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Posts tagged "Energy in Depth – Ohio"

UPDATE: Central Ohio Transit Authority Ready for Transition to CNG Fleet

Tuesday, May 21st, 2013 | 0 Comments

UPDATE (5/21/2013, 10:13pm ET): Earlier this month, the Central Ohio Transit Authority (COTA) released its first 30 CNG buses for use.  While they don’t look much different than the typical diesel-fuel bus, COTA will definitely notice the difference in cost.  They pay about $3.20 for a gallon of diesel fuel, but will pay only about 80 cents for a gallon equivalent of natural gas.  All told, COTA could save $28,800 a year in fuel costs for each bus.  Akron’s METRO Regional Transit Authority saved about $600,000 on fuel last year because of their CNG vehicles.

Currently, COTA has more than 320 buses. They hope to transition the entire fleet to CNG over the next 12 years at a pace of about 30 each year.  Jeff Hiott, a senior program manager with the American Public Transportation Association commented on the difference between diesel and CNG:

“A diesel-fueled bus is still the cheapest buy. However, when you look at everything combined, you can realize some savings there.” –Jeff Hiott (COTA’s cheap-fuel buses roll out today, 5/6/13)

That’s certainly good news for taxpayers in Central Ohio.

COTA isn’t alone in their quest for a cleaner and cheaper fuel for public transportation.  More than a third of transit buses nationwide were hybrids or used an alternative fuel in 2011. According to the American Public Transportation Association, that’s up from 10 percent a decade earlier.

- Original post from November 20, 2012 -

Last week, the International Energy Agency (IEA) released its annual forecast for international energy production. Their findings were nothing short of astounding, however they may have surprised few as America’s shale development has taken off in the past years with much fanfare.

The agency, which advises industrialized nations on energy policy, projects the United States will become the world’s largest producer of natural gas by 2015, surpassing Russia as the world’s natural gas juggernaut. The report also identified the United States becoming the world’s top oil producer in 2017, replacing Saudi Arabia as the highest-producing nation.

This is a direct result of expanding shale development taking place across the country, including in Ohio’s Utica Shale. And businesses are taking full advantage of the opportunities these domestic energy resources are providing.

As the IEA released its report, the Central Ohio Transit Authority (COTA) was beginning preparations to convert their fleet to compressed natural gas (CNG) powered busses. In late April, COTA expects to receive their first 30 CNG vehicles, marking the first steps in the process of a full conversion.

Long-term, this move will reduce both operational costs and the carbon emissions of the fleet. COTA expected to spend about $12 million on diesel this year, and notes the switch to CNG could cut their fuel budget by about two-thirds once completed. The reduction of operating costs – thanks to an abundance of natural gas available thanks to shale development, is a driving factor in the conversion, as COTA CEO Curtis Stitt explained in an interview with Columbus Business First:

As we were moving through the process of rehabilitation, we decided on CNG as the fuel of COTA for the future. – Curtis Stitt, CEO, COTA (COTA gets ready for 1st shipment of CNG vehicles, 11/16/12)

In addition to the benefits of converting to natural gas vehicles in being more environmentally friendly and easy on the wallet, the paper also highlights another benefit touted by COTA: noise reduction. The column cites COTA officials noting it would take ten CNG buses to create the same noise level as a single diesel-powered bus- just another reason COTA is converting its entire fleet over the next decade.

The benefits of the increasing use of natural gas have been covered extensively on our blog, and have garnered much attention and support throughout the state, and country.

Earlier this year, the Institute for Energy Research released a study noting that the U.S. has led the world in carbon reductions since 2006, thanks in large part to a growing utilization of natural gas as and energy resource. In October, America’s Natural Gas Alliance, in coordination with Governor John Kasich’s office and the Public Utilities Commission of Ohio, held a Natural Gas Vehicle Summit to help companies and municipalities see these benefits, and offer a glimpse of what’s here in Ohio and what will be an expanding industry in the years to come.

While COTA may be the latest to make the switch, they are not the first. The Stark Area Regional Transit Authority has set plans to switch their vehicles to natural gas, and, back in April, Smith Dairy announced they would convert their entire fleet of large diesel power trucks to run on CNG.  The company broke ground on a $1.5 million fueling station at their headquarters in Orrville.

Starting next year, TravelCenters of America LLC, a company based in Cleveland, reported in June that they hope to add at least 200 CNG fuel pumps at its truck stops across the nation through a partnership with Shell Oil Co.

The trend is taking place in other regions of the country as well. In April, Frito-Lay announced it would add 67 trucks that would run on CNG to its fleet.  Other national companies making the switch include Sunny Delight and AT&T.

More and more companies, communities, and municipalities are recognizing the benefits of natural gas vehicles, and the appeal of utilizing natural gas as an energy source. As we see continued high production of domestic natural gas, we can expect this trend to continue as these entities work to take full advantage of our resources. Here at home, we can see how Ohio is preparing to do just that, emerging as a pioneer in the shale revolution that is not only pushing the U.S. to be worldwide leader in energy production, but creating jobs for American families as well.

