February 2013 Ohio Gas & Oil Magazine

Dix Communications - Gas & Oil February 2013 Edition 1www.OhioGO.com

Andrew S. [email protected]

G.C. Dix [email protected]

Ray BoothExecutive [email protected]

Rob TodorExecutive [email protected]

Cathryn StanleyRegional [email protected]

Niki WolfeRegional [email protected]

Ed ArchibaldSE Ohio Sales Cambridge, Ohio [email protected] 740-439-3531

Janice WyattNational Major Accounts Sales [email protected]

Peggy MurgatroydSE Ohio Sales Barnesville and Newcomerstown, Ohio [email protected] Barnesville 740-498-7117 Newcomerstown

Jeff KaplanNE Ohio Sales Alliance & Minerva, Ohio [email protected] 330-821-1200

Kelsie DavisLayout Designer

“Gas & Oil” is a monthly publication jointly produced by Dix Communication newspapers across Ohio. Copyright 2013.

Cover Photo: Laurie Huffman, Dix CommunicationsLouisville City Manager Tom Ault stands before the site currently being leveled for construction of a new field office for Chesapeake Energy Corporation.

◆ $2.2billiontoOhiolandowners..............pg. 3◆EQTfocusonconversionoffleet anddrillingrigstonaturalgas.................pg. 4◆Horizontaldrilling,hydraulicfracturing advanceshaledevelopment.....................pg. 6◆SiteworkbeginsnearSummerfield........pg. 8◆TreatmentservicesforChesapeake.......pg.11◆OMEGAhasnewhomeontheweb......pg.12◆StudentsattendiBELIEVEcamp..........pg. 15◆EnvironmentalCouncil’ssecondtown hallmeetinginCambridge....................pg. 16◆Progressmadeatnewfieldoffice..........pg.21◆Besavvywhenextrapipelines arerequested..........................................pg.22◆Miller’sClothingandShoes..................pg.23

◆Accountability&keepingyourword....pg.28◆WhydoIneedtoread myexistinglease?.................................pg.30◆Seismicmappingfornaturalgas...........pg.33◆ Importantissuesin2013.......................pg.34◆Watershednegotiatesnon-development oil,gasleaseforSenecaLake...............pg.37◆Pipelineinstillationamajortopic..........pg.38◆USenergyindependenceby2013.........pg.42◆Oldcompanyhasnewimpact...............pg.44◆ShaleandYou:Aworkshop forlandowners.......................................pg.46◆ChesapeakeEnergylistedon Fortune’s100BestCo.toworkfor......pg.48

Table of Contents

Attributions

A FREE monthly PublicAtion

Ohio

octobER 2012 • www.ohiogo.com

OMEGA website may have answers

Well pads:

of it all

EQT on NGV (Natural Gas Vehicles)

$2.2 BILLION and counting

Farm Bureau urges‘Be Savvy’

A FREE monthly PublicAtion

FEbRuARy 2013 • www.ohiogo.com A FREE monthly PublicAtion

Ohio

octobER 2012 • www.ohiogo.com

Gas&Oil1

Gas & Oil February 2013 Edition - Dix Communications www.OhioGO.com2

Chesapeake has paid $2.2 billion to

Gas&Oil2

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Chesapeake has paid $2.2 billion toChesapeake Energy

Corporation, the sec-ond-largest producer

of natural gas, a Top 15 pro-ducer of oil and natural gas liquids, and the most active driller of new wells in the U.S., has reached the second anniversary of its drilling ac-tivity in Ohio.

“We spudded the Buell Well in Harrison County in Decem-ber of 2010, so we have just hit

our second anniversary in Ohio,” said Pete Kenworthy, manager of community relations for the company’s Canton office. “During the time Chesapeake has been operating in Ohio, a little more than two years now, we have experienced tremendous growth that has benefitted both state and local economies as well as landowners in the eastern part of Ohio. To date, we have spent more than $3

billion to acquire leasehold and drill wells in Ohio. Our employment has also grown to include more than 550 Ohioans.”

The company, which has head-quarters in Oklahoma City, focuses only on discovering and developing unconventional natural gas and oil fields onshore in the U.S. It holds leading positions in the Utica and Marcellus unconventional gas shale plays, which are primarily located in

Northeastern Ohio. Fol-lowing is some of the high points of what the company has accom-plished in the past two years.

– Chesapeake currently operates 13 rigs in Ohio, and has drilled a total of 134 wells in the play. As of the end of Septem-ber, it operated 32 producing wells, had 37 waiting on pipeline, and 65 in various other stages of completion, according to a recent, year-end report from Kenworthy.

– Chesapeake’s local employment record has also made a tremendous jump in the past two years. Chesapeake now em-ploys 550 people who live in the state of Ohio, up from 40 in January of 2011. The total annual salary for those employees is more than $32 million.

– Chesapeake has spent more than $58 million on road improvement projects. And, at the end of the third quarter in 2012, the company had spent $3.3 billion in capital expendi-tures, which includes both leasehold and drilling activities.

– To acquire its industry-leading 1.3 million acres, the company paid more than $2.2 billion to Ohio land-owners.

– Chesapeake has donated nearly $1 million to various projects and organizations throughout its operat-ing area in Ohio. Notably, more than $100,000 has been given to multiple United Way affiliates and $60,000 was raised to build a Habitat for Hu-manity house. And, to date, Chesa-

peake employees have volunteered close to 800 hours of their time to various projects throughout the operating area.

“I grew up in this part of Ohio. It is exciting to see so many locals benefit from the increased jobs, investment and personal wealth associated with Utica Shale development. And we, at Chesapeake, look forward to further expanding the benefits of this economic opportunity,” said Keith Fuller, senior director of government affairs at the Chesapeake office in Canton.

Laurie HuffmanDix Communications

“I grew up in this part of Ohio. It is exciting to see so many locals ben-efit from the increased jobs, invest-ment and personal wealth associat-ed with Utica Shale development.”

-Keith Fuller, Chesapeake

Gas&x


Gas&Oil4

Representatives of the EQT Corporation told the Guernsey Energy

Coalition about the company’s focus on safety when members held their 19th meeting earlier this year in Cambridge.

Jo Sexton, president of the Cambridge Area Chamber of Commerce, introduced repre-sentatives of EQT Corpora-tion: Andrew Place, corporate director of energy and envi-

ronmental policy; Jessica Car-penter, community advisor; and Nathaniel Manchin, manager of community relations.

The company has been in the business for more than 120 years, but does not intend to rest on its laurels.

Carpenter and Manchin presented a brief history of com-pany, the Environmental Protection Agency’s new rules for gas and oil drilling, and its latest endeavor to promote an industry in its infancy in the United States.

Carpenter said it was her job to “make sure we do things the right way. I do the legwork to get you to the right person to answer your questions.”

“EQT has 10,000 acres here and one well operating in Spencer Township — for now,” said Manchin. “Our focus is on safety, natural gas fleet conversion, natural gas drilling rig conversion and “green completion” technology.

“We are very excited about natural gas conversion,” he said.“The EQT Corp. not only talks the talk, we also walk the

walk,” said Place, who explained to attendees how the com-pany is in the forefront of converting its transportation fleet’s fuel source from diesel and regular gasoline to compressed natural gas.

“Natural gas vehicles is not a new thing. NGVs have been around for some time in other parts of the world. It just makes sense. We know that natural gas is cheaper. The cost, equiva-lent to a gallon of gasoline, is about $1.77. It cost me about $13 to fill up my company vehicle. The average mileage for a tank of natural gas is 250 miles.

“It’s cleaner. We know that emissions from carbon dioxide can be reduced 20 to 30 percent. Air emissions from diesel fuel, used primarily for trucks and school buses is eliminated, there is no odor. And, we have an abundance of domestic local fuel right in our own backyard.

“We have opened our first natural gas filling station in Pitts-burgh which supplies fuel for 60 of our company vehicles. It is very popular for fleets — ours and others. We are encouraging

Jo Sexton, president of the Cambridge Area Chamber of Commerce, seated second from l, gets ready to introduce representatives of EQT Corporation at the Guernsey Energy Coalition’s monthly meeting at the Southgate Hotel in Cambridge. Seated, l, Nathaniel Manchin, manager of community relations; Andrew Place, standing, corporate director of energy/environmental policy; Jessica Carpenter, r, community advisor.

other industries to convert their vehicles. We are scheduled to add 80 more vehicles this year and to replace up to 10 percent of our fleet each year to use compressed natural gas.

