‘Year in Review’ of gas and oil development in eastern Ohio

Judie Perkowski Dix Communications Published:

Knowing that Ohio was the leading oil-producing state in the nation from 1895 to 1903 doesn’t mean much to most people living in eastern Ohio today, with the exception of some who inherited gas and/or oil lease royalties from their grandparents or great-grandparents.

According to the Ohio Department of Natural Resources, Division of Mineral Resources Management, while Ohio oil-and-gas production has never again reached the levels attained in 1896, petroleum producers have worked continuously since that time to steadily identify and develop oil-and-gas resources across Ohio, with little attention paid to their activity.

Until July of 2011, no one was really excited or interested in listening to the “grapevine” chatter elicited from newspaper articles, the unusually high number of vehicles with out-of-state license plates seen in the area, or the increased traffic at local airports up and down the eastern Ohio border and extending westward to Muskingum County.

Although the Marcellus Shale, which encompasses a “sliver” of Ohio’s eastern border and has produced an overabundance of dry natural gas, geologists reports and seismic studies indicate the Utica Shale, which lies under the Marcellus formation and covers approximately a third of Ohio’s land mass, has the more desirable “wet gas” from which “black gold” is extracted.

Critics scoffed at the “rumors,” and said Ohio was possibly on the brink of another “boom and bust.” By January of 2012, rumors transformed into viable discussions as the gas and oil industry made its presence known when dozens of abstractors researching landowners’ leases lined the hallways leading to county recorders’ offices in counties situated on the Marcellus and Utica Shale Plays.

It’s hard to believe how two little words — gas and oil — have dramatically changed the lives of so many people who reside in the depressed Appalachian counties in Ohio.

Who would have thought in their wildest dreams of what has transpired in one of eastern Ohio’s poorest counties since May of 2009 when Amy Rutledge, director of the Carroll County Convention and Visitors Bureau, said, “There are no four-lane highways in this laid-back community ... Carroll County is off the beaten path but well worth the trip,” when she spoke at a Cambridge Rotary Club meeting.

Truer words about Carroll County were never spoken. Just ask Chesapeake Exploration, LLC, the major oil company has demonstrated just how “well worth the trip” Carroll County really was, and is, by drilling its first well there in 2010. According to ODNR’s website, Carroll County is currently the “hot spot” and is at the top of the list for the number of wells in various stages from permitted to production, with the majority owned by Chesapeake.

• In mid-July of 2011, in the early stages of the gas and oil conversation, Cambridge Area Chamber of Commerce President Jo Sexton, initiated the Guernsey County Energy Coalition, which has emerged as a reliable source of information about complicated issues in the gas and oil industry. Sexton invites industry and ancillary service-related representatives, state officials and heads of industry-related organizations, to speak to local business owners, city and county officials and other interested persons at the monthly meetings.

• Local newspapers began reporting on the all areas of the industry, from explaining terms most knew nothing about, to quoting experts in the field about leases, adamantly recommending landowners seek legal advice before signing anything, to attending meet and greet events scheduled by gas and oil companies to acquaint the public with industry equipment and personnel.

Residents were introduced to words like shale formations, seismic activity, hydraulic fracturing, brine water, flaring, injection wells, royalties, road use agreements, etc., and names like Halliburton, Shell, Chesapeake, Anadarko and Gulfport, to name a few of the energy companies converging on Appalachian counties.

As more and more information became available, the editors at Dix Communication decided to compose a magazine devoted exclusively to the gas and oil industry, to keep the public abreast of what, where and by whom the industry’s activity was occurring in eastern Ohio. Dix Communication, based in Wooster, is a family-owned business, offering media to small markets and local communities.

In June of 2012, GAS& OIL magazine debuted. The publication has developed into a forum for advertising products and services, articles offering legal advice, the importance of education, jobs, state rules and regulations, water issues, stories of gas and oil companies building a rapport with communities where they have staked a claim, and much more.

The free monthly magazine, which has received rave reviews, is distributed to 13 counties situated on the immense Marcellus and Utica Shale formations.

• Throughout the years gas and oil companies, collectively referred to as “big oil,” has not have a stellar public image. Huge oil spills combined with soaring gasoline prices, gave the public little to commend and environmentalists a platform to make their case for moratoriums on any phase of gas and oil activity.

Most recent case in point: Environmental groups rally for their cause claiming vertical and horizontal drilling were the reason for minor earthquakes in Mahoning County, beginning in August of 2011 through May 29, 2012.

To ensure public safety and to determine the origin of the quakes was reason enough for local officials to cease operation of several injection wells in the area.

After a thorough investigation of the Youngstown seismic events, Terry Fleming, executive director, Ohio Petroleum Council, said, “The report by Ohio’s Department of Natural Resources states that ‘all the evidence indicates that properly located injection wells will not cause earthquakes.’ We look forward to reviewing Ohio’s proposed new set of regulatory standards for these brine disposal wells.

“Man made earthquakes have been known for some time, from dam building to geothermal projects. Geologists involved in this isolated report concluded that ‘it is very difficult for all conditions to be met to induce seismic events.’”

And it wasn’t long before a group of environmentalists, with a movie star at the helm of a production called “Gasland,” conjured up a DVD of “incidents related to the harmful effects of hydraulic fracturing.” Which was later followed by “Truthland,” produced by experts in the field of gas and oil, which dispelled the falsehood of the previous movie’s contentions.

But, be aware, the ball is in actor Matt Damon’s court, again. This time with a full blown-out Hollywood production with actors and scripts written by people with too much money.

