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Repeal the Venting & Flaring Rule

Posted By Lyndsey Kleven, Communications Coordinator, Monday, March 20, 2017
Updated: Tuesday, March 21, 2017

In today's headlines it's apparent that we need to contact Senator Portman on use of the Congressional Review Act (CRA) for the BLM Venting and Flaring Rule. 

Repeal of Obama Drilling Rule Stalls in the Senate
The Hill | 3/21/2017
The GOP’s effort to roll back contentious Obama-era regulations is hitting a snag. Some Republican senators are coming out against a resolution that would repeal an Interior Department regulation governing oil and natural gas drilling on federal land. The rule is designed to cut down on the release of methane, a potent greenhouse gas.

ACTION ITEM: 
Below is a draft letter which we ask you send to Senator Portman. You can click here to easily access the submission page (hosted on Enervest website), which will email Senator Portman’s office directly regarding the issue. For business owners, please share this email with your staff and any others you feel may be affected so they too can contact the Senator.

WHY: 
BLM’s Venting and Flaring Rule, which was finalized in the waning days of the Obama Administration, will have an impact on Ohio producers with acreage in the Wayne National Forest Proclamation Boundary. The Venting and Flaring Rule would require producers to install costly emissions control equipment on wells where it may not be economic to do so-which could lead to the premature plugging of wells before the end of their productive life. While we originally believed that the Venting and Flaring Rule would only affect future wells on federal lands, we have learned that is NOT the case and the rule will be applied to previously drilled wells. For those producers who have leases with landowners that may revert to federal mineral ownership at some point in the future, we are of the understanding that those well may be subject to the venting and flaring rule when those minerals revert back to federal ownership. So, while the rule may not affect you now, it may in the future if we do not act.

We have an opportunity to get Congress to act to repeal the Venting and Flaring rule using the Congressional Review Act (CRA). The House has passed the CRA to repeal the BLM Venting and Flaring rule, and we need the Senate to do the same.  Time is of the essence as it has to be done by March 24.

This regulation, released at the eleventh hour by the Obama Administration, will impact adversely the ability of independent oil and natural gas producers to operate on federal lands.

While there are many aspects of this rule that are flawed, none is more blatant than the lack of authority the BLM has under the Minerals Leasing Act to regulate methane emissions.  

TO SUBMIT:
Below we have drafted a letter which you should send to Senator Portman. We encourage you to personalize it to reflect how this rule will directly negatively impact you and your business. This must be done before Thursday or we will lose our brief window of opportunity for the Senate to act.

You can click here to access the form letter (hosted on Enervest website), which will allow you to easily email Senator Portman’s office directly regarding the issue. 


Example Letter:

Dear Senator Portman,

As a member of the Ohio oil and natural gas industry, I would like to express my strong support for use of the Congressional Review Act (CRA) to repeal the Bureau of Land Management’s (BLM) Waste Production, Production Subject to Royalties, and Resource Conservation rule (commonly referred to as the BLM methane Venting and Flaring Rule). The Joint Resolution will nullify the Bureau of Land Management (BLM) rule by the same name published in the Federal Register on November 18, 2016.  If this rule is not repealed it will have a significant impact on existing and future operations in the Wayne national Forest!

Over the course of this rulemaking, our industry consistently outlined concerns that this rule is unnecessary.  I believe the BLM ignored substantive information in favor of pushing through an environmental agenda as part of the Obama Administration’s Climate Action Plan. This regulation, released at the eleventh hour by the Obama Administration, will impact adversely the ability of independent oil and natural gas producers to operate on federal lands.

While there are many aspects of this rule that are flawed, none is more blatant than the lack of authority the BLM has under the Minerals Leasing Act to regulate methane emissions. Congress delegated that task to the Environmental Protection Agency (EPA) under the Clean Air Act in 1963.  As a result, portions of the rule not pertaining to air emissions will not be subject to the CRA’s prohibition on promulgating a substantially similar rule.

The economic justification provided by BLM for the rule is outdated, making it inaccurate, and plays heavily into the mantra of monetizing the ‘social cost of methane.’ Cost estimates for the rule come from a 2014 carbon limits study and maintain the assumption that natural gas is currently trading at $4/mcf, which is highly inflated for today’s market. The fugitive emissions program outlined in the rule will result in many marginal wells that produce less than 15 barrels of oil per day or 90 mcf of gas per day to be plugged as the cost of installing and maintaining mandatory measuring equipment is not viable at a low rate of production. This means that states and the federal government will forgo $114 million annually.