“It is cheap, easy as filling up at a regular gas station, and eases environmental concerns.”

Retrofitting a car to accommodate CNG is not cheap. Cost for an automobile is $2,000 to $3,000; double or triple that amount for trucks.

In regards to “green completion,” EQT’s natural gas drilling rig conversion is a priority.

Place said the EPA passed new rules in 2012 banning the practice of venting gas into the atmosphere without burning or flaring. The new process filters out fracking fluids, debris and sand. He said drillers will be required to convert their well operations by 2015.

The environmental benefit of retrofitting is a 27 percent re-duction in nitrogen oxide, 86 percent reduction in carbon mon-oxide and 6 percent reduction in particulate matter. The sale the captured natural gas, an otherwise “wasted product,” could save gas and oil companies millions of dollars.

EQT has five gas wells in Green County that are already in compliance with the new policy.

Judie PerkowskiDix Communications

EQT’s focus on conversion of fleets and drilling rigs to natural gas

Continued on pg. 12


EQT’s focus on conversion of fleets and drilling rigs to natural gas

Gas&Oil5

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Horizontal drilling, hydraulic fracturing

advance shale development

The process of drill-ing and completing a single horizontal oil or

gas well takes about 70 to 100 days, after which the well can be in production for 20 to 40 years. That typically includes four to eight weeks to prepare the site for drilling, four or five weeks of rig work including drilling, casing and cement-ing, and moving all associ-ated auxiliary equipment off the well site before fracturing

operations commence, and two to five days for the multi-stage fracturing operation. Techno-logical advances in horizontal drilling and hydraulic fracturing continue to advance the development of the oil and gas trapped within tight shale formations thousands of feet underground.

Once completed, the production site is about the size of a two-car garage, with the rest of the site restored to its original condi-tion. Local impacts, such as noise, dust, and land disturbance, are largely confined to the initial phase of development.

But what really happens underground? Horizontal drilling and hydraulic fractur-ing (often called “fracking”) have been around for 50+ years. What pioneers of modern shale fracturing developed in the Barnett shale around Fort Worth, Texas in the 1990s was the technique of combin-ing these two technologies with innovative proppants – fine sand and ceramic beads – to “prop” the cracks open so that oil and gas could be released to the drill hole. It took a lot of trial and error to figure out the exact combination of these techniques that would work, but the resulting developments have revolutionized the U.S. oil and gas future.

Geologists have always known that the shales and similar rock formations were the sources for the oil and gas that percolated upward over millions of years into the con-

ventional reservoirs that have been tapped for more than a cen-tury. Knowing it was there did producers no good because the oil and gas in the rock is unable to flow very far due to the low permeability formations. They could drill a traditional vertical well into the shale, but very little oil or gas would flow into the well bore.

Horizontal drilling involves drilling down vertically to a desired depth and then making a 90 degree turn to continue drilling laterally through the shale seam away from the verti-

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Continued on pg. 18


Gas&Oil7

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‘Cooling’ plant site work begins near Summerfield

Excavation work is reportedly taking place at the site of a proposed “wet” gas cooling

plant in eastern Noble County.And a preliminary legal document

to purchase the property has been filed in the county recorder’s office.

Noble County commissioners heard from a project engineer with MarkWest Energy Partners recently, and received schematics of the pro-posed gas processing complex, fit-tingly named Seneca, which will be

located near Summerfield.Aaron Heydinger, project engineer with MarkWest, presented

Cryogenic Processing Plant drawings to Engineer Mark Eicher and commissioners. The plant will have two phases. There will be low truck traffic associated with the plant after construction.

Eicher recently advised Beaver Excavating of Canton was mov-ing earth.

MarkWest last year announced plans to build two processing plants in Ohio to process the liquids rich gas coming from the Utica Shale development. A plant is being constructed in Cadiz in Harrison County.

According to the Noble County Recorder’s Office, a Memoran-dum of Option between Reserve Coal Properties Co., Cannons-burg, Pa., and MarkWest Utica EMG LLC, Denver, Colo., was filed Nov. 13, 2012, regarding the property in Marion Township.

Deadline for acting on that option, regarding 418 acres owned by Reserve Coal Properties, is Jan. 28, said Noble County Re-corder Juanita Matheney.

MarkWest Utica EMG and Colorado-based Antero Resources in November joined forces for the Noble County project.

According to reports, MarkWest Utica will operate an interim refrigeration natural gas processing plant at the Seneca processing complex. It will be capable of handling up to 45 million cubic

feet per day. It is slated to be completed in the second quarter of 2013.

That will be followed by the new Seneca I, a cryogenic gas processing facility capable of handling 200 million cubic feet per day. That is expected to be in operation by the third quarter 2013.

The agreement also calls for Seneca II, a 200 million-cubic-feet-per-day cryogenic facility that could open in late 2013.

Antero has leased about 60,000 acres in Ohio. It is running one drilling rig and plans to add a second rig next year. It has permits for five wells in Noble and Monroe counties.

Antero is reportedly building the needed pipeline in Noble County.

Before the completion of the fractionation complex in Har-rison County and associated pipelines, Antero’s natural gas liq-uids processed in Noble County may be transported to either the company’s Houston, Pa., fractionation and marketing complex (the largest facility of its kind in the Marcellus shale) or its Si-loam fractionator in South Shore, Ky., sources report.

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Tervita Corporation, a leading North American environ-mental and energy services company, has been awarded a contract to treat Chesapeake Energy’s produced and

tophole drilling water in its Utica shale production in Ohio, to help Chesapeake Energy efficiently continue its Aqua Re-new™ program by recycling water in its operations.

“This is a great opportunity for us to partner with one of the major players in the Utica by recycling and reusing a resource as vital as water,” said Phil Vogel, president, Tervita U.S. “Ter-vita’s water treatment capabilities and technologies, paired with our integrated service offerings, are invaluable to our cus-tomers as they continue to put more effort into responsible and sustainable resource development.”

Tervita will provide Chesapeake Energy with a water treat-ment facility, in Carroll County, with an option for mobile water treatment technology. Using its Hybrid Water Recycling Technology, Tervita can remove hydrocarbons and suspended solids from produced water, top-hole drilling water and well pad rain water. In addition to these services to Chesapeake En-ergy, Tervita can provide hardness removal, well site sludge and ponds treatment, if necessary.

Tervita can also deploy its proprietary Mobile Processing System to treat flowback and produced water by removing un-

wanted suspended solids, so water can be reused.“Chesapeake Energy is pleased to select Tervita as our Utica

water treatment vendor,” said Tim Dugan, Chesapeake Energy district manager, Utica. “Tervita’s treatment process will pro-vide clean water and decrease our process costs which will increase our efficiency with reusing water.”

Tervita Dioxi-TreatTM and Tervita Dioxi-GreenTM (Cl02) will be available to Chesapeake as a cost-effective solution to a variety of challenges encountered with oilfield waters that require treatment prior to reuse.

In addition to water treatment technologies, Tervita offers a variety of environmental solutions in the Utica and Marcel-lus shale play, including engineered landfills, closed-loop sys-tems, drilling fluids services and frac tank rentals.

Tervita is a leading North American environmental and en-ergy services company. Tervita maintains a strategically lo-cated network of more than 95 state-of-the-art waste manage-ment facilities and a fleet of specialized equipment and assets to help customers address production and operational waste challenges. Its highly effective, convenient and environmen-tally sound solutions help minimize environmental impact and maximize returns.

Tervita to provide water treatment services for Chesapeake


Gas&Oil12

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When asked about the company’s future plans in Guernsey County, Place said “The Utica Play is a game changer ... We are committed to the region in substantial numbers. We are pretty sure how much natural gas is there and what’s going to be pro-duced. That knowledge is what pays for the operation.”

EQT does not own rigs, wells, water trucks, drilling equip-ment or anything else that it takes to operate a site. The com-pany contracts for services for everything from drilling and transporting natural gas to “cracker” plants, where the gas is separated into other liquids.