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Ohio’s Production Numbers Don’t Tell All

Friday, May 17th, 2013 | 2 Comments

After at least an extra month of guarded anticipation, the Ohio Department of Natural Resources (DNR) finally released oil and gas production data on 86 wells producing from the Utica shale during 2012.  Oddly enough, an article from Reuters appearing in Friday’s papers dismisses the Utica play as a bust.  To quote the article written by Edward McAllister and Sabina Zawadzki:

“U.S. hopes for a new shale oil bonanza in Ohio, joining the prolific Bakken and Eagle Ford plays that have raised production to 20-year highs, were shattered on Thursday by the first hard evidence that the Utica formation was primarily gas-prone.

“Now, data from Ohio’s Department of Natural Resources (DNR) showed that in 2012, the first full year of drilling, oil output amounted to only 636,000 barrels — about enough to fill a single small crude oil tanker. On average for the full year, output came to a mere 1,742 barrels a day (bpd) versus 780,000 bpd in North Dakota, where much of Bakken lies.”

The numbers reported to the DNR and discussed in the Reuters account would indicate that the 86 wells now producing are averaging approximately 20 barrels of oil per day.  It’s hard to argue with statistics, but it’s also important to understand that on the surface, these particular ones are very misleading.

For example, Chesapeake Energy reported production on 53 wells that averaged 77 BOPD and 2097 Mcfd.  The gas production rates are certainly substantial, even with only three wells being online for more than 300 days, but the oil production rates appear less than impressive.  However, no mention is made of natural gas liquids (NGLs) that are being recovered from the gas.  In fact, considerable NGLs are being recovered from the gas stream and are not reported as oil production to the state.  Similarly, nothing is mentioned as to how the wells are being produced. Notably, due to limited pipeline capacity (a condition that is only temporary, given massive buildouts already underway), many of these wells are being “choked back” until the product can actually be sent somewhere.

In fact, nearly $10 billion is being invested in Ohio’s midstream infrastructure to help bring the gas and entrained NGLs from these wells to market.  How will this impact the production from these same 86 wells going forward? No one knows for sure.  But it’s safe to say that the numbers will look better when this infrastructure is in place.

In the end, the raw production numbers reported to the state represent only a snapshot of what the industry is actually doing — and, more importantly, what it’s capable of doing.  No, the oil numbers are not as good as other, more mature plays, like the Eagle Ford in Texas. But the real question is, are the wells economic?  Can a company invest $5-9 million to drill and complete a well in the Utica shale and make a profit on its investment?  The most important numbers to a company are net present value and payout time — neither of which are reported to the State.

The Reuters report also compares the Bakken’s current production numbers to the Utica’s first year.  This is hardly a fair comparison.  I don’t know what the Bakken produced in its first year, but I can assure you it wasn’t 780,000 barrels of oil per day. Heck, back in the mid-1990s, the U.S. Geological Survey thought the Bakken only held about 151 million barrels of oil, a number they later had to upwardly revised by nearly 25-fold in 2008 after development began to take off.  The article does not state how many wells are responsible for that production either.

Personally, I like to compare apples to apples — not apples to airplanes.

I’m not throwing in the towel on Ohio production, and we know the companies operating here in Ohio aren’t either.  In fact, I’m celebrating the fact that the number of permits taken out at the DNR is steadily rising along with infrastructure development and production — which is great news for our economic future in this part of the country.

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OOGEEP Trains 1,000 Firefighters for Oil & Gas Industry

Wednesday, May 15th, 2013 | 0 Comments

The Ohio Oil and Gas Energy Education Program (OOGEEP) firefighter training program reached a milestone recently when it trained its 1,000th firefighter to respond to an oilfield emergency.  Since 2000, firefighters from seven states have participated in the one-of-a-kind program which is funded entirely by revenues from Ohio’s oil and gas producers.

Source: OOGEEP

The training provides background information and practical guidelines to assist responders in communicating and evaluating a potential emergency site, and the capability to respond an unforeseen emergency.  OOGEEP even provide hands-on training including “live burns” utilizing crude oil and natural gas props.  One of the instructors for the program, Brent Gates, a Fire Chief and Ohio Certified Fire Instructor from New Concord, Ohio, explained the importance of hands-on training:

“This is by far one of the best training programs I have been involved in. The information and hands-on training we provide makes a difference to so many communities who are impacted by the development of oil and gas.”—Brent Gates

OOGEEP developed the training to prepare communities for possible emergencies and they believe the 13 year old program is part of the reason the state has a strong safety record in oil and natural gas production. OOGEEP’s executive director, Rhonda Reda, commented on the program’s success and how it could serve as a model for other states:

“Ohio citizens should be honored that many other energy producing regions have looked to Ohio as a model to set up similar safety programs in their respective states.”—Rhonda Reda

The training is endorsed by the Ohio Fire Chief’s Association, the Ohio Society of Fire Service Instructors and the Ohio Fire and Emergency Services Foundation.  The program provides each firefighter the opportunity to receive up to 12 CEU credit hours and an optional college graduate credit through Hocking College upon completion.

Charlie Dixon, lead fire instructor and OOGEEP’s safety and workforce administrator, explained how the program can benefit individual communities:

“Ohio has always been a leader in developing safety programs. While there have been very few natural gas and crude oil emergencies in Ohio, often times fire departments are often called to respond to non-emergency incidents simply because there is a lack of knowledge or unfamiliarity of equipment, standard practices, and advanced technologies used by Ohio’s industry. The fact is not all incidents reported are emergencies, and we are hopeful that this program will mitigate those types of reported incidents that could tie up community resources that may be needed elsewhere.”—Charlie Dixon

As Ohio’s oil and natural gas production increases its comforting knowing that innovative OOGEEP has already trained over 1,000 firefighters on how to handle unforeseen emergencies if they occur.  While incidents in Ohio’s oil and gas fields are rare, it’s comforting knowing that if an event occurs that the most courageous among us are armed with the best strategies and approaches in tackling this situation.

