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Thursday, May 31, 2012

UPDATE: Chesapeake Withdraws Oil & Gas Lease Offer for Carrollton Property

UPDATE:  The Free Press Standard has also posted an article about this situation.  Read the entire article here, but this is an excerpt:
The decision to lease village owned property has been a treacherous path. Council members held special meetings to discuss options and have voiced fears of contamination to the water fields. Council quickly passed a restrictive ordinance regarding adult cabarets within village limits and has had residents speak of man-camps and excessive traffic.
Original report:

From the Times Reporter:
An offer by Chesapeake Energy Corp. for oil and gas drilling rights on property owned by the village has been taken off the table. 
The Oklahoma-based company in April had offered the village $5,800 per acre with an additional income of 20 percent of the gross for oil and gas rights for 275 acres of village property. 
However, Finance Committee Chairman Don Locke told village council members Tuesday that the offer no longer was available to them.  Locke said he had no additional information on why the offer had been withdrawn. 
Contacted Wednesday afternoon, a Chesapeake spokesperson said the company would have no comment on its decision. 
Locke added that Rex Energy was offering the village $3,500 per acre and 20 percent of the gross and is interested in 267 of the 275 total acres available. A total of 223 of those acres are at the village’s water well site. A no-drill clause is included for the water well properties.  
Read the rest of the article here.

That's only a $660,500 difference in lease signing bonus money.  Chump change, right?

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UPDATE WITH VIDEO: Carroll County Economic Director Speaks at Ohio University Conference

UPDATE:  Energy in Depth has posted an article about this conference, with video of Glenn Enslen speaking about the impact of shale drilling in Carroll County.  View the article here.  The videos can be seen below.







Original article from 5/24/12:

Sierra Club Wants to Destroy Natural Gas, No Matter How Much it Costs the Rest of Us

Use renewables as much as we can. Natural gas is the next-cleanest fuel, then we have oil and then we have coal… We’re trying to make sure that we innovatively and creatively use whatever fuel we burn (and) that we rely primarily on the fuels that are the cleanest… And, among the fossil fuels, natural gas is at the top.
Those are the words of former Sierra Club executive director Carl Pope in 2008, back when the Sierra Club supported natural gas as an alternative energy source.  In fact, the Sierra Club accepted more than $25 million from Chesapeake Energy back in those days to help fund the Club's Beyond Coal campaign.


Nowadays the Sierra Club is singing a different tune.  In fact, they have organized a "Beyond Natural Gas" campaign which they clearly hope will push natural gas companies to the brink of extinction in the same way that nuclear power and the coal industry have been impacted by similar Sierra Club efforts in the past.


Why the shift in agenda?  From the Wall Street Journal:

So why is the Sierra Club suddenly portraying natural gas as a villain? The answer surely is the industry's drilling success. The greens were happy to support natural gas as a "bridge fuel to the 21st century" when it cost $8 or more per million BTUs and seemed to be in limited domestic supply. 
But now that the hydraulic fracturing and shale revolution has sent gas prices down to $2.50, the lobby fears natural gas will come to dominate U.S. energy production. At that price, the Sierra Club's Valhalla of wind, solar and biofuel power may never be competitive. So the green left has decided it must do everything it can to reduce the supply of gas and keep its price as high as possible. 
The losers if this effort succeeds would be the millions of Americans who are benefitting from the shale boom. Shale gas supports some 600,000 jobs in the natural gas industry, according to an analysis by the consulting firm IHS Global Insight. That's almost eight times more jobs than are employed by the wind industry. 
But the losers would also include electricity consumers paying lower prices at home; the steel workers in Youngstown, Ohio who have been rehired to make pipe for gas drillers in the Marcellus Shale; and the thousands of high-paying jobs in chemicals, fertilizer and other manufacturing that is returning to the U.S. because natural gas prices are so much lower. 
The Sierra Club campaign underscores that the modern green agenda is about far more than clean air and water and protecting wildlife. The real goal is to ban all fossil fuels—regardless of economic cost. It's hard to imagine a campaign that poses a greater threat to the U.S. economy, energy security and American health.

