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68 Years and OOGA’s Still Going Strong, 2015 Winter Meeting is Success

Posted By Lyndsey Kleven, Communications Coordinator, Tuesday, March 24, 2015

The Ohio Oil and Gas Association hosted its 68th annual Winter Meeting in Columbus on March 11th – March 13th which brought together 1,150 individuals including membership and top industry leaders from Ohio and the nation to provide the most current updates of the state’s oil and gas industry.

The first day was considered a day of “pre-meeting events,” leaving most the day for OOGA Committees, Executive Committee and Board of Trustees to reconvene and continue to work towards improving the Association.  This also served as time for exhibitors to set up and prepare for the following day’s main event. Succeeding the board and committee meetings, the first speaker event was hosted in collaboration with the Ohio Geological Society. This event brought in a large crowd, as the topic was Hydraulic Fracturing and Earthquakes: Ethically, How Do We Move Forward and Do the Right Thing?” presented by Donald D. Clarke, AAPG Distinguished Ethics Lecturer. The Association hosted its Corporate Member Reception following the OGS presentation. The reception provided an opportunity for the Association to show its appreciation of its valued 225 Corporate Members who convened for hors d’oeuvres and drinks.

The next two days held the main events including updates from national authorities, state and federal elected officials, and included production, exploration, legal and legislative industry information. The keynote speaker for this year was Dr. Philip K. Verleger, president of PKVerleger LLC, his research has focused on the study of energy commodity markets and more recently the amazing transformation of the US energy sector. Dr. Verleger will have a feature article in the April issue of the Bulletin  on his presentation on “Energy’s Black Swan: Why Saudi Arabia Refused to Cut” provided interesting insight on current oil pricing.

Packed into the Business Session Verleger presented to, was a powerhouse of additional speakers. Karen Harbert is the president and chief executive officer of the U.S. Chamber of Commerce’s Institute for 21st Century Energy. Harbert leads the Institutes’ efforts to build support for meaningful energy action nationally and internationally. It was a packed house during her presentation on “America’s Energy Future: Challenges & Opportunities.” Former Member of the U.S. House of Representatives 4th District of Oklahoma J.C. Watts, Jr. provided a captivating presentation on “The State of Washington.” Watts has tremendous insight on national policy through his experience in Congress and is still greatly involved with the industry through the Domestic Energy Producers Alliance. Matt Kellogg, Tax and Environmental Council for the Independent Petroleum Association of America (IPAA) also provided a national perspective during Thursday’s business session where he provided an update of what IPAA the national trade association is involved with.

Federal officials representing Ohio were present during this session as well, and the Association is appreciative for their support of the industry. U.S. Senator Rob Portman made a special guest appearance, along with U.S. Congressman Bill Johnson, 6th District of Ohio. Both gave speeches echoing similar messages, on the importance of having policies and regulations that encourage responsible growth for development of oil and gas in Ohio, and not hinder it. Both of these officials recognize the impact this industry is making in the state of Ohio, creating jobs and the tremendous economic impact, and want to see the oil and gas boom continue.

The Winter Meeting also hosted a strong political presence from the Ohio General Assembly. Cliff Rosenberger, Speaker of the Ohio House of Representatives, along with Andy Thompson, State Representative from the 95th district, Christina Hagan, State Representative from the 50th District, Al Landis, State Representative from the 98th District, and Sean O’Brien, State Representative from the 63rd District, and Ohio Senator Troy Balderson all stopped by the event.

The Thursday afternoon business session included an Ohio Statehouse Roundtable discussion. The Roundtable dialogue was between: Ohio Senator Troy Balderson, 20th District, Rep. Sean O’Brien, Rep. Al Landis, and Rep. Andy Thompson. Moderated by Matt Hammond of Chesapeake Energy, this discussion centered on Ohio policy impacting the oil and gas industry, as well as highlighting the importance of this industry being in Ohio and staying in Ohio.

OOGA Technical Committee Chair Jody Jones of Chesapeake Energy and OOGA Environmental Committee Chair Melissa Hamsher, gave their perspective on a regulatory updates as well.