EQT Corporation is one of the largest and oldest natural gas producers in the Appalachian Basin operating in Pennsylvania, Virginia, West Virginia, Kentucky, and now Ohio, with 14,000 productive wells and 5.2 trillion cubic feet of total natural gas reserves, and growing.

“EQT’s Focus” from pg. 4

A new website for the Ohio Mid-Eastern Governments Association (OMEGA) is now online.

The new site is designed to provide up-to-date in-formation on federal and state economic and community de-velopment grant and loan programs available in the OMEGA region. The website also offers a data center that provides in-depth statistics for the following counties: Belmont, Carroll, Co-lumbiana, Coshocton, Guernsey, Harrison, Holmes, Jefferson, Muskingum, and Tuscarawas. Links to other federal and state agencies are also listed. Meeting dates and featured speaker in-formation will be updated on a regular basis.

The new site was launched in time to post an economic de-velopment report for a 30-day comment period. As an eco-nomic development agency certified by the U.S. Department of Commerce, Economic Development Administration (EDA), OMEGA is required to post all Comprehensive Economic De-velopment Strategy (CEDS) reports for a period of 30 days for comment by the public. CEDS reports are designed to bring to-gether the public and private sectors in the creation of an eco-nomic development roadmap to diversify and strengthen region-al economies. A new report is produced every three years with an update required each of the two years between new reports. The public comment period will end on Tuesday, Feb. 19, 2013.

The final report will be posted on the website and remain until the next required update.

The report is also available at the OMEGA office weekdays from 8 a.m. – 4 p.m. CD copies are available upon request.

The OMEGA office is located at 326 Highland Avenue in Cambridge.

For more information, contact Cindi Kerschbaumer at (740) 439-4471, ext. 206 or [email protected].

OMEGA has new home on the web


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Students attend iBELIEVE CampFive Malvern High School sophomore students attended a

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fostered leadership skills for their futures.The goal of iBELIEVE 2012 is to provide scholarships to high-

school and middle-school Appalachian students. Malvern High School scholarships for their five students were provided by the iBELIEVE Foundation from Chesapeake Energy. The objectives of iBELIEVE are:

• Provide financial sponsorships for Appalachian teens to get im-portant soft-skill development with the focus on leadership, com-munication, and problem solving skills;

• Implement a strong foundation and leadership core in high schools, middle schools, and Appalachian communities with the goal of 10-percent student body participation in four years;

• Increase collegiate attendance and retention for Appalachian and first-generation students;

• Focus on raising the retention of collegiate graduates and young professionals in Appalachian communities; and

• Build peer mentorship with successful student leaders from non-Appalachian counties.

Dix Communications Photo/ Thomas ClapperMalvern sophmores (from left) Delaney Vahila, Zach Kerns, Josh Browning, Malcolm Simmons, and Savanna Simpson attended a leadership camp by the Ohio Association of Student Councils and sponsored by the iBELIEVE Foundation.


Gas&Oil16

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Environmental Council’s second town hall meeting in Cambridge

Presenting a forum for the public to question city and county officials about their

role in the developing shale gas and oil industry, representatives of the Columbus-based Ohio En-vironmental Council welcomed approximately 30 people to the event at the Cambridge Area YMCA Wednesday evening.

Jack Shaner, deputy director and senior director of OEC Leg-islative and Public Affairs, and

Melanie Houston, director of OEC Water Policy and Environmental Health, also shared informa-tion about how to research and comment on state laws, rules and regulations in reference to the gas and oil industry.

Panel members were Jeff Deeks, fire chief for the Cam-bridge Fire Department, who answered questions from the au-dience about fire prevention and safety at well sites; and Del George, Guernsey County engineer, answered questions about

Judie PerkowskiDix Communications

drilling companies’ responsibilities regarding road use in Guern-sey County.

Deeks said that the majority of firefighters have received train-ing regarding gas and oil fires of all kinds and that the two-day event was paid for by the Ohio Oil and Gas Energy Education Program.

“The fire department doesn’t have all the fancy equipment, but we do our best. We have also joined the Buckeye STEPS Pro-gram,” said Deeks. “Public safety is our number one concern.”

The Buckeye STEPS (Service, Transmission, Exploration and Production Safety) program promotes safety, health and environ-mental improvement in the exploration and production of oil and

Continued on pg. 18


Gas&Oil17

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Gas&Oil18

cal well bore. This technique allows the production company to “mine” a seam of oil or gas bearing shale by drilling laterals that penetrate the oil or gas bearing shale layer horizontally. Lateral lengths can range from 1000 ft. to more than 10,000 ft. The long lateral creates a large surface area in contact with the rock and the potential for a lot more oil or gas flowing into the well bore.

Typically, steel pipe known as surface casing is cemented into place at the uppermost portion of a well for the explicit purpose of protecting the groundwater. The depth of the surface casing is determined based on groundwater protection and other fac-tors. As the well is drilled deeper, additional casing is installed to isolate the formation(s) from which oil or natural gas is to be produced, which further protects groundwater from the produc-ing formations in the well.

Casing and cementing are critical parts of the well construc-tion that not only protect any water zones, but are also important to successful oil or natural gas production from hydrocarbon bearing zones. After the well is drilled and completed, the lateral section of the well pipe is perforated. Then a fluid mixture that is about 80 percent water, 19.5 percent sand and 0.5 percent vari-ous lubricants and chemicals, is pumped down the well at very high pressure. This so called hydraulic fracturing process is a high- pressure stimulation process used to create small cracks in the tight shale rock that allows fluids and natural gas trapped in the formation to flow more easily into the well pipe and up to

“HorizonTal drilling” from pg. 6

gas. The organization meets monthly at the Willett Pratt Training Center.Answering questions about chemicals used in the hydraulic fracturing process, Deeks said Senate Bill 315 requires a MSDS, a mate-

rial safety data sheet listing all chemicals used at a drill site, and the sheet must be posted at the site. In regards to how the department would handle an emergency at a drill site, he said the department works with several agencies and

other fire departments depending on the situation. Depending on the severity of a gas and oil fire, “the Federal Emergency Management Administration would be involved.”

Del George explained how gas and oil companies are legally bound to maintain and repair damage to county and township roads and bridges that provide access to shale development areas.

“It all comes down to a matter of safety,” said George. “If the road is not safe, I will close it down. We have a number of Road Use Management Agreements. We recommend the driller drive the roads with us to view the road(s) they plan to use for access to their drill site, to actually see where problems could arise ... All drilling companies, which include companies who provide a service to the drilling company, for example, someone who provides water, must also sign a RUMA.”

“EnvironmEnTals council’s sEcond mEETing” from pg. 16

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the surface. When the pressure is released, the fractures attempt to close, but the sand contained in the fluid keeps the fractures open, making an easy path for oil and gas to flow into the well. Fracking opens up hundreds of little conduits for oil and gas to flow through (or actually around) the rock to get to the well bore deep underground. The proppants hold those little conduits open so they don’t close up right away.

Hydraulic fracturing and horizontal drilling have considerably increased the efficiency of oil and gas recovery for three reasons. First, there is lower geological risk - because producers know where the shale is, there are no dry holes. Second, many laterals can be drilled in several directions from one drilling pad. The same horizontal drilling rig can be moved slightly to extend a new lateral instead of packing up and moving to a new loca-tion to drill a new vertical well. And third, there are high initial production rates. Relative to vertical wells, shale wells are ex-pensive to develop because of the high cost of long laterals and fracturing treatments. However, as a result of the efficiencies and greater production volumes described above, the per-unit cost of production is lower. In addition, because the initial production rate is high, producers recover their investment faster.

Pictures are worth a thousand words, and an excellent vid-eo of the process can be found at http://marcelluscoalition.org/2009/01/drilling-process-video/.


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Gas&Oil21

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Progress made at new Chesapeake field office in LouisvilleIn 2012, the Chesapeake Oil

Co. purchased 291 acres of land comprising the Beck

Industrial Park, an area the city of Louisville had developed with the hope of bringing more industry to the city.