Read the rest of that article here.

So we have deep-pocketed environmentalist organizations funding movements to destroy the gas supply chain that is enabling homeowners to enjoy lower energy costs as well as providing employment to thousands and thousands of workers, after previously supporting the shift to natural gas because it is the cleanest practical energy solution available.  Wonderful.

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Wednesday, May 30, 2012

As Don't Frack Ohio's Big Day Nears, EID Also Sends a Message to Ohioans

Josh Fox, Mark Ruffalo, and other fracktivists are preparing to converge on Ohio in an attempt to stop fracking in the state.  They invite others who share their fears over fracking to join them in their protest:
Dear friends–The fracking industry has been causing earthquakes in Ohio. So it’s time we caused one of our own. 
No, not a 4.0-on-the-Richter-scale temblor like the one that shook Youngstown on New Year’s Eve. Instead, we need to aim for an 8.0 on the political scale–we need to shake Columbus with the biggest anti-fracking gathering yet seen in the U.S.Save these dates: June 14-17, in Columbus. 
The 14-16th will be dedicated to training and movement building, and on the 17th we’ll be taking over the Ohio statehouse for a people’s assembly that will ‘pass’ legislation that Ohioans need to stop this destructive practice. You can sign up here, but we need you to do more–please spread the word to friends and colleagues. And get ready for the caravan that will cross the state in mid-May to raise awareness – we’ll have much more on that front soon.
Read the rest of their "call to action" here.

In response, Energy in Depth has something to say about Josh Fox in particular taking such an interest in Ohio, as he has other states where fracking has taken place, and what kind of effect his activist activities have had on his career and finances.
Western Pennsylvania/eastern Ohio has always been a blue collar region. A region I’m proud to call home. Born from the toil of its tempered inhabitants are the steel industry, which built our cities… the coal industry, which for decades has kept the lights on for millions of Americans… and the oil and gas industry, which perhaps more than anything else is responsible for the comfortable standard of living that society enjoys today. It’s a region that’s not afraid to roll up its sleeves and get to work. A region that has little use for excuses, and much use for rolling up sleeves and getting the job done. Mother Nature provides us what we need to survive, but has little sympathy for those who refuse to help themselves. 
When the Marcellus Shale came to town, it was greeted with open arms. An outpatient, non-invasive alternative to the neck to navel open heart surgery that is the coal mining that we’ve long since become accustomed to. Five to eight acres of surface disturbance can drain 1,200 acres of gas, as opposed to 1,200 acres of disturbance to reach 1,200 acres of coal via surface mining. This Marcellus gas burns much cleaner than coal, and places where coal couldn’t burn…in cars, trucks, and buses. It was cheap, it was clean, and it was ours – and in such abundance that the decades old dream of energy independence and the shackles it shed were no longer a dream, but an inevitability. 
But you don’t just discover you’re sitting on the second largest energy field in the world without garnering some attention. And in today’s world, attention is a marketable commodity. Enter Josh Fox. Fox, an unknown theater director from New York City, with no knowledge whatsoever of the natural gas industry, saw an opportunity to spin Marcellus mania to his gain. In the information vacuum that existed in the first years of development, Fox jumped in head first. Facts and truth meant little, while sensationalism and outright fabrication ruled the day in the early stages of Marcellus development. 
Fox’s home spun “documentary” was just that: sensationalism and outright fabrication. He peddled his wares and found a buyer. The Park Foundation, a huge endowment which has spent millions to try to ban hydraulic fracturing, has subsidized him beyond his wildest dreams. HBO coughed up a sweet $750,000 to Fox for Gasland 2. Fox even charges $7,500 to college kids to show up and speak at their school (not counting first class airfare to and from New York City). Fox went from unknown starving artist to a big bankroll celebrity activist almost overnight, and why quit a gig that pays like that, right?
Read the rest of that article here.