Shifting from the political recap, the Winter Meeting also included a slew of industry professionals covering various topics. The other panel discussion that took place was a Clinton Horizontal Panel. Moderated by OOGA President David R. Hill, Mark Lytle of Buckeye Oil Producing Co., Greg Mason from the Energy Cooperative, and Bob Trevail of Dallas Energy, LLC, all reflected and examined on their experiences drilling horizontally in the Clinton sandstone.

Additional industry specific presentations were covered during the Thursday morning business session. OOGA’s legal counsel W. Jonathan Airey, Of Counsel for Vorys, Sater, Seymour and Pease LLP, gave an Ohio Oil and Gas Legal Report. Martin Shumway, of Shumway Resources, LLC, gave an in-depth presentation on the Debrosse & Exploration Report. Jackie Stewart of Energy In Depth, and Mike Chadsey of OOGA gave an “Out in the Field” report of how these two groups are collaborating to make a grassroots impact in local communities. The Ohio Oil and Gas Energy Education Program (OOGEEP) Executive Director Rhonda Reda gave a presentation on what OOGEEP does to educate the community and Ohio schools on the oil and gas industry.

As all of these business session presentations were occurring, another component of the Winter Meeting was simultaneously taking place right outside the presentations in the form of an industry trade show. This year the Association had 83 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 could engage with exhibitors showing the latest in oil and gas.

And of course this event would not be possible without our sponsors. Even during trying times in the industry we appreciate the support from each and every one of you. 

The Association hopes to see each of you back at next year’s 69th annual Winter Meeting. 

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OOGA Provides Testimony for HB 64 and HB 8

Posted By Lyndsey Kleven, Communications Coordinator, Monday, March 9, 2015

Over the past month the Association has provided testimony for House Bill 64 and House Bill 8, both of which impact our membership. On March 3, OOGA Executive Vice President Shawn Bennett appeared before the House Ways and Means Committee to discuss the severance tax provision of HB 64. The membership of the Association opposes the severance tax provisions proposed in HB 64. 

The current market forces that are impacting the oil and gas industry provide a clear explanation that the industry is entering a recession. Crude oil prices have dropped over 50% since June of 2014 and has slowed many projects.

Governor Kasich's executive budget proposal includes a substantial severance tax increase. This high severance tax rate will curb exploration of Ohio's Utica Shale and diminish many company's drilling schedules. 

The new rate would also be calculated on the commodity's "spot price" as determined by the tax commissioner, and not the actual value that the producer received. 

Commodity prices have a direct impact on industry activity. Companies base drilling schedules on economics and geology. In times when the industry is facing low commodity prices, schedules are curtailed in line with how much minerals the rock will produce and how economic those minerals will be. Lumping a severance tax increase on top of these market factors will further depress drilling activity.

View the Association's entire testimony of HB 64 here.

On February 17, 2015 Bennett appeared before the House Energy and Natural Resources Committee to offer proponent testimony regarding House Bill 8. The bill will provide for timely consideration of unitization requests submitted by our membership's operators, as well as urge county auditors to follow the law when when establishing Ad Valoreum valuation on minerals in their county.  

Unitization is the process by which landowners can share in the benefits of oil and natural gas resources by combining their acreage into a "unit." It is a process which ensures that majority mineral interest are not blocked from development by minority mineral interest. Currently the industry is experiencing unnecessary delays in the process when the minority interest involves state-owned lands. 

HB 8 streamlines the current process by creating a statutory timeline by which the Ohio Department of Natural Resources would need to schedule a hearing or make a determination on a unitization application. Each day of unnecessary delay could lead to less revenue for energy companies, businesses, and landowners. 

View the Association's entire testimony of HB 8 here. 

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Member Spotlight: Todd Dever, Devco Oil, Inc.

Posted By Lyndsey Kleven, Communications Coordinator, Monday, March 2, 2015

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

Background information:

Todd Dever was born and bread into the oil and gas industry, he is the fourth generation of his family to work in the industry and, the third generation to work for Devco Oil, Inc. the Dever family business, which Todd now runs. Growing up Dever always worked at Devco Oil during the summers while he was in school.

