry hasn't come clean on disclosing what chemicals are used to "frack" wells.
"This call-to-action day is an opportunity for the public to put pressure on and demand answers from these companies that have so far shown blatant disregard for anything other than their bottom line," Hagan said.
Tom Humphries, president and CEO of the Youngstown/Warren Regional Chamber, said in a statement that new Ohio regulations afford citizens adequate protection, and that opposition to the oil and gas industry is "misguided." "Looking at the facts shows that over the last two years, the Utica shale development has helped attract more than $1 billion in investments and about 1,500 new jobs in just the shale supply chains in the Mahoning Valley," Humphries said.
This development has proceeded without a single environmental incident related to hydraulic fracturing, a process that has been used in the drilling industry since the 1940s, Humphries continued. In the case of the brine injection wells, the state has shut down those wells suspected of causing problems and has strengthened regulations to protect the public, he added.
"I think protesting this responsible activity is misguided and does a disservice to the many people in our Valley who have obtained jobs or hope to obtain jobs related to shale development," Humphries said.
"I understand people have concerns," added Terry Fleming, executive director of the Ohio Petroleum Institute. "But, in Ohio we're operating under the strictest regulations in the country."
Fleming said that while he was in town last week for the second-annual Youngstown Ohio Utica and Natural Gas conference and expo, he noticed a substantially different atmosphere in the community compared to five or six years ago.
"I saw a totally different Mahoning Valley," he said. "You could just feel the excitement."
Many of those opposed to hydraulic fracturing and drilling are passing on information that isn't factual, and use fear as a means to get their message across, Fleming stated. Despite vocal protests, he believes the overwhelming majority of residents in the Mahoning Valley are largely in favor of what the oil and gas industry is doing.
"As in any industry, there are risks," he noted. But new companies and jobs moving into the Valley also provide a sense of stability and optimism that the region hasn't experienced in decades.
"The good far, far outweighs the risks involved," Fleming said. "If you give people the straight facts and let them decide for themselves, the majority will be quite comfortable [with] what we're doing in Ohio."
Copyright 2012 The Business Journal, Youngstown, Ohio.
"It's about health, safety and welfare," said Doug Shields, a former president of Pittsburgh City Council who successfully led the charge to ban drilling within that city's limits in 2010. "In Pennsylvania, like Ohio, you have no zoning authority anymore and when an operation wants to come into a residential area, they do."
Shields spoke to a crowd of about 30 Wednesday afternoon at the First Unitarian Universalist Church, where the group was shown an 18-minute film, The Sky is Pink, by Josh Fox, who also produced Gasland, a scathing examination of the use of hydraulic fracturing in the oil and gas industry.
The group then marched to the steps of Stambaugh Auditorium and then to City Hall.
The event coincided with similar protests in several states across the country as part of "Freedom From Toxic Frack Waste: National Rally Day," organized by Frackfree America National Coalition and the Network for Oil & Gas Accountability & Protection.
Shields said the oil and gas industry is the only industry exempt from local zoning laws, which grants it an unfair advantage over other businesses. "How can that be?" he questioned.
He added that communities find it difficult to plan ahead as long as the oil and gas industry dangles incentives and bonus payments before landowners and local governments, which see a windfall of money in return for leasing their land.
Moreover, Shields said local governments have ignored the potential health risks and hazards that the industry poses.
"No one's looked at the health, welfare and safety issues, or the diversion of assets," that a community would require such as firefighter training to support a single industry, he said.
Shields said he was able to convince Pittsburgh City Council to ban drilling simply because he was able to present a solid case based on factual evidence.
"We brought science, law and industry before the council and at the end of the day, the council's assessment was that this is not safe," he said.
Oil and gas companies use a process called hydraulic fracturing and horizontal drilling to crack open tightly packed shale rock that holds trapped natural gas. Hydraulic fracturing, or "fracking," calls for injecting water, sand and chemicals under high pressure to break apart the shale and unleash the gas. The wastewater is contaminated, and is often stored in injection wells across the state of Ohio.
An injection well in Youngstown was tied to a series of earthquakes in the Mahoning Valley last year.
Shields emphasized his concerns that these chemicals -- some of them known carcinogens -- used in the fracking process can migrate through cement casings in the well shaft and poison water supplies.
"What happens to my water in my well, for other uses such as recreation? What happens to my health?" Shields said. "There are no answers for this." "This is something that has a profound lasting effect to everything in our community. Why would we not want to do our due diligence?" he asked.
Liberty Towsnhip Trustee Jodi Stoyak said that she's tried to pass a measure, to no avail, that would call for the township to investigate how it could attain more control over the oil and gas industry and drilling activity there.
"They tabled it," she said. "They didn't want to have anything to do with it." Stoyak also attempted to put a similar measure before the Ohio Township Association, but that, too was squelched when the local township association refused to endorse it.
"I don't know that they're all educated on this," she said. "My immediate concern is that we have no local control."
Ohio Rep. Robert Hagan, D-60 Youngstown, said in a statement that the national protest demonstrates a high-level of concern related to hydraulic fracturing and the threat it poses to the environment. "Today, in Youngstown and all across the country, people concerned about the dangers of fracking and injection wells are coming together to stand up to the big-money oil and gas industry," he said.