Chesapeake has stated the plans are to construct facilities for its Utica shale operations on the site, which is located between Beck Avenue and State Route 44, south of Main

Street. The facility will house at least three buildings, according to Keith Fuller, Chesapeake’s senior director of government affairs. An office building at least five stories high will be constructed, along with a shop where equipment can be worked on and another building to house Chesapeake’s affiliate oil field services companies.

Thus far, a road leading into the industrial park off State Route 44 has been constructed as well as a bridge to traverse

over the portion of Nimishillen Creek that runs across the property near the entrance from Route 44. The city of Louis-ville had received a grant from Ohio Department of Transpor-tation to pay for 70 percent of the $3.5 million road and bridge

Louisville City Manager Tom Ault stands before a new road and bridge recently constructed to connect the new Chesapeake Energy Corporation field office to State Route 44.

Continued on pg. 32


“Take your time. Negotiate on good faith. Consider the use of the property, and remember — everything is negotiable.”

-Dale Arnold

Gas&Oil22

rary pipes laying across the top of the ground. And, he said, temporary pipes can be in place for decades. Bachman also pointed out Ohio EPA rules apply when pipes are running across streams, and phone numbers are required to be posted on the pipelines, in case of emergency, which should also be included in the lease.

“Easements last forever and a day. So do temporary water pipes. So, these should be handled on a separate lease,” said

Arnold. “Intra-state pipeline will be put in by national gas and oil com-panies and you will see a tremen-dous amount of development, all to be either installed or updated. Hav-ing access to good legal counsel is key. Also, when ditches are created to install larger pipes, they are in a “v” shape and are not just a slit in the ground. That’s why the companies need an 80-foot right-of-way. Your

land will be changed. So, legal counsel will help protect you.”In conclusion, Arnold advised, “Take your time. Negotiate

on good faith. Consider the use of the property, and remember — everything is negotiable.”

Be savvy when extra pipelines are requested

How much extra should a landowner charge and should a separate lease be

created each time new pipe is in-stalled leading to or from an oil and gas well? These are burning ques-tions considering the oil and gas companies will soon need to trans-port their products for marketing.

These questions were answered and other helpful information was given during a Gas and Oil talk re-cently held in New Philadelphia that was organized by the Ohio Farm Bu-

reau. Speakers included Dale Arnold, director of energy, util-ity, and local government policy for the OFB, and Joe Bach-man, Tuscarawas County engineer.

According to Arnold, factors to consider when establish-ing payment for additional pipeline to be installed include the length of the pipe, and the width of the pipe, including total acreage to be effected, either temporarily or permanently, plus the impact this installation will have on future use of the land. A separate lease should also be created for each additional pipeline. For those who are in a drilling unit or pool, find out where the pipeline will be placed. The pipe may go across some people’s property and not others.

“Talk to your county auditor, then get a market value price, in dollars per acre, from a realtor,” said Arnold. “You must also consider loss of value, such as loss of timber production, loss of nursery stock, loss of crop produc-tion and replacement costs for feed-ing livestock, and loss due to com-paction of the land, plus any costs to correct it. The value of guardian-ship (landowners watching over the pipeline) should also be factored in, along with the cost of personal attor-ney fees, consultants, surveys, filing fees, etc. Also, talk to your banker and ask if it will change the value of your land to have pipe running through your property.”

Plug all this information into a spreadsheet to come up with a cost, and divide that by the number of feet to get a dollar amount per foot. “The cost will probably be different from the dollar-per-foot price originally thrown out at you,” Arnold as-sured.

Bachman noted Tuscarawas County requires pipes to be placed 60 inches deep, and this should be put in the lease. In some cases, Arnold said, he has even seen “so-called” tempo-

Dale Arnold, director of energy, utility, and local government policy for the Ohio Farm Bureau, talks to a member of the audience following a recent discussion held in New Philadelphia addressing requests for additional pipeline by gas and oil companies.


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Be savvy when extra pipelines are requested

Gas&Oil23

For approximately 35 years, Miller’s Clothing and Shoes in New Philadelphia

has been supplying men with any-thing from suits to work boots. Now, they are adding flame and fire resistant apparel to that listing.

The addition of “FR clothing” — as it is commonly referred to — is a result of the influx of the oil and gas industry workers com-ing to the area, said owner Marty Miller.

The store carries flame resistant clothing from Wrangler and Carhart, as high visibility items.

They also specialize in work boots that are needed for oil and gas field sites.

Miller predicts that “this is just the beginning” of the oil and gas industry boosting the local economy.

He knows one family that is living in Carrollton, that shops at Miller’s, and is in the oil and gas industry. He said they moved here from Louisiana and expects to be here

Miller’s Clothing and Shoes:Offering anything from work boots to suits

Niki WolfeNewcomerstown news

Marty Miller of Miller’s Clothing and Shoes in New Philadelphia holds up one of the new high visibility flame resistant jackets that he now carries in his store.

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10110221

some eight to ten years for the oil and gas industry. Even though Miller’s Clothing and Shoes specializes in men’s

clothing, they also offer and can order in flame resistant clothing for women.

Continued on next pg.


Gas&Oil24

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Miller’s Clothing and Shoes is located at 159 W. High Ave., New Philadelphia.

“If I don’t have it, I will do my best to get it,” he said.Miller is no stranger to merchandising or to Newcomer-

stown for that matter. He began stocking shelves at a Newcom-erstown clothing store back when he was only 12 years old. He said his roots are in southern Tuscarawas County by attending school in Newcomerstown. He can also remember getting his first haircut at Poland’s Barber Shop in the village and visiting the dentist, Dr. Murray, in Newcomerstown.

But, Miller is a true people-person and does his best to pro-vide what the customer wants.

“I try to take good care of them (the customer) to have what they need and what they want,” Miller said about his custom-ers.

Miller’s Clothing and Shoes also offers alterations and em-broidery.

Miller said he also has police, fire and deputy sheriff uni-forms, and tries to purchase as much USA-made items as pos-sible.

Miller’s Clothing and Shoes is open Monday, Tuesday, Wednesday and Saturday from 9:30 a.m. to 5:30 p.m.; Thurs-day and Friday from 9:30 a.m. to 8 p.m.; and closed Sunday.

They may be reached by calling 330-364-2688.

“millErs cloTHing and sHoEs” from pg. 23


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AccountAbility and keeping your word

I paid $16.50 a rod ($1 a foot) for a pipeline right of way in the mid-eighties.

The price was being necessi-tated by a competing oil and gas company paying $25 a rod. You would have thought I robbed the national treasury when my boss found out about this exorbitant amount. I had to explain myself and was re-lieved I only received a tongue lashing for being so cavalier

with the finite resources of the company. A lesson I never forgot. But, in some respects, a good les-

son to learn as a young man. Accountability and keeping your word became much more important than just seeing how much money you could throw at a problem to make it go away.

I was reminded of my first time of paying for pipeline by the foot when I ran into a Harrison County resident in Venice, Florida. After some con-versation about oil and gas, he asked me to review his right of way form he had received. His property was along State Route 800 and the lake. He didn’t necessarily want a pipeline taking up his entire prime frontage. I knew the area and could see his point. But to be fair to those around him, I encouraged him to sign the agreement with stipulations he could live with.

The first item to look at was the term “lineal feet.” It was unclear to him what that meant. I explained that for each foot of pipeline laid on the property, the company would pay him X amount of dollars. The catch being (in this agreement) they

Don GaddLandman

had rolled up the payment for pipeline with the damages to be paid when the line was finished. One payment for all. I ex-plained further that though the fee seemed reasonable, the idea of combining everything into one payment was not.

As your favorite tax accountant will tell you, there is tax to pay on all ordinary farm income. And getting paid on a right of way is considered that. However, damages are not. They are the reparation costs that you have incurred as a result of letting someone do business on your property. Figure loss of income from crops such as corn, winter wheat, timber, etc. And, be-lieve it or not, this isn’t a one year problem. Once the ground is disturbed, it may take many years for it to come back to the necessary place in order to grow crops again. You may want to have language in fertile fields to separate the top soil from the sub soil and make sure it is laid back appropriately.

