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The Town, Cleveland…The Topic, Energy

Posted By Mike Chadsey, Director of Public Relations, Monday, July 25, 2016
Updated: Tuesday, July 26, 2016

Last week, I had the privilege of attending the Republican National Convention in Cleveland. While downtown, I took the opportunity to attend a few energy themed forums hosted by various media outlets discussing how the topic of energy impacts the election, the economy and the environment.

The Atlantic, A forum on Energy and the Environment:

For those unfamiliar with The Atlantic, it is known as a publication that advances bold ideas on the urgent issues of our time. According to its website, “since its inception in 1857, it has evolved into a multi-media must-read, illuminating fresh thinking on politics, business, technology, entertainment, and culture. It stirs vital national conversations through groundbreaking perspectives and a distinctively unbiased approach.”

The Atlantic held a forum that focused on the topic of Energy and the Environment. A couple of key questions that were asked during this event included, what strategies and policies should the next President of the United States adopt to consolidate these gains in energy production? Is there an ideal mix of conventional and renewable energy sources that will help grow the economy while protecting the environment? To answer those questions and more, both Congressman Kevin Cramer, (ND-R) and Congressman Bill Johnson (OH-R) took to the stage. The first question was addressed by Congressman Cramer and he spoke of how Mr. Trump’s policy is “more fossil fuels, less rules while preserving our environment.” Additionally the Congressman went on to say that Mr. Trump, whatever the issue, looks at it from an “America First” point of view. No matter if it is the Trans Pacific Partnership, the Paris Climate agreement or their predecessors like the North American Free Trade Agreement, he will do what is best every time for America and its citizens. Then it was Congressman Johnson’s turn and he came right out of the gate talking about how honest he and other Republican members of congress are when talking about where our energy portfolio comes from and how it is based on natural gas, crude oil, coal and nuclear. Then he followed that comment up by saying when talking about renewables those opportunities “need to be market driven not mandated by D.C.” One of the major themes I walked away with is that these two gentlemen and many like them truly believe that producing energy and protecting the environment are not mutually exclusive.

To watch the video click here: http://www.theatlantic.com/live/events/striking-a-balance-rnc/2016/

The Washington Post, A forum on Energy and Economy:

The Post’s forum hosted the former Governor of the great state of Mississippi, The Honorable Haley Barbour who took questions from the crowd and a moderator, covered a wide range of energy topics. I had the chance to ask him a question about regulations. I was interested on his take on whether the states or the feds are best to regulate the oil and gas business, and where and when those lines should intersect. In answering my question, he went into great detail about the history of how states have regulated the oil and gas industry, excluding on federal lands and off shore. He explained from his perspective “that since the beginning states have regulated production, drilling, unit size, fracturing etc.” He shared that the control should stay with the states and went even further to share that the President’s budget had monies for seven different departments to regulate the industry, and it was his opinion that there is no need for that.

To watch the video (third video down) click here: https://www.washingtonpost.com/blogs/post-live/wp/2016/07/13/the-washington-post-will-be-live-at-the-republican-and-democratic-convention/

Politico, A Forum on Energy and the Election:

If you have not read POLITICO, it is a global news and information company at the intersection of politics and policy. Since its launch in 2007, POLITICO has delivered journalism about politics and policy making that is more useful to people with a professional interest in public affairs; and that is more fun to read for a community of people who love the drama and sheer sport of politics.

This forum featured several congressmen, business leaders and the U.S. Chamber of Commerce among others. The discussion focused on how the topic of energy was going to influence the candidates and/or the election itself. The conversation kicked off by looking at what is in and what is out of the Republican Party platform such as issues like carbon capture. Much of what was discussed was allowing the market to use things like carbon as a commodity instead of looking at it as a problem. There was even a reference to the anti-oil and gas movement of “Keep it in the Ground”, again suggesting let the innovators find solutions as a way of dealing with current issues instead of shutting industry down. America should continue to lead on issues like the environment by letting innovation solve problems.

To watch the video click here: http://www.politico.com/events/2016/07/politico-caucus-energy-and-the-election-at-the-rnc-225020?slide=0

These three forums are just a small sample of some of the great events and opportunities that were available to convention goers all week long in Cleveland. Leaving the city after all of the parties, speeches and activities a few things were clear. First, Cleveland did a great job keeping everyone moving and safe. Second, energy will continue to be a topic of important national discussion. Lastly, Ohio will play a key role once again not only on energy and the debate about it, but the overall election.

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Energy from the Party Perspective

Posted By Brian Hickman, Director of Government Affairs, Operations Managing Director, Monday, July 18, 2016

As the Republican National Convention comes to Cleveland this week, we thought it might be a good idea to look at what the two major U.S. political parties are saying about energy.

Republicans have focused their platform on utilizing America’s natural resources in an effort to achieve energy independence. “We support domestic energy production of clean coal and hydropower, as well as solar, wind, geothermal and nuclear power. And we support drilling for oil and natural gas in an environmentally responsible way,” claims the GOP’s website.