Hagan has supported a moratorium on new injection wells throughout the state, and contends that the oil and gas industry hasn't come clean on disclosing what chemicals are used to "frack" wells.
"This call-to-action day is an opportunity for the public to put pressure on and demand answers from these companies that have so far shown blatant disregard for anything other than their bottom line," Hagan said.
Tom Humphries, president and CEO of the Youngstown/Warren Regional Chamber, said in a statement that new Ohio regulations afford citizens adequate protection, and that opposition to the oil and gas industry is "misguided." "Looking at the facts shows that over the last two years, the Utica shale development has helped attract more than $1 billion in investments and about 1,500 new jobs in just the shale supply chains in the Mahoning Valley," Humphries said.
This development has proceeded without a single environmental incident related to hydraulic fracturing, a process that has been used in the drilling industry since the 1940s, Humphries continued. In the case of the brine injection wells, the state has shut down those wells suspected of causing problems and has strengthened regulations to protect the public, he added.
"I think protesting this responsible activity is misguided and does a disservice to the many people in our Valley who have obtained jobs or hope to obtain jobs related to shale development," Humphries said.
"I understand people have concerns," added Terry Fleming, executive director of the Ohio Petroleum Institute. "But, in Ohio we're operating under the strictest regulations in the country."
Fleming said that while he was in town last week for the second-annual Youngstown Ohio Utica and Natural Gas conference and expo, he noticed a substantially different atmosphere in the community compared to five or six years ago.
"I saw a totally different Mahoning Valley," he said. "You could just feel the excitement."
Many of those opposed to hydraulic fracturing and drilling are passing on information that isn't factual, and use fear as a means to get their message across, Fleming stated. Despite vocal protests, he believes the overwhelming majority of residents in the Mahoning Valley are largely in favor of what the oil and gas industry is doing.
"As in any industry, there are risks," he noted. But new companies and jobs moving into the Valley also provide a sense of stability and optimism that the region hasn't experienced in decades.
"The good far, far outweighs the risks involved," Fleming said. "If you give people the straight facts and let them decide for themselves, the majority will be quite comfortable [with] what we're doing in Ohio."
Copyright 2012 The Business Journal, Youngstown, Ohio.
Wednesday, September 12, 2012
New Well Permits Issued
COLUMBUS, Ohio – The Ohio Department of Natural Resources has issued six new
horizontal drilling permits to Chesapeake Exploration LLC that would allow the
development of wells in Columbiana and Carroll counties.
Chesapeake was awarded a permit Sept. 4 to drill in Salem and Center townships in Columbiana County, ODNR reported. The well in Salem is permitted for the Weaver farm while the well in Center Township is for the Mrugala property.
The Oklahoma-based energy company has drilled 20 new wells in the county since last year and at least one well, the Sanor well in Knox Township, is producing, according to ODNR's field activity report.
Four other horizontal permits were issued to Chesapeake for new wells in Carroll County, the most active region in the Utica shale.
Chesapeake now holds permits for more than 120 horizontal wells in Carroll County.
And, Hilcorp Energy Corp. is looking to drill a deeper well in Lawrence County in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.
Houston-based Hilcorp was awarded a permit Aug. 23 to drill deeper into shale formations under the Whiting farm, according to state DEP records. The company had secured a horizontal permit to drill on the land earlier this year.
Chesapeake was awarded a permit Sept. 4 to drill in Salem and Center townships in Columbiana County, ODNR reported. The well in Salem is permitted for the Weaver farm while the well in Center Township is for the Mrugala property.
The Oklahoma-based energy company has drilled 20 new wells in the county since last year and at least one well, the Sanor well in Knox Township, is producing, according to ODNR's field activity report.
Four other horizontal permits were issued to Chesapeake for new wells in Carroll County, the most active region in the Utica shale.
Chesapeake now holds permits for more than 120 horizontal wells in Carroll County.
And, Hilcorp Energy Corp. is looking to drill a deeper well in Lawrence County in western Pennsylvania, according to the Pennsylvania Department of Environmental Protection.
Houston-based Hilcorp was awarded a permit Aug. 23 to drill deeper into shale formations under the Whiting farm, according to state DEP records. The company had secured a horizontal permit to drill on the land earlier this year.
Monday, September 10, 2012
Communities seek ways to override state control of oil and gas drilling boom
Patti Gorcheff is worried about the potential dangers of oil and gas drilling
near schools in her community near Youngstown.
Julia Fuhrman Davis, who lives in the same area south of town, considers the drilling — known as hydraulic fracturing or fracking — to be a threat, and she’s angry that there is little citizens can do.
Their concerns are twofold: The rich discoveries of oil and gas in eastern Ohio have brought a surge in drilling, but eight years ago, the Ohio legislature and former Gov. Bob Taft stripped local governments of control.
The Ohio Department of Natural Resources is now in charge.
The two activists are involved in grass-roots campaigns to give communities more weapons to fight the spread of horizontal boring in the Utica shale formation, and injection wells, which are used for disposal of the polluted water that comes from oil and gas exploration.
They are pushing what’s called limited home rule in Ohio townships and a community bill of rights in cities and villages, both aimed at increased protection for air, water, health, property values and public safety.
