Houston-based Plains Marketing LP purchased 40-plus acres situated on the outskirts of Toronto, Ohio from FirstEnergy for its shale-related business activity. According to the papers filed in the Jefferson County recorder’s office on December 28, 2012, Plains Marketing LP paid $2.5 million for the property. Sources close to the transaction have indicated that Plains Marketing LP intends to transport wet gases from Utica shale wells to the site, where it will be stored and eventually shipped to refineries on the Gulf Coast.
Toronto Mayor John Geddis described the site, which has been vacant since 1986, as “prime property,” with barge docking facilities and the potential for a rail spur. Mayor Geddis further indicated that the project would likely bring jobs to the area in the near future.
The Ohio Department of Natural Resources (ODNR) reports that during the week of December 16 through December 22, it approved 11 new horizontal well drilling permits regarding the Utica/Point Pleasant Shale, the majority of which were issued for operations in Carroll County, which leads the state in well permits issued for the year (177, through December 22, 2012). Other recently issued permits include one in each of Columbiana and Guernsey Counties, and two in Monroe County. Through December 22, the ODNR has issued 485 horizontal well permits, and 196 horizontal wells were drilled under such permits, 45 of which are in production. Additionally, the rig count for Utica Shale development has reached a total of 30 rigs.
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Hannibal Real Estate of White Plains, NY, and Carload Express of Oakmont, PA, plan to revive a 12 mile rail line serving Hannibal Industrial Park in Monroe County, OH. The partners hope the rail line, known as the Ohio Terminal Railway Co., will attract businesses that are participating in the Utica and Marcellus shale plays. Trains are expected to haul sand, concrete and other materials used in shale development to and from the 122 acre industrial park.
On December 20, 2012, the Buckeye Water District, a municipal sewer and water authority in Columbiana County, Ohio, approved the sale of treated sewage water for use in hydraulic fracturing operations. Under the one-year agreement with Keystone Clearwater Solutions, Keystone will pay a bulk rate of $6.60 per thousand gallons for the first 30 million gallons used. For any additional water, Keystone will pay a descending scale of $12, $10, $8 or $6 per thousand gallons depending on the daily volume used.
Encouraging well results have fueled the creation of 38,830 jobs in Ohio since the beginning of 2012, and studies have indicated another 100,000 jobs could be produced by 2020. Labor income from jobs created directly and indirectly from the development of the Utica Shale in Ohio is estimated to reach $9.2 billion in 2020, a 3.8 percent increase to wage earning potential and salaries across the state. According to the Ohio Chamber of Commerce, such an influx in jobs and wage earning potential could provide the resources going forward for Ohio to reinvest in its infrastructure, schools and other areas of need.
BP has announced plans to expand existing infrastructure in northeast Ohio to accommodate increased natural gas production in the area, as well as exploring partnerships with midstream processing plants in Trumbull County. Such plants are already under construction in Mahoning and Columbiana counties. BP has leased more than 84,000 mineral acres in the area and are expected to have invested $100 million in Trubull County drilling by next year.
After receiving a favorable decision from the Ohio Environmental Review Appeals Commission (ERAC) and resuming its operations treating low-salinity wastewater from hydraulic fracturing operations, Patriot Water Treatment, LLC (Patriot) has filed suit against the Ohio Department of Natural Resources (ODNR). Patriot’s operations were shut down as a result of Ohio EPA’s order denying the city of Warren a permit to receive water from Patriot and remained closed for three months until ERAC’s July 3, 2012 decision reversed Ohio EPA’s order. Patriot’s complaint, filed in the Court of Claims of Ohio on November 2, alleges that ODNR concealed public documents which could have prevented Patriot’s operations from being shut down. Patriot seeks $3.5 million in damages and attorney’s fees.
On November 6, 2012, residents of the city of Mansfield, Ohio voted to approve an environmental bill of rights that will require any company planning to construct an injection well for the disposal of brine from oil and gas production operations to obtain prior approval from the Mansfield city council. The city council decided to put the environmental bill of rights before voters in July 2012 but the bill did not garner much attention until a few weeks before the election when the Ohio Chamber of Commerce, American Petroleum Institute, and Mansfielders for Jobs issued political materials opposing the bill. The bill was approved with 62.9 percent of voters in favor of the bill.
