Posted By Guest Blog: Ohio Chamber of Commerce,
Monday, February 5, 2018
Updated: Monday, February 12, 2018
The Ohio House of Representatives passed HB 430 yesterday by a substantial, bipartisan margin (85-12). Why should you care? It’s important to your business because predictability and stability are crucial elements to a fair tax system, and HB 430 is a step towards protecting accepted practice and enforcement of Ohio’s tax laws and regulations. HB 430 deals specifically with the oil and gas industry, but similar concerns about shifting interpretation or definition changes are affecting other industries such as manufacturing processes and other commercial activities.
Over the years, changes brought about by advanced technology have created a need to adjust Ohio’s laws and accepted practices of tax enforcement. In this vein, HB 430 is an update to legislation that first defined “production equipment” for the oil and gas regulation law. Numerous changes were made in the wake of the broad emergence of horizontal hydraulic fracturing methods in Ohio. (S.B. 165 of the 128th General Assembly). Some further refinement has become necessary.
HB 430 modifies the sales and use tax exemption for property used in producing oil and natural gas and specifies that property that is approved by the Department of Natural Resources as part of a water pollution control facility qualifies for existing property and sales and use tax exemptions.
The bill modifies the existing sales and use tax exemption for property used directly in producing oil and natural gas. Existing law exempts the sale or use of tangible personal property used “directly” in the production of crude oil or natural gas. The bill redefines what constitutes the “production” of oil and gas by substituting “production operation” – for “production.”
The Ohio Chamber supports these changes that simply reaffirm what the state law has been for decades by clarifying the Ohio Revised Code, as originally intended by the Ohio General Assembly, and the Ohio Administrative Code that these direct sales are treated as nontaxable. The purpose is not to expand the scope of the current exemptions or exclusion; rather it is to aggregate and clarify them.
This action would bring a measure of clarity and certainty to the industry, which contributes to good business and continued business growth. We believe that it may also give a guideline for similar issues in other areas of law and regulation. The Ohio Chamber will continue working toward fair implementation of all taxes on behalf of our members and all Ohioans.
Posted By Lyndsey Kleven, Communications Coordinator,
Wednesday, January 31, 2018
The Ohio Oil and Gas Association (OOGA) and the Ohio Environmental Council Action Fund (OEC Action Fund) are both praising a bill that passed the Ohio House that would streamline the state’s idle and orphan oil and gas well program, it passed the Ohio House with unanimous support on Jan. 17.
Introduced by State Rep. Andy Thompson (R-Marietta), House Bill 225 will establish a more robust and streamlined program for plugging the state’s idle and orphan wells, which do not have identifiable owners and may date back as far as 1885.
The number of idle and orphan oil and gas wells in the state is estimated to be in the thousands and there are currently 700 wells on a waiting list to be plugged through the state’s Orphan Well Plugging Program, which is administered by the Ohio Department of Natural Resources (ODNR) and funded by severance taxes paid by Ohio’s oil and gas industry.
“We commend Rep. Andy Thompson and the co-sponsors of this bill for legislation that is in the interest of the public and Ohio’s natural environment,” said Melanie Houston, OEC’s director of climate programs. “House Bill 225 will make considerable progress in expediting ODNR’s process for plugging these abandoned wells across Ohio.”
OOGA and the OEC Action Fund mentioned several provisions of House Bill 225 that would increase the efficiency of the Orphan Well Plugging Program and provide ODNR the resources needed to address this longstanding issue to protect public health, safety and the environment. Key provisions include:
·Streamlined historical title and landowner research requirements.
·Process to allow ODNR to pay well service contractors directly, eliminating upfront, out-of-pocket costs and potential tax liabilities for landowners.
·Increased accountability by requiring ODNR to report well-plugging progress annually to the Ohio General Assembly.
·Increased program funding from 14 to 45 percent.
“This legislation establishes the framework necessary to report the wells, rank them, get them plugged, and to spend the allocated funds to prevent the problem,” said Mike Chadsey, OOGA’s director of public relations. “This is a historic opportunity for Ohio to finally eradicate the issue of idle and orphan wells.”
Following passage by the Ohio House, House Bill 225 was introduced in the Ohio Senate on Jan. 22. OOGA and the OEC Action Fund look forward to working with the Senate and the swift approval of this essential legislation.