Limited home rule already is an option for townships. The community bill of rights could be adopted in cities and villages as resolutions or charter amendments. Such provisions say state laws allowing drilling violate the civil rights of local residents and threaten their health and safety. Supporters say the new efforts give local communities power over state laws.
However, state officials believe otherwise. Under Ohio law, drilling cannot be banned or blocked by local communities.
“We have the sole authority under Ohio law for regulating aspects of the oil and gas industry in Ohio,” said agency spokeswoman Heidi Hetzel-Evans. “That, we feel, is clear.”
‘It’s David versus Goliath’
“We can’t ban fracking, and we know that,” said Fuhrman Davis. “But with limited home rule, we can adopt local rules on hours of operation, noise limits, truck traffic and routes, local nuisance rules, fences and sign rules for drillers, waste shipments. … We can use those rules to fight back a little bit, to give us more control. It’s David versus Goliath. But it’s a way to fight drilling.”
She said it’s not a fracking problem; it’s a democracy problem.
“Citizens are losing rights and this is just another example. … Home rule would help us regain that voice,” she said.
Anti-fracking efforts are growing in Ohio, Pennsylvania and New York as interest in shale drilling grows.
Locally, limited home rule will appear on the Nov. 6 ballot in Portage County’s Randolph Township.
After the township rejected a proposed community bill of rights, a group led by Sandra and Newt Engle decided to place the issue of home rule on the ballot. They needed 209 signatures and collected 271.
Will home rule provide the air-and-water protection they seek?
“I hope so. But I really don’t know,” Newt Engle said. “No one does. That truly is the great unknown.”
If approved by voters, extended home rule would begin Jan. 1. And there would be challenges. Regulations must apply to all, not just drillers.
And there is a financial cost to taking on home rule, according to township trustee Roger Klodt.
Establishing a police department and hiring a part-time law director could cost as much as $500,000, and that would require a tax levy of as much as 5 mills, Klodt said.
Gorcheff and Fuhrman Davis have hit a legal snag in their efforts to get expanded home rule in their community, Beaver Township, on the Nov. 6 ballot.
The two women circulated petitions and got 369 signatures, more than the 296 required. However, on July 27, their petitions were rejected by the township, which said the wrong forms were used.
Akron attorney Warner Mendenhall has taken their case to the Ohio Supreme Court, asking that trustees be ordered to place the issue before voters.
The high court has not yet ruled, leaving the home-rule issue in Beaver Township in legal limbo.
Limited home rule is in place in 48 urban Ohio townships, including Springfield in Summit County and Lake, Jackson, Plain and Perry in Stark County.
Drilling in Medina County has led to serious discussions about limited home rule there, but nothing is likely to appear on the ballot this year, said spokeswoman Sandra Bilek of the Concerned Citizens of Medina County.
She also is involved in a new grass-roots campaign to convince Gov. John Kasich and legislative leaders to return control of drilling to municipalities. Nonbinding resolutions seeking that change are being submitted to local governments and petitions will be circulated, she said.
Bill of rights
Others are trying a different approach: pioneering community bills of rights that acknowledge the rights of the citizens over the government.
Some communities are targeting gas wells, some injection wells, and some target both.
Cincinnati City Council has voted to ban injection wells. The village of Yellow Springs near Dayton is adopting a resolution against gas and injection wells.
Mansfield will vote on Nov. 6 to amend its charter to block injection wells. Athens, in southeastern Ohio, prohibits drilling in protected areas around drinking-water wells.
On Tuesday, the Broadview Heights City Council approved a city charter amendment prohibiting future drilling as part of a community bill of rights. If approved by voters Nov. 6, the initiative would also state that city residents have a right to clean air, clean water, clean soil and a sustainable energy future.
Behind the initiative was Mothers Against Drilling in our Neighborhoods, which collected 1,519 valid signatures on petitions, meeting requirements in the city charter and Ohio law. There are more than 90 active wells in the Cleveland suburb.
Water agencies in Montgomery and Hamilton counties — Dayton and Cincinnati, respectively — are fighting injection wells for fear they will threaten drinking water.
An additional 29 Ohio municipalities have called for drilling bans and moratoriums. They include North Canton, Munroe Falls, Canton, Garrettsville, Hartville, Meyers Lake and Canal Fulton and the following townships: Hinckley, Medina, Montville, Plain, York and Randolph, according to Food and Water Watch, a national environmental group concerned about fracking.
Nonprofit leads effort
Behind many of the local efforts, including the one in Broadview Heights, is the Community Environmental Legal Defense Fund, a nonprofit based in Mercersburg, Pa.
Its pro-democracy campaign was first used in Ohio years ago in an unsuccessful effort to wrest control of factory farms from the Ohio Department of Agriculture and give communities more leverage.
To date, more than 100 communities, mostly in Pennsylvania, have pushed for increased local control with laws drafted by the defense fund, said group spokesman Ben Price.
He worked with Pittsburgh in late 2010 on banning fracking within the city. More recently, he made a presentation to Youngstown City Council in support of a community bill of rights.
“It’s not a movement yet,” he said in a telephone interview. “What’s happening is small, but it’s growing. … We’re attempting to assist communities to establish the greatest degree of local control and self-government possible.”
When laws don’t serve the people, you change the laws, he said.