Republicans also want regulations that encourage investment, lowers energy prices, and creates jobs. Republicans site recent EPA regulations (including air regulations and the “sue and settle” process) as deter mental to the American consumer and economy. 

As you might have guessed, Democrats see things a little differently. According to their website, Democrats think that the time to rely upon “unsustainable energy sources” from the past is the “status quo by special interests”. Their website touts clean-energy technologies that are paving the way for a sustainable energy future. Democrats also see a “transition to clean energy” as a way to grow the American economy.

Curiously, with this as a background, Democrats go on to tout that under President Obama domestic oil production is at an eight-year high while dependence on foreign oil is at a sixteen-year low. This is in part due to speeding up the leasing process and improving safety, which has in turn expanded domestic oil production.  

While the general nature of these policies should remain, the degree and focus of them is destined to change in the coming campaign. For Democrats, the campaign of Bernie Sanders had a large focus on energy specifically oil and gas production and hydraulic fracturing. One could expect the party to lean closer to this view, which would be to ban hydraulic fracturing, further reject the keystone pipeline, and ban offshore drilling of oil and gas, in an effort to ensure the votes of former Sanders supporters.

For Republicans, one could expect a stronger message and support of fossil fuels. For the Trump campaign to be successful, swing Midwest states (specifically Ohio, Pennsylvania, and Michigan) will be needed for support. These states would benefit from enhanced energy production, be it oil, natural gas or coal. Trump must secure these Midwestern states in most election models to gain the Presidency.

As we head into the campaign season, one can only claim that anything can happen this year. I mean, the city of Cleveland did win a professional sports title, right?    

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UC Study Claiming Air Pollution from Fracking Quietly Retracted Due to Bad Data

Posted By Seth Whitehead, Energy In Depth, Monday, July 11, 2016
Updated: Wednesday, July 13, 2016

The University of Cincinnati (UC) has yet to publish the results of a now year-old study that found no water contamination from hydraulic fracturing in a scientific journal, despite scrutinymedia attention, and numerous calls from groups and elected officials to do so.

This indefinite delay is all the more interesting considering that UC couldn’t wait to publish the results of its 2015 study that claimed fracking was causing significant air pollution in Carroll County. That study appeared in Environmental Science & Technology just three months after it was completed.

But the UC researchers’ urgency has apparently come back to bite them as they have just retracted the study due to “errors” and “incorrect” calculations:

Retraction

UC’s rush to publish its air study while it dawdles for a year in publishing its groundwater study finding no harm from fracking is even more interesting considering the results of both studies were first announced at events hosted by Carroll County Concerned Citizens (CCCC), a well-known anti-fracking group. The same professor that presented the air quality study results to CCCC, study co-lead author Dr. Erin Hayes, has also participated in other anti-fracking events.

The retraction of the Carroll County air study comes as no surprise to Energy In Depth, which pointed out its many flaws last May. Not only were the study participants recruited by an anti-fracking activist group, the researchers did not use random testing, did not account for sources of Polycyclic Aromatic Hydrocarbon (PAH) other than oil and gas activity, and assumed worst case scenarios in their cancer hazard assessments. A Carroll County landowner also informed EID that some of the highest PAH levels detected by the researchers were collected on his property, which is more than 10 miles from the nearest shale gas well. This completely refuted the researchers’ summation that high PAH levels correlated directly to close proximity to shale gas wells.

The authors even admitted that the sample size used for their study was too small and that the chief assumption used for their research model was “totally impractical,” according to media reports.

That didn’t keep several media outlets from accepting the authors’ conclusions as gospel with such headlines as: “Fracking may cause air pollution, respiratory issues” and “Fracking could increase risk of cancer, new study finds.” This is a prime example of a rushed study, designed to scapegoat fracking, that fails to fully vet the data collected — yet garners media coverage anyway.

Making matters worse is the fact that the Carroll County air study was 100 percent taxpayer funded. UC’s Center for Environmental Genetics (CEG) received federal tax dollars for this study in the form of a grant from the NIH’s National Institute of Environmental Health Sciences (NIEHS)for $47,910.

Of course, the authors of the study do not disclose whether their revised calculations show much lower emissions – but considering this background and the fact that the researchers just omit that data in their retraction, it’s difficult to imagine their corrected results show anything other than a repudiation of their original conclusions. Regardless, the real problem is this: By not providing that information UC is not being forthcoming with data again, just as it has by refusing to release its groundwater study.

Ohioans deserve a full explanation as to why a study that generated numerous alarmist headlines by promoting fear was retracted. It will also be interesting to see if the retraction gets as much media attention as the flawed study generated.

But, considering Ohioans are still waiting for UC to release its groundwater study (which cost taxpayers $400,000, by the way), it might not be a good idea to hold your breath on that.