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Critics’ Concerns Over Pipelines Are Largely Unfounded

Tuesday, May 14th, 2013 | 1 Comment

As many of us in eastern Ohio have seen, there has been a tremendous amount of pipeline work happening in this portion of the state.  The pipelines are necessary due to the liquids-rich gas that the Utica Shale/Point Pleasant provides– liquids that include valuable products like butane, propane, ethane and pentane. These components are what make the Utica Shale so exciting, since they sell at a rate much higher than dry natural gas.  

In order to release these liquids from their gaseous state, the liquids must be processed at natural gas processing plants like the M3 project in Kensington and Scio, or the MarkWest plants in Cadiz and Noble County.  In order to deliver the “NGLs” to these facilities, companies in eastern Ohio have been putting in long hours to make sure the matrix of pipelines is able to handle the influx of liquids rich gas.  

In a recent Columbus Dispatch article, the reporter raised a few questions as to the safety and potential spills involved in these projects.  Of course, safety and the environment are two of the most important priorities within the oil and gas industry, and operators here in Ohio have gone to such great lengths to minimize impacts (remember, in the dozens of Utica wells in Ohio, there has not been a single environmental violation to date).

Moreover, the incidents to which the reporter referred were not what one would typically think of as “spills.” But before we get to that, it’s useful to provide a little background on pipeline construction.

In order to bore a pipeline under roads and waterways (which is actually the most environmentally friendly way to site a pipeline), a company must essentially use a directional drill rig.  As with all drill rigs, the operator must use drilling mud and drilling fluid to keep the bore moving along.  The drilling mud consists of 95 percent water and 5 percent bentonite clay.  The drilling mud helps wash away cuttings from the bore and eases the movement of the cutting head through the borehole.  Bentonite clay specifically forms a casing on the borehole walls, which prevents the drilling fluid from seeping out.  This is typically called a “filter cake,” making it the preferred drilling mud of operators.

In a few instances, however, this mud and water have made their way into a culvert or stream.  Unfortunately, when this happens, it can settle on top of aquatic life.  These spills are tightly regulated by the U.S. EPA — under the Clean Water Act, as per their Section 404 permits — and are remediated on the off chance that they do occur.  If a company fails to comply, it is also subject to stiff fines.  Thankfully, these spills are rare, do not consist of anything toxic, and do not threaten our drinking water supplies.

It should also be noted that this type of directional drilling is not unique to natural gas pipelines.  Utilities like water, sewer, electric, cable and telephone lines all use this type of practice to route themselves under roads, waterways and railroads. 

Pipelines in general — as with virtually any project — have a temporary construction phase.  Easements are excavated and the pipelines are laid.  Sections of pipeline may only take days to lay depending on the length of pipeline.  Once the pipeline is laid underground, the land is reclaimed and seeded — returning the ground to its natural state.  So when one argues that the pipelines are altering the countryside, these claims are by definition only looking at a snapshot in time — and they certainly aren’t including the fact that the reclamation and restoration is part of the process.

reclamation

Pipelines are nothing new to us in Ohio, or anywhere across the United States for that matter.  In fact, nearly 2.1 million miles of natural gas pipelines crisscross the country. To put that in perspective, if you laid 2.1 million miles of pipe end to end, you would have enough pipe to stretch to the moon and back — more than four times! Even more impressive? Most people couldn’t tell you where a pipeline is laid after it has been there for a couple months. Those targeting pipelines as some sort of eyesore are just looking for any reason possible to be against oil and gas development, no matter how silly their claims are. 

In terms of safety, pipelines are among the safest and most reliable form of transportation we have to deliver natural gas and natural gas liquids.  Even from the Columbus Dispatch article, a skeptic acknowledges that pipelines have also improved dramatically (“certainly better than they used to be,” according to a member of the group Carroll Concerned Citizens). Part of that improvement comes from what’s known as “inspection pigging,” which helps reduce leaks.

Inspection pigging is a process that cleans out pipelines while also performing a high tech inspection of pipelines from within.  When “pigging” a line, a device will travel through the pipeline and use two methods to gather information about the interior condition of the pipeline: magnetic flux leakage, and ultrasonics.  These methods send information back to the operator detailing thickness, imperfections, corrosion or possible leakage in the pipe.  With these real time details, pipeline operators know when and exactly where to replace pipe to ensure leakage is averted.  Pigging is done routinely throughout the life of the pipeline, keeping the chance of leakage to a minimum.

The bottom line? Pipelines are a necessary and proven way to transport our natural gas.  While we may see new pipelines being built, we know these rights of way will only be noticeable until the seeding on the ground begins to sprout, making the right of way disappear into the neighboring fields.  We also know they are safe, thanks in large part to innovations allowing companies to get real time information to ensure structural integrity. 

Pipelines are nothing new, and the folks who oppose oil and gas development still oppose it in all of its forms. Thankfully, the facts also remain the facts, and they still tell a completely different story than what opponents would have us believe.