Reducing methane emissions is in the best interest of every oil and natural gas producer. Producers have every incentive to capture and sell as much of their product as possible to consumers, rather than letting it escape into the atmosphere. However, currently, a lack of infrastructure and gathering lines to collect gas at the wellhead and an extremely slow process to permit pipeline right-of-ways by the BLM make it difficult for producers to safely transport our product to market. Independent producers repeatedly shared our concerns with and provided industry data to the Obama Administration, only to be ignored.

Again, as an employee of an independent producer of oil and natural gas, I strongly urge you to support the repeal this unnecessary and costly rule.

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Ohio Anti-Fracking Group Organizer Pleads Guilty to 13 Felony Counts for Election Fraud

Posted By Jackie Stewart, Energy In Depth , Thursday, March 16, 2017

Rebecca Hammonds, a local organizer and employee of the Ohio Organizing Collaborative (OOC) — the multi-million dollar anti-fracking grassroots organization behind the six-times-failed Youngstown Community Bill of Rights ballot initiatives — was sentenced to 180 days in jail this week after pleading guilty to 13 felony counts for false voter registration and election fraud in January.

This is ironic considering this is the same vocal anti oil-and-gas grassroots organization that falsely claimed election fraud after their onslaught of failed Community Bill of Rights efforts in Youngstown just two years ago. Of course, a hand-recount found that, indeed, that the Community Bill of Rights rightly failed. Fast forward two years later, and we learn that one of this group’s organizers has pleaded guilty to multiple felonies and is even guilty of registering deceased people to vote.

But it doesn’t stop there — before Hammonds was sentenced, she stated,

“I felt like I needed to keep the numbers up because it was stated that if there weren’t very many numbers then they would pull the funding, which would mean not only my job but eight other peoples’ jobs.” (Emphasis added)

But that explanation just doesn’t make much sense, considering the organization’s campaign coffers swelled from $1.6 million in 2014 to $2.5 million in 2015, and OCC has taken money directly from anti-fracking national groups such as the George Gund Foundation and the Ford Foundation. As was recently noted,

“[o]ver half of the OOC’s funds are raised through grants from both Ohio-based and national foundations, like the George Gund Foundation and the Ford Foundation, respectively.”

In fact, these “national foundations” have dumped hundreds of thousands of dollars into their campaign, resulting in the OOC’s  coffers to swell by almost a million year-over-year. Yet, according to Hammonds, the OOC was threatening funding cuts, which led to their organizer signing up dead people to vote, apparently.

Indeed, this group has made it clear that their priority is to shut down the oil and natural gas industry by way of local control, and its website defines how it plans to carry out their anti-fracking agenda at the local level. From their website,

“Oil and Natural Gas Exploration: In 2004, state law stripped local governments of regulatory power over the oil and gas industry, with all decisions now made at the state level. MVOC partnered with the Committee for Local Control in Youngstown this spring to support a Community Bill of Rights, securing commitments from all Mayoral candidates to seek changes to the existing state law. Organizers have also been traveling across eastern Ohio, meeting with grassroots leaders and attending concerned citizen meetings. Statewide, OOC partnered with Ohio Citizen Action to organize first responders to support legislation which would bring Ohio into compliance with the federal Emergency Planning Community Right to Know Act: ensuring that all first responders are aware of chemicals used in large-scale industrial activities, in order to develop a plan to respond in case of an accident.” (Emphasis added)

However, OOC failed not once but six times in Youngstown and their fringe so-called “environmental justice” campaigns have been failing all over the state. It appears OOC has become so desperate that it has stooped to unlawful levels to try to advance its anti-fracking cause.

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OOGA Celebrates 70 Years at the Annual Winter Meeting

Posted By Lyndsey Kleven, Communications Coordinator, Monday, March 13, 2017
Updated: 23 hours ago

The Ohio Oil and Gas Association hosted its 70th annual Winter Meeting in Columbus on March 8th – March 10th which brought together more than 800 attendees including members and top industry leaders from Ohio and the nation to provide the most current updates of the state’s oil and gas industry. There was a more optimistic mood throughout this year’s event as the industry has been experiencing a moderate increase from last year’s downturn.

The first day of the event kicked off with what is considered a day of “pre-meeting events,” with OOGA hosting its Executive Committee and Board of Trustees to convene and continue to work towards improving the Association. Evening receptions followed on day one and two that allowed for attendees to network and the Association thank attendees for their support.