So, what do you think?  Why does Josh Fox care about protesting fracking in Ohio - because he loves the people who live here so much, or because keeping out at the forefront of the fracking debate is the best way to keep his checks rolling in?

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More Testing of Water Determines No Contamination from Marcellus Shale Operations

From Chesapeake:
The Environmental Protection Agency (EPA) is currently conducting a national study to determine if hydraulic fracturing has any impact on drinking water sources. As part of a larger study, the EPA is conducting five focused retrospective studies in separate areas across the country including Bradford County, Pennsylvania. 
Samples were taken in Bradford County during the study’s first round of sampling in October and November 2011. In a collaborative effort, Chesapeake Energy Corporation consultants collected split samples with the EPA from 15 individual drinking water sources for analysis by accredited laboratories. Chesapeake then commissioned WESTON Solutions, Inc. to critically evaluate the results and compare them with more than 4,000 historic and baseline groundwater samples in the area. Approximately 310 of these samples came from the United States Geologic Survey’s public databases and predate any Marcellus Shale natural gas development activity in the area. Based on the data evaluated, WESTON has concluded these drinking water sources have not been impacted by Marcellus Shale natural gas development activity – including hydraulic fracturing.
View the findings from WESTON Solutions by clicking here.

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Will Someone Take a Chance on Chesapeake?

From Businessweek:
Chesapeake Energy Corp. (CHK) (CHK)’s depressed valuation is making the company a potential target for acquirers willing to bet that natural-gas prices will rebound from a decade low. 
Chesapeake’s equity and net debt are valued at $9.19 for each barrel of oil equivalent, the lowest among U.S. oil and gas explorers with market capitalizations greater than $5 billion, according to data compiled by Bloomberg. While a stock purchase by Carl Icahn helped the $11 billion company’s shares rebound in the past week, Chesapeake is still down 27 percent (CHK) in 2012 amid investigations into Chief Executive Officer Aubrey McClendon’s personal loans backed by stakes in company-operated wells. 
The second-largest U.S. natural-gas producer said it may face a cash shortfall as early as next year after prices for natural gas, which accounts for 83 percent (CHK) of its reserves, reached a 10-year low last month. While a buyer would have to cope with seven joint ventures and $13.1 billion of debt, Exxon (XOM) (XOM) Mobil Corp. and Chevron Corp. (CVX) (CVX) may see a chance to scoop up the largest holder of onshore drilling leases before gas prices rebound, said SunTrust Robinson Humphrey Inc. Royal Dutch Shell Plc (RDSA) may also be interested, said Huntington Asset Advisors Inc. 
“For any of the major integrated oil companies that want to pick up reserves on the cheap, this would be a good one,” said Peter Sorrentino, who helps oversee $14.7 billion at Huntington in Cincinnati. Chesapeake and other gas producers will be “worth a whole lot more than they are today. We’ll look back on this and say, ‘Wow, this was really an opportunity.’ There may be some people that end up kicking themselves.” 
Chesapeake “had a bit of a drama around it,” he said. “But that doesn’t change the fact that these are very desirable assets.”
Read the rest of the article here.

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Rex Energy Completes Drilling on Brace Well in Carroll County

From Yahoo:
Rex Energy said it has completed drilling its first Ohio Utica well, the Brace #1H, located in Carroll County. The well encountered approximately 135 feet of Point Pleasant formation and approximately143 feet of overlying Utica Shale formation. The vertical hole was plugged back and the well was drilled to a total measured depth of 12,332 feet with a lateral length of approximately 4,170 feet. Fracture stimulation is currently scheduled for June. 
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Tuesday, May 29, 2012

Icahn Drops the Hammer on Chesapeake

As we reported recently, investor Carl Icahn has taken a significant stake in Chesapeake.  Reports say that he is now the third-largest Chesapeake shareholder.