“You can’t get away from it. My dad and grandpa, Frank, they put you to work,” said Dever. “You were out there at least weed eating, painting tanks, any little knickknack job that needed done.”

A graduate from John Glenn High School in New Concord, Ohio, Dever did not start working for the family business immediately. Following high school he went to Otterbein College in Westerville where he received a degree in public relations and a minor in speech communications. After college he started working in Columbus.

Dever worked in Columbus for a year when the family started talking about having him come back to work for Devco. At this point Dever’s parents were getting older and became interested in traveling more. Everyone agreed it was the right time for him to come back, so Dever became Operations Manager, over seeing day-to-day operations. Dever now lives in New Concord with his wife Cassie, who will soon be joining the business and their two children Noah, 7 and Cora, 4.

About Devco:

Todd’s grandfather Frank Dever along with his father Phill Dever and Roger Frantz (Phill’s brother-in-law) started the company. Much of the knowledge came from the experience Frank gained working in the oil fields of Findlay, Ohio, as his father did. Frank did not finish high school but immediately started working in the oil and gas industry as a teenager in the 1930s. In the 1950s, Frank built a couple of service rigs and started servicing wells in Findlay and locally. In 1975 Devco Oil Inc. was established.

In addition to service rigs, Frank also had a couple drilling rigs working throughout Ohio and some in Michigan. The Dever’s had wells that they drilled which made up the business through the mid 1980s, later leading them into the trucking business.

“We kind of actually just fell into trucking,” Todd said. “We had our own wells and our own production and thought we would just haul our own oil. In 1975 we started hauling our own production just in Guernsey County. We’re a service outfit, and we wanted it picked up quickly and safely.”

Other local producers knew Devco was hauling its own oil, and asked the company to haul theirs as well, and this became Devco’s original client base. In the mid 1980s Devco got out of drilling to focus on trucking. Devco still has 7 wells that are in production from the late 1960s.

“Once we started building a customer base for hauling we saw that’s where we needed to be. So we went that route, started to gather customers and meeting with clients to build the trucking side.”  Devco now operates solely as a trucking outlet; it purchases oil and sells it to refineries.

“The producers are also friends, it’s not just a business relationship. We like to build a solid friendship with everyone, and I think everyone in the industry, for the most part, gets along—it’s a great industry to be in and associated with.”

During the Mt. Gilead boom, Devco had 12-15 trucks operating with a facility in Ashland. Today Devco operates with approximately 12 employees; this includes 8 drivers and office personnel. Todd became the president of the company following his father’s recent passing.

“We’ve been here for 40 years, hauling crude. We just have a really good core of people in this company, and our turn over rate is exceptional. I have a guy still working for me that started with us and is coming close to retirement.”

OOGA involvement:

Devco Oil has been a member of the Ohio Oil and Gas Association (OOGA) since the mid 1970s. The Association’s current President, David R. Hill has been a longtime friend and business associate with Devco, and shared the value of joining the Association with Todd.

“The leadership that is in place at OOGA is probably the best Association that is around. The Association is great and really works together. It’s good at getting the word out and we have great people putting the positive information out there—not only positive, but factual information.”

Dever also credited the Association’s sister organization, OOGEEP, as being a powerhouse on the educational front. Being involved with both organizations, Dever has served on the OOGEEP Scholarship Committee since 2009 and currently holds a position on the OOGA Board of Trustees.

The Association has opened Devco Oil up to new clients and provided great networking opportunities. Dever also highlighted the annual Winter and Summer Meetings as providing great opportunities for interactions with people in the industry.

“You definitely meet interesting people and a lot of great contacts. Being around this group has exposed Devco to more northern producers. Previously there was a perception that Devco only worked in the southern region around Cambridge. Networking throughout the OOGA has allowed us to let more people know we go all the way up to Ashtabula.”

Shale-development’s impact on business:

Devco’s original client base had been conventional oil producers, but it recently has started hauling some Utica shale. Devco plans to continue to take care of its conventional producers, as this group helped to build the business, but sees the future where shale is heading and is prepared for it when the time comes.