The next two days held the main events including updates from national authorities, state elected officials, and included production, exploration, legal and legislative industry information. We were excited to host this year’s keynote speaker Robert Bryce, a prominent energy journalist. Bryce covered an array of topics in his address Texas LNG to Kuwait: The Upside-Down, Post-Paris, Post-Trump Global Energy Landscape

While the business session presentations were occurring an industry trade show was simultaneously taking place in the halls of the venue. This year the Association had 80 exhibitor booths displaying products, demonstrating new equipment techniques, and representing multifaceted components of the industry. As attendees came and went and transitioned between business sessions, they engaged with exhibitors showing the latest in oil and gas.

And of course this event would not be possible without our sponsors. The OOGA appreciates the support from each and every one of you. We would also like to extend a special thank you to our premier event sponsors Ergon Oil Purchasing, Inc., Ergon Trucking Inc., Dominion East Ohio and American Refining Group. 

The Association hopes to see each of you back at next year’s annual Winter Meeting and at our Summer Meeting on Aug 7-8 in Zanesville. 

 

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Celebrating 70 Years, OOGA enters 2017 with a renewed sense of optimism

Posted By Lyndsey Kleven, Communications Coordinator, Friday, March 3, 2017

As we begin 2017, we are looking forward to a celebration of the Ohio Oil and Gas Association’s 70-year anniversary. Established in 1947, the Ohio Oil and Gas Association (OOGA) has taken great pride in protecting and promoting the common interests of those engaged in all aspects of the Ohio crude oil and natural gas producing industry. The OOGA hopes to carry on this mission and defend America’s greatest industry for at least 70 more years to come.

 

Come join us in celebrating our 70th Anniversary by attending our annual Winter Meeting, which runs March 8-10. The industry is slowly emerging out of trying times, and brighter days lie ahead. It is more important now than ever that we come together and support both our industry and your Association. As always, the Winter Meeting is the Association’s premier business meeting and networking event of the year.

 

Speaking of supporting our industry, 2017 has also ushered in a change in the White House and, in turn, federal policy. While it still remains to be seen what will actually be accomplished on the regulatory front under the Trump administration, he is a welcomed relief from the onslaught of regulations that were heaped upon the industry over the past eight years. He has been vocal about wanting to unlock America’s energy potential. President Trump has made clear his administration seeks energy independence for the U.S. and will help revitalize the oil and gas industry. It is refreshing to see this ideology from a new president who has allies in Congress who share this goal and are hard at work using the Congressional Review Act to take steps to repeal a number of onerous regulations.

 

In Ohio and across the Appalachian Basin, we have become victims of our own success. There is an abundance of natural gas with no apparent outlet.  Thankfully there are numerous projects on the horizon that will alleviate some of the glut. The Ohio Environmental Protection Agency has issued wastewater permits for the PPT Global’s proposed ethane cracker plant being considered in Belmont County. The plant has not been officially announced, but the issuance of the wastewater treatment permit is another positive sign that Ohio may actually have a cracker built within our boarders. Ohio’s oil and gas industry is looking for markets for the products we produce and it would be an economic win for the entire state, and even the Appalachian Basin, if we can maximize downstream products that can be manufactured from ethane.

 

On the transmission and distribution side of the equation, the state is waiting on pipeline projects to get the green light from the federal government. Once the remaining projects are authorized that will greatly help move our gas to more favorable markets. The pair of interstate natural gas pipeline projects stretching across Ohio, Pennsylvania, West Virginia and Kentucky were authorized for construction and operation by FERC in mid-January. Kinder Morgan began construction on its 215-mile Utopia Pipeline the first week of February. The Rover Pipeline has received FERC approval (and not a moment too soon). The pipeline was granted approval the evening before FERC Commissioner’s last day, as FERC entered a stretch where they will not have a quorum to operate until a new Commissioner is appointed. Approval for the Nexus Pipeline is still currently pending.

 

Another outlet for our gas is to create additional electric generation plants right here in Ohio. There are ten natural gas fired power plants currently in development. Many of the proposed plants are in eastern Ohio, and if they all are built, will require about 9,800 megawatts capacity. Lordstown recently approved a second multi-million dollar energy plant to the Trumbull Energy Center in northeast Ohio.

 

The industry had additional cause for celebration in 2016 when the U.S. Bureau of Land Management allowed for leasing in the federally owned portions of the Wayne Nation Forest. A second lease sale will be held in March for another 1,186 acres and could yield an additional $2 million revenue. The first sale conducted in December included 719 acres, generating approximately $1.7 million in revenue for taxpayers.

 

Those of you working in the industry for any length of time have weathered storms in the past. As we enter the first few months of 2017, it is with relief that we put the past few years firmly in our rearview mirror to end what has been a difficult regulatory and economic road and we look forward to the opportunities of the next year. 