The bills of rights recognize that local residents “have certain rights and that to protect those rights they have the democratic authority to prohibit activities that would violate these rights,” he said. “Our basic premise is that those rights are yours, and for the state to remove local control is a violation of those rights.”
Industry opposition
The industry is strongly against the citizen efforts.
“The activist organizations furthering these efforts are taking cues from out-of-state organizations that oppose the responsible development of fossil fuels at every turn,” said Dan Alfaro of the pro-drilling, industry-backed group Energy in Depth-Ohio.
“More often than not, these organizations ignore the fact that the region has a long history of development — development that utilized the six-decade-old practice of the hydraulic fracturing process they have focused efforts on. More and more Ohioans are witnessing the positive benefits we are already seeing in this early stage in the exploration of the Utica shale and have educated themselves on the time-tested practices and processes involved in oil and natural gas extraction.”
Critics of the citizen movement point out that landowners who want to drill may have their rights taken away.
Until 2004, Ohio municipalities had the right to control where — and whether — oil and gas wells could be drilled in their communities through zoning and outright bans.
But with passage of House Bill 278, the Division of Oil and Gas Resources Management in the Department of Natural Resources became the sole authority over oil and gas wells.
To date, there have been no legal challenges to local attempts to control the drilling.
Ohio Attorney General Mike DeWine’s office can’t comment on such scenarios, said spokesman Dan Tierney. His office would be responsible for advising and defending Natural Resources and therefore is in a position of attorney-client privilege.
Even the citizen groups are uncertain whether more home rule will stop or slow drilling.
“If hundreds of local communities adopted home rule, it would be wonderful and amazing and might make a difference,” said anti-fracking activist Teresa Mills of Columbus. But she said she fears that it would take years to win such widespread support and that drilling by then will be firmly entrenched in eastern Ohio.
She said there appears to be little interest in the legislature to rethink the local-control issue.
Julia Furhman Davis talks about the efforts of she and friend Patti Gorcheff
having home rule established in Beaver Township.
(Karen Schiely /Akron Beacon Journal)
“Fracking is waking people up that we don’t have home rule or control over what is happening locally. It is an issue of trying to protect democracy or fixing the lack of democracy,” she said.
Yellow Springs will be the first Ohio community to ban fracking and injection wells through rights-based legislation, although it’s not in the target zone for oil and gas.
The proposal, pushed by a grass-roots group, Gas and Oil Drilling Awareness and Education, was introduced on Aug. 6 and is expected to get a final vote on Sept. 17.
The proposed ordinance would ban oil and gas extraction or injection wells in Yellow Springs on the premise that they violate the civil rights and threaten the health and safety of residents.
“It’s something we believe in and we’re convinced that this is the right way to go,” said Vickie Hennessy, a spokeswoman for the grass-roots group. “This one stood out and we feel that it might really work. This is the only clear way to go.”
However, Village Solicitor John Chambers told local media that the ordinance may not be enforceable and could face a court challenge.
The Community Environmental Legal Defense Fund says Yellow Springs will join 12 communities in Pennsylvania and New York in approving the rights-based legislation, but there have been no attempts at enforcement, so there have been no court challenges.
Hennessy acknowledged that oil and gas exploration in Yellow Springs isn’t likely, but the underground geology could open the community to injection wells.
Voters in Mansfield will be asked to approve a city charter amendment that would block two proposed injection wells in Richland County.
The change, drafted by Law Director John Spon, would add a community bill of rights to the charter and prohibit the injection of fracking waste on the grounds that the policy is necessary to secure and protect citizens’ rights.
The charter change also recognizes that corporate rights are subordinate to the rights of the people of Mansfield, as well as recognizing the rights of residents, natural communities and ecosystems to clean air and water.
A Texas-based company, Preferred Fluids Management, has state approval to drill two 5,000-foot-deep wells in Mans-field. The company intends to take briny wastes from Pennsylvania via rail.
In Mahoning County, Gorcheff and Fuhrman Davis are not giving up.
“Quitting is not an option,” Gorcheff said. “We’ve worked too hard. This is just such a monster to fight. We’re digging in.”
Said Fuhrman Davis: “We live here. We should decide what happens here.”
Julia Fuhrman Davis, who lives in the same area south of town, considers the drilling — known as hydraulic fracturing or fracking — to be a threat, and she’s angry that there is little citizens can do.
Their concerns are twofold: The rich discoveries of oil and gas in eastern Ohio have brought a surge in drilling, but eight years ago, the Ohio legislature and former Gov. Bob Taft stripped local governments of control.
The Ohio Department of Natural Resources is now in charge.
The two activists are involved in grass-roots campaigns to give communities more weapons to fight the spread of horizontal boring in the Utica shale formation, and injection wells, which are used for disposal of the polluted water that comes from oil and gas exploration.
They are pushing what’s called limited home rule in Ohio townships and a community bill of rights in cities and villages, both aimed at increased protection for air, water, health, property values and public safety.
Limited home rule already is an option for townships. The community bill of rights could be adopted in cities and villages as resolutions or charter amendments. Such provisions say state laws allowing drilling violate the civil rights of local residents and threaten their health and safety. Supporters say the new efforts give local communities power over state laws.
However, state officials believe otherwise. Under Ohio law, drilling cannot be banned or blocked by local communities.