“It’s only a matter of time where everyone has to put their hand in to keep up with shale development. These wells they’re drilling are huge, even with higher decline rates, they keep drilling a lot of wells. If they do decline, at some point, the rate will level out to a certain number of barrels a day, they’ll be around for a long time.”

Dever cited the decline in current oil prices as being a deterrent for new shale drilling, but foresees it taking a turn once oil prices bounce back.

“We’ve been through the booms and busts. These are expensive wells, if you’re spending 6-10 million it takes a long time to get a return on that investment. While prices are low Utica wells will remain low, but will come back once the prices take a turn.”

Dever sees that it has been proven that the oil and natural gas is here and it’s going to be around. He sees that companies continue to have infrastructure being built and even if they leave for a little while, the infrastructure will still be there to come back. He thinks that once prices rebound all of the infrastructure in place will be ready to be put to work.

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State Budget 2015

Posted By Brian Hickman, Director of Government Affairs, Operations Managing Director, Wednesday, February 18, 2015

It’s officially state budget bill season. Language pertaining to Governor John Kasich’s executive budget proposal has been released in the form of House Bill 64 and several provisions impact our membership.

Several regulatory provisions are included in the budget bill. Most proposals were discussed last year during House Bill 490 (Governor Kasich’s Energy “MBR” bill) deliberations. The bill includes regulatory changes which, if enacted, would require companies applying for a registration to operate in Ohio to disclose any felony convictions or pleas pertaining to state or federal Clean Water Act violations for the officers of the company. As proposed, this disclosure would be for 25 years from the date of application. After this background check, the Chief would have the ability to deny the company’s registration.

Additionally, chemical disclosure requirements are expanded in times of an emergency to public and private water supplies. ODNR is permitted to share chemical information to another state agency or emergency responder in the time of an emergency or investigation. Once shared, chemicals designated as a “trade secret” are not public records and restrictions on disclosing trade secret information carry to whomever receives the information.

Criminal penalties and civil penalties and their associated fines are increased in the bill. A majority of those increases would make violations of oil and gas law felonies. Certain violations of oil and gas law would permit a fine for each day of each violation. 

Other regulatory provisions included in House Bill 64 involve a re-write of current law pertaining to unitization, clarification of how the state handles information under the Emergency Planning and Community Right-to-Know Act (EPCRA), and providing the ODNR notice when an oilfield emergency takes place, amongst others.

It wouldn’t be a budget bill if oil and gas taxation wasn’t being changed. Under the bill, oil and natural gas severed from a horizontal well will be taxed at 6.5% of total volume multiplied by the quarterly spot price. Natural gas that is processed into natural gas liquids or condensate will be taxed at 4.5% of total volume multiplied by the quarterly spot price. The spot price will be defined by the Ohio Tax Commissioner from a source of their choosing. The purpose of this increase is to first fund the state oil and gas regulatory program. The next 20% of the funds collected are for counties experiencing the shale activity. The remainder will go towards a reduction in the personal income tax.

Additional tax changes included in the budget are an increase in the CAT (Commercial Activities Tax) from 0.026% to 0.032 on every commercial transaction and an increase in the state sales tax (from 5.75% to 6.25%). Those tax changes will have an impact on the industry as well.

The OOGA will continue to promote, protect, and foster our member’s interests before the state legislature and update our membership on the budget bill and our actions accordingly.

More information on House Bill 64 can be found via the Ohio House of Representatives website, located at: https://www.legislature.ohio.gov/legislation/legislation-summary?id=GA131-HB-64

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2015 OOGA Winter Meeting Preview

Posted By Mike Chadsey, Director of Public Relations, Monday, February 9, 2015

Register today: www.oogawintermeeting.com 

The Ohio Oil and Gas Association will host its annual meeting in Columbus on March 11th – March 13th bringing together the membership and top industry leaders, from Ohio and the nation, to provide the most current updates of the state’s oil and gas industry. Attendees will hear from the nationally renowned oil markets economist Phil Verleger, Karen Harbert of the U.S. Chamber’s Institute for 21st Century Energy as well as state and federal elected officials. The meeting will also include production, exploration, legal and legislative updates, as well as several evening receptions to socialize with old friends and new. Visit the newly redesigned website at www.oogawintermeeting.com to register and find additional information.