Posted By Lyndsey Kleven, Communications Coordinator,
Wednesday, December 20, 2017
Updated: Tuesday, December 19, 2017
Whether or not you realize the importance of natural gas, it is ubiquitous. Natural gas and products made from it are below you and all around you, a form of it is most likely on you and maybe even inside of you. It is fundamental to everyday life and becoming increasingly vital to the world’s energy portfolio. Natural gas is a fossil fuel used for heating, cooking, electricity, fuel for vehicles, a chemical feedstock in making plastics, and other commercially imported organic chemicals. This naturally occurring hydrocarbon gas mixture is found deep underground, and in the U.S. has primarily been extracted from shale rock over the past decade.
Across the Appalachian region there are two shale formations that together are producing a lot of the U.S. natural gas. The Marcellus shale extends from New York to Kentucky, covering about 95,000 square miles. The Utica shale sits beneath the Marcellus and is below us in Ohio, spanning 60,000 total square miles between New York, Pennsylvania and West Virginia.
Innovations in drilling and hydraulic fracturing has advanced to the point where oil and gas production can be economic in these tight shale formations, allowing the region to become very prolific over the past years. According to new information from the U.S. Energy Information Administration (EIA) the Appalachian region is driving growth in our country’s natural gas production. Since 2012, the average monthly natural gas production per rig for new wells in the region has increased by 10.8 million cubic feet per day. A decade ago this level of production would have been unthinkable for our area. Fast-forward to today and if Ohio, West Virginia, and Pennsylvania were hypothetically to combine as a country, it would be the third highest natural gas producing country in the world.
·Provide electricity for 559,245 houses for a year.
·Take a cross-country road trip 255,000 times.
·Travel to the moon and back 12,857 times.
EIA’s Drilling Productivity Report finds that natural gas from the Marcellus and Utica has increased by more than 14 billion cubic feet per day since 2012. To put that into perspective over the last five years, that’s an increase in production of natural gas from 7.8 Bcf/d in 2012, to producing 22.1 Bcf/d in 2016, and the third quarter of 2017 shows production at 23.8 Bcf/d in 2017. As of November 2017 more than 1,800 wells have been drilled in the Utica-Point Pleasant, and more than 11,300 wells have been drilled in the Marcellus.
There’s still more to come as the Appalachian region continues to show what its capable of bringing to the U.S. energy portfolio. It is projected that the northeast states will account for 35% of U.S. natural gas production by 2020. It will be exciting to see our industry continue to advance techniques that will improve production and bring even more economic development across our region.
Posted By Lyndsey Kleven, Communications Coordinator,
Monday, December 18, 2017
The Ohio Oil and Gas Association (OOGA) hosted its annual holiday membership reception on December 14, 2017 at the Cherry Valley Lodge in Newark. The event had a great turn out and it was nice to have our members coming to celebrate the holiday season with colleagues, friends, and Association staff.
Following the annual OOGA Executive Committee and Board of Directors meeting, a large representation from these groups was also present. This event is a great opportunity for groups to network, mingle, and Association members from near and far to get together to enjoy hors d’oeuvres and drinks.
The OOGA thanks everyone who was able to attend the annual holiday reception and wishes all of our members a very Happy New Year!
Posted By Jackie Stewart, Energy In Depth,
Monday, December 4, 2017
Updated: Wednesday, December 6, 2017
After more than two dozen failures at the local level in Ohio, the Pennsylvania-based Community Environmental Legal Defense (CELDF) recently announced plans to launch a statewide initiative petition for two Ohio constitutional amendments. The ultimate goal is to alter state law to allow local fracking bans (among other extreme objectives). While the proposed so-called “Ohio Community Rights Amendment” and the “Initiative and Referendum Amendment for Counties and Townships” garnered 1,000 signatures and was certified by the Ohio’s Attorney General, the road to a statewide ballot measure includes passing muster with the Ohio Ballot Board and would require at least 305,591 Ohio voter signatures to qualify. In other words, CELDF is on step two of the 28 total steps it will take implement an actual statewide citizens-initiated constitutional amendment. In addition, despite what CELDF claimed in a press release announcing the decision this week, the group has had nothing but failures in other “similar” attempts in other states (a fact most media outletsfailed to note).
With that said, here are the facts of the matter (to date):
When was the petition submitted and certified? And how does that process work?
On Nov. 17, CELDF submitted two petitions for state constitutional amendment to Ohio Attorney General Mike DeWine, who certified the signatures on Nov. 27. These were the first and second steps in a very long process that is nowhere near complete. While CELDF would have you believe their so-called ballot measure will hit the masses tomorrow, 26 steps in the process remainleading up to the July deadline, according to the Ohio Secretary of State’s website. Notably, more than 50 percent of efforts that clear the Ohio Attorney General’s first two steps do not make it to the ballot.