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Member Spotlight: Jonathan Hudson, Appalachian Well Surveys

Posted By Lyndsey Kleven, Communications Coordinator, Tuesday, June 28, 2016

The member spotlight series features legacy OOGA members who have been a member of the Association for at least 10 years. If you would like to recommend someone to be highlighted, please contact Lyndsey Kleven lyndsey@ooga.org

 

Background information:

 

Jonathan (Jon) Hudson was born and raised in Guernsey County, and has stayed around the area his entire life. He started college at Zane State College (formerly Muskingum Technical College) in the late 1970s, transferring to Marietta college two years later to finish his degree. Jon had no family ties to the energy business and originally started college to become a civil engineer. While dating a girl from New Concord Ohio, whose brother-in-law worked for an oil and gas company, Jon was able to get a summer job that lasted throughout his college career.

 

“An old man told me, once you get oil on your boots you’ll never get it off. So I’ve never taken the oil off my boots. And it’s been boots on ever since,” Jon remarked. 

 

After his first summer working the oilfields, Jon switched his major to petroleum engineering and graduated in 1982.

 

“The more you get into this business, the more it sucks you in. Every summer that I worked was something different. The next year I got to work with folks on leasing property. The year after that we worked in oil field solvents. The more experience I got, the more I enjoyed it. The more people I met, the more they sucked me in too. The people in the industry are a very unique breed of people—and it’s a brotherhood. You aren’t going to find too many people that’s any closer then the oil and gas industry.”

 

Jon’s first job after college was working for Marathon Oil Company in Bridgeport Illinois. Following that year, Jon decided to return back to Ohio and started working for Eastern Well Surveys, an independent wireline company in Wooster that he stayed at for another year. Bringing him full circle back to Cambridge in 1983 was Sego Services, a start-up service company. Jon worked at Sego Services through 1986, which was a time when the industry started to really take a downturn.

 

“Then I get this genius idea that I was going to go into business for myself.”

 

Appalachian Well Surveys Overview:

 

Jon had several years experience working in the service business and was able to see that everyone had a unique way of doing things. Starting a business in April of 1987 as the industry was facing a tough time was an added challenge. After fully deciding that’s what he wanted to do, Jon visited his banker and shared his ambitions of getting into the wireline business.

 

His banker said, “Jon if you’ve got enough guts to get in this business right now, I’ve got enough guts to lend you the money.”

 

Jon knew of a company in Texas that was facing financial struggles with 130 wireline trucks to sell. He went to the auction in Texas and bought one of the trucks and drove it back to Ohio.

“It scared me to death because I had never driven a diesel, everything I had driven was gasoline. Here I am traveling 1,000 miles with a diesel I’d never driven before and away I went.”

 

Arriving back on a Friday, Jon had already set up his first job to perforate a well with Doug Gonzalez the following Tuesday—officially starting his business, Appalachian Well Surveys (AWS). Having been able to find work quickly, Jon still recalled how tough it really was starting out at this time. The company was in debt, the industry was doing poorly and there was a good amount of competition with many other well established wireline companies in the area. 

 

“It was really rough to get started during that time, and I would not wish that on my worst enemy. The first ten years were the ugliest ten years I ever had in my entire life. Just because the industry was tough and the prices were down. If you can get through that first ten-year hump, which is so critical for any business, you’re usually going to make it through then.”

 

It required two people to man a truck, so starting out it was Jon and one other employee. After the first year they went back to Texas and bought another truck and hired two more employees. As AWS was picking up more business they started running two stations, one in Ohio and one in Pennsylvania. In its third year they felt they knew what they were doing and Jon decided to expand into the open-hole business. The first two trucks were cased hole trucks and the newest truck was a logging truck. Jon described open-hole as an experience, dealing with radiation that brought with it a realm of federal regulations.

 

Around 1994 the industry started picking up and the commodity prices started to climb. Companies started to drill more which created more work for the service companies. It was also during this time that a good amount of Jon’s competitors (some of whom were older) started to sell out, creating less competition.

 

“As small as we are, we know what our limitations are. We knew what the industry needed in our Appalachian basin and we provided the tools that were used everyday, afford to buy and enough to keep us busy.”

 

Through the late 1990s is when the company had its biggest growth spurt with a total of ten employees. Over the years Jon has considered his staff family. Up until the latest downturn AWS consistently had 13 employees. The latest downturn forced the company to downsize, which was one of the toughest things Jon had to do in his nearly thirty years in business. Jon is an optimist that the industry will eventually rebound and he will be able to bring back his former staff. He is also optimistic in achieving status of being the oldest wireline company in the history of the Appalachian basin. In five more years AWS will surpass Jon’s former boss Bill Musselman’s tenure at Easter Well Surveys, which was in business for 30 years.

 

Horizontal drilling and state of the industry:

 

Looking at the current state of the oil and gas industry, the biggest changes Jon has seen over the years have been technological. He feels the basics are still used but the technology being used today has changed twofold.