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OOGA report: Ohio Oil and Gas Industry Property Tax Payments

Posted By Lyndsey Kleven, Communications Coordinator, Monday, February 13, 2017
Updated: Tuesday, February 14, 2017

The Ohio Oil and Gas Association (OOGA) along with Energy In Depth (EID) has released its first white paper in the 2017 Utica Shale Local Support Series: Ohio Oil and Gas Industry Property Tax Payments report, highlighting that the oil and natural gas industry has contributed $43.7 million to six Ohio counties from 2010 to 2015. The report projects that over the next decade, $200-$250 million will be paid to these six counties alone. We encourage all of our members to read the report and distribute the findings among interested parties. 

Given the record-breaking oil and natural gas production in 2012 and 2013, it should come as no surprise that the real estate property tax revenue, officially referred to as an ad valorem tax, has climbed as result. Of the $43 million generated between 2010 to 2015 from this tax, 95 percent was a direct result of horizontal drilling activity in the Utica Shale. In addition, of the total receipts from all real estate property taxes collected in 2015, the ad valorem taxes from wells accounted for (on average) 24 percent of total revenue collected from all real estate property taxes for these counties. This is significant, as prior to 2015, the ad valorem tax revenues from wells accounted for less than one percent of total revenue from all real estate property taxes.

Ohio oil and natural gas reserves are assessed and taxed as real estate, similar to property taxes paid on a residential home. All of the revenue collected from this tax goes directly to support the areas where the oil and natural gas is produced: counties, villages, townships, cities, and most importantly, local schools.

Key Findings For Ohio Shale Counties:

· Total Property Tax Paid (2010-2015) $43 Million

· Projected Property Taxes to Be Paid (2016-2026) $200-$250 Million

· Amount of Property Tax Directly Paid To Local Governments/Schools 100 Percent

· Percent of Property Tax Collections to Ohio Local Schools 60-70 Percent

Quick Links:


In the news:

Ohio drillers say 6 shale counties saw $43M tax bump (FOX Business, 2/9/2017)

Drillers Paid $43M in Property Tax in Ohio (The Intelligencer, 2/10/2017)

Ohio's oil and gas industry projects paying $250M in property taxes over 10 years (Columbus Business First, 2/9/2017)

Utica shale wells gush tax revenue (Canton Rep, 2/9/2017)

Report: Property tax on Ohio oil, gas increasingly aids schools, governments (Columbus Dispatch, 2/9/2017)

Eastern Ohio counties reap millions from oil and gas (Times Recorder, 2/9/2017)

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Join OOGA For Our Winter Meeting

Posted By Lyndsey Kleven, Communications Coordinator, Monday, February 6, 2017
Updated: Thursday, February 9, 2017

Come join us in celebrating our 70th Anniversary by attending our annual Winter Meeting, which runs March 8-10. The industry is slowly emerging out of trying times, and brighter days lie ahead. It is more important now than ever that we come together and support both our industry and your Association. As always, the Winter Meeting is the Association’s premier business meeting and networking event of the year.

Join us for a series of in-depth presentations during our business sessions and panel discussions. Topics include 2016 Merger and Acquisitions in the Appalachian Basin and the DeBrosse Memorial Report reviewing annual oil and gas activity. Tune in for our panel discussion--Ohio Pipelines and End Use: Keeping it Local. Hear the latest legislative and regulatory updates, legal report as well as a Statehouse update from members of the Ohio General Assembly!

We are excited to announce our keynote speaker is Robert Bryce. Bryce is an author, journalist and public speaker with more than 1,000 published articles and five books. His byline has appeared in dozens of publications ranging from the Wall Street Journal and National Review to the Sydney Morning Herald and New York Times. In 2010, he published Power Hungry: The Myths of Green Energy and the Real Fuels of the Future. His most recent book, Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong, was published in 2014 by his longtime publisher, PublicAffairs, and is now available in paperback. A senior fellow at the Manhattan Institute, he lives in Austin. 

Register before February 17 to save $50 with our early registration discounted rate! Sponsorship and exhibitor opportunities are still available. Learn more by visiting: www.oogawintermeeting.com 

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Shale Crescent USA bringing jobs back

Posted By Greg Kozera, Shale Crescent USA, Monday, January 30, 2017
Updated: Wednesday, February 1, 2017

In his inaugural speech, President Trump talked about “jobs coming back to the USA.” I was surprised and disappointed when some of the pundits commented after the speech, “We know that isn’t going to happen.” I guess that is what happens when media people don’t leave Washington, D.C., or New York City. They become clueless.