What do the petitions actually say?
The Ohio Community Rights Amendment initiative petition states as follows:
This amendment secures the right of local, community self-government for the people of Ohio by guaranteeing local authority to enact laws to protect unalienable rights and the health, safety and welfare of community members and natural ecosystems, free from state preemption or corporate interference. This right includes the power of each Ohioan to act collectively through his or her local government to alter, amend or abolish systems of law and government when they fail to protect or when they directly or indirectly violate the unalienable rights and the health, safety and welfare of community members and natural ecosystems.
Following adoption of this proposed amendment, the right of local community self-government will be exercised through the adoption of county and municipal laws either directly by the people of those communities through the initiative process or by their local elected representatives on behalf of the people of the community. Under this amendment, State laws won’t have the power or authority to preempt or overturn local laws enacted to protect the rights of community members and the local ecosystem. Claimed corporate “rights” will not be able to override the rights protected by the exercise of the right of local community self-government. Local laws enacted pursuant to this amendment will not be valid if they violate or diminish the rights of natural persons or ecosystems, nor will they be valid if they reduce established protections in law for natural persons or ecosystems.
The Initiative and Referendum Amendment for Counties and Townships initiative petition statesas follows:
This amendment establishes a right of initiative and referendum powers to residents of counties and townships, just as residents in Ohio municipalities have possessed since 1912.
Has a political action committee been filed for this effort?
No. Not at this time. This is significant because any legitimate effort to actually launch a statewide campaign would include a campaign committee.
Have there been any other statewide ballot initiatives in other states where CELDF has been successful?
No. While CELDF is aggressively trying to mislead Ohio media and the public that they have made headway “advancing” what they call “similar efforts” in other states, that’s simply not true. CELDF’s similar efforts in both New Hampshire and Colorado failed, and they only recently made attempts to implement similar initiatives in other states.
And let’s not forget they have been failing for years in Ohio at the local level.
CELDF is the very definition of “big money.” Its coffers swelled from $1.6 million in 2014 to $2.5 million in 2015, and spent almost a million dollars on lobbying and grassroots efforts, as a result of the more than $3.4 million the group has raised over the past few years. According to its latest tax filing, the organization has seen its fundraising increase by more than 73 percent since 2009. However, new reports indicate there may be millions more in dark money pouring into its coffers.
What does the language of the petitions actually mean?
The language of the petition is extremely broad, and CELDF itself said in its recent press release, “This goes beyond fossil fuel industries.” Indeed it does. And in fact, the constitutional amendment, if passed, would literally mean that a local law (on any issue) would supersede state law. In other words, local townships or cities could pass laws to prohibit certain activities that are protected by state laws, as Susan Beiersdorfer, activist and author of these amendment petitions, has admitted:
“This is a movement about saying we, the people, in the cities of Youngstown can decide what industries come in here.”
That’s right: if the city decides it doesn’t like your business, you’re out of business!
Beiersdorfer’s statement is certainly consistent with CELDF’s overarching mission to ban any kind of industry it doesn’t like, as stated by CELDF founder, Thomas Linzey,
“If you are going to put all that work into a ballot initiative, why not do a ballot initiative that bans all finance companies in New York City from funding new projects that exacerbate climate change? Why not do something real…why not do something real…cause people are saying to themselves, ‘it would be illegal, it would be unlawful, it would be unconstitutional, because you are taking their property’ well..(expletive), it’s time.”
If that’s not enough, take a look at this meeting where CELDF organizer Ben Price and his colleagues explain how they’d like things to run:
Meeting attendee: “Ben was nice enough to say we’re gonna make decisions in here that the rest of the community will just have to live with.”
Ben Price: “It’s how it’s done!”
Meeting attendee: “We laugh about it, but sadly it’s how it’s done.”
After six consecutive CELDF failures in Youngstown, one would think that voters have spoken on this issue enough. As the Youngstown Vindicator rightfully pointed out,
“A reasonable person — with emphasis on the word reasonable— would conclude, therefore, that the outcome of the general election should be the final word on this self-serving issue. After all, the people have spoken, over and over. But the Beiersdorfers and others, who are determined to save us from ourselves, continue to believe they represent a majority of the residents of the city — despite evidence to the contrary.”
But CELDF has proven to be anything but reasonable. And it is important for Ohio voters to know that the group’s lack of rationality is surpassed only by its desire to ban fracking and other business activity essential to Ohio’s economy.