 

“We know all the basics but this new age of drilling is amazing. How we’re getting the product out of the ground, more efficiently, with less of a footprint, it just amazes me—and it’s all for the good. I am working with young engineers that are educating me on the new technology.”

 

The new technology has been a cause for new regulatory changes, which Jon feels, overall, is a positive for the industry. It is a challenge, costing more money (especially now) but Jon feels it is important to make sure procedures are done right. And Jon feel’s there isn’t one person on the OOGA Board who wouldn’t agree—he says, if we’re going to preach, we’ve got to practice it.

 

The last few years has caused AWS to re-evaluate its outlook because of horizontal drilling, which has caused vertical open-hole operations to slow dramatically. AWS has purchased some new tools that are standard of the new drilling operations. This has brought the company some work in the new era, but Jon’s motto has always been to keep things simple and not get pushed out of his comfort zone. 

 

History with the OOGA:

 

Jon has been a member of the Ohio Oil and Gas Association for more than two decades. Jon credits the Association as being very instrumental in the mid 1990s to helping keep many of the independent companies in Ohio in business.

“They did everything they could to listen to our problems, and it’s no different than it is today. The industry was really, really working together. I think the industry in itself, as long as you’re progressing and positive, those guys were there to help you,” Jon recognized.

As AWS became more established Jon was able to take on a more active role within the Association, which he attributes as being built around a strong foundation of brotherhood. In 2014 Jon was elected to the Board of Trustees, a role he currently holds today. Jon happily mentioned the comradery among the group, saying the majority of the board are his customers and he is always given the chance to bid on work.

“Being on the board, you get a more well rounded background of what all the Association is really doing out there to fight for our industry. And we need a strong taskforce like that to tell the truth.”

The guys that keep Jon going are the old-time, legacy members that uphold a positive attitude, regardless of the state of the industry, with a passion to “drill baby, drill.”

Having been involved with the Association for the long hull, Jon has seen its evolution over the years. New board members with interest in different drilling techniques have gained board seats as the industry has changed. Jon says Tom Stewart has been one of his all time favorites, and appreciates his tireless dedication to the industry and drive to instill this attitude among other board members—many of which are constantly going over and above their responsibility.

“All we’re trying to do is find energy for people. And we’re trying to do it right. And we have some of the sharpest cats on the block, bar none.” 

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ODNR Releases Oil and Natural Gas Totals for First Quarter 2016, Oil Production Drops for First Time

Posted By Lyndsey Kleven, Communications Coordinator, Monday, June 20, 2016
Updated: Tuesday, June 21, 2016

The Ohio Department of Natural Resources (ODNR) has released its first quarter 2016 Ohio shale wells production totals. Over the first three months of this year, Ohio’s shale wells produced 5,485,854 barrels of oil and 329,537,838 McF (329 billion cubic feet) of natural gas. 

The ODNR released the results in a press release touting a “significant increase from quarterly productions from the first quarter of 2015.” However, looking at a comparison on a quarter-by-quarter basis, oil production has dropped for the first time ever since ODNR has started tracking these statistics. Oil production dipped -12.3% from the fourth quarter of 2015—slipping from 6.25 million barrels in Q4 of 2015 to 5.48 million barrels produced in Q1 of 2016.

The ODNR pointed out in its release that oil production was up 24% in the first quarter of 2016. Although this statistic is one representation, it is not a proper demonstration of what is happening in our industry. The 5.4 million barrels pales in comparison to the last three quarters, in an arena where consecutive increases were previously seen quarter-to-quarter.

Barrels of Oil Produced

2016   Q1       5,485,854      -12.3%

2015   Q4       6,249,116      +9%

2015   Q3       5,696,780      +2%

2015   Q2       5,578,255      +26%

2015   Q1       4,401,687      +25%

The numbers being reported are finally starting to reflect the continuing industry downturn and low commodity prices we have been facing starting in 2015. The oil and gas industry peaked in summer of 2014 when a barrel of oil was selling for more than $110. The fall of 2014 was when prices started to downturn and into early 2015 we saw them level out around $50 a barrel. Throughout the rest of the year prices continued to face an overall decline and in February of 2016 a barrel of oil was trading at $26 at one point—some of the lowest oil prices the industry has seen in years.

Another key element to consider looking at the ODNR quarterly production reports is that they are reflecting information from the quarter before the current quarter. The production report that was released on June 17, 2016 is covering production results that happened in January 2016 through March 2016. 

In addition, the agency reported that natural gas production grew by 80% from first quarter 2015 to first quarter 2016. Looking at a quarter-to-quarter comparison paints a different picture here as well, seeing only an 8.7% increase in natural gas production (303 BcF in Q4 2015 to 329.5 Bcf in Q1 2016). Although we did see an increase in natural gas production (as previously seen), the momentous increases are lessening (this is the first single digit percentage increase seen for Ohio’s natural gas production from shale).