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Marlington High School Trains Students for the Oil & Gas Industry

Tuesday, May 7th, 2013 | 0 Comments

UPDATE (5/7/13 11:00 am ET): In the six months since Energy In Depth’s first visit to Marlington High School‘s Gas and Oil Technology Program, the class has garnered statewide attention.  The flagship program led by instructor Bob Givens has received support from Governor John Kasich, hosted visits from big names in oil and gas, and even recently gave students a special opportunity with their local state representative.

For example, students met Representative Christina Hagan at an Ohio ACTE event at the statehouse earlier this year.  Hagan, a Marlington High School alum, told students she always wanted to learn how to operate a bulldozer, so the students invited her up to learn just that.  John Deere donated the class a bulldozer for two weeks, and Rep. Hagan returned to Marlington to learn from the students.  After a quick lesson, Hagan looked like a professional:

Givens explained that not only did students get to meet their state representative, but the experience gave them an opportunity to show that they understand the significance of what they’re learning.  He encourages the students to teach others so that in a future job interview, they can fully explain their experience and knowledge, both of which have been gained in and out of the classroom.  The students have visited well sites, trade shows, and welding facilities to get first hand experience, and two students were given the opportunity to job shadow on a well site for a full day.  Senior Alex Hatfield chatted with Energy In Depth about his experience:

“It’s big time…it shows me places to go, what opportunities there are. It’s going to help me big time in the future.” –Alex Hatfield (:37)

With Ohio’s shale industry growing rapidly, more jobs will need to be filled.  Students like those at Marlington High School are getting a jump start toward the opportunities changing the state’s economic landscape.

- Original Post from December 4, 2012 -

Throughout the past three months, Marlington High School in Alliance has caught the eye of Ohio media for leading the way in vocational education. To name a few, the Canton Repository, Akron Beacon Journal, Alliance Review, and Farm and Dairy have covered the school’s Gas and Oil Technology Program.  While many of the articles have focused on the senior class, EID was invited to visit the program’s junior class that will participate in the program a full two years.  12 juniors and 10 seniors enrolled in Ohio’s first oil and gas technology program.

Instructor Bob Givens explained that the program will give students a head start in the industry by learning basic mechanical training that used to be taught in now defunct shop classes. He highlighted the fact that students will learn to use tractors, trailers, loaders, hydraulic equipment like log splitters, and chainsaws; learn welding, piping, block laying, wiring, electrical work, and plumbing.

While some time with equipment is donated by local companies, Givens looks to rent equipment rather than purchase. Since technology changes so rapidly, he wants students to learn from new equipment and stay up to date.

Some students hope to get an entry-level job upon completion; others hope to receive college credit to use after graduation.  He stresses to his students how early in Ohio’s shale development we really are and the incredible opportunities it will bring through job creation:

They’re learning that this industry is not just a fly-by-night, it’s a long term, and they’re looking at all the different options of what the job opportunities might be—whether it’s transient movement with the rigs, or staying with a permanent job in a community with processing and the delivery of those products—Robert Given, Marlington High School Gas and Oil Technology Program (1:35)

Since this is a pilot program in collaboration with the Ohio Department of Education and Stark State College, grants will be needed to fund the program after its two year trial. Currently, Marlington High School itself funds the class.  Next year, they hope to expand the program providing open enrollment to neighboring schools and bringing on another teacher to fulfill needs.  This school year, the class plans to present to Governor Kasich’s Ohio Economic Education Summit and applied to present at the 2013 Legislative Seminar.

The program also aims to develop a curriculum that can be used in other school districts across Ohio.  Schools in Ohio, Pennsylvania, and West Virginia have inquired about Marlington’s program in hopes of starting their own.

The hands-on experiences using large equipment has given juniors Otha Loving and Darrian Nelson hope of finding jobs in the oil and gas industry or related fields. EID was able to bring them out of class for a few minutes to chat about their experience:

I thought it’d be a great opportunity to get a head start of everyone else who doesn’t have the experience we’re getting in the two years—Otha Loving, Marlington High School Gas & Oil Technology Program (:04)

After a year or two of learning the industry’s terminology, safety practices, mechanical basics, and operating and maintaining large equipment, Marlington High School’s students will be better prepared to take part in Ohio’s oil and gas revolution. These are great first steps towards ensuring a brighter, more prosperous future.

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Hickory Bend Investment Could Reach $1B

Thursday, May 2nd, 2013 | 0 Comments

As many have heard, an important project is underway in Springfield Township in southern Mahoning County:  $300 million is being spent on the Hickory Bend gas gathering and processing project, which is being developed by NiSource Midstream Services LLC and Hilcorp Energy’s joint venture, Pennant Midstream LLC.  NiSource is mainly responsible for infrastructure development and Hilcorp will work on exploration and production.  The project includes a $150 million cryogenic processing plant, and an additional $150 million in pipelines that will extend from western Pennsylvania to Mahoning and Columbiana counties in Ohio.