Opponents of the environmental bill of rights have expressed concern that the regulatory scope of the bill may extend beyond injection wells. Section 1.02(H)(2) states that “No permit, license, privilege or charter issued by any State or government agency . . . which would violate the prohibitions of this Charter provision or deprive any City resident(s), of any rights, privileges, or immunities secured by this Charter, the Ohio Constitution, the United States Constitution, or other laws, shall be deemed valid within the City of Mansfield, without the written legislative consent of the City of Mansfield.” However, the bill of rights may not be enforceable and could face a court challenge since the local legislation would be preempted by state law under Ohio Rev. Code 1509.03.
On November 2, 2012, Ohio EPA reported that the air quality near a drilling site in Muskingum County, Ohio is within federal standards. Ohio EPA collected four months of data from a monitor that measured concentrations of particulate matter, various hydrocarbons, and methane. The agency explained that the only exceedance, which occurred on June 8, 2012, may have been caused by the construction of a nearby road on that particular date. Ohio EPA plans to continue monitoring air quality at well sites for at least two years.
On October 30-31, 2012, the Advanced Energy B2B Expo was held at the Greater Columbus Convention Center in Columbus, Ohio. The conference brought energy companies, regulators, and researchers together to discuss the diverse portfolio of advanced energy technologies that are being developed and implemented in Ohio including solar, co-generation, and natural gas. James Zheringer, Director of the Ohio Department of Natural Resources, noted that while Ohio is only in the early stages of developing the Utica shale (431 permits issued, 178 wells drilled, and 36 wells producing natural gas), the shale industry is expected to contribute close to $ 5 billion to Ohio’s gross state product and create nearly 66,000 new jobs by 2014. Todd Snitchler, Chairman of the Public Utilities Commission of Ohio spoke about the importance of continued innovation and commercialization in the advanced energy sector. Chairman Snitchler also highlighted the importance of having policies in place that will stimulate the growth of advanced energy.
On Monday, October 15, 2012, Carizzo Oil and Gas announced that Halcon Resources Corp. purchased a majority of their Utica Shale leases in Trumbull, Ohio, and Mercer and Crawford counties, Pennsylvania, for $43 million. An existing drilling pad and approved well drilling permits were also part of the sale. Carrizo will continue to own an undivided 10% interest, along with an option to increase its ownership to 50%, in nearly 26,000 additional gross acres, primarily in Guernsey County, Ohio, where the company said there were encouraging drilling results. Continue reading…
Gulfport Energy Corporation reported positive production results for its Shugert 1-1H well in Ohio’s Utica shale. Located in Belmont County, Ohio, Shugert 1-1H tested at a peak rate of 20.0 million cubic feet per day of natural gas, 144 barrels of condensate per day, and 2,002 barrels of natural gas liquids per day. Gulfport plans to begin flowing the Shugert 1-1H well into a sales pipeline by early December.
Marathon Petroleum Corporation and Harvest Pipeline Company on Tuesday announced a letter of intent between the companies to jointly develop infrastructure on the Ohio River to allow transport of hydrocarbon liquids produced from the Utica Shale. The project is anticipated to include a truck unloading facility and a barge loading terminal in Wellsville, WV, that will enable liquid hydrocarbons produced in the region to be shipped to Marathon’s refinery in Catlettsburg, KY. The improvements are expected to be finished in late 2013. Marathon also recently completed an expansion of its unloading facilities at its Canton, OH, refinery. The State Journal has more.
On October 4, 2012, the U.S. Geological Survey (“USGS”) released the first assessment of shale gas resources in the Utica. The assessment covered areas in Maryland, New York, Ohio, Pennsylvania, Virginia, and West Virginia. The estimate of undiscovered oil ranges from 590 million barrels to 1.39 billion barrels, natural gas ranges from 21 to 61 trillion cubic feet, and the estimate of natural gas liquids ranges from 4 to 16 million barrels (95 percent to 5 percent probability, respectively).
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On Oct. 1, the Yellow Springs Village Council voted 3-2 to adopt a Community Bill of Rights ordinance banning shale gas drilling and related activities in the village. Yellow Springs is the first municipality in the state of Ohio to enact a local Bill of Rights and protect those rights by prohibiting shale gas drilling and fracing and the ensuing injection wells. However, such ordinance may not be enforceable and could face a court challenge since the local legislation would be preempted by state law under Ohio Rev. Code 1509.03. Continue reading…