Billion Cubic Feet of Natural Gas Produced

2016   Q1       329 Bcf           +9%

2015   Q4       303 Bcf           +23%

             2015   Q3       245 Bcf           +10%

             2015   Q2       222 Bcf           +21%

             2015   Q1       183 Bcf           +11%

When you analyze the current production numbers in comparison to previous quarters, it is apparent that  the oil and gas industry is in a downturn. While we are encouraged that oil and gas producers are able to find efficiencies and continue to drill new wells, it is important that the production results are represented accurately and so that the general public gets a realistic view of what is happening across the industry. As with many industries, the oil and gas industry is cyclical and the Association is optimistic that we will see a rebound.   

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Shale Crescent USA – The Ohio Valley Energy Advantage Kickoff Event

Posted By Mike Chadsey, Director of Public Relations, Monday, June 13, 2016
Updated: Tuesday, June 14, 2016

Creating a World-class Business Advantage for the Mid-Ohio Valley 

The energy was palpable. Recently, over 700 people from the Greater Marietta area, representing numerous businesses and industries, gathered at the newly remodeled People’s Bank Theater to kickoff Shale Crescent USA. The idea here is simple, Eastern Ohio and the majority of Appalachia lay above the largest, most abundant, and affordable natural gas supply in the industrialized world. The oil and gas business is currently facing an economic downturn and are looking for a solution—in which there are really only two solutions.

The solutions are to drill less wells OR use more gas. The second solution is where Shale Crescent USA comes into play.

In an effort to burn more gas, Shale Crescent USA is marketing eastern Ohio, western Pennsylvania and northern West Virginia to the entire world with that very message. 

Here are a list of the Top Ten reasons to do business in The Shale Crescent USA:

1.     Access to low cost and abundant oil and gas feedstocks

2.     Natural gas prices have declined over the last several years

3.     Area will account for 35% of U.S. natural gas production by 2020

4.     Within a day’s drive to over half of the U.S. population

5.     Good quality ground for consumption

6.     Ohio River flows into the Mississippi River and onto the Gulf of Mexico for transportation

7.     Ohio exports are among the top 10 in the U.S.

8.     State of Ohio’s tax burden is the lowest in the Midwest for new investment

9.     Quality and diversity of education system leads to skilled workforce

10.  Small town USA, not too large & not too small, availability of charming places to live, work & play.

The event began with the keynote speaker, Mr. Jim Tressel (Yes, that Jim Tressel) President of Youngstown State University. He talked about how important it is to work as a team and to give back to your community which are both central to the Shale Crescent USA idea. After the former coach spoke, a panel moderated by Mr. John Wharff, featuring Ben Thomas, a retired Associate Professor of Petroleum Engineering and Geology at Marietta College, Jerry James who is President and CEO of Artex Oil Company, and Wally Kandel, Senior Vice President and Marietta Site Manager of SOLVY took the stage to talk about the assets in Shale Crescent USA. Discussion focused on the unprecedented business advantages that are available thanks to shale gas development. Also examined by the panel was the concept of using this abundant and cheap natural gas to fuel a manufacturing renaissance in the Mid-Ohio Valley. That very idea is explained in the Shale Crescent USA mission statement:

The mission of the Shale Crescent USA economic development initiative is to encourage business growth in the Mid-Ohio Valley based upon low natural gas prices that allow manufacturers to operate more efficiently while producing products more economically with access to water and over half of the population of the United States.

It is a bold idea and one that will take time and talent, as Tressel shared, to “move the ball down the field,” which can, should and will be done for the benefit of the entire Mid-Ohio Valley. 

To learn more, visit shalecrescentusa.com 

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Shale Insight 2016 Energized with Regional Oil & Gas Partnership

Posted By Lyndsey Kleven, Communications Coordinator, Monday, June 06, 2016

MSC, OOGA, WVONGA partnership advances stronger industry voice and collaboration 

Learn more by visiting: http://shaleinsight.com/ 

Download the official press release

The Marcellus Shale Coalition (MSC), the Ohio Oil and Gas Association (OOGA) and the West Virginia Oil and Natural Gas Association (WVONGA), are pleased to announce a joint partnership to host the sixth annual SHALE INSIGHTTM Conference.  This industry-leading event will take place in the heart of the Marcellus and Utica shale gas plays on September 21 and 22 at the David L. Lawrence Convention Center in Pittsburgh, Pa. 

“By partnering with key regional trade groups in three of the top energy producing states in the nation, SHALE INSIGHTTM 2016 is sure to be the premier industry conference this year, and will further enhance the conference’s programming by  highlighting the challenges and opportunities in the Appalachian Basin, presenting greater value to attendees,” said MSC president David Spigelmyer.  “The SHALE INSIGHTTM conference has been at the forefront of showcasing emerging trends, especially related to technologies and best practices, while bringing together thought leaders, top executives as well as public officials to discuss and offer impactful analysis.”