The second flag I pointed out with his right of way was the half-sentence allowing the company to place “additional” lines alongside of and through the property “at the same cost.” What did that mean? It didn’t say for “additional” payment of X

amount per foot which is common in right of ways. The decision he had to make was how many lines did he want going through his property and if it was going to be more than one, how much was he going to be paid?

I had told him earlier that to satisfy his mind he should ask the company to survey or set out the route of the line and have the company make a map of same to be recorded with the right of way (a term the company

later agreed to). At that point he had to decide whether or not he would grant a right of way for just one line only, or for ad-ditional lines to be laid in the future for additional payments.

The money seemed great at first ($25 a foot). However, I

“Accountability and keeping your word became much more impor-tant than just seeing how much money you could throw at a prob-lem to make it go away. ”

-Don Gadd

Gas&Oil28

Fish is this country’s biggest import second only to oil!Domer’s Fish Hatchery Inc. has spent the past 20 years promoting and building a multi million dollar fish farming industry in eastern Ohio. As a result of Domer’s direction, Ohio is now the #1 hybrid bluegill producing state in the country, also the #2 yellow perch and #4 large mouth bass producing state in the country, with returns as high as $20,000.00 plus per acre. We are in need of larger and smaller fish farmers. The entire world has long ago surpassed its sustainable supply of wild fish, making fish farming the only alternative.

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Continued on pg. 32


had rolled up the payment for pipeline with the damages to be paid when the line was finished. One payment for all. I ex-plained further that though the fee seemed reasonable, the idea of combining everything into one payment was not.

As your favorite tax accountant will tell you, there is tax to pay on all ordinary farm income. And getting paid on a right of way is considered that. However, damages are not. They are the reparation costs that you have incurred as a result of letting someone do business on your property. Figure loss of income from crops such as corn, winter wheat, timber, etc. And, be-lieve it or not, this isn’t a one year problem. Once the ground is disturbed, it may take many years for it to come back to the necessary place in order to grow crops again. You may want to have language in fertile fields to separate the top soil from the sub soil and make sure it is laid back appropriately.

The second flag I pointed out with his right of way was the half-sentence allowing the company to place “additional” lines alongside of and through the property “at the same cost.” What did that mean? It didn’t say for “additional” payment of X

amount per foot which is common in right of ways. The decision he had to make was how many lines did he want going through his property and if it was going to be more than one, how much was he going to be paid?

I had told him earlier that to satisfy his mind he should ask the company to survey or set out the route of the line and have the company make a map of same to be recorded with the right of way (a term the company

later agreed to). At that point he had to decide whether or not he would grant a right of way for just one line only, or for ad-ditional lines to be laid in the future for additional payments.

The money seemed great at first ($25 a foot). However, I

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1010785


As the boom contin-ues, landowners have called us because

they have been unable to join in the action for up-front bo-nuses and enhanced royalties because of the existing lease burdening their land. The ex-isting lease, of course, grants the rights to produce the oil and gas to the lessee (the pro-ducer, typically).

These rights can be, and frequently are, assigned to other

producers. It is no secret that the shallow producers are assign-ing these rights, or portions of these rights, to companies ca-pable of producing the shale formations. In a previous article, I discussed how the lack of production of the shallow well can terminate the existing lease.

However, there are other lease provisions that can affect the “shallow” producer’s ability to assign to a “deep” producer, or to even hold the lease at all. You must read your lease. We have encountered the following issues:

• Anti-assignment clauses. Some leases have language that specifically prevents the lessee from assigning the oil and gas rights to another entity. This is contested by both sides. Les-sees have claimed that the law will not permit lessors to “un-reasonably” withholding consent. This remains to be settled by the courts.

• Pooling restrictions. “Pooling” is the practice of aggregat-ing contiguous leased properties into an amount of acreage that the government requires, or the industry needs, for drilling op-erations. Typically, the deeper the well, the greater the required acreage. Today, the horizontal shale wells require 640 acres.

In some leases, the lessor and lessee had originally agreed that the lessee could not “pool” the lessor’s acreage at all or limited the acreage into which it could be pooled. Assigning this type of lease to a horizontal producer presents problems: the landowner can object to being pooled into a 640-acre (or even a 1,280-acre) unit.

Of course, the existing lease remains valid. Contesting on this basis can result in making the property profitable for no one.

Defined production. Most leases have the nebulous “produc-tion in paying quantities” language. However, a select few spe-cifically define the amount the annual production required to

Why do I need to read my existing lease?

Ethan VesselsMarietta Attorney

hold the lease. Has your well produced that amount?• Depth restrictions. Do not assume that your existing lease

grants the rights to the center of the earth. Some leases specifi-cally reserve only “shallow” rights for the lessee, even from the inception of the lease. Have you looked?

• Indefinite promises to produce and delay rentals. This could consume and entire article. Nonetheless, shallow pro-ducers have been attempting to hold acreage by claiming that the indefinite payment of “delay rentals” holds the lease open. Recent Ohio court decisions confirm the general national con-sensus that “delay rentals” (payments made to keep a lease active during periods of lack of production) apply only during the primary term of the lease, not indefinitely.

Gas&Oil30

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have seen as high as $65 a foot in some areas here recently. Now, that figure involved not only paying for lineal footage, but took into account the diameter of the line. Each increase in pipe size increased the fee to be paid for the right of way. What a novel idea. But, an expensive one. I wish I would have had a check book like that.

With these changes in mind, he was ready to have his first meeting with the right of way company and begin the process of getting a right of way agreement that was not only accept-able to him, but worked for the company. Next month I will tell you how it worked out with some of the additional clauses we needed to add, and the hitches encountered prior to getting down to business.

You must analyze those checks you receive. Are they royal-ties or purported “delay rental” payments? Is the lessee claim-ing an indefinite right to hold your land?

Disclaimer. As with all articles on legal issues, this article is intended for educational and informational purposes. The reader should not rely on this article as a substitute for actual legal advice regarding his or her particular case. You should consult an attorney regarding the specifics of your situation. Ethan Vessels is an attorney in Marietta, Ohio with the firm of Fields, Dehmlow & Vessels, LLC. His firm is actively representing landowners throughout East and Southeast Ohio regarding oil & gas lease forfeiture actions, royalty disputes, and other oil & gas matters. Visit www.fieldsdehmlow.com for more information.

Gas&Oil32

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construction project, which Ault said will keep trucks off Beck Avenue and Georgetown Road by routing traffic into the site off Route 44. The city will pay the remaining 30 percent of the project.

Ault has reported Chesapeake is spending “tens of millions of dollars” for the balance of the site development. Pete Ken-worthy, marketing manager for Chesapeake, recently reported the field office may be completed by the end of 2013, but he added that is probably optimistic, and said the completion may wind up being early in 2014.


Gas&Oil33

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Seismic testing to search for and map natural gas beneath the ground for

future drilling is happening throughout Portage County, and now on stretches along most of state Route 43, heading south from the Twin Lakes area, through Kent, Brimfield and Suf-field and into Stark County.

Kent residents began asking questions Thursday, noticing a long orange cable, connected to metal seismic activity moni-tors strung through downtown Kent and across driveways, lawns and intersections that continues for miles.

The work along state Route 43 is being carried out by Preci-sion Geophysical Inc., a Millersburg company that maps the data throughout Michigan, Indiana, Ohio, Tennessee, Pennsyl-vania, Virginia, West Virginia and New York, according to the company’s website. The process uses large trucks that carry Enviro-Vibes sounding equipment, which sends pulses into the ground that are read by the roadside monitoring equipment.

“The process provides data that is used by geophysicists to determine the best location for drilling natural gas wells,” Kent Service Director Gene Roberts said.

Precision Geophysical is not testing within Kent’s city lim-its, however, as the city determined that a bond requirement of $2.25 million would be necessary to insure the value of Kent’s state Route 43 pavement. State Route 43 runs along South Water and North Mantua streets. The bond requirement was deemed too high by Precision Geophysical, according to an email sent by Roberts to city officials when the company sought a permit.

“The bond is to protect the city’s pavement,” Roberts said, explaining that the pulses sent out by the Enviro-Vibes equip-ment can potentially damage it.

Portage County Engineer Michael Marozzi said the work has been carried out by similar companies throughout Portage County for about half a year now.