In total, the upstream oil and natural gas industry has spent more than $300 million in eight Ohio counties from 2011 to the first quarter of 2017, and improved more than 630 miles of roads from these investments alone. This report takes a closer look at the history and execution of these agreements within eight counties spanning from 2011 to 2017: Belmont, Carroll, Columbiana, Guernsey, Jefferson, Harrison, Monroe and Noble. This report is the second of its kind in an on-going Utica Shale Local Support Series between OOGA and EID Ohio that collectively examine multiple ways in which oil and natural gas production directly benefits local schools, counties, townships, cities, villages and other vital local services and infrastructure.
Key Findings For Ohio Shale Counties:
· Total Investment Made in Ohio Infrastructure: More Than $300 Million
· Total Number of Road Miles Improved: More Than 630 Miles
· Amount of Investment Directly to Local Communities: 100 Percent
Earlier this year the first report was released, which found Ohio’s oil and gas operators contributed more than $43 million dollars in six counties over five years, as a result of property taxes paid on crude oil and natural gas production. An addendum with two additional counties was added to the release report to include both Columbiana and Jefferson Counties pushing the Ad Valorem contributed number to $45 million. Combined, these two reports find the oil and gas industry has contributed more than $345 million in direct investment into counties where drilling and production of oil and natural gas from the state’s shale resources is occurring.
Posted By Lyndsey Kleven, Communications Coordinator,
Monday, November 6, 2017
Updated: Thursday, November 9, 2017
The Ohio Oil and Gas Association hosted its seventh annual Technical Conference and Oilfield Expo on November 2, 2017. For the third year, the event was held in Cambridge at the Pritchard Laughlin Civic Center. With the industry slowly recovering from the downturn, the overall attendance, as well as enthusiasm, was up over the last few years as the industry settles into the new normal. The event hosted a wide array of attendees, exhibitors, and sponsors, all contributing its success. The International Union of Operating Engineers Local 18 was the event’s premier sponsor and was a key driver to the overall success of the event.
The evening before the technical conference presentations, the Association hosted a welcome reception held on the exhibit floor for everyone attending. This was well attended and provided an opportunity for attendees to network, mingle, and visit the exhibitor booths while enjoying hors d’oeuvres and drinks.
“Our technical conference is about sharing information to make our industry better and more efficient. It was truly a great event this year,” OOGA Executive Vice President Shawn Bennett expressed. “This year we had presentations from all aspects of our industry so there was something there for all of our members. We had a great turnout and can’t wait to be back next year.”
What really stole the show were the speaker presentations and panel discussions during the technical conference, providing in depth discussion on topics impacting the oil and gas industry.
Some of the various topics at the Technical Conference included comments from experts on emergency response and minimizing costs, to overviews of pieces of equipment such as reciprocating compressors and in-pipe turbine generators. One of the key presentations was provided by Bryce Custer who is experienced in all aspects of commercial real estate. Bryce spoke on the topic site selection criteria for petrochemical and energy service facilities.
“We are beginning to see a renaissance along the Ohio River Corridor. Dormant steel factories, power plants and industrial sites are being remediated and repurposed for the advent of industries related to the shale gas industry,” said Bryce Custer, with NAI Spring. “The Shell petrochemical plant under construction in Monaca Pennsylvania is providing additional interest in the entire Ohio River and Appalachian basin area. From “Rust Belt to Plastic Belt” will be the new normal for the entire area.”
“This area has the key criteria for Site Selection in terms of abundant and low cost feedstock, many suitable sites, ongoing infrastructure upgrades, a skilled workforce and most importantly, our proximity to customers along with local and state incentives” according to Custer.
Every year the Association strives to bring the best and brightest to Cambridge to keep all of its members up to date on the latest and greatest innovations within the industry. This is one of the key roles the Association plays, creating a platform for its members to interact and do business. We encourage everyone to join the conversation next year and attend the event in person to hear the presentations impacting our industry in their entirety.
Posted By Mike Chadsey, Director of Public Relations,
Wednesday, November 1, 2017
Updated: Thursday, November 9, 2017
The Appalachia Chapter of National Association of Royalty Owners (NARO) recently held its annual conference at the Greenbrier Resort in White Sulfur Springs, WV. Members from Ohio, West Virginia and elsewhere attended the annual event to network and discuss current issues regarding leases, drilling activity and legislative affairs the Utica and Marcellus development area.
The two day event hosted many knowledgeable speakers on a wide range of topics.
Bob Orndorff, Dominion Energy; Jim Crews, Marathon/MPLX; and Brent Breon of Blue Racer Midstream sharing some insights on the topic of midstream buildout. Eclipse Resources’ Oleg Tolmachev provided a report on what his company is up to as they continue to expand lateral length and explore for resources underneath the Wayne National Forest. A legislative update from West Virginia and Ohio were provided by State Senator Charles Trump and State Representative Andrew Thompson.