A group of successful business people and community leaders here in the Parkersburg-Marietta area figured out that this area now has the cheapest natural gas in the industrialized world. Not only is the natural gas in this area cheap, it is abundant. We have a supply that will last over 100 years based on today’s technology. In addition we are close to 50% of the markets in the USA and Canada. They also realized how our abundant economical natural gas coupled with the Ohio River for process water and transportation, an extensive rail network, an experienced workforce and a community that has a great quality of life is a unique combination that exists in very few places in the world. The problem is, do people in Asia, Europe or even Chicago know this?

This combination created prosperity here in the Mid-Ohio Valley in the late 1800s and again after World War II. Industry left when the local oil and gas industry declined and oil and natural gas had to come from outside the area. The same pipelines that brought natural gas into the region are now carrying natural gas out of the northeast and to places like the Gulf Coast and Virginia. These leaders asked the question, “Isn’t it time to use our abundant cheap natural gas to bring industry and prosperity back to the Mid-Ohio Valley?”

These leaders took action and formed Shale Crescent USA (SCUSA), a nonprofit organization to promote the Mid-Ohio Valley as a premier place for businesses to grow and relocate. The mission of Shale Crescent USA is to encourage business growth in the Mid-Ohio Valley based upon the lowest natural gas prices in the industrialized world that allows manufacturers to operate more efficiently while producing products more economically with access to fresh water and half the population of the United States and Canada. The ultimate goal is to bring in high wage permanent industrial jobs so that people don’t have to leave the area to find work.

These business and community leaders didn’t wait for government or industry to make something happen. They took action. That is what leaders do. SCUSA introduced their initiative to the community last June with a kickoff event in Marietta. Over 800 people attended. Jim Tressel, former Ohio State football coach and current president of Youngstown University opened the event. But it was the panel discussion that got the public excited about the potential of the Mid-Ohio Valley.

Currently SCUSA has been making progress in publicizing the benefits and creating interest in the Mid-Ohio Valley for business. SCUSA has been reaching out using the internet and traditional media like radio and print. SCUSA also will get face to face with the executives of potential new business at events like the World Petrochemical Conference in Houston, Texas in March and the Marcellus to Manufacturing Conference and Expo in Morgantown in May. This is just the beginning.

Bringing a company to the Mid-Ohio Valley is a lengthy process. It starts with creating awareness. SCUSA wants to make sure that the Mid-Ohio Valley is on the radar screen of petrochemical, glass and other industries as a place grow or relocate. Government can do a lot to help bring in business but typically doesn’t do a very good job of staying focused on marketing and sales. SCUSA can help. SCUSA doesn’t care which side of the river an industry chooses to relocate. Every win is a win for the region by providing jobs. Prosperity is contagious.

SCUSA is an example of how leadership can bring people together to achieve a common goal. A group of people formed into a Team can achieve far more than individuals or individual organizations and that is what is beginning to happen.

For more information on SCUSA go to www.shalecrescentusa.com. You can also follow Shale Crescent USA on Facebook. Activity updates are posted regularly. We know that we now have the power to bring high wage, permanent jobs back to this area. SCUSA is one vehicle that can help bring about that change. But it is a total team effort. Everyone has a role. We need to continue to be that well maintained, vibrant, welcoming community that businesses will want to become part of. It is time to use the gift of our abundant natural gas and the Ohio River to bring industry and high wage permanent jobs and prosperity back to the Mid-Ohio Valley. Everyone can pass that message on to their network. It starts with a vision of what can be and the belief that anything is possible, if we work together and take action.

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Frack or Fiction

Posted By Guest Submission: Makenzie Senter, Monday, January 16, 2017
Updated: Thursday, January 19, 2017

Undergraduate student Makenzie Senter is a student at Kent State University. Senter wrote a persuasive paper on hydraulic fracturing for a college writing class. The post below has been shortened from its original version.

Fracking has been used for over 65 years, despite what most people think since it is prominent in the news now more than ever. Without fracking, energy abundance in America, along with all of its benefits, would not exist. One of the major benefits from fracking is natural gas being released in an abundant, clean manner. Fracking gives us natural gas as a source of reliable energy on days that the sun does not shine (for solar panels) or the wind does not blow (for wind mills).