• To dispel misinformation and refute environmentalists’ efforts for a statewide moratorium, industry organizations, agencies, and programs such as Energy in Depth, Ohio Oil and Gas Energy Education Program, Ohio Farm Bureau, Ohio Oil and Gas Association — and many more — sent representatives to counties on the speculated huge oil and gas reserve to educate a nervous public, not only about the gas and oil industry, but of the real possibility of the economic benefits for families and communities through substantial tax revenues and thousands of jobs in the industry and its service providers.

Almost overnight entrepreneurs were finding their niche by creating new businesses, encouraging established businesses to expand their square footage and number of employees.

“The unemployment rate continues to drop in Guernsey County, and part of that is due to local residents becoming employed with companies related to the oil and gas industry. Many have found work with Halliburton, GoFrac, Crescent, Chesapeake, and many smaller service companies,” said Sue Thomas Sikora, manager of the Guernsey County Opportunity Center, during a recent interview. The Center is part of the One-Stop system that includes Muskingum, Coshocton and Licking counties.

“Job orders continue to be posted. I think many thought the industry would come in stronger so there seems to be a perception that the work really isn’t there, but that isn’t true. Companies continue to look for individuals with CDL/tanker and haz-mat endorsement, as well as field mechanics, pipeline techs, engineering and some general operator techs. To find work in this industry, you have to be diligent in your job search and make sure you have the credentials they are asking for, such as the licensures/certifications.

“It is so important to use our Opportunity Center as the base for job searching. More employers than ever, including oil and gas companies, are relying on the services provided by the Opportunity Center to help them find the workers they need.

“Guernsey County continues to be in a very good place for employment in general, across all industry sectors. Oil and gas careers are an added bonus to the wonderful job opportunities available with our existing businesses and industries.”

• To promote training and education of the local workforce and accommodate the industry with competent employees, Zane State College President Dr. Paul Brown hosted a seminar at the Zanesville campus in February of 2012 on energy, education and economic development for a consortium of business leaders and oil and gas representatives to address the need for education and training for jobs in the industry. Brown related his vision for a High Tech Corridor encompassing seven counties within the Marcellus and Utica Shale Formations.

Since then Zane State has broken ground for a multi-million dollar expansion to its home at the Willet-Pratt Training Center in Cambridge where certificates and expanded associate degree programs relating to the gas and oil industry are already available. Zane State has been in the forefront of industry-related programs.

Ohio University, the latest institution of higher learning “to expand academic offerings in the areas of applied management, social work and general education and to serve the needs of non-traditional, working students in the Cambridge area,” said Richard Greenlee, dean of OU Zanesville and Eastern. “Degrees to be offered in Cambridge could provide a boost to new business ventures related to the gas and oil industry.”

The new OU campus will be in a building at 7077 Glenn Highway (Route 40).

• “A year ago, many around the state thought the Ohio Oil and Gas Energy Education Program Economic Impact Study, released late in 2011, was exaggerating the economic and job potential of the Utica Shale. One year later, more than $3 billion has been invested in the state, and nearly 39,000 jobs have been generated in Ohio. Hotels throughout the eastern part of the state are full, and many restaurants even have an “Oilfield Worker Special” on the menu. No, these were not exaggerated numbers, but now appear to have been conservative," said Rhonda Reda, executive director of the Ohio Oil and Gas energy Education Program.

“With funding from Ohio’s natural gas and crude oil producers, and no taxpayer dollars, OOGEEP is now working with 45 Ohio colleges, universities, career centers and vocational schools gearing up to help meet the demands for a trained workforce in the next several years. An additional 35 new scholarships were awarded to Ohio students through our scholarship foundation. More than 2,600 K-12 schools and teachers, from all 88 Ohio counties, have participated in science-based curriculum workshops. Another 1,800 Ohio industry workers and 972 Ohio firefighters have completed specialized industry training.

In 2012, OOGEEP gave 208 public presentations around the state and distributed more than 1 million fact sheets to local communities, business leaders, chambers and professional groups. And, to think — we are just getting started.”

• In April of 2012, neighboring Muskingum County was awarded a multi-million dollar contract from Halliburton, one of the world’s largest providers of products and services to the energy industry. The company broke ground at the EastPoint Business Park for a $35-$50 million investment in an equipment and field service center, which will employ approximately 300 people, 70 percent of them local.

A recent report from the Ohio Oil & Gas Association announced a $1 billion natural gas processing plant is being built in eastern Columbiana County, scheduled to be operational in May 2013. The facility is being built by M3 Midstream LLC in a partnership with Chesapeake Corp. and EV Energy Partners.

“The growing infrastructure, like this new plant, is needed to handle the volume expected from the Utica Shale,” said Dan Alfero, spokesperson for Energy in Depth-Ohio, an outreach and education group, who was quoted on EID’s website in regards to the processing facility.

“Midstream investment, things like pipelines and processing facilities, are absolutely essential to maximize the resources we have in Ohio, and they’re probably the greatest barometer of the potential we have here,” he added.

• As of Dec. 15, 2012, the latest figures available from the ODNR report on Utica/Point Pleasant Shale Wells, activity continues to grow. A total of 477 horizontal permits have been issued; 196 horizontal wells have been drilled; and 45 wells are producing, with Carroll County still leading the pack with 165 wells in some step of the process, from permitted to production.

• News items that will be front and center in 2013: A hike in the gas and oil severance tax, and House Bill 537.

Gov. John Kasich stated unequivocally that “We are going to get a higher severance tax plan in this state. It’s going to happen. It’s just a matter of when ... I will not give up on this until we get it done, and it is going to get done.”

House Bill 537 is legislation that has been offered in the Ohio House. The bill calls for restoring local control of regulating locations of gas and oil wells, rather than rely on statewide standards and regulations under the ODNR.

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