NiSource COO Chad Zamarin came to the Mahoning Valley this week to meet with local officials and reporters, revealing the project could see even more investment in the next few years:

“We believe our initial $300 million project has the potential over the next few years to be $1 billion worth of investment in this very footprint” —Chad Zamarin (NiSource Exec: $300M Gas Project Could Grow to $1B, 5/1/13)

You read that right — $1 billion. Foreseeing the need for more infrastructure, NiSource is preparing the site for future investment, as Zamarin explained:

“We’re developing an area that will allow for multiple plants to be sited. When we do come back and expand the location, it can be done at very little impact” —Chad Zamarin (NiSource Exec: $300M Gas Project Could Grow to $1B, 5/1/13)

He also stated that 200 local excavators, operating engineers, and laborers are preparing the site for the new plant. Translation: hundreds of new jobs. As work continues, he said the number of local contractors and members from the building trades could grow to around 1,000.  As the project grows, so will the need for workers:

“We’ve found an incredibly talented work force. The trades and the unions are working with us on training and development programs so that by the time we get ready to do work, the folks are ready to hit the ground running.” —Chad Zamarin (NiSource Exec: $300M Gas Project Could Grow to $1B, 5/1/13)

The cryogenic plant’s construction should begin in June. Zamarin said within 12 months, the plant should be installed and in service.  The plant will chill natural gas to separate wet gas from dry gas. The dry gas will then be pumped into natural gas lines, while the wet gas will go to a fractionation plant.

Of course, NiSource isn’t new to the Mahoning Valley, and the company will continue to operate as a good neighbor. They’ve already paved two roads in the area and, as a means of reducing emissions, will run the plant on electricity rather than diesel fuel.  Through Columbia Gas, of which NiSource is a parent company, Zamarin explained that the company’s pipelines “have been in this area for over 100 years.”

Projects like Hickory Bend show Ohio’s Utica Shale is not to be overlooked, and the local impact of development can be — and indeed typically is — quite significant. When a company is considering spending $1 billion in a concentrated area, other investment will no doubt follow. The communities benefit from increased revenue and economic activity, and all Ohioans benefit from a plethora of new jobs. More headlines like this are sure to come!

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Senator Portman Connects Job Seekers with Oil & Gas Jobs, Training

Monday, April 29th, 2013 | 1 Comment

The summer of 2013 is starting off strong in eastern Ohio. U.S. Senator Rob Portman’s office hosted an energy jobs fair this week in Youngstown, in partnership with the Ohio Oil & Gas Association and the Youngstown/Warren Regional Chamber of Commerce. More than two dozen companies and roughly 15 training centers and universities sent representatives to Youngstown to give Ohioans a chance at the incredible opportunities the oil and gas industry is bringing the state.  Several hundred eager applicants pre-registered for the jobs fair, with many additional folks expected to attend.

The morning began with Eric Planey, Vice-President of International Business Attraction at Youngstown/Warren Regional Chamber, who introduced the day’s host, Sen. Portman. The Senator addressed hundreds of attendees, telling them he has faith in the area and the opportunities coming to Ohio because of shale development:

“I believe in the Valley, the Valley is coming back, and oil and gas is going to be a part of it.” –U.S. Senator Rob Portman

 

Senator Rob Portman addresses the crowd of job seekers early on Monday.

Companies like Chesapeake Energy, MarkWest Energy Partners MS Consultants, V & M Star, and Plumbers and Pipefitters 396 offered “Skilled workforce opportunities,”  which include pipeline welders, engineers, maintenance technicians, plant operators, electricians, millwrights, CAD drafters, designers, mechanical estimators, and surveyors.

Meanwhile, “general workforce opportunities” were provided by companies such as Dominion, Halliburton, Ohio Cat, and U.S. Steel.  These types of openings include entry level jobs to operate water pumping stations, technical and well operators, drivers, equipment operators, derrickmen, business planners, dispatchers, and sales/operations management.

Lastly, universities and colleges such as Youngstown State University, Stark State College, Eastern Gateway Community College, Zane State College, and Belmont College were giving information on degree programs and workforce training offerings.  Technical centers like ITT Technical Institute, Diplomatic Protection Training Institute, New Castle School of Trades, Trumbull Career & Technical Center, and Columbiana County Career and Technical Center were giving information on (and signing applicants up for) technical training programs that prepare individuals for specific oil and gas industry jobs.

Senator Rob Portman speaks with a representative from Eastern Gateway Community College on their shale gas training programs at Monday’s jobs fair.

While Energy In Depth has attended multiple oil and gas job fairs since shale development has begun to revitalize the state, today’s job fair demonstrated once again that elected officials and business development agencies are fully behind the industry.  Ohio’s recent economic success is new to many, especially with much of the state being plagued by the recession and economic stagnation. But as a glimmer of hope, shale development is providing thousands of jobs across the state, and companies are looking to invest in the Ohio workforce for generations to come.

Today the job fair saw individuals from all walks of life looking to get their foot in the door. Veterans, students, former steel workers, and many others — all looking for a better opportunity.  As production continues to ramp up in the Buckeye State, more opportunities will certainly be available for Ohio’s eager workforce.

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UPDATE: OSU Student Networking Event Draws Big Names in Shale

Friday, April 26th, 2013 | 1 Comment

UPDATE (4/26/13 9:00 am ET): It appears the Buckeye Shale Energy Organization‘s networking has paid off.  At a school of more than 43,000 undergraduate students, the Ohio State University student group was named the 2013 Outstanding New Organization Award.  Ohio State facilitates more than 1,000 student groups, and BSEO stood out this year for its achievements in educating fellow students about oil and gas and networking with some of the biggest names in the industry.