When talking to people between the ages of 18-30, many of them had little to no knowledge on what hydraulic fracturing or fracking was, or what we get from fracking. According to EnergyFromShale.org fracking involves safely tapping shale and other tight-rock formations by drilling a mile or more below the surface before gradually turning horizontal and continuing several thousand feet more. Once the well is drilled, cased and cemented, small perforations are made in the horizontal portion of the well pipe, through which a typical mixture of 90% water, 9.5% sand, and 0.5% additives is pumped at high pressure to create micro-fractures in the rock that are held open by grains of sand. Additives play several roles, including helping reduce friction (thereby reducing the amount of pumping pressure from diesel-powered sources, which reduces air emissions) and prevent pipe corrosion, which in turn help protect the environment and boost well efficiency. Fracking is the single biggest reason that America is experiencing a revolution in energy right now and giving us an abundance of natural energy. Fracking is letting us get into vast oil and natural gas reserves that were previously unattainable, locked away in shale and other tight-rock formations.

A new study published by the National Academy of Sciences states that fracking is safe. The National Science Foundation and Duke University funded a team of scientists at other universities including Ohio State, to do research on if there is a link between groundwater pollution and fracking. The study examined 130 wells and concluded that no groundwater or aquifer pollution resulted from fracking. Among the 130 wells that were studied and observed, only a few cases were found to have any sort of water contamination at all. There were seven wells in Pennsylvania and one in Texas that had any contamination. However, the water contamination was due to faults in well construction. Professor Avner Bengosh of Duke University states, “these results appear to rule out the migration of methane up in to drinking water aquifers from depth because of horizontal drilling or fracturing”.

Many of these studies answer the most important question, proving without a doubt that fracking itself does not cause gas to seep into the water supply, however it does not answer other important questions. One of the questions is whether there is a frequency of contamination of water supplies by naturally occurring petroleum, methane, and other gases. Natural pollution of this kind is extremely common and is a natural process that has been occurring for many millennia. There were sites where petroleum seeped to the surface, such as in the 19th century Drake oil field in Pennsylvania. Native Americans had made use of the oily substance as a lubricant for thousands of years. Since that oil was naturally coming to the surface, it was “contaminating” nearby streams and groundwater.

Also, at thousands of hot springs and other sites, methane and other gases, including ammonia and helium, are released naturally into the environment, the most famous example is Yellowstone National Park. The release of methane from the ocean floor is also a prevalent feature of the natural environment. In comparison with these widespread and perennial sources of methane contamination, the amount of gas released by faulty oil and gas wells is miniscule. Expectantly, there will be a study in the future that will show the ratio of man-made to natural release of gases to show just how small the number really is.

Even if the oil industry achieved 100% safety with the construction of casing and cement walls or even if they stopped fracking all together, there would still be massive amounts of methane and other “polluting” gases that would seep into groundwater as a result of natural processes.

According to a study by the University of Cincinnati, the quality of water was not in any way influenced by natural gas drilling or fracking. The study was kick-started by Duke University when they did a peer-reviewed study to answer the question “Tapping a Valuable Resource or Invading the Environment? Research Examines the Start of Fracking in Ohio” To answer this question, researchers set out to collect samples over a three-year period. The samples were collected four times a year from five different counties in Ohio that were known for their shale. They collected from 23 water wells from 2012-2015, totaling 191 samples. The samples were taken from volunteers, which many, ironically, were connected with anti-fracking groups such as the Carroll County Concerned Citizens. 

Although the study claims it was not taking funding from groups who opposed fracking, Dr. Townsend, who was part of the study, said “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 fracking is scary and so they were hoping our data could point to a reason to ban it”. What I take away from what Dr. Townsend said is that these anti-fracking groups were not particularly interested in making sure that fracking was safe, but they were trying to find a reason to rid the oil and gas developments altogether. However, after the 2011 Duke study failed, the University of Cincinnati was given a $400,000 grant from the National Science Foundation to get to the root of the problem: what was causing the water contamination?

After the multi-year study, and evident water contamination in Flint, Michigan, as well as Sebring, Ohio, conclusions were made that the contamination was caused by ageing infrastructure issues and pre-existing water quality issues from naturally occurring methane. There was no evidence of fracking or natural gas drilling contaminating the water. Since fracking is safe for the water, it has been observed that it is also safe for the environment. Per the Energy Information Administration, they estimate that the total U.S. gas production between 2012 and 2040 will increase 56%, with natural gas from shale being the biggest contributor. EnergyFromShale.org says, “The shale gas share of total U.S. production will increase from 40% in 2012 to 53% in 2040.” That basically means that fracking is the basis of the U.S. energy revolution.