“We have the sole authority under Ohio law for regulating aspects of the oil and gas industry in Ohio,” said agency spokeswoman Heidi Hetzel-Evans. “That, we feel, is clear.”
‘It’s David versus Goliath’
“We can’t ban fracking, and we know that,” said Fuhrman Davis. “But with limited home rule, we can adopt local rules on hours of operation, noise limits, truck traffic and routes, local nuisance rules, fences and sign rules for drillers, waste shipments. … We can use those rules to fight back a little bit, to give us more control. It’s David versus Goliath. But it’s a way to fight drilling.”
She said it’s not a fracking problem; it’s a democracy problem.
“Citizens are losing rights and this is just another example. … Home rule would help us regain that voice,” she said.
Anti-fracking efforts are growing in Ohio, Pennsylvania and New York as interest in shale drilling grows.
Locally, limited home rule will appear on the Nov. 6 ballot in Portage County’s Randolph Township.
After the township rejected a proposed community bill of rights, a group led by Sandra and Newt Engle decided to place the issue of home rule on the ballot. They needed 209 signatures and collected 271.
Will home rule provide the air-and-water protection they seek?
“I hope so. But I really don’t know,” Newt Engle said. “No one does. That truly is the great unknown.”
If approved by voters, extended home rule would begin Jan. 1. And there would be challenges. Regulations must apply to all, not just drillers.
And there is a financial cost to taking on home rule, according to township trustee Roger Klodt.
Establishing a police department and hiring a part-time law director could cost as much as $500,000, and that would require a tax levy of as much as 5 mills, Klodt said.
Gorcheff and Fuhrman Davis have hit a legal snag in their efforts to get expanded home rule in their community, Beaver Township, on the Nov. 6 ballot.
The two women circulated petitions and got 369 signatures, more than the 296 required. However, on July 27, their petitions were rejected by the township, which said the wrong forms were used.
Akron attorney Warner Mendenhall has taken their case to the Ohio Supreme Court, asking that trustees be ordered to place the issue before voters.
The high court has not yet ruled, leaving the home-rule issue in Beaver Township in legal limbo.
Limited home rule is in place in 48 urban Ohio townships, including Springfield in Summit County and Lake, Jackson, Plain and Perry in Stark County.
Drilling in Medina County has led to serious discussions about limited home rule there, but nothing is likely to appear on the ballot this year, said spokeswoman Sandra Bilek of the Concerned Citizens of Medina County.
She also is involved in a new grass-roots campaign to convince Gov. John Kasich and legislative leaders to return control of drilling to municipalities. Nonbinding resolutions seeking that change are being submitted to local governments and petitions will be circulated, she said.
Bill of rights
Others are trying a different approach: pioneering community bills of rights that acknowledge the rights of the citizens over the government.
Some communities are targeting gas wells, some injection wells, and some target both.
Cincinnati City Council has voted to ban injection wells. The village of Yellow Springs near Dayton is adopting a resolution against gas and injection wells.
Mansfield will vote on Nov. 6 to amend its charter to block injection wells. Athens, in southeastern Ohio, prohibits drilling in protected areas around drinking-water wells.
On Tuesday, the Broadview Heights City Council approved a city charter amendment prohibiting future drilling as part of a community bill of rights. If approved by voters Nov. 6, the initiative would also state that city residents have a right to clean air, clean water, clean soil and a sustainable energy future.
Behind the initiative was Mothers Against Drilling in our Neighborhoods, which collected 1,519 valid signatures on petitions, meeting requirements in the city charter and Ohio law. There are more than 90 active wells in the Cleveland suburb.
Water agencies in Montgomery and Hamilton counties — Dayton and Cincinnati, respectively — are fighting injection wells for fear they will threaten drinking water.
An additional 29 Ohio municipalities have called for drilling bans and moratoriums. They include North Canton, Munroe Falls, Canton, Garrettsville, Hartville, Meyers Lake and Canal Fulton and the following townships: Hinckley, Medina, Montville, Plain, York and Randolph, according to Food and Water Watch, a national environmental group concerned about fracking.
Nonprofit leads effort
Behind many of the local efforts, including the one in Broadview Heights, is the Community Environmental Legal Defense Fund, a nonprofit based in Mercersburg, Pa.
Its pro-democracy campaign was first used in Ohio years ago in an unsuccessful effort to wrest control of factory farms from the Ohio Department of Agriculture and give communities more leverage.
To date, more than 100 communities, mostly in Pennsylvania, have pushed for increased local control with laws drafted by the defense fund, said group spokesman Ben Price.
He worked with Pittsburgh in late 2010 on banning fracking within the city. More recently, he made a presentation to Youngstown City Council in support of a community bill of rights.
“It’s not a movement yet,” he said in a telephone interview. “What’s happening is small, but it’s growing. … We’re attempting to assist communities to establish the greatest degree of local control and self-government possible.”
When laws don’t serve the people, you change the laws, he said.
The bills of rights recognize that local residents “have certain rights and that to protect those rights they have the democratic authority to prohibit activities that would violate these rights,” he said. “Our basic premise is that those rights are yours, and for the state to remove local control is a violation of those rights.”
Industry opposition
The industry is strongly against the citizen efforts.