As many of you know the annual meeting has grown in both size and scope over the last few years to reflect the changes of Ohio’s oil and gas industry. The Association expects a large capacity crowd again this year and pre-registration for the meeting is recommended. Hotel accommodations are filling up quick, check the website under “Staying in Columbus” to find partnering hotels. We look forward to seeing you there. 

The annual gather includes:

·       Business Sessions

·       State and Federal activities updates

·       Trade Show

·       Presidents Reception

·       PAC Fundraising Reception


The Venue:

Hilton Columbus at Easton

3900 Chagrin Drive

Columbus, Ohio 43219

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The Double-Edged Sword of Low Oil Prices

Posted By Lyndsey Kleven, Communications Coordinator, Wednesday, February 4, 2015

The ebb and flow of oil prices is nothing new to anyone who has monitored the oil and gas industry for a length of time. The last peak in oil prices was seen in June 2014, when crude oil was selling for nearly $110 a barrel—fast forward six months and we’re looking at average prices below $55 a barrel. In July 2008 the national average price of regular gas was $4.06 and today it’s just over $2 ($2.05). With prices plummeting by half, there are going to be some clear winners and loser. 

The obvious winners are consumers that are saving money at the gas pump. Prices at the pump have dropped drastically as a direct result of lower crude oil prices. Cheaper oil is giving money back to the consumer that in turn, boosts spending and the economy elsewhere.

Ohio was among the first states in the US to see gas prices drop below $2 in mid December. The last time prices dropped below $2 a gallon was nearly six years ago in early 2009. Low crude oil prices have paid dividends at the pump, what is equivalent to a $750 tax cut for the average American household.

Lower pump prices are nice but people aren’t realizing the cost that it is taking the industry. The prices continued to drop following the Organization of Petroleum Exporting Countries (OPEC) meeting late in 2014, when the group opted not to cut production. The ramifications vary among countries, crippling to some nations while lifting others. In the United States, it’s most adversely impacting the American shale oil and gas producers responsible for the domestic energy boom.

Shale oil, which is extracted from the ground through horizontal drilling combined with advancements in hydraulic fracturing technologies, is a relatively expensive process, requiring oil to sell around $70 a barrel to be economical. When drilling new wells no longer makes economic sense, many companies will decide to pull back their drilling programs. Ohio has already begun to see this take place. With investment being dramatically cut back, the U.S. and Ohio are losing some of its high paying energy jobs.

The ripple effect is being felt across the whole energy industry, affecting thousands of people—including Ohio’s conventional operators. Revenue from higher oil prices isn’t there and all producers are tightening their belts and watching every penny they spend.

While prices are low, drilling new wells will also remain low. As long as conditions in Ohio remain favorable to oil and gas exploration, drilling activity is expected to flourish once the market rebounds. 

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Member Spotlight: Steve Downey, EnerVest Operating, LLC

Posted By Lyndsey Kleven, Communications Coordinator, Tuesday, January 27, 2015

Background information:

Steve Downey has a B.S. degree in Accounting from West Virginia Institute of Technology and passed the certified public accountant exam in 1989. Starting his career as an internal auditor for a bank, Downey would have never thought he would spend the majority of his nearly 30-year career in the oil and gas industry out of Charleston, West Virginia. Fresh off the CPA track, Downey left the finance sector of Columbia Gas Transmission in 1990 and never looked back taking positions in strategic planning, marketing, and facility sales. Columbia Gas transmission is a midstream company that provides storage and gas transportation services and was looking for someone with banking experience; Downey spent the next 18 years working there.

“I think being a CPA does give me a different perspective than engineers and geologist, the real scientist behind the industry, who are just brilliant,” said Downey. “I look at things a little bit differently at times and it is a healthy balance.”