BSEO’s President and outgoing senior, Vince Melillo, told Energy In Depth how the award shows the recognition shale is getting throughout the state:

“Members of the BSEO are ecstatic to be recognized by the university. In creating this organization, we realized the potential impact the shale industry would have in our beloved state. It is nice to know that Ohio State acknowledges the same fact.” –Vince Melillo

Last year, Vince wrote a blog post for Energy In Depth on his wish to stay in Ohio by getting a good job in the oil and gas industry.  Now, he can say that wish came true.  He recently accepted the position of Project Engineer with Marathon here in Ohio:

“Not only was I excited to be offered a job from a renowned company such as Marathon, but I am thrilled to be able to stay in my home state. As we travel in to the future of the shale energy industry in Ohio, I expect more and more students to be able to do the same.” –Vince Melillo

While we can report Ohio has created more than 38,000 jobs related to shale development, Vince’s news shows just how important the industry is to the Buckeye State:  He was eager to remain in the state he calls home, and without this industry he likely would have been forced to leave.  Now, with the incredible opportunities the oil and gas industry has brought to our state, college graduates and technical students are not only finding good jobs, but they’re finding those jobs in the state they love.

–-Original post from November 9, 2012—

This week EID traveled to Columbus to attend Buckeye Shale Energy Organization’s (BSEO) Second Annual Shale Energy Student-Industry Networking Event.  The event was in partnership with Ohio State’s Subsurface Energy Resource Center, Buckeye STEPS, and University Clean Energy Alliance of Ohio.  Not a job fair, the event was meant to facilitate dialog between Engineering and Geoscience students from Ohio universities and representatives from Ohio’s oil and gas industry.  Students were given the opportunity to network with more than 20 companies that are leading the way in Ohio’s shale industry.  Not only were production companies in attendance, but also companies involved in the growing supply chain for the industry.

Yesterday’s event was an example of BSEO’s continued efforts in outreach to the industry, as well as other students.  The group, comprised of students in engineering and geology, is led by Dr. Jeff Daniels of OSU’s School of Earth Sciences and aims to educate interested students on the vast opportunities shale development offers and to connect dedicated students with interested employers.  At a past meeting, Dr. Daniels also emphasized that while the students are promoting the incredible potential that lies in the Utica Shale, they are also promoting the safe practices used by oil and gas developers to extract those resources.

Dr. Daniels stepped out of the event to chat with EID about the group and its purpose:

I’m the advisor to the Buckeye Shale Energy Organization, which is a group of students primarily engineering students who are interested in shale industry and really working with industry and looking at the various aspects of energy and the environment for the shale—Dr. Jeff Daniels, Ohio State University (:19)

The networking event drew many of  Ohio’s oil and gas developers including BP, Halliburton, and Chesapeake and companies involved in Ohio’s shale development including Kokosing, Shaw Environmental, and Excalibur Machine.

BSEO’s co-founder and President Vince Melillo took time away from the event to chat with EID about the group’s unique event and opportunity:

What we’re doing is essentially gathering up people who are from our state who want to stay here and make Ohio into a great oil and gas producer—Vince Melillo, President, Buckeye Shale Energy Organization (:50)

BSEO’s Treasurer and cofounder, Alex Sava, is a fifth-year engineering student interested in the growing shale play.  He’s confident he and fellow students will graduate to many opportunities in the oil and gas industry:

I think there are a lot of great opportunities coming from Ohio, western PA, all around here. Students are going to have a lot of job opportunities from these companies—Alex Sava, Buckeye Shale Energy Organization (:20)

Overall, BSEO put on a great event, making themselves known to industry leaders and putting them in a position to hopefully work alongside them soon.  These students understand the incredible opportunities coming to Ohio from shale development, and plan to take full advantage.

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UPDATE: Shale Development Bringing Investment Across Ohio River Valley

Monday, April 22nd, 2013 | 0 Comments

UPDATE II ( 1:13 p.m. ET; Apr. 22, 2013) – Ohio is getting closer to having a vast network of midstream operations in place.  The Utica East Ohio cryogenic plant in Columbiana County is being built at a rapid pace.  Until plants like these come online, production at many natural gas wells across the state is being held back.

George Fransisco, executive vice president of M3 Midstream, recently explained how the projects construction will aid in realizing the Utica’s bigger picture:

“A lot of us are working as fast and fierce as we can to get our plants up and running. Once that’s done wells can flow at unrestricted rates, so we’ll see more of what the play entails”–George Fransisco (Cryogenic Processing Plant Takes Shape in Kensington, 4/19/13)

The Kensington plant, part of the $900 million investment by Utica East Ohio, should have their first phase ready to process natural gas liquids by June.   Baron John, construction coordinator for the Kensington project, says things are on schedule:

“We’re a little over halfway finished with the first phase. We’re keeping on schedule and want to commission sections of the plant so we can get gas flowing”–John Baron (Cryogenic Processing Plant Takes Shape in Kensington, 4/19/13)

Baron explained 300 to 350 workers are currently on site, backing up the claim that shale development is aiding in a construction industry revitalization.  Also a part of the Utica East Ohio project is the fractionation plant 50 miles south in Harrison County, which employs hundreds more construction workers.