The focus of this year’s conference is the next phase of the shale revolution and will emphasize end use and connecting the market place through infrastructure.  The conference will feature keynote presentations, an interactive and robust exhibit floor, tailored panel discussions, the Technology Showcase and a Natural Gas Use Marketplace, which all present networking opportunities for attendees.

“This is a tremendous opportunity to showcase our region, and we’re excited to be collaborating with the MSC and WVONGA this year for SHALE INSIGHTTM,” said OOGA executive vice president Shawn Bennett. “While our industry continues to face significant challenges, the current and future prospects for the Appalachian Basin remain very promising. This conference creates an important forum to exchange ideas, share best practices and heighten the dialogue around common sense energy policies, and we’re glad to be part of its continued success.”

In addition to several keynote presentations, the conference will feature daily educational sessions exploring various technical and public affairs-related topics.

“A number of energy producers as well as suppliers and vendors across Appalachia are active in more than one state, so this combined effort absolutely adds value for attendees,” said WVONGA executive director Corky DeMarco. “We’re very eager to contribute to the conference and look forward to working alongside our regional partner trade groups to make this year’s event worthwhile for all involved.”

Registration is now open, offering special member and early bird rates.  A variety of sponsorships offering comprehensive entitlements are available, including general session presentations, luncheons, networking events and other branding and marketing opportunities. 

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Member Spotlight: Jay Henthorne, Jr., Petro Evaluation Services, Inc.

Posted By Lyndsey Kleven, Communications Coordinator, Tuesday, May 31, 2016

The member spotlight series features legacy OOGA members who have been a member of the Association for at least 10 years. If you would like to recommend someone to be highlighted, please contact Lyndsey Kleven: lyndsey@ooga.org

 

Background information:

 

Jay Henthorne Jr. was born in Olive Hill, Kentucky in 1941; his father J. G. Henthorne Sr., worked as a mining engineer for General Refractories Fire Brick Company. Jay Jr. attended the University of Kentucky where his original major was chemical engineering, however, he graduated in 1964 with a B.S. in petroleum geology. Working as a roughneck the summer of his junior year in western Kentucky altered Jay’s career path, leading him to a career in the oil and gas industry that has stuck for more than 40 years.

 

Working for Tennit Brooks in eastern Kentucky was where Jay started out as a junior geologist, among holding other roles. The Morrow County oil boom had taken off in Ohio during that time, and brought a force of frenzied oil development that attracted people from all over the country to come take part in the oil play. Brooks invited Jay to follow him to Morrow County and work for Clark and Cardinal Oil, a partnership between Brooks and Clark oil, whose office was in Worthington, Ohio. The Morrow County, Mount Gilead oil boom would be seen as the last unrestricted oil development in the state. Jay found success in Morrow County and was a consultant on other successful jobs. In 1965 the Ohio division of oil and gas was created, which also brought new spacing regulations that effectively caused the end of the Morrow County boom.

 

In the fall of 1965 Jay left to work for a company that logged wells in Wooster called Birdwell Logging. Jay accepted the position as a logging engineer and was involved with setting up storage logging programs with East Ohio Gas Storage and Columbia Gas Storage during the East Canton Drilling boom. Birdwell became even busier when the Clinton drilling boom struck. Jay worked for Birdwell for nine years until he left in 1974.

 

To his wife’s dismay, Jay left a stable job at Birdwell to start his own company, all while having two young sons at home. In 1974 he started Petro Evaluation Services, which became fully incorporated in 1976.

 

Work History Overview:

 

Morton Salt was one of Petro Evaluation Services’ first big clients as Jay had previously done consulting work for the nationwide company. Early on Jay traveled around the country drilling and fracturing salt wells, using a salt mining solution that recrystallized salt to become edible. Fracturing the salt wells was a much different process when compared to mining salt; the mined salt was dirty and not edible.

 

Petro also found success when it started drilling some of its first wells back in Morrow County. Jay visited Red Armstrong of Armstrong Drilling in Wooster and they made a deal for Jay to have a rig available by the time the state permit was issued to drill a well in Harmony Township. After nailing down the logistics the two shook hands on the deal and went on their way. Jay questioned if they needed a contract and Red replied, “Aren’t you going to pay me?” to which Jay said, “Of course.” Early on many deals were simply made on a handshake. The well, Hurdle #1, was among one of Petro’s best producers.

 

Other wells that Petro attributes to its early on success were found around east central Lake County, Lake Erie College in Painsville, Gilmour Academy in Gates Mills, University School in Pepper Pike, and various other sites around the city of Cuyahoga Falls. Drilling wells in urban areas and college campuses was not a common practice in the mid 1970s; Petro was involved in some of the early urban drilling projects in the northeast.

 

The city of Cuyahoga Falls hired Petro to drill six wells on a local golf course, which was in a residential area. Knowing the importance of building a good reputation and having strong environmental practices, Jay made certain to keep the area around the well nice and used industrial mufflers to keep the noise down as they drilled throughout the night. There were some complaints from local residents in the area but Petro always attempted to make good with the local residents and got praise from local media and the parks and recreation superintendent in doing so.