After leaving Columbia, Downey went to work for Triana Energy, a production company that purchased the former affiliate of Columbia ultimately purchased by Chesapeake where he worked until leaving for EnerVest Operating, LLC. in March 2006.

About EnerVest:

EnerVest is an exploration and production company that was formed in 1992 and currently operating in 15 states, owning 6 million acres. EnerVest employs 1,300 people and has more than 28,000 wells that they operate with an interest in approximately 6,000 more as a non-operator, having a stake in both conventional and horizontal wells. EnerVest has an interest in most of the large production basins throughout the United States Its Appalachian assets are located in Ohio, West Virginia, Pennsylvania, Michigan and New York.    

EnerVest operates as two entities, private equity and a publically traded MLP, EnerVest Energy Partners. The private equity model is working out of Fund XIII right now, which will make $3 billion in assets acquisitions and is kicking off its next fund, Fund XIV, which will be a $2.5 to $3.0 billion fund.

Downey is the Vice President of Marketing and Business Development for EnerVest. His region covers the Appalachian states that EnerVest’s operates in (Ohio, West Virginia, Pennsylvania, New York, and Michigan), and includes 13,000 wells and 1.5 million acres. Much of Downey’s time is spent in Ohio being that a million (one sixth) of EnerVest’s total acreage is here.

“I’m responsible for selling the gas that EnerVest produces on a daily basis,” said Downey. “The business development role wears a lot of hats. I had the pleasure of working with our midstream investments in the Utica with Cardinal Gas Services and Utica East Ohio, seeing the projects through the negotiation of contracts, the building of the actual facilities, the operations, and ultimately the divestiture of the facilities.”

Downey is also involved in joint venture transactions at EnerVest and acquisition and divestitures transactions. He described his role as pretty varied, with a lot of flexibility to be involved with the state associations where he represents EnerVest currently in Ohio and formerly as an officer of the West Virginia Independent Oil and Gas Association. EnerVest encourage its employees to not only be members of the associations, but also to be actively involved in the association.

OOGA Involvement:

Downey became involved with the Ohio Oil and Gas Association (OOGA) after he reacquainted with Ohio producers in his business development role. In 2008 he was asked to run for the Board of Trustees and much to his surprise, was elected on the first ballot. He will hold his current position as Secretary/Treasurer of the Executive Committee until the 2015 election. 

“I was surprised because I was a West Virginia guy with a background in working in the pipelines business, which is not always embraced by producers, but I’ve really been welcomed by all of the Ohio folks.”

In addition to his integral role on the Executive Committee, Downey was also appointed as the Commerce Committee chair. Downey’s background in midstream and pipeline has brought great value to OOGA, and he has even spearheaded the formation of the midstream subcommittee that was recently given full committee status given its importance in the development of the Utica Shale.

“Once we saw midstream growing in Ohio—pipelines, gathering lines, processing and fractionation plants—it became necessary for us to get our arms around that side of things and understand it better and be in a position to lobby for it. I was able to organize the midstream subcommittee with the movers and shakers of that segment including MarkWest, Blue Racer, Utica East Ohio, Cardinal Gas Services, EnLink, just to name a few, and I think we’ve been able to do some really good things to help the development of the shale in Ohio. Moreover, there are also opportunities for the conventional producers in this regard that the Association is focused on.”

When asked what value being a member of OOGA brings, Downey said, “The OOGA benefits are amazing, quite frankly.” Downey described OOGA as always keeping a watchful eye to see what’s happening to associations and the industry in other states, and being able to use what it has gleaned in shaping tax policy and rule making to the benefit of Ohio.

“OOGA put a lot of things in place very early in Ohio, through its public policy efforts, in case the shale revolution came to Ohio,” said Downey. “More importantly, OOGA has never forgotten its mission of representing all Ohio producers by equally representing both conventional and shale producers—and has always done a good job of taking both those players into account.”

EnerVest not only has interest in shale, but they are also the largest conventional operator in Ohio. It is just as important for EnerVest, as well as OOGA, to also make sure shale regulation is not adversely affecting the conventional producers.