The construction is also supporting regional companies.  While many of the components are prefabricated offsite, UEO is also using suppliers in Ohio.  Pioneer Pipe/Viking Fabricators Inc. out of Marietta supplied structural steel for the project and Exterran‘s new plant in the Mahoning Valley will likely supply additional components.

UPDATE (03/07/13 6:00 am ET): Ohio may be seeing more midstream facilities in the coming year.  At a conference last year, information surfaced pointing to Kinder Morgan building a processing plant.  According to the Akron Beacon Journal, company spokesman Richard Wheatley said Kinder Morgan is looking at Ohio’s Tuscarawas County for the facility, but nothing has been confirmed.  While this is only speculation, it is positive to hear the company is considering Ohio locations.  Another company, EV Energy Partners, who are active in the state, mentioned Kinder Morgan’s project during its earnings call last week.

Kinder Morgan is the largest midstream and the third largest energy company in the North America.  Between its four publicly traded entities, it owns or operates 75,000 miles of pipeline and 180 terminals, totaling $100 billion.

The proposed Kinder Morgan project would include a natural gas processing plant meant to handle up to 300 million cubic feet of natural gas per day and a fractionation plant to handle up to 48 million barrels of natural gas liquids a day.

Word of the continent’s largest midstream company coming to Ohio is excellent news.  Not only would Tuscarawas and the state benefit from job creation, but also facilities allowing producers to continue developing Ohio’s Utica Shale.  The project would join five other gas processing plants in the works in eastern Ohio.

–Original post from February 20, 2013–

Communities across Appalachia are seeing new jobs and incredible investment stemming from a new influx of oil and natural gas related operations. As  the development of the Marcellus and Utica/Point Pleasant Shale formations continues to expand,  new projects –  like the recently announced processing and polyethylene manufacturing plants – are coming online to create marketable products from the incredible amount of natural gas being produced in the region.

In Ohio, the construction of a cryogenic plant will begin later in 2013 in Leesville . The plant is expected to bring  hundreds of construction jobs and 25 to 30 permanent jobs once it goes online in June of 2014.  The plant is part of a project containing another cryogenic plant in Kensington in Columbiana County and a fractionation facility in Scio in Harrison County.  The project is a joint venture of M3 Midstream, Access Midstream, and EnerVest Energy Partners.  Cryogenic processing facilities subject natural gas to low temperatures and recover more than 90 percent of natural gas liquids (NGLs). Once the Kensington and Leesville facilities have completed that process, the NGLs will be piped to the Scio fractionation facility which should come online in June of this year.

The Leesville facility will be part of the Utica East Ohio Buckeye complex, where the three partners are making an initial investment of $900 million.  Ground is expected to be broken in late summer or early fall of this year.  The location was chosen because they needed one cryogenic location in the north and one in the south.  The plant was originally to be constructed in Scio, but the partners recently signed an agreement with Dominion East Ohio Gas, giving them access to their pipelines.  Leesville made sense because the location is close to the pipelines.

George Francisco, executive vice president of M3, explained how the location benefits the companies in a recent interview with the Canton Repository.

It’s strategic for us. It extends our footprint to the south, and it enhances the efficiency of our overall system to have two plants at either end—(Plant construction to create jobs in Leesville, 2/19/13)

The move – and the jobs that come with it – is welcome news to the residents of Leesville, including  Mayor Ed Alsept.

I’m all for it. We need growth in this area. If we get 20 to 30 jobs, that’s a good thing. (Plant construction to create jobs in Leesville, 2/19/13)

Not only is the plant bringing jobs to Leesville and Carroll County, but also opportunities for infrastructure.  The village is currently trying to build sanitary sewer system. Since the plant would mean more customers for the sewer system, prices should be lower for residents.

I’ve heard they would need infrastructure run up there. I’ve talked with our engineering firm, and we would have the capacity to take that—(Plant construction to create jobs in Leesville, 2/19/13)

Since the plant would mean more customers for the sewer system, prices should be lower for residents in yet another example of the far-reaching benefits shale development is bringing to the area.

It’s good news that we’re getting a Midstream plant in the county, such as water and sewer. These are good-paying jobs, and they should all become local jobs. - Amy Rutledge, director of the Carroll County Chamber of Commerce (Plant construction to create jobs in Leesville,2/19/13)

Just over the river in West Virginia, Appalachian Resins Inc. announced they are seeking to place a polyethylene (PE) manufacturing plant at with a targeted construction date in late 2013.  The plant, which will be located south of Wheeling, is being created to take advantage of the resources in the Marcellus and Utica/Point Pleasant formations. Included in their plans is the construction of a small cracker plant, a project that will bring additional construction jobs along with the ability to “crack” ethane, crude and liquids coming from the area’s shale production to extract ethylene.

The Appalachian Resins Inc. project will bring $500 million dollars in investment, with the plant being designed to hold the capacity to produce 500 million pounds of PE per year. This feedstock, the most widely used plastic in the world, is used to create some of the most common, everyday items we use in our lives. Plastic bottles,  cling wrap, kitchen utensils  and plastic bags – all are polyethylene products.