“They’ve done a tremendous amount of this testing. From what we know, they’ve strung lines all over Portage County,” Marozzi said, noting that his department only issues permits for the jobs on county roads.

Brent Kovacs, a public information officer for the Ohio De-partment of Transportation, which issues permits for the right-of-way use for such activity on state routes, said the work is now common in northeastern Ohio counties that sit above the Marcellus and Utica shale formations that house natural gas deposits.

“I would say it’s normal in the counties that they’re looking to do the fracking in,” he said.

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Gas & Oil February 2013 Edition - Dix Communications www.OhioGO.com34 Gas & Oil February 2013 Edition - Dix

Important issues in 2013As we enter another legisla-

tive term in the Ohio House of Representatives, there

are a lot of important issues on our plate that will be addressed in the coming two years. Last session brought a wide range of new reforms to spur job creation, encourage business growth and ensure greater government responsibility. We will immediately start tackling the next biennium budget, as well as look-ing at utility costs, taxes, regulatory burdens and ways to find greater ef-ficiency in our government opera-tions.

The topic of jobs remains front and center in the 130th Gen-eral Assembly. In Washington County, the latest figures show that the unemployment rate plummeted to 5.5% as of the end of December. There is much more to do, but people are return-ing to work not just in Washington County but in many other

Andy ThompsonState Rep.

94th District

counties across the state. More than 120,000 jobs have been created inside our borders since January 2011.

The Ohio General Assembly has also helped provide small family businesses and farms more certainty, now that the estate tax has been officially repealed. Regarding efficiency, state-run agencies are now subject to performance audits. Beyond that, reforms enacted in the areas of Medicaid, corrections, and transportation reduced taxpayer costs substantially.

Shale development and tax policy relating to that develop-ment are also on the front burner. The governor proposes to raise the severance tax in order to offer a modest income tax cut to taxpayers across the state. I am opposed to raising taxes on oil and gas producers because I believe we should not threaten or delay the fantastic progress we’re making economically in the shale areas. I believe this rising tide will lift all boats if given a bit more time to develop. Clearly our educational insti-tutions have a fantastic opportunity in workforce development to produce the thousands of new employees the oil and gas industry will need as the shale play continues.

We are continuing to implement reforms in education and workforce development, to ensure greater accountability and to promote excellence at all levels. As Speaker William Batch-elder said during his inaugural address, “Our students are the ones left to face the many challenges that we either have not yet overcome or have yet to encounter.” Our reforms will en-sure that these students are properly-equipped with the skills necessary for success.

Rep. Thompson may be reached by calling (614) 644-8728,

e-mailing [email protected], or writing to State Rep. Andy Thompson, 77 South High Street, Columbus, Ohio 43215.

“I am opposed to raising taxes on oil and gas producers because I believe we should not threaten or delay the fantastic progress we’re making economically in the shale areas.”

-State Rep. Andy Thompson

Gas&Oil34

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counties across the state. More than 120,000 jobs have been created inside our borders since January 2011.

The Ohio General Assembly has also helped provide small family businesses and farms more certainty, now that the estate tax has been officially repealed. Regarding efficiency, state-run agencies are now subject to performance audits. Beyond that, reforms enacted in the areas of Medicaid, corrections, and transportation reduced taxpayer costs substantially.

Shale development and tax policy relating to that develop-ment are also on the front burner. The governor proposes to raise the severance tax in order to offer a modest income tax cut to taxpayers across the state. I am opposed to raising taxes on oil and gas producers because I believe we should not threaten or delay the fantastic progress we’re making economically in the shale areas. I believe this rising tide will lift all boats if given a bit more time to develop. Clearly our educational insti-tutions have a fantastic opportunity in workforce development to produce the thousands of new employees the oil and gas industry will need as the shale play continues.

We are continuing to implement reforms in education and workforce development, to ensure greater accountability and to promote excellence at all levels. As Speaker William Batch-elder said during his inaugural address, “Our students are the ones left to face the many challenges that we either have not yet overcome or have yet to encounter.” Our reforms will en-sure that these students are properly-equipped with the skills necessary for success.

Rep. Thompson may be reached by calling (614) 644-8728,

e-mailing [email protected], or writing to State Rep. Andy Thompson, 77 South High Street, Columbus, Ohio 43215.

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The Muskingum Watershed Conservancy District has ne-gotiated an oil and gas lease for 6,700 acres of its property at Seneca Lake in Guernsey and Noble counties that will

prohibit any surface development on MWCD property and add protections to adjacent private properties.

The lease agreement between the MWCD and Antero Resourc-es of Colorado was presented to the MWCD Board of Directors for review during a meeting Friday, Jan. 18, with an expected recommendation for the Board to approve the lease at the Board’s meeting in February.

The lease contains a number of environmental protections for the MWCD property at Seneca Lake that includes additional protections for property owners adjacent to the MWCD-owned property, said Sean D. Logan, MWCD’s chief of conservation.

“The MWCD has always negotiates basic protections into the leases it enters into,” Logan said. “This lease builds upon those, utilizing the concerns and comments that were provided to our staff and Board of Directors from the public. We are pleased that we received very serious, very thoughtful suggestions and guid-ance from the public that shares our concerns in this process.”

Under the lease terms, there will be no well pads, lease roads or pipelines on MWCD property, and surface operations on adjacent lands where the MWCD shares in the well or lands also leased by Antero and located within a half-mile of MWCD property also will be subject to the terms of the lease, said Mark Swiger, MWCD’s natural resources administrator who has negotiated and managed MWCD leases for more than 35 years.

Other protections of the reservoir area included in the lease, according to Swiger, include:

• The MWCD will have an opportunity to view Antero’s well development plans annually.

• The MWCD will have the right to review the location of all well pads, associated roadways and pipelines.

• The MWCD will review all erosion and sedimentation plans, safety plans and engineering site plans prior to any construction.

• The MWCD will have access to the construction site prior to work commencing and during the drilling and completion phases.

• The lease also will include light and sound control to reduce the impact to the immediate lake community.

Financial terms of the lease still are being negotiated, Logan said.

The lease document also can be found on the MWCD website (www.mwcd.org/conservation) and public comments will be ac-cepted by the MWCD by sending an email message to [email protected], by fax at 330-64-4161 or by regular mail to, Seneca Comments, MWCD, P.O. Box 349, New Philadelphia, OH 44663.

The MWCD staff plans to recommend to the Board of Direc-tors to enter into the lease with Antero at the Board’s Feb. 15


Gas&Oil37

The Muskingum Watershed Conservancy District has ne-gotiated an oil and gas lease for 6,700 acres of its property at Seneca Lake in Guernsey and Noble counties that will

prohibit any surface development on MWCD property and add protections to adjacent private properties.

The lease agreement between the MWCD and Antero Resourc-es of Colorado was presented to the MWCD Board of Directors for review during a meeting Friday, Jan. 18, with an expected recommendation for the Board to approve the lease at the Board’s meeting in February.

The lease contains a number of environmental protections for the MWCD property at Seneca Lake that includes additional protections for property owners adjacent to the MWCD-owned property, said Sean D. Logan, MWCD’s chief of conservation.

“The MWCD has always negotiates basic protections into the leases it enters into,” Logan said. “This lease builds upon those, utilizing the concerns and comments that were provided to our staff and Board of Directors from the public. We are pleased that we received very serious, very thoughtful suggestions and guid-ance from the public that shares our concerns in this process.”

Under the lease terms, there will be no well pads, lease roads or pipelines on MWCD property, and surface operations on adjacent lands where the MWCD shares in the well or lands also leased by Antero and located within a half-mile of MWCD property also will be subject to the terms of the lease, said Mark Swiger, MWCD’s natural resources administrator who has negotiated and managed MWCD leases for more than 35 years.

Other protections of the reservoir area included in the lease, according to Swiger, include:

• The MWCD will have an opportunity to view Antero’s well development plans annually.

• The MWCD will have the right to review the location of all well pads, associated roadways and pipelines.

• The MWCD will review all erosion and sedimentation plans, safety plans and engineering site plans prior to any construction.

• The MWCD will have access to the construction site prior to work commencing and during the drilling and completion phases.

• The lease also will include light and sound control to reduce the impact to the immediate lake community.