Overall, fracking is not only safe, but it is also beneficial to our economy. Fracking, itself, does not cause any sort of pollution to groundwater. The only reason, proven through studies, that there would be any sort of leakage or pollution is through faulty well construction, which is obviously a fixable flaw. Not only is fracking safe, but it is also creating jobs and boosting the economy. Prices of gasoline are lower than they have been in years and consumers are paying less for natural gas. The United States is also slowly but surely becoming the leader of oil production and has been the leader of natural gas production. In conclusion, fracking should be more widely accepted since it is safe and helping boost our economy.

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General Assembly Ends with Line-Item Veto of Sales Tax Fix, Passage of OOGEEP Changes

Posted By Brian Hickman, Director of Government Affairs, Operations Managing Director, Monday, January 9, 2017
Updated: Monday, January 16, 2017

As the 131st General Assembly came to a close, your Association was hard at work ensuring that two important measures passed and enacted into law. The first measure was a clarification on how sales tax can be applied to tangible personal property pertaining to oil and gas operations. The second measure involved OOGA Board-approved changes to the Ohio Oil & Gas Energy Education Program (OOGEEP).

Recently, several oil and gas producers were being audited by the Ohio Department of Taxation (ODT). The reason for these audits was tied to the application of sales tax for oil and gas related sales. While the Association and its members always understood that what was taxable was what was defined by current law and practice, the ODT appeared to take a different view. As a result, OOGA members under audit were being assessed different tax valuations outside of what was commonly viewed as taxable.

In an effort to provide clarity to the situation, the OOGA inserted an amendment into Substitute Senate Bill 235 that would marry the definition of sales tax to a production operation as defined in Ohio Revised Code Section 1509.01. Generally speaking, the sales tax does not apply to items directly used in the exploration and production of oil and gas, or specifically a production operation. The sales tax only applies to indirect items, which includes things such as tanks or other storage devices used to hold hydraulic fracturing fluids, equipment used for earth moving and reclamation at the well site, and property used to transport, deliver, or remove other equipment to or from a well site or the storage of such equipment before its use at a well site.

Additionally, in the uncodified section of the law, this definition was applied retroactively to all sales since Substitute Senate Bill 165 was enacted (and when a production operation was defined in Ohio law). Therefore, this change is retroactive and effective as of June 30, 2010.

On December 22nd, Governor John Kasich, citing his ability to utilize a line-item veto, vetoed the sales tax provisions pertaining to oil and gas in Substitute Senate Bill 235, thus eliminating it from Ohio law.

In his veto message, Governor Kasich noted that there were several reasons for the veto. First, he noted that the language would expand the current exemption for the application of sales tax for tangible personal property purchased and directly used in oil and gas production. In his view, the language “goes well beyond the ‘direct use’ exemption for exploration and production and would result in a situation where oil and gas companies would be exempt from sales tax on almost everything they purchase.”

Kasich also noted that the loss of state and local government revenues was also considered in the veto. Per the Ohio Department of Taxation, this revenue loss was scored at $264 million ($215 million in state resources, $49 million to local governments) due to the retroactivity of these provisions. However, no further information or details on where the specific losses would come from where ever revealed.

“This revenue loss as well as the ongoing issues in the future would force the need to reassess current and upcoming budget plans, triggering a triaging of priorities to ensure the most essential functions can still be covered, such as education, policing, fire protection and ambulance services,” Kasich noted in his veto message.

The Governor concluded his veto message noting the “favorable tax climate” the oil and gas industry currently enjoys, stating that the language was “not necessary for this industry to flourish”.

“The oil and gas industry already has a very favorable tax climate in Ohio,” Kasich stated in his message. “This is true not only with respect to the severance tax, which is only 20 cents per barrel of oil and 3 cents per MCF of natural gas, but also with respect to the commercial activity tax (CAT) and the property tax. The oil and gas industry has continued to expand its production in Ohio, even in the face of price declines for oil and gas, which is further evidence that the industry tax climate is no barrier to exploration or production.”

Kasich concluded his remarks noting that such a measure would create an “uneven playing field” benefiting the oil and gas industry over other industries within the state. This could lead to other industries, such as the agriculture and manufacturing industries, to push for similar exemptions within the tax code. 

Also during “lame duck” session, an amendment was inserted into Amended Substitute House Bill 471 (the sunset review bill) that would make statutory changes to the OOGEEP program. The amendment expanded the OOGEEP operating committee from 7 members to 13 members in an effort to incorporate horizontal shale production. A change was also made to allow a horizontal shale producer to directly pay the program in lieu of the traditional first purchaser assessment. The measure also officially provided a mechanism for OOGEEP to administer administrative aspects of the referendum procedure.