James Cutler, the company’s CEO, explained how the vast resources in shale formations across the Appalachian Basin have redefined the refining and petrochemical industries to the  Marcellus Drilling News:

In the 1960s, the petrochemical industry was an extension of the refining industry, and the decision was made to build petrochemical plants on the Gulf Coast, because that’s where the feedstocks were. But now people don’t know what to do with all this natural gas — there’s no shortage of it. – James Cutler, CEO Appalachian Resins Inc. (“Small” Ethane Cracker Plant Coming to Wheeling, WV, 2/16/13)

In addition to increasing the company’s ability to produce a valuable, widely utilized commodity at lower cost (thanks, of course, to the geological gifts the region offers) the plant will bring hundreds of construction jobs, and create up to 125 full-time jobs to West Virginia. That’s always welcome news to any community.

Along the Ohio River, communities across the banks have new cause to celebrate. And, as we’ve noted here before, we are still only scratching the surface of the incredible potential of these vast natural resources. As Rhonda Reda, Executive Director of the recently noted, the billions of dollars of investments, and the thousands of jobs created are only “a glimpse” of what is to come in the years ahead. As our infrastructure and production continue to expand, so too will our pillar industries. This, of course, bring more investment, and more jobs.

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Top Ohio Oil & Gas Regulator Lauds State Regulation

Thursday, April 18th, 2013 | 1 Comment

This week, Rick Simmers, Chief of the Ohio Department of Natural Resources — Division of Oil & Gas Resources, traveled to Washington, DC, to explain to the U.S. House Natural Resources Committee that Ohio’s hydraulic fracturing and Class II injection well program is properly regulated by the state — and has a track record to prove it.  As Energy In Depth has extensively covered, Ohio imposes more stringent regulation than even the federal EPA, which has jurisdiction over injection wells.  When the state improved their oversight with Senate Bill 315, existing regulation was already lauded by STRONGER, an EPA-supported review group composed of state regulators and other experts.

Simmers told the committee that his inspectors can enforce regulation properly because they live in operating areas and can reach emergencies and inspections quickly.  He said Ohio has issued 596 permits for horizontal development in the Utica Shale, and of those, 293 have been drilled and 81 and have been completed.  He said their team of fifty field inspectors is doing a great job and can hire more if needed:

“We welcome any review of our program because we’re doing a great job. We are both better suited and better situated to run this program than the federal EPA.” —Rick Simmers (Official testifies on Ohio fracking oversight, 4/17/13)

When the D&L Energy and Hardrock Excavating incidents were brought up during the testimony, Simmers explained they could be used as an example of ODNR doing its job:

“If it was not for the on-the-ground efforts of ODNR’s oil and gas inspectors, this criminal and environmentally threatening illegal activity of dumping oilfield waste directly into the Mahoning River could still be occurring. Only with the proper resources and experienced staff could this type of action have been executed so swiftly.” —Rick Simmers (Official testifies on Ohio fracking oversight, 4/17/13)

Without proper research, some would disagree Ohio is doing a great job.  An out-of-state reporter from ShaleReporter.com — part of the Beaver County Times – claimed that Ohio is essentially a disaster zone with little to no regulatory oversight:

“Despite a history marked with fracking catastrophes, Ohio still wants to retain oversight of its hydraulic fracturing and wastewater disposal industry.” –Rachel Morgan (Ohio tells feds: Stay off fracking, 4/18/13)

Ohio has no history of “fracking catastrophes” — convenient how the specific examples of incidents from fracking were omitted, isn’t it? — and that’s due to strong state oversight. Morgan instead focuses on the dubious fracking-earthquake nexus that she tried to invent a few months ago, citing a handful of specific events instead of the thousands upon thousands of wells that have operated without incident. But why would an actual reporter bother with such details?

For the sake of discussion, however, let’s now look at just how stringent Ohio’s regulation of oil and gas truly is, contrary to the narrative that ShaleReporter.com wants us all to believe.

Energy In Depth has made many comparisons between ODNR’s regulation and the federal regulation it bests.  Since Ohio received primacy of the UIC program in 1983, over 200 million barrels of brine have been processed without a single case of groundwater contamination. Environmentalists recently expressed a desire for oversight by the federal government, which means they are ironically pushing for more lax regulation (albeit with an EPA they feel they can manipulate much more easily). Here are some examples of how ODNR’s rules are more stringent than the federal EPA’s:

Comparison of Ohio’s Class II Brine Injection Regulations with USEPA Regulations
Ohio Division of Oil & Gas Resources Management United States Environmental Protection Agency
Unannounced inspections, on average, every 11-12 weeks. One inspection done per well each year by EPA consultant.
Continuous mechanical integrity monitoring or monthly mini-tests to demonstrate continuous mechanical integrity. Demonstration of mechanical integrity at least once every five years.
Injection volumes greater than 200 barrels per day require a ½-mile area of review of all other wells. Less than 200 barrels per day is a ¼-mile radius. All Class II wells shall be cased and cemented to prevent movement of fluids into or between underground sources of drinking water.
ODNR has the authority to require seismic testing and monitoring. Federal code does not specifically address seismic testing and monitoring.

 

As far as well casing standards, Ohio leads the nation in well construction regulation, boasting 54 standards in place:

 

 

It’s encouraging to see Ohio’s top oil and gas regulator lauding the state’s well researched legislation and regulation.  Ohio’s laws exceed those of the federal government for a reason. The state needs inspections, safety, and rules to insure our resources are developed properly and our economic revitalization continues, and the data prove that the state is meeting that challenge.

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