“The activist organizations furthering these efforts are taking cues from out-of-state organizations that oppose the responsible development of fossil fuels at every turn,” said Dan Alfaro of the pro-drilling, industry-backed group Energy in Depth-Ohio.
“More often than not, these organizations ignore the fact that the region has a long history of development — development that utilized the six-decade-old practice of the hydraulic fracturing process they have focused efforts on. More and more Ohioans are witnessing the positive benefits we are already seeing in this early stage in the exploration of the Utica shale and have educated themselves on the time-tested practices and processes involved in oil and natural gas extraction.”
Critics of the citizen movement point out that landowners who want to drill may have their rights taken away.
Until 2004, Ohio municipalities had the right to control where — and whether — oil and gas wells could be drilled in their communities through zoning and outright bans.
But with passage of House Bill 278, the Division of Oil and Gas Resources Management in the Department of Natural Resources became the sole authority over oil and gas wells.
To date, there have been no legal challenges to local attempts to control the drilling.
Ohio Attorney General Mike DeWine’s office can’t comment on such scenarios, said spokesman Dan Tierney. His office would be responsible for advising and defending Natural Resources and therefore is in a position of attorney-client privilege.
Even the citizen groups are uncertain whether more home rule will stop or slow drilling.
“If hundreds of local communities adopted home rule, it would be wonderful and amazing and might make a difference,” said anti-fracking activist Teresa Mills of Columbus. But she said she fears that it would take years to win such widespread support and that drilling by then will be firmly entrenched in eastern Ohio.
She said there appears to be little interest in the legislature to rethink the local-control issue.
Julia Furhman Davis talks about the efforts of she and friend Patti Gorcheff
having home rule established in Beaver Township. (Karen Schiely /Akron Beacon Journal)
“Fracking is waking people up that we don’t have home rule or control over what is happening locally. It is an issue of trying to protect democracy or fixing the lack of democracy,” she said.
Yellow Springs will be the first Ohio community to ban fracking and injection wells through rights-based legislation, although it’s not in the target zone for oil and gas.
The proposal, pushed by a grass-roots group, Gas and Oil Drilling Awareness and Education, was introduced on Aug. 6 and is expected to get a final vote on Sept. 17.
The proposed ordinance would ban oil and gas extraction or injection wells in Yellow Springs on the premise that they violate the civil rights and threaten the health and safety of residents.
“It’s something we believe in and we’re convinced that this is the right way to go,” said Vickie Hennessy, a spokeswoman for the grass-roots group. “This one stood out and we feel that it might really work. This is the only clear way to go.”
However, Village Solicitor John Chambers told local media that the ordinance may not be enforceable and could face a court challenge.
The Community Environmental Legal Defense Fund says Yellow Springs will join 12 communities in Pennsylvania and New York in approving the rights-based legislation, but there have been no attempts at enforcement, so there have been no court challenges.
Hennessy acknowledged that oil and gas exploration in Yellow Springs isn’t likely, but the underground geology could open the community to injection wells.
Voters in Mansfield will be asked to approve a city charter amendment that would block two proposed injection wells in Richland County.
The change, drafted by Law Director John Spon, would add a community bill of rights to the charter and prohibit the injection of fracking waste on the grounds that the policy is necessary to secure and protect citizens’ rights.
The charter change also recognizes that corporate rights are subordinate to the rights of the people of Mansfield, as well as recognizing the rights of residents, natural communities and ecosystems to clean air and water.
A Texas-based company, Preferred Fluids Management, has state approval to drill two 5,000-foot-deep wells in Mans-field. The company intends to take briny wastes from Pennsylvania via rail.
In Mahoning County, Gorcheff and Fuhrman Davis are not giving up.
“Quitting is not an option,” Gorcheff said. “We’ve worked too hard. This is just such a monster to fight. We’re digging in.”
Said Fuhrman Davis: “We live here. We should decide what happens here.”
Thursday, September 6, 2012
Broadview Heights residents will have a chance in November to say whether they want more oil and gas wells in their city.
Tish O'Dell, stands near a well, left, and storage tanks, right, common sights in Broadview Heights. Tish helped collect more than 1,700 signatures to place an anti-drilling charter amendment on the November ballot.
Broadview Heights residents will have a chance in November to say whether they want more oil and gas wells in their city.
But even if they oppose new drilling, it's not clear whether they can actually prevent it from happening.
Council members voted unanimously Tuesday night to place an amendment on the ballot that would prohibit new wells in the southern Cuyahoga County bedroom community. The city currently has about 90 wells scattered throughout 13 square miles, most of them sunk in the last five years.
"Based on going door to door, I think people here think it's enough," said Tish O'Dell, who helped organize the drive to collect signatures in support of an anti-drilling ballot initiative.
"This is a victory for the rights of the local community over state pre-emptive law, which strips citizens of local self-governing rights," she said.
O'Dell, co-founder of the grassroots Mothers Against Drilling in Our Neighborhoods, said using a charter amendment instead of a city ordinance to outlaw new oil and gas operations is aimed at trumping a 2004 state law that gave the Ohio Department of Natural Resources authority for all decisions about drilling.
"We are seeing more of these local resolutions," ODNR spokeswoman Heidi Hetzel-Evans said. "We do have sole authority for regulating all aspects of the oil and gas industry in Ohio and we will continue to uphold the law."