Shale development’s impact on business:

Working for EnerVest, Downey has a lot of interactions with people and businesses in Ohio and other states. His experience of seeing the Shale revolution in other states has been a great asset to bring to the OOGA Board of Trustees.

“I have seen it in other states and I have been involved with many of the people who have prior experience in other states with the development of the shale. I think that interaction and the experience it has afforded me that I can share with the Board is mostly what I have brought to the table at OOGA.”

Downey credited Ohio as being one of the more proactive states when it comes to shale development and balancing it with the needs of the conventional producers. He also sees the things impacting Ohio that are also impacting EnerVest’s other operating areas. Part of the job is to leverage what is impacting each area that EnerVest operates in, and to stay ahead of it.

“The OOGA, to its credit, really got out in front of the shale development,” Downey said. “Tom Stewart and all of the OOGA officers were masterful at looking at what was happening in other states and its impact on all facets of the Industry. They did this with the thought that there could be shale in Ohio, and really did a wonderful job of foreseeing the future and balancing the needs of its members.” 

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State of American Energy 2015

Posted By Lyndsey Kleven, Communications Coordinator, Tuesday, January 20, 2015

The United States Congress has assembled for the 114th session to kick off 2015. In a unique occurrence at the federal level, as well as in Ohio, republicans have now assumed the majority party in the House and Senate. Key issues expected to arise federally in 2015 are lifting the ban on U.S. crude oil exports, protecting IDCs and percentage depletion, and Endangered Species Act issues.

Last week the American Petroleum Institute (API) reported on The State of American Energy 2015 in its annual report. The report covers all sectors of energy ranging from solar energy, natural gas, hydropower, to petroleum, using government data to highlight the growth in each area. Each segment is contributing to the U.S. energy portfolio and the future has a strong outlook.

Jack Gerard, API’s CEO, says, “Today the United States is the world’s top producer of natural gas, the world’s leading refiner of petroleum products, and very soon could be the leading producer of oil. These developments are strengthening America’s energy and economic security and benefitting tens of millions of individuals.”

This is part of the larger story, coupled with rising use of renewable energy and increased oil and natural gas production; the U.S. is emerging as a global energy giant. Public policy choices that enable domestic energy opportunities will allow the U.S. to thrive, as economic growth and job creation are the backbone of energy creation.

The API report inherently starts by highlighting America’s petroleum renaissance, saying that “oil represents the lifeblood of the U.S. economy and provides more than one-third of our current energy needs—which is not expected to change significantly over the next quarter century.”

Hydraulic fracturing has brought us the technology innovations to surpass Russia in becoming the world’s largest natural gas producer (with projections of becoming a net exporter). According to the report, the natural gas industry adds about $385 billion to the national economy each year while supporting nearly 3 million jobs. In addition, the average U.S. household had an additional $1,200 in disposable incoming in 2012 from lower energy costs thanks to hydraulic fracturing—a total expected to grow to $3,500 in 2025.

Issues on the table dealing with federal policy are expediting the approval of liquefied natural gas (LNG) facilities and exports. To maximize the domestic supply of natural gas, the U.S. needs to act quickly and join the global race in building infrastructure and allowing for exports. API projects with the U.S. becoming an exporter, a reduction in the nation’s trade deficit, increased government revenue, a growing the economy with millions of jobs. Gerard concludes, “With our abundant array of resources, technological expertise and skilled workforce, the United States stands on the threshold of energy self-sufficiency at a level unthinkable just a few years ago. With America’s diverse and plentiful range of resources, our energy renaissance is only beginning.”  

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OOGA Converts to New Website and Membership Software

Posted By Deneen Welker, Operations Managing Director, Director of Finance, Monday, January 12, 2015

The Ohio Oil and Gas Association is pleased to announce its conversion to a new membership platform and website powered by YourMembership.com.  The new software integrates membership data seamlessly within the website allowing ease of use for members and the ability for increased communications. The new system is secure as members must sign-in for access.  In addition, all financial transactions comply with Industry Data Security Standards (PCI Compliance) and allows for payments to be received using Visa, MasterCard, American Express, Discover, and ACH/E-check processing.