On Friday, Icahn let Chesapeake know what was on his mind:
May 25, 2012 
Ladies and Gentlemen: 
The past several weeks have proved a difficult time for shareholders of Chesapeake Energy. The basic function of a board is to oversee management and to hold it accountable. We believe the board has failed this duty in a dramatic fashion. Rather than act as a source of stability and provide assurance to shareholders, this board has led the company through a highly publicized spate of corporate governance breakdowns while amassing an astounding $16 billion funding gap, which we believe has contributed to the share price decline of over 55% from the 52-week high. 
We are not alone in criticizing this board. Shareholders have filed lawsuits, withhold campaigns and have otherwise voiced disapproval and all three major proxy advisory firms (i.e., ISS, Glass, Lewis and Egan-Jones) have advised shareholders to withhold votes from directors at the 2012 annual meeting. Chesapeake shareholders will benefit neither from a constant stream of negative news reflecting upon the companies troubled past, nor from a half hearted attempt by the board to make the minimum possible number of changes to skate by for one more year. The board must not only find a way to eliminate the enormous funding gap, but also the more substantial creditability gap. 

EID Calls Fracktivists' Mission "A Love Affair With Fear"

From Energy in Depth:
If Orson Welles and War of the Worlds taught us anything, it is that Americans have a love affair with the mysteries of the unknown.  Generating hysteria regarding the unfamiliar just isn’t that difficult because we’re all vulnerable.  It is, in fact, one of our favorite pastimes and even basic science such as hydraulic fracturing, that’s been around for 60 years, can serve as the fodder for fear mongering when people are unaware of the basic facts. 
I’m sure cave men somehow communicated to their young their own fears of what was beyond beyond the cave entrance. That was wise back then, as we were not necessarily the top of the food chain. Our primordial ancestors probably used hand gestures, a primitive language of grunts and groans and crude wall paintings to instill a proper fear of the outside world.  Plato even wrote about this
Today, thousands of years later, we see the same tactics. Why?  It worked then, and still works today.  Books have been written exposing the ways of fear and how clever people incite it as a method of implementing their own agendas.  Yet, fear is not all bad.  As parents, we use stories from our past to teach lessons based on past mistakes and explain to others what to fear in the real world.  We try to balance it, however, with the exercise of prudence and reason. One of the main lessons I was taught, for example, relies on just three words; verify,verify and verify. Get to the truth without causing alarm by verifying the facts.  Don’t speculate, which only causes paralysis, but, rather, investigate and determine the facts.
Read the rest of the article here.

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What's Going on in Carroll County?

Rumors and rumblings are being heard from various directions that the shale boom in Carroll County is slowing to a crawl.  Why did Select Energy pull out of the Commerce Park project and head to Tuscarawas County?  Is Rex Energy abandoning the area?  Will Chesapeake's money problems cause them to pull back?  Are all of the workers gradually leaving?  What does it mean for the area?

The statements from Chesapeake and what we can see with our own eyes don't seem to completely mesh up.  What are you hearing and seeing as far as the drilling activity is concerned?  Share your observations and thoughts in the comments!

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University at Buffalo Now Completely Backing Away From Shale Impact Study

We've previously referenced the report by the University at Buffalo which looked at the environmental impact of shale development both here and here.

Now, the latest from the Washington Times:
Faced with mounting criticism, the State University of New York at Buffalo is distancing itself from a Marcellus Shale gas-drilling study released earlier this month by the school’s own Shale Resources and Society Institute. 
But the report’s lead author is defending the work by the fledgling institute, saying Monday that it’s being mischaracterized by environmental activists who oppose any additional domestic fossil-fuel production. 
“I stand by the work,” said Timothy ConsidineUniversity of Wyoming professor and one of three researchers who penned the institute’s survey, adding that he and his colleagues aren’t at all surprised by the green backlash it has generated. 
“This whole debate [about fracking] has been so polarized,” he said. 
Released earlier this month, the report concludes that Pennsylvania regulators have done an effective job cutting down on environmental incidents within the state’s burgeoning natural-gas industry, a sector driven almost entirelyby hydraulic fracturing, or fracking, the controversial practice of using water, sand and chemicals to crack deep underground rock and release huge quantities of natural gas.
Read the entire article here.