Energy in Depth’s (EID) Jackie Stewart joined OOGA for a talk about how to most effectively use grassroots to get your message across. Your Association and EID have a great and ongoing working relationship with the folks at NARO. Additionally, Jackie had her own session to speak about what the anti-oil and gas groups are up to these days, explaining her various efforts pushing back on their. OOGA was also able to provide a Utica Shale update discussing the status of various upstream, midstream and downstream projects and how the industry gives back to communities across Ohio.
At the membership dinner, The Department of Energy, National Energy Technology Lab’s, Dr. Randall Gentry shared the various research projects he and his teams are working on how their work impacts the industry.
The credit for this very successful event goes to our friend and Medina County’s own, Rebecca Clutter, NARO Appalachia Board member. Rebecca put together a very comprehensive program addressing many of the hot topics of the day. Perhaps most importantly, she addressed the audience about her working relationship with the industry in Ohio and how through combined efforts has been able to get many important items to both landowners and producers accomplished.
This was a great event and we are truly grateful and thankful to Rebecca for having OOGA out to speak and to have the ability to network among friends.
Posted By Lyndsey Kleven,
Wednesday, October 25, 2017
Updated: Thursday, October 26, 2017
Once again the Ohio Oil and Gas Association is pleased to host its seventh annual Technical Conference and Oilfield Expo on November 1-2, 2017 in the heart of Eastern Ohio at the Pritchard Laughlin Civic Center in Cambridge. Network with other professionals, hear dynamic speakers discuss cutting edge topics and join the oilfield welcome reception on the evening of November 1. The main event is all day November 2 and is slated to host hundreds of participants, see who is exhibiting with the interactive Trade Show Floor Plan. As OOGA’s premier fall oil and gas industry event, in-depth presentations on today’s most important topics will include:
OOGSC – Emergency Response to Gas Meter Station Slip
Minimizing Costs and Maximizing Assets for Salt Water Disposal Wells
Structural Control of the Point Pleasant Formation Deposition and Production
Capacity Control for Reciprocating Compressors
In-Pipe Turbine Generator (IPTG)
Site Selection Criteria for Petrochemical and Energy Services Facilities
Dissolved Hydrocarbon Gas Analysis in Water
Characteristics and Performance of Microbial-Based Well-Stimulation and Paraffin Dispersal Products Obtained From a Novel Fermentation Process
Following day one of exhibitor set-up all event attendees are invited to join exhibitors for the new evening networking reception that will be held on the trade show floor.
OOGA would also like to thank each of our sponsors for making this event possible, with special recognition to International Union of Operating Engineers for being the event’s premier sponsor.
We look forward to seeing you there, visit the event website to learn more and register online!
Posted By Brian Hickman, Director of Government Affairs,
Monday, October 16, 2017
In 2010, House Bill 133 was passed and enacted. The bill provided Ohio with a formalized process to determine if oil and gas activity was suitable on public lands. Before HB 133, Ohio’s Department of Administrative Services (DAS) was the sole arbiter of leases, which usually entitled DAS sending the agency in question a boilerplate contract for such an agreement.
HB 133 looked at this practice and created the Oil and Gas Leasing Commission. The panel was comprised of two representatives of the oil and gas industry, a representative knowledgeable in finance or real estate transactions, an environmental or conservation interest, and the Chief of the Division of Geological Survey, who would Chair this group.
Collectively, the Commission would harness these perspectives and decide if an oil and gas lease would be beneficial to enter into with an operator. This analysis would be vital to both the success of the program and the quality of offers accepted and entered into by the State of Ohio.
For example, conceptually the oil and gas industry representatives would provide the Commission with information regarding the drilling of the well, setbacks, and other details pertinent to drilling and operating an oil and gas well. The member representing real estate or finance would provide the Commission with information on the lease, as in what is a reasonable amount for the state to receive with the lease or other contractual provisions. The environmental or conservation interest would bring a perspective of these state lands, as in is it feasible to lease here or, if a lease can proceed, what additional safeguards should be discussed.
In summary, the Oil and Gas Leasing Commission was established to create a formalized process for various interests to begin a discussion about if an oil and gas lease should be entered into on certain state lands. Communication between these interests, the state, the regulatory body, and the general public is the central notion of the program. Now that one individual has been appointed, it is our hope that more appointments follow so that this important discussion can take place for the benefit of Ohio and its citizens.