 

Jay described the situation, “That was kind of our philosophy and it stuck, building strong community relations.”

 

Petro continued to grow as the company continued to drill new wells during the Clinton drilling boom. They hit many good wells and the Clinton boom moved south. “It was crazy, the wheeling and dealing at these times. It was a lot of fun and quite a ride,” recalled Jay.

 

Throughout the 1980s Petro drilled many wells with Leo Altier.  Perry County was an area Petro and the Altier brothers found success. Petro also drilled numerous well with many of the conventional producers still involved with the Association today, include Jerry Olds, David Hill, and Dick Poling.

 

Petro expanded its drilling operations outside of Ohio into Pennsylvania and Michigan for a period of time. It was during this time Jay asked his son Jason to join the company—having a background in geology and environmental science from the University of Pennsylvania.   

 

Finding the most success in Ohio and Pennsylvania, Petro opened an office in Pennsylvania in 2005 with Jason heading up much of this operation. Petro drilled a 12,458 foot well in Pennsylvania, completing it and eventually selling it. Samples from the well and the footage was donated to the Ohio Geological Survey, Petro found it important to donate this information to help Ohio because the logs that the state had did not contain this type of information. The Pennsylvania office remained open for five years and was used primarily for leasing until the downturn started.

 

Drilling projects that Petro focused on across Pennsylvania were in the Trenton Black River and Knox formations. The company’s Utica and Marcellus leases helped offset some projects that were less successful than anticipated. The company had a good acreage position on the boarder of Ohio and Pennsylvania before people knew what the Marcellus was. The wells and experience gained in the Trenton and Knox put them on the forefront of the shale.

 

Petro tried to morph as times got tough opening different entities over the years; with Petro Evaluation Services, Inc. remaining the overarching business that has been operating in Ohio for 40 years. In the 1970s Petro opened Environmental Brine and learned how to operate the disposal process. Petro Energy Services was opened for a period of time to serve mid-stream companies.  Petro Evaluation served as the leasing arm of all the Petro companies. Jay attributes Petro’s success to keeping ahead of the curve and not growing too rapidly. Petro has actively owned, managed or been involved in almost every aspect of oil and gas production in Ohio.

 

Today Petro operates with seven full time employees, ranging from office employees to a few pumpers working in the field. From the beginning Petro has drilled and operated its own wells, and has approximately 80 wells still in operation today.

 

Changes in the industry:

 

Recently, while giving a presentation to a group of college students Jay was asked how many booms he’s been through, and was able to quickly respond, “four.”

 

“When I got out of college all the geologist were facing a downtime. I remember four of these downtimes, the industry grows, falls, grows and falls, and it will be back though.”

 

The greatest positive change Jay has seen in the industry over time has been the advancements in technology. Technological drilling techniques and the ability to get answers quickly from computers has shaped the industry to a new level it’s at today.

 

With the new technology bringing new drilling techniques—like horizontal drilling—it has also brought stricter regulations. Jay thinks working in the industry is not going to get any easier and it is important to get and stay ahead of the curve. Some of the rules being applied to horizontal drilling get carried over to older wells where they shouldn’t apply—which new inspectors don’t often realize.

 

Jay’s outlook for the industry remains strong. He feels it is important for someone such as himself, who has been in the industry for years, to give back. He does this by supporting his preferred colleges and occasionally speaking at them.

“There’s going to be a lot of severing of minerals that we can do. Natural gas is the main stay energy of the future. We’re going to need geologist to steer us away from trouble, and geology in that sense is going to be absolutely critical.”

History with the OOGA:

Jay has been a member of the Ohio Oil and Gas Association since the mid 1960s when he started working for Birdwell. In 1987 he was elected to the Board of Trustees where he held the position through 1995. Jay also had involvement with the PAC committee over the years.

Jay feels the educational side of the Association, Ohio Oil and Gas Energy Education Program (OOGEEP) has been a great thing for the industry, stressing the importance of educating our teachers and students on the oil and gas industry.

Jay described Petro as going about the industry “the old fashion way” and enjoying things. He touted the work that the Association has done to make Ohio a good state to do work in.

 “Ohio is really a ring leader in state development, in terms of being pro oil and gas. And that’s in large part to Tom Stewart and a couple of his forbearers.”

Jay’s positive outlook and closing thoughts on the industry, “Drill baby, drill. It has been fun, and it still is.” 

 

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No show, no problem; Antis need educated before spewing falsehoods

Posted By Mike Chadsey, Director of Public Relations, Monday, May 23, 2016
Updated: Wednesday, May 25, 2016

Last Tuesday a few dozen activists got in their cars and drove to the Ohio Statehouse to collaborate in an organized session scolding Ohio’s use of fossil fuels. The Fresh Water Accountability Project (FWAP) organized a Public Health & Liability Conference: Fracking and Ohio’s Future. The event was open to the public, free to attend, with the goal educating Ohio’s legislators and regulators to learn the negative impacts of hydraulic fracturing.