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Monday, May 28, 2012

Concerns Over Ohio's New Fracking Regulations

From the Toledo Blade:
State Rep. Bob Hagan, a Youngstown Democrat, compared Ohio's fracking legislation to a "runaway locomotive." He was one of several House members who tried unsuccessfully to stop the bill approved by state lawmakers this week. 
Many Ohioans are ambivalent about that speeding train and about how the rush by state leaders to accommodate oil and gas drillers could come at the public's expense. General awareness of the oil industry's accelerated interest in Ohio's natural resources is limited to what is projected about new jobs and economic revival. 
That's how big money, behind the move to drill in areas of the state rich in Utica and Marcellus shale, effectively framed the fracking issue to Ohioans. The ploy worked brilliantly. 
With voters fixated on the economy, politicians who might otherwise balk at the audacious demands of drillers -- no severance tax, guarded disclosure of drilling fluids, no citizen appeal of drilling permits -- caved in. Proceed at any cost. 
Voices that urged environmental precaution, more transparency, greater citizen input into drilling decisions, and stricter regulation and inspection never had a chance against industry giants. The abiding influence of powerful oil and gas companies to shape driller-friendly policy in the state, starting with Gov. John Kasich's administration, overwhelmed opponents. 
"It's about control," conceded Mr. Hagan, whose district experienced an earthquake on New Year's Eve that has been linked to a wastewater injection well near a fault line. 
"We are really at the epicenter of the [drilling] discussion itself," he told me. But it's tough to get the prodrilling crowd to debate or even talk about community concerns, he said. 
"Kowtowing politicians are still doing whatever they can to protect the industry," said the frustrated lawmaker.
Read the rest of the article here.

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Energy in Depth Takes Another Look at Dimock

From Energy in Depth:

As we arrived at Carter Road I had an excited feeling. This is it. I finally get to see what all the hype has been about, i told myself.  I prepared for the worst because, where I’m from Dimock and the term “wasteland” tend to be synonymous. While I knew much of what I had read in the news had already been refuted by science and water testing, I think I still expected to see some hint of truth on that famous stretch of road. I was happy to learn there was none. 
As I passed the Sautner’s house all I could see were dozens of anti natural gas signs, dirty looks shot my way and reporters. This was the only hint of discontent; the only marring of a sleepy road that has been given an undo spotlight by the world. 
One of these signs (see below) especially caught my eye. It was a “For Sale” sign on the Sautner property in the amount of $5,000,000! I’ve heard stories of price gouging in the media, but that about takes the cake. This family has already been offered twice the value of their home, and yet they have continuously asked for money over clean water. That sign was a real eye opener to what is really going on in an otherwise quiet town.  It was obviously intended as some form of sarcasm, but it still provides insight into what this ongoing discussion is all about. 
We passed the Sautner’s house and pulled into their neighbors’ who live not more then a few hundred feet from the house with “bad drinking water.” It was here that I met one of the nicest and kind spirited people I have ever met. She didn’t give me any dirty looks, instead, offered me something to eat and the opportunity to hear the side of the story the media doesn’t seem interested in covering.  She was in Gasland, by the way, and is none too happy with Josh Fox.

Read the rest of the article here.

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Have the Oil and Gas Companies Moved Too Quickly For Carroll County?

From The Newark Advocate:

This April, I went with a group to Carroll County, the new hot spot for deep shale drilling here in Ohio. Currently, there are about 20 wells. Soon, there will be thousands. Here's what we saw and were told: 
» Large pipeline clearings lace the countryside, 4 to 5 acre well pads grace the hilltops and huge semis stream through downtown Carrollton. 
» Most gas-oil taxes go to the state with little staying locally. 
» We were told, "Companies are always pushing the envelope." Gas-oil companies are moving so fast, it's hard for local officials to make wise decisions. 
» The Ohio Department of Natural Resources is not addressing community concerns about drilling in wetlands, headwaters and water protection areas. 
» No one seemed to know who would pay for a major community disaster if one were to occur. 
» Skilled workers needed by local businesses are taking jobs as truck drivers and security guards. 
» Rents have doubled because of out-of-state workers. Some residents no longer can afford to rent locally. 
» One farming family with a huge well pad behind their house and a large compressor station nearby said that if they could rethink their leasing decision, they would "fight like hell" to keep it from happening.