Each individual member and corporate member account contact has been sent an announcement email, including a username and password, requesting that current membership information be reviewed and updated (if necessary).  The information can be viewed and edited through the “Manage Profile” page under “Edit Bio” tab in the “Information & Settings” section on the site. If this email has not been received, please double check to ensure that this message has not been filtered as spam, and if needed, contact the Association’s office.

In addition to allowing members to manage membership contact information and search for other members online, membership dues can be renewed online through the software.   Additional software features will roll out during the next several months and will be communicated to our members through email blasts and additional Bulletin articles.  

We look forward to your comments, suggestions and patience as we continue to strive to improve your member experience with the Ohio Oil and Gas Association.

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What’s Going Down in Eastern Ohio, Unemployment

Posted By Lyndsey Kleven, Communications Coordinator, Tuesday, January 6, 2015
Updated: Wednesday, January 7, 2015

Extracting oil and gas safely and responsibly has left Eastern Ohio with the great fortune of employment opportunities. This is largely in thanks to the huge deposits of shale rock formation that sit beneath much of the eastern half of the state. The shale gas industry is creating new jobs and helping to restore economic prosperity to much of Eastern Ohio. This has not always been the case, look back a few years and many of these areas were struggling.

Spanning some of the highest unemployment rates in 2011, Ohio saw an annual average unemployment rate of 9.2 percent (not seasonally adjusted)—ranking it in the lower third of highest unemployment rates in the United States. Many Eastern Ohio areas saw unemployment rates in double digits, well above the state average. The shale revolution started to take off around this time and the level of unemployment in Ohio’s struggling Eastern region started to shrink, significantly.

Look ahead to November 2014, and Ohio’s unemployment rate fell below 5 percent. The state, as a whole, is on an economic upswing, seeing the lowest rates in 13 years. It is expected to see improvement in all areas, but some of the areas with the highest unemployment have managed to bounce back, exceedingly well. With the shale revolution and oil and gas jobs becoming available, the Eastern Ohio counties hit hardest by unemployment have surpassed the Ohio average unemployment rate (data from Ohio Department of Jobs and Family Services, Labor Market Information).


Eastern Ohio unemployment percentage rates, June 2011 compared to November 2014:

June 2011 November 2014
Carroll County 10.4 4.5
Columbiana County 10.7 4.8
Stark County 10.0 4.5
Tuscarawas County 9.1 4.0
Guernsey County 10.4 5.1
Noble County 12.7 5.7
Morgan County 12.7 6.7
Washington County  8.3  3.9

The US Department of Labor provides statistics of unemployment from June 2011 to November 2014 by metropolitan area; also reflecting Ohio areas with oil and gas activity seeing significant decreases in unemployment. For example, Canton-Massillon was at a 10 percent unemployment rate (above the state average 9.2 percent) and dropped by 5.5 percent in 2014. Another region impacted by shale development, Youngstown-Warren-Boardman area; saw a 9.7 percent unemployment rate in 2011, which dropped by 4.7 percent in 2014, below the state average.

Aaron Dodds, Economic Development Director of Carroll County said in the Youngstown Business Journal, “The impact over the last three years is clearly transformative. Farmers who once struggled have now paid off their debts, preventing foreclosures or sales of their assets. Cash flows at a rate never before experienced in the history of the county. Equipment dealerships, restaurants, service businesses flourish; manufacturers have moved into the area; and new construction is visible along the major business corridor in Carrollton. People are starting to spend money, no longer waiting for a knock on the door with someone saying they want their check back.”

As we ended 2014, Ohio doubled the number of horizontal shale wells in the state over the course of the year—with 650 shale wells in 2013, reaching 1,300 wells to end 2014, concentrated in the eastern part of the state. As the industry is starting to mature in Ohio, 2015 is expected to bring an investment in processing facilities and pipelines to create a more efficient means of transporting Ohio’s resource. Ohio manufacturing and shale-drilling jobs will continue to increase in 2015, as constructing this infrastructure will surely secure jobs for many years to come.

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