In a press release from FWAP it seems as if they’re deeming the conference as a flop:

The conference hoped to provide the information and education regulators and legislators need from sources not connected to the oil and gas industry. Organizers invited regulators from the Ohio Department of Natural Resources (ONDR), the Ohio Environmental Protection Agency, the Ohio Department of Health, the Kasich Administration and all Ohio legislators. The conference was organized in the Statehouse Atrium with accessibility for regulators and legislators in mind, but few managed to make an appearance to learn from the experts. 

Holding the event in an opportune place to draw legislator attendance was not able to bring in the presence the group was looking for. Or maybe it was because the ODNR regulates the industry and did not feel the need to hear from these so called “experts” whose only affiliation with the industry is in its attempts to bring it down.

The University of Cincinnati had two speakers, Erin Haynes and James O’Reilly, presenting on various topics at the event. Erin Haynes was slated to present on oil and gas development, views from environmental public health perspective. Much of presentation time was passed on for a collaborator from the University of Cincinnati to present new findings from preliminary results from a new pilot study examining the quality of life amid unconventional oil and gas extraction in eastern Ohio. The results presented looked to be more along the lines of a survey results than a scientific study, where interviews were conducted with 34 residents in Guernsey and Noble County.

It was interesting to see these two speakers from the University of Cincinnati present at the forum, but the researcher who conducted a three-year study testing water contamination from hydraulic fracturing was not on the speaking roster. Dr. Amy Townsend-Small analyzed groundwater before the onset of fracing, during, and after fracing completion, concluding that hydraulic fracturing does not have any links to contaminating water. She likely would have been asked to speak if the results were negative, just like she said while presenting them at a public meeting in Carroll County, “I’m really sad to say this but some of our funders, the groups that had given us funding in the past, were a little disappointed in our results. They feel that fracing is scary and so they were hoping our data could point to a reason to ban it.”

The final speaker of the day was Jensen Silvis, an attorney for the FWAP (also in a press release from FWAP):

“There are too many regulatory loopholes at the federal and state levels to allow fracking to degrade public health and the environment.  We need to educate ourselves and our representatives regarding the facts and close the legal gaps allowing the industry to proceed and pollute at public harm and expense.”

After flying through his presentation on the numerous regulatory loopholes he found through his research, Silvis said:

“I wish I knew of more. I always tell people, I’m not a scientist either. So I can look at the law. I’m brand new at doing the legal stuff too. But I need like another me as a scientist, to try to help me decipher all these different numbers and all this. If you know anybody, let me know.”

This concluded the pane of experts the FWAP organized for its public health and liability, fracing and Ohio’s future discussion.

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Fracking is Driving Dramatic Reductions in U.S. CO2 Emissions

Posted By Guest blog by: Energy In Depth, Monday, May 16, 2016
Updated: Thursday, May 19, 2016

http://energyindepth.org/national/fracking-is-driving-dramatic-reductions-in-american-co2-emissions/

Additional data released by the EIA today shows that carbon dioxide emissions from electricity generation in 2015 were lowest since 1993.  Similar to other reports, this data indicates that,

“A shift on the electricity generation mix, with generation from natural gas and renewables displacing coal-fired power, drove the reductions in emissions.”

EIA Chart

It is thanks to a boom in domestic production, and the fracking that made it possible, that so much natural gas is available at a reasonable price for this electricity generation.

— Original Post May 10, 2016 —

Increased natural gas production from fracking is driving a dramatic drop in American carbon dioxide (CO2) emissions since 2005, according to new data from the Energy Information Administration (EIA).

EIA found that CO2 emissions have fallen by 12 percent since 2005 and estimates that 68 percent of that drop can be attributed to increased natural gas usage. The report attributes CO2 emissions reductions due to an “increased use of natural gas for electricity generation.” From the report:

“The reductions in CO2 emissions are spread out among the different end-use sectors in proportion to the share of total electricity sales to each sector. Overall, the fuel-use changes in the power sector have accounted for 68% of the total energy-related CO2 reductions from 2005 to 2015.” (Emphasis added)

EIA

The relationship between decreasing CO2 emissions and fracking has already been noted by theIntergovernmental Panel on Climate Change (IPPC), the International Energy Agency (IEA),President ObamaEPA Administrator McCarthy, and Secretary of Energy Ernest Moniz.  Even anti-fracking groups like the Sierra Club have admitted that natural gas plays a key role in decreasing U.S. emissions, as it noted last year:

“We project that as a result of recent coal retirements, as well as advocacy for related policy measures like efficiency and demand response and market forces including historically low natural gas prices, electric sector coal use in 2015 will be approximately 9 percent lower than in 2014.” (Emphasis added)

The EIA’s latest report is simply the most recent testament to the climate benefits of fracked natural gas.

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