Broadview Heights Law Director Vince Ruffa advised council members to oppose putting the amendment before voters.
"As much as I would love to say we can control it, we can't," he said. Ruffa predicted the amendment will be unenforceable if adopted "And if we try to enforce it, I would assume that we will get sued by the people who want to drill."
Councilman George Stelmaschuk said the measure might send a message even if it doesn't withstand legal scrutiny.
"I hope at least it will provide some kind of deterrent," he said. "Maybe some of these oil companies will see that we don't want these wells, and maybe residents . . .won't sign leases."
Supporters of a ban collected over 1,700 signatures in July and August backing a ballot vote.
Dubbed a "Community Bill of Rights," the measure says that Broadview Heights residents have the right to clean air, clean water, clean soil and a sustainable energy future. It also prohibits new drilling or using new methods such as horizontal fracking to extract gas and oil from existing wells.
Other communities in Ohio, including Mansfield, also are trying to block drilling operations by arguing that the home-rule provision of the Ohio Constitution supercedes the authority of the ODNR.
O'Dell said her group worked closely with the Community Environmental Legal Defense Fund, out of Pennsylvania, to craft the bill-of-rights charter change.
"Our motive is strictly based on, we care about the community and the people in the community," she said.
Tuesday, September 4, 2012
Ohio already has nearly 35,000 wells to monitor, the report found.
Taxing issues
In the area of taxes, however, the report seems to indicate that drillers are getting a very good deal in Ohio, which currently taxes the production of gas at 2.5 cents per thousand cubic feet (mcf) of gas produced, or about 1% of the gas' market value. That's much less than the 18.45 cents per mcf, or 7.5%, that Texas charges with its severance tax, or the 17.2 cents per mcf (7%) that Oklahoma charges, the report found. The study used a price point of $2.46 per mcf in order to convert absolute taxes to percentages.
Drillers, who are fighting Ohio Gov. John Kasich's ongoing efforts to increase severance taxes in Ohio, have argued that a tax increase would have a chilling effect on drilling in the state, pushing companies to move their rigs to other states.
However, the report shows that some states with the highest severance taxes also have the highest number of wells drilled.
Texas has among the highest overall tax rates on oil and gas production but leads the nation with more than 95,000 total gas wells and twice the shale gas production of any other state. But Texas is a very large state in terms of its land area. But even relatively small West Virginia, with a tax rate of 12.3 cents per mcf, or about 5% of the total proceeds from the sale of its gas, has more than 52,000 gas wells, all of them old-style conventional wells, data in the report show.
Oklahoma, similar in size to Ohio and with taxes about seven times higher, still has 44,000 gas wells and is the third-largest producing state in terms of shale gas, the report finds.
Data like that might be helpful to state legislators as they try to decide whether to back their governor's tax request. But both Mr. Richardson and Tom Stewart, executive vice president of the Ohio Oil and Gas Association, warned that comparing how states tax gas drilling isn't always as simple as just comparing rates.
“There may be a lower tax on initial production in some states (such as Texas),” Mr. Richardson said. “The problem with that is, on shale gas wells, that's a substantial part of your tax revenues.”
He said that's because shale gas wells tend to produce more gas per day initially, right after they are drilled and production has begun, than they do months or even days and weeks afterward.
Scratching the surface
Mr. Stewart said he's looked at several other states that, on the surface, have higher taxes than Ohio — and found that there are mitigating circumstances in many of those states that result in taxes that are effectively lower, especially for horizontal drilling of shale gas wells that produce gas only after they are fracked, like the wells in Ohio. Texas, for example, charges its base tax rate on drillers accessing conventional deposits of oil and gas, but discounts the rate significantly for high-cost shale gas, he said.
Other states have similar mitigating circumstances, Mr. Stewart said. For example, Michigan has a tax rate of 5%, which is about five times higher than Ohio.
“But, what we don't often read is that a producer paying that 5% in Michigan gets to offset that against his normal state business taxes. ... So it's a fair deal,” Mr. Stewart said.
Other states should not be used as examples, because their tax strategies aren't working, he said.
“Arkansas put in a severance tax in 2008, gave a small abatement period of a couple of years — and ever since then, the drilling rate has dropped by as much as 50%,” Mr. Stewart said.
“And West Virginia? I'm not sure why anyone in Ohio public policy would want to mimic the state of West Virginia,” he said, noting that drillers are ignoring parts of West Virginia, while drilling in nearby Pennsylvania is going strong.
Pennsylvania charges drillers an impact fee to compensate local governments for wear and tear on their infrastructure but has no severance tax, he said. “That really hasn't worked out for the great state of West Virginia,” Mr. Stewart said.
Mr. Stewart said he's fine with Ohio's regulations. Indeed, he contends, they are the result of about a century of drilling in Ohio and represent challenges that were met along the way with new laws that often were supported by the oil and gas industry.
But higher taxes are something the industry remains dead set against, he said. A tax of just a few percentage points on a drillers' gross receipts could end up being a tax on as much as half of their profits, because margins are tight, Mr. Stewart said.
“And anyone who believes that taking half of the net profits won't have an impact on the drilling rate is nuts,” he said.