Financial terms of the lease still are being negotiated, Logan said.

The lease document also can be found on the MWCD website (www.mwcd.org/conservation) and public comments will be ac-cepted by the MWCD by sending an email message to [email protected], by fax at 330-64-4161 or by regular mail to, Seneca Comments, MWCD, P.O. Box 349, New Philadelphia, OH 44663.

The MWCD staff plans to recommend to the Board of Direc-tors to enter into the lease with Antero at the Board’s Feb. 15

Watershed negotiates non-development oil, gas lease for Seneca Lake property meeting, and will review comments and suggestions received

prior to that meeting for any potential lease changes and up-grades, said Logan, MWCD’s chief of conservation.

“The MWCD is pleased to provide this deliberate process in order to demonstrate the environmental concerns built into the lease and to allow interested citizens with an opportunity to re-view the lease and offer their own comments and suggestions,” Logan said. “For 80 years the MWCD has been negotiating and managing leases for oil and gas development on the MWCD properties, and the MWCD lease has been used by public and private landowners as a model.”

The MWCD pledged in 2012 after meeting with a group of interested residents and groups that it would enhance opportu-nities for public input and transparency into the process of oil and gas leasing of MWCD property as part of the interest in the Utica shale region in Eastern Ohio. MWCD officials held a public meeting last October in the Village of Senecaville in which they announced that lease negotiations would begin and invited comment during and following the meeting, and pledged that any lease developed for recommendation to the Board of Directors first would be available for a period of public review and comment prior to any action by the Board.

The public meeting and public review and comment period are not required by law, and input previously received by the MWCD following the public meeting were incorporated into the proposed lease agreement with Antero, Logan said.

The MWCD previously signed leases related to the Utica shale development in 2011 with Gulfport Energy Co. for MWCD-owned property at Clendening Lake in Harrison County and a similar non-development lease in 2012 with Chesapeake Energy Co. for MWCD-owned property at Leesville Lake in Carroll County.

The MWCD has managed oil and gas leases on its properties for its entire 80-year history as a part of its overall natural re-sources stewardship program. There are approximately 275 tra-ditional (Clinton development) wells that the MWCD receives royalties from, Swiger said.

The MWCD, a political subdivision of the state, was orga-nized in 1933 to develop and implement a plan to reduce flood-ing and conserve water for beneficial public uses in the Musk-ingum River Watershed, the largest wholly contained watershed in Ohio. Since their construction, the 16 reservoirs and dams in the MWCD region have been credited for saving more than $10 billion worth of potential property damage from flooding, ac-cording to the federal government, as well as providing popular recreational opportunities that bolster the region’s economy. A significant portion of the reservoirs are managed by the MWCD and the dams are managed for flood-risk management by the federal U.S. Army Corps of Engineers.

For information about the MWCD, visit www.mwcd.org and follow the MWCD on Facebook and Twitter.


Gas&Oil38

Pipeline installation a major topic in Ohio

At this stage in natural gas and oil development within Ohio, pipeline development

is becoming a major issue, accord-ing to Dale Arnold, the Ohio Farm Bureau Federation Director of En-ergy, Utility, and Local Government Issues, who spoke on the topic at a recent public program held in New Philadelphia.

“Construction and remediation standards must be considered when interstate, intrastate, and local col-lection pipelines are installed,” said Arnold.

Pipeline and energy development companies have begun contacting residents across the region to request preliminary surveys and environmental evaluations, and Steve Quillin, president of the Tuscarawas County Farm Bureau, recom-mends accompanying them in the process to meet company representatives, get contact information, discuss the farm’s soil and water conservation requirements, and note infrastructure that could be impacted during a possible construction project.

George and David Mizer, landowners from Harrison Coun-ty, near Tappan Lake, in Cadiz, recently had pipeline installed on their property, and the two spoke at the farm bureau session to outline some of the pitfalls. First of all, the brothers said not to be in a hurry when negotiating an agreement.

“These companies are in a hurry,” they said. “But, us farm-ers, we aren’t used to this stuff. The Ohio Farm Bureau recom-mended we not sign anything right away, so we slowed things down.”

As the two were negotiating their first contract with Do-minion Gas, the company told them trees had to begin being

Dix Communications Photo / Laurie HuffmanGeorge Mizer, right, answers questions after speaking at a Farm Bureau session covering issues related to pipeline installation across farm land

Dix Communications Photo/ Laurie HuffmanDavid Mizer, right, talks with Tuscarawas County Engineer Joe Bachman at a recent public forum held by the Ohio Farm Bureau.

cleared so deadlines could be met. The Mizer brothers signed an agreement just for that portion of the work so they could ne-gotiate for a longer period on the main contract. The extra time proved fruitful, as they were able to negotiate the application of gravel along the sides of a pipeline ditch that was 10 feet wide and 7 feet deep, paid for by the company at a cost of $20,000. The two said they were given good advice they have always fol-lowed, which is: “If you don’t like the way the meeting is go-ing, then say the meeting is over.” They also advise if there is a representative you are not comfortable with, tell the company to send someone else.

The Mizers also pointed out if land being crossed will be pas-ture, and if there are renters who farm or who own livestock, that is also something to think about. The brothers had pipeline laid where their renters wanted it, and the renters were also able to plan where the fencing would be placed. The two said beware of temporary fences, because they had to add barbed wire to keep their livestock from going through it. In the end, they requested all their temporary fences be woven wire. They also suggested working alongside the contractors as they usually know little, if anything, about farmland.

As final advice, the two said, “You don’t know how strong the EPA is until they come onto your property. You will want to have some say about reclaiming your land ahead of time, before they come around.”

The Mizers asked Dominion Gas to build up and wrap the sides of a stream to be crossed with pipeline. Now, the brothers report the stream is in better shape than it ever was, and they won’t have issues to deal with later from the EPA.



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With new tech, US energy independence by 2035

The days of worrying about im-minent decline of crude pe-troleum production (known

as “peak oil”) and a consequent en-ergy crisis can be pushed well into the future, an expert from The Ohio State University suggested.

“Forget about peak oil,” Jeff Dan-iels said during a meeting of the Guernsey County Energy Coalition at the Southgate Hotel.

The development of horizontal drilling technology, as well as the

use of hydraulic fracturing, will open the United States and the world to crude oil reserves previously untouchable.

As a result, the United States will be energy independent by 2035, Daniels said.

Although the new method of drilling that enables energy com-panies to tap into the fossil fuel reserves in the Marcellus and Uti-ca shale formations here in eastern Ohio is costly, that expense is more than justified by the crude oil recovery rate, Daniels said.

“Horizontal drilling has a recovery rate three to four times greater than [conventional] drilling,” he said.

The conventional method of vertical, drilled wells only cap-tured 15 to 20 percent of the oil present, leaving about 80 per-cent of the reserve behind.

“Shale energy is just the beginning,” Daniels said. “We will be using horizontal drilling in the [traditional] fields.”

The current boom with regard to the shale promise is “not a geology play,” he said. “It’s a technology play.”

Horizontal drilling is the biggest “game changer” to come along in petroleum engineering in the course of Daniels’ 50-year career in geology, he said.

Despite Daniels’ belief there is yet an abundant supply of pe-troleum worldwide, he espoused a balanced approach to satis-fying our energy needs. Nuclear and renewable energy sources must be developed and deployed in addition to our continued use of fossil fuels, he said.

The meeting Thursday was the 18th gathering of the Guern-sey County Energy Coalition, said Jo Sexton, president of the Cambridge Area Chamber of Commerce. The next meeting will be Jan. 3.

She suggested members go online to check out how oil drill-ing rigs work.

“The more we understand about what is going on, the better,” she said.

John LoweDix Communications


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MArcellus shAle

uticA shAle

8 Wells Permitted

3 Not Drilled

279 Wells Permitted

16 Wells Drilling

48 Wells Producing

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5 Not Drilled

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2 Wells Drilled

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20 total horizontal Permits2 inactive

500 total horizontal Permits

Data as of 1/19/12 Source: Ohio Department of Natural resources

138 Wells Drilled


Drive by a typical gas or oil well site in Ohio and you will see a synthetic ground

cover, usually colored green. You would probably be surprised to find out that its use is not only function-al but eco-friendly as well.