As such, OOGEEP is in the process of creating the referendum to officially implement these changes into the program. The referendum will also include a 50% reduction in fees collected by the program.   

In other news, another measure passed the legislature that impacts local ballot initiatives, including those anti-industry groups who continue their fights against the oil and gas industry.  An amendment was included in Amended Substitute House Bill 463 that would provide a statutory mechanism for the Ohio Secretary of State to invalidate a local ballot initiative if the measure is outside of the powers of that locality. As such, municipalities cannot go against general law, which would include Ohio Revised Code Section 1509.02, which states that the siting and location of oil and gas wells are the “sole and exclusive” regulatory authority of the Ohio Department of Natural Resources.

Next up, the 132nd General Assembly begins on January 3rd  whose first big responsibility will be the next state budget bill. 

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OOGA celebrates the holidays, bids farewell to president David Hill and welcomes incoming President Jim Aslanides

Posted By Lyndsey Kleven, Communications Coordinator, Wednesday, December 21, 2016
Updated: Friday, December 23, 2016

With 2017 rapidly approaching, the Association would like to take a moment to recap some activities ending 2016 and take a look ahead at 2017. Last Thursday we hosted our Annual Holiday Membership reception at the Cherry Valley Lodge in Newark. The event had a great turnout, with 250 of our members coming out to celebrate the holiday season with colleagues, friends and Association staff.

Prior to the Holiday Reception the Association held an annual meeting for the OOGA Executive Committee and Board of Directors. This year was especially significant as the Association’s leadership is undergoing a presidential transition due to term limits.

The Association has been under the leadership of David R. Hill from January 2014 to December 2016. This is an unusual term for the Association’s president to hold, but when the OOGA needed someone to step-up and fulfill an extra year of an unexpired presidential term, David stepped right in.

To say that David faced a difficult term would be an understatement. Over the past 36 months he guided the Association through wildly fluctuating oil and gas prices; he started his term as the industry began to peak and saw prices collapse at the end of 2015, thankfully he is leaving at a time when prices have begun to pick up. In addition, he was here to see the Association through a major transition when Tom Stewart retired as the OOGA’s executive vice president after 21 years in late 2014, and Shawn Bennett took over the position to manage and lead the organization. These events only begin to skim the surface.  

The onslaught of legislative and regulatory changes presented from both the state and federal government throughout this time has been unprecedented. David has been instrumental in helping to identify possible threats to the industry and guide the OOGA to deal with them accordingly.

“I would be remiss if I didn’t give a proper farewell to our President David R. Hill,” said Shawn Bennett, OOGA’s executive vice president. “Anyone can hold the helm when the sea is calm. David however took the helm during some of the roughest seas our industry has faced in many years. Without his guidance and leadership, our Association would not have been in the position it is today.  We thank you for your time, your effort, those years we have unintentionally taken off of your life by being the President of the Ohio Oil and Gas Association.”

The Association is extremely grateful for David’s service to Ohio’s oil and gas producers. David will continue to stay involved with the OOGA and among our past presidents council. With that, we would like to welcome Jim Aslanides to the OOGA as our new president.

“Having worked with Jim over the years, there couldn’t have been a better pick to follow David,” said Bennett. “He is a true leader and as a former legislator, he will be invaluable as we continue to drive oil and gas policy at the Ohio Statehouse.”

Jim Aslanides has a multi-faceted background that will greatly benefit the Association. Jim has served in various capacities during his career, as Chair and a member of OOGA Committees, as a member of the Ohio House of Representative, and now, as the Association’s President.

Jim currently serves as the President of Media Fuel Company (dba MFC Drilling, Inc.). The company, which was founded in 1981, is actively involved in the exploration and production of oil and gas in Ohio. The company has also made new field discoveries in the State of Ohio.

Jim has been a member of the Ohio Oil & Gas Association since 1981. He has served on the OOGA Board of Trustees twice, with the first run beginning in 1996. He served for six years, ending his first Board of Trustees run in 2001. Jim rejoined the OOGA Board in 2009, where he has served ever since. During this time, he has served as the Chair of the OOGA Meetings Committee and the Governmental Affairs Committee.

When Jim was away, he was serving the constituents of the 94th and 95th House Districts. On June 30, 1999, Aslanides was elected to replace Rep. Joy Padgett, who had resigned. Aslanides served an additional four terms in this position.

As Jim prepares to takeover leadership of the Association, he is reminded of a saying that he is fond of: “As a family of producers, there is no one of us that is as good as all of us.” Jim will use this as a mantra for his upcoming Presidency. 

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