By DAN SHINGLE
Partial Article CCB
4:30 am, September 4, 2012
In the area of taxes, however, the report seems to indicate that drillers are getting a very good deal in Ohio, which currently taxes the production of gas at 2.5 cents per thousand cubic feet (mcf) of gas produced, or about 1% of the gas' market value. That's much less than the 18.45 cents per mcf, or 7.5%, that Texas charges with its severance tax, or the 17.2 cents per mcf (7%) that Oklahoma charges, the report found. The study used a price point of $2.46 per mcf in order to convert absolute taxes to percentages.
Drillers, who are fighting Ohio Gov. John Kasich's ongoing efforts to increase severance taxes in Ohio, have argued that a tax increase would have a chilling effect on drilling in the state, pushing companies to move their rigs to other states.
However, the report shows that some states with the highest severance taxes also have the highest number of wells drilled.
Texas has among the highest overall tax rates on oil and gas production but leads the nation with more than 95,000 total gas wells and twice the shale gas production of any other state. But Texas is a very large state in terms of its land area. But even relatively small West Virginia, with a tax rate of 12.3 cents per mcf, or about 5% of the total proceeds from the sale of its gas, has more than 52,000 gas wells, all of them old-style conventional wells, data in the report show.
Oklahoma, similar in size to Ohio and with taxes about seven times higher, still has 44,000 gas wells and is the third-largest producing state in terms of shale gas, the report finds.
Data like that might be helpful to state legislators as they try to decide whether to back their governor's tax request. But both Mr. Richardson and Tom Stewart, executive vice president of the Ohio Oil and Gas Association, warned that comparing how states tax gas drilling isn't always as simple as just comparing rates.
“There may be a lower tax on initial production in some states (such as Texas),” Mr. Richardson said. “The problem with that is, on shale gas wells, that's a substantial part of your tax revenues.”
He said that's because shale gas wells tend to produce more gas per day initially, right after they are drilled and production has begun, than they do months or even days and weeks afterward.
Scratching the surface
Mr. Stewart said he's looked at several other states that, on the surface, have higher taxes than Ohio — and found that there are mitigating circumstances in many of those states that result in taxes that are effectively lower, especially for horizontal drilling of shale gas wells that produce gas only after they are fracked, like the wells in Ohio. Texas, for example, charges its base tax rate on drillers accessing conventional deposits of oil and gas, but discounts the rate significantly for high-cost shale gas, he said.
Other states have similar mitigating circumstances, Mr. Stewart said. For example, Michigan has a tax rate of 5%, which is about five times higher than Ohio.
“But, what we don't often read is that a producer paying that 5% in Michigan gets to offset that against his normal state business taxes. ... So it's a fair deal,” Mr. Stewart said.
Other states should not be used as examples, because their tax strategies aren't working, he said.
“Arkansas put in a severance tax in 2008, gave a small abatement period of a couple of years — and ever since then, the drilling rate has dropped by as much as 50%,” Mr. Stewart said.
“And West Virginia? I'm not sure why anyone in Ohio public policy would want to mimic the state of West Virginia,” he said, noting that drillers are ignoring parts of West Virginia, while drilling in nearby Pennsylvania is going strong.
Pennsylvania charges drillers an impact fee to compensate local governments for wear and tear on their infrastructure but has no severance tax, he said. “That really hasn't worked out for the great state of West Virginia,” Mr. Stewart said.
Mr. Stewart said he's fine with Ohio's regulations. Indeed, he contends, they are the result of about a century of drilling in Ohio and represent challenges that were met along the way with new laws that often were supported by the oil and gas industry.
But higher taxes are something the industry remains dead set against, he said. A tax of just a few percentage points on a drillers' gross receipts could end up being a tax on as much as half of their profits, because margins are tight, Mr. Stewart said.
“And anyone who believes that taking half of the net profits won't have an impact on the drilling rate is nuts,” he said.
By DAN SHINGLE
Partial Article CCB
4:30 am, September 4, 2012
Companies new, old jockey for position in Ohio's rapidly developing Utica play
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Indeed, new players not only are entering the Ohio Utica, but are being formed to do so. Texas-based Beland Energy Utica LLC, for one, was created in May by Beusa Energy principals, who have had success drilling for shale gas in the Haynesville shale play, which includes parts of Arkansas, Louisiana and East Texas, said Gregory Brown, the general counsel for both Beland and Beusa. They hope to repeat their success in the Utica, he said.
“The Utica is an interesting area and an interesting play and people go where opportunities are,” Mr. Brown said. “And lots of people see potential in the Utica.”
Mr. Brown declined to say how much capital Beusa, a privately held company, has to spend on Utica leases or for drilling here, but said the company would like to initially acquire the mineral rights to 15,000 to 20,000 acres here. If those acres prove profitable, it likely will try to buy more, he said.
That's not going to be a cheap ticket in at this point. Mineral rights in the Utica have skyrocketed in price in the last two years, and currently fetch between $2,000 and $5,000 per acre.
Even at the low end of that price range, the mineral rights alone on 15,000 acres would cost $30 million — which does not include the roughly $6 million to $10 million that Utica drillers say they currently are spending to drill each new well.
A 15,000-acre parcel could support about 23 well pads, at 640 acres per pad, with each pad containing as many as six wells, drillers say.
By DAN SHINGLER
4:30 am, September 4, 2012
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