American Engineered Fabrics, a 100-year-old company based in New Bedford, Mass., has made a substantial entrance into the gas and oil industry in the Utica Shale area.Daniel Weinstein, the company’s

president and Chief Executive Officer, is excited about the future for AEF as the industry expands.

He’s also proud of the eco-friendly component of the products his company produces.

“We’ve sent a large volume of product into Ohio and Western Pennsylvania,” says Weinstein. “If New York opens up the Mar-cellus Shale we expect to send product there in the future.”

A popular use for the AEF product is as a ground cover, or well pad, for the drilling area. It can also be used to secure near-

by retention ponds, ensuring the prevention of hazardous materi-als from leeching into the ground.

The product — referred to as felt by contractors — is non-woven, meaning it is resistant to tears and can withstand extreme temperatures.

And it’s eco-friendly from start to finish. It’s produced from recycled green plastic soda bottles — and no additives or dyes are added.

“To quantify that,” says Weinstein, “one truckload of our prod-uct can save 300,000 bottles from the landfill.”

Also, companies that use the material qualify for LEED (Lead-ership in Energy and Environmental Design) points.

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Continued on pg. 48


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Shale and You: A Workshop for Landowners

Landowners and community leaders interested in shale energy development may want to attend an Ohio State University Extension workshop on Saturday, Feb. 23.

“Shale and You: A Workshop for Landowners” will be held 1-5:30 p.m. at the Mill Creek MetroParks Farm, 7574 Colum-biana-Canfield Road, Canfield.

Registration is $15. Materials and refreshments will be guaranteed to those whose registrations arrive at the OSU Ex-tension Ag Law’s office in Columbus by Monday, Feb. 18. The registration form with the office’s address and other details can be downloaded here and is also available athttp://shalegas.osu.edu -- click on the “Shale and You” event under “Upcoming Extension Events.”

“We held a similar workshop in Cambridge last November, and those who attended said they got a lot out of it,” said Peg-gy Hall, assistant professor and OSU Extension field specialist in agricultural and resource law.

“Participants especially appreciated the ability to talk one-on-one with OSU Extension educators at information booths over the course of the day,” she said.

Hall, who is coordinating the effort, emphasizes that the workshop is designed to help landowners and community leaders make the best decisions possible. It is not geared to discuss the pros and cons of such development.

“As an educational institution, OSU Extension is focused on providing relevant information to help those who are dealing with shale energy development,” Hall said. “We don’t set policy or make decisions for people.”

The workshop will include presentations by OSU Extension educators, including sessions on:

Update on Ohio Shale Development and Activity, by Chris Pen-rose, OSU Extension educator in Morgan County.

Leasing and Landowners: What if Problems Arise? by Peggy Hall, OSU Extension Agricultural Law Program.

Taxation and Wealth Management of Oil and Gas Income, by Dave Marrison, OSU Extension educator in Ashtabula and Trum-bull counties, and Polly Loy, OSU Extension educator in Belmont County.

Your Private Water Source: When and Why to Test, by Sarah Cross, OSU Extension educator in Harrison and Jefferson coun-ties, and Peggy Hall, OSU Extension Agricultural Law Program.

Pumping the Product: Pipeline Construction, by Mark Lande-feld, OSU Extension educator in Monroe County, and Chris Zoller, OSU Extension educator in Tuscarawas County.

One Family’s Experience with Shale Development, featuring Steve Schumacher, OSU Extension educator in Belmont County and a panel of landowners who have dealt with shale development directly.

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Continued on pg. 48


Gas&Oil47

1. Carroll County 1822. Harrison County 64

3. Columbiana County 624. Jefferson County 355. Monroe County 32

6. Guernsey County 267. Noble County 25

8. Belmont County 21 9. Mahoning County 15

10. Portage County 1411. Stark County 13

12. Tuscarawas County 1213. Coshocton County 5

14. Muskingum County 3Holmes County 3

15. Knox County 2Trumbull County 2

14. Ashland County 1 Geauga County 1 Medina County 1

Wayne County 125 50 75 100 125 150 185

Top CounTies WiTh horizonTal Drilling aCTiviTyBy numBer of siTes

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Chesapeake Energy listed on Fortune’s ‘100 Best Companies to Work For’For the sixth consecutive year, Fortune Magazine named

Chesapeake Energy Corporation to its list of 100 Best Companies to Work For®.

Chesapeake ranked 26, the highest listed Oklahoma-based employer for the third consecutive year, and the second highest ranked company in the energy industry. The full list and related stories will appear in the Feb. 4 issue of Fortune.

Aubrey K. McClendon, Chesapeake’s chief executive officer said, “Empowered and motivated employees continue to make Chesapeake a great place to work. Our employees are focused on creating and delivering value for our shareholders while also making our country more energy secure. Although we have made progress in achieving these goals, we are determined to do even better with our distinctive and attractive corporate culture and workplace being key elements in our drive for further success.”

“We believe our workplace culture allows Chesapeake to re-cruit and retain some of the industry’s best talent,” noted Martha A. Burger, Chesapeake’s senior vice president – human and cor-porate resource. “We are extremely proud of our nearly 12,000 employees who consistently deliver outstanding performance, quality, innovation and collaboration, even when faced with the cyclical nature of our industry.”

Archie W. Dunham, Chesapeake’s non-executive chairman of the board, added, “In addition to our extraordinarily high quality assets below ground, Chesapeake has built an asset base of tre-mendous breadth, value and energy above ground – our employ-ees. It is a tribute to our management team for their excellence

and efforts that Chesapeake has now been recognized among the 100 Best Companies to Work For six years running.”

More information about Chesapeake and its careers can be found at www.chk.com/careers <http://www.chk.com/careers> .

To pick the 100 Best Companies to Work For, Fortune part-ners with the Great Place to Work Institute to conduct the most extensive employee survey in corporate America: 259 firms par-ticipated in this year’s survey. More than 277,000 employees at those companies responded to a survey created by the institute, a global research and consulting firm operating in 45 countries around the world.

Two-thirds of a company’s score is based on the results of the institute’s Trust Index survey, which is sent to a random sample of employees from each company. The survey asks questions re-lated to their attitudes about management’s credibility, job satis-faction, and camaraderie. The other third is based on responses to the institute’s Culture Audit, which includes detailed questions about pay and benefit programs and a series of open-ended ques-tions about hiring practices, methods of internal communication, training, recognition programs, and diversity efforts.

After evaluations are completed, if news about a company comes to light that may significantly damage employees’ faith in management, Fortune may exclude it from the list. Any com-pany that is at least five years old and has more than 1,000 U.S. employees is eligible. For more information on how to apply, see http://bit.ly/n8bVJ3

Information Provided by Chesapeake Corp.

“That’s a niche that we saw was not being served,” says Wein-stein.

American Engineered Fabrics has long been a significant force in the oil industry, mostly in retention and spill and erosion con-trol.

“We’ve produced pads and booms (to control spills) for quite some time,” says Weinstein. “We worked on the Exxon Valdez spill (in 1989) for example.

“We’ve always been environmentally-focused,” he continues. “We wanted to expand our products for traditional construction industries while at the same time offering something eco friend-ly.”

The feedback Weinstein has received from gas and oil compa-nies tells him AEF is on the right track.

“Containment is not a big concern in Texas, for example, be-cause the fields are in the middle of the desert,” says Weinstein. “But in Ohio and Pennsylvania they are leasing a lot of land close to homes and communities. In Ohio, for instance, the issue of containment moved from a standard best practice to mandated.

The workshop is being partially funded by a grant from the U.S. Department of Agriculture’s North Central Region Risk Management Education Center.

For more information, contact Chris Hogan with OSU Ex-tension’s Agricultural Law Program at 614-247-7898 or [email protected].

“A lot of the demand comes from its light color,” says Wein-stein, “because the typical ground cover is black. Our green-colored fiber can reduce the head load by about 15 or 20 de-grees in the spring and summer. That’s a big difference when you’re talking about a whole (rig) crew working on a 300 (feet) by 300, or 600 by 600 pad.”

Gas&Oil48

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February 2013 Ohio Gas & Oil Magazine