Read the rest of the article here.

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Friday, May 25, 2012

The Incredible Hulk is Coming to Ohio to Fight Fracking

Mark Ruffalo is planning on leading the charge at an anti-fracking rally in Columbus on June 17.  Here is what EcoWatch has to say:

Mark Ruffalo is someone worth listening to—and not just because he’s known to occasionally turn into a giant green rage-monster. 
He’s also deeply involved in the growing national movement against the dangerous gas drilling technique hydrofracking (AKA fracking)—a fight he’s taking to Ohio. The organization he helped found, Water Defense, is joining us in supporting a big action against fracking called Don’t Frack Ohio, which is happening in the statehouse in Columbus on June 17. 
Mark just recorded this great video to invite you to join the action because Ohio is a critical state to make a stand—Gov. John Kasich is putting together an energy plan that would gag doctors from talking about fracking related illness, while imposing fewer taxes and creating bigger safety loopholes than just about any other state in the nation. Shutting down Ohio’s fracking wastewater disposal wells will put a big dent in the industry’s ability to expand drilling elsewhere. And a strong, visible anti-fracking movement will help make an impression on our presidential candidates campaign in Ohio this fall.

Here is the video of the Hulk talking about the "Don't Frack Ohio" rally.  Read the rest of the EcoWatch post here.



I wonder if he'll find time while he's here to stop and visit all of the business owners and previously unemployed individuals for whom the shale boom in Ohio has been the best thing that's happened in years.  Maybe he could show all of the facts and scientific evidence he's accumulated which conclusively proves that fracking does all of the horrible things he says it does.

Meanwhile, Energy in Depth is taking a look at the new Ohio regulations that "Don't Frack Ohio" fracktivists are worked up into a lather over.  Not surprisingly, EID has a very different take on the bill that will soon be signed into law by Governor Kasich.

In recent weeks, the Ohio General Assembly has been working to further strengthen and improve what’s already considered one of the most stringent oil and gas regulatory regimes in the country. The current rules, updated in 2010 and signed into law by a Democratic governor, have already been hailed as “meeting its program objectives” and “well managed” by an EPA-supported independent panel of regulators and environmentalists called STRONGER.  Now, building on that reputation, Ohio is poised again to raise the bar even higher. 
Of course, a lot of the talk in the Buckeye State these days is centered on the Utica Shale, a 450-million year-old rock formation that underlies much of the eastern part of the state. To date, 74 Utica wells have been developed in Ohio — without a single environmental incident recorded. In fact, not a single violation has been issued despite more than 250 separate inspections by the Ohio Department of Natural Resources, which shows operators are following the existing rules closely. The companies developing Ohio’s natural gas wells are also voluntarily disclosing information on the fluids they use through a the website called FracFocus.org.  It may be early days for shale here in Ohio, but at least in terms of safety and transparency, the Utica is already a success story. 
Unfortunately, this good news was overlooked by a small number of groups, highlighted in recent articles reporting on lawmakers’ efforts to update the state’s oil and gas rules. These organizations seem focused not on fact, but sensationalist claims aimed at deterring an industry with a demonstrated record of safe, responsible development of Ohio’s natural resources.  As it turns out, the claims being made by these groups are directly at odds with what the legislation proposes. Had a little more research been done, these  stories would have turned out differently.  So let’s set the record straight:

Read the rest of that article here.

It's just another day for the opponents in the fracking debate!

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Friday's Oil & Gas Links - The Mega Edition

Time is very limited for the blog today as we work on completing the Carroll County Energy News for June.  But here are links to several oil and gas stories to help you stay up to date.

Chesapeake prepares to sell 500,000 acres.

The reasons for Chesapeake's problems with shareholders are partially on display in the NBA Playoffs.

Why are investors scrambling to sell their Chesapeake stock?

Energy in Depth disputes recent reports regarding the safety hazards for oil and gas truckers.

Oil and gas workers have children too - an industry worker takes offense at those who demonize the industry for seeking leases in the area of schools.

Free Press Standard updates their article on Select Energy with some focus on the McJunkin Redman Corporation's plans to build in the Carroll County Commerce Park.

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Thursday, May 24, 2012

Pictures: Returning to Carroll County Drilling Site

The Daily Digger returned to the Gallo Road drilling site in Carrollton to see how things looked compared to the video we took on March 19th.  While you can't get very close or see very much of what is actually going on from the road, here are some pics of what the site looks like now.

Why Do Activists Really Oppose the New Ohio Bill?

Activist groups not happy to be legally neutered
The new bill that is progressing through the Ohio House would bring some pretty strict regulations to the oil and gas industry.  One might think that environmental groups would like the bill because of that.

Yet, groups such as the Ohio Environmental Council and the Sierra Club are opposing the bill because of a provision regulating who has the right to sue the oil and gas industry for withholding chemical trade secrets.

From the Times Bulletin:
Jack Shaner of the Ohio Environmental Council said the provision establishing who has standing to sue over trade secrets would make it virtually impossible for most Ohioans to file legal action. 
"Virtually impossible for most Ohioans to file legal action."  Is that accurate?

Another quote from the same article (italics ours):
Under the contested provision, those eligible to sue companies that withhold chemical trade secrets would include property owners, adjacent neighbors, and any person or state agency "having an interest that is or may be adversely affected" by the chemical protected as a trade secret. 
"Any person or state agency 'having an interest that is or may be adversely affected.'"  Doesn't sound like most Ohioans are going to be unable to file legal action to me.

But wait, who isn't on that list?  Oh yeah...activist groups.

Ah, I see - to Shaner and the Sierra Club "most Ohioans" obviously means their organizations.

So this measure will serve to limit frivolous, attention-grabbing, grandstanding lawsuits by activist organizations while allowing Ohio residents who may have a legitimate claim to take appropriate legal action if necessary.  No wonder those organizations are upset.  Some of their favorite tactics are being legally outlawed.

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Ohio Shale Gas Bill Marching Through House Despite Activist Opposition

From the Cleveland Plain Dealer:
Ohio lawmakers moved ahead despite opposition Wednesday with a controversial bill to regulate shale gas production and tinker with renewable energy rules. 
The House Public Utilities Committee voted to approve the measure nearly intact as it arrived from the Senate despite hearing a full day of testimony -- and more than 25 amendments -- from environmental groups warning the new law would not go far enough. 
The bill is expected to easily win approval in the House Thursday in a largely partisan vote as lawmakers race to adjourn before Memorial Day. 
Still missing from the proposal are provisions that would require complete disclosure of all chemicals used during drilling and hydraulic fracturing of shale rock to free natural gas and oil. 
That's what Gov. John Kasich wanted, but lawmakers in the Senate last week eliminated disclosure of drilling lubricants once the well is below the local water table but still thousands of feet above its final depth. 
Hydraulic fracturing, or fracking, requires millions of gallons of water and sand --plus chemicals to kill bacteria and assist with the high-pressure fracturing. 
The bill does not require producers and contractors to reveal those chemicals until after the well is drilled. Opponents want disclosure before so they can have their wells tested. And the bill gives the Ohio Department of Natural Resources up to 60 days to post the chemicals on its web site. 
As now written, the legislation slightly loosens the gag on doctors treating patients injured by these chemicals who have obtained the proprietary chemical formula of the substances. 
Doctors can reveal the formulate to the patient, family and other doctors involved, and now, under an amendment this week, can identify the trade secret chemicals in reports required by law or professional ethics.
Read the rest of the article here.

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Chesapeake Releases Letter to Shareholders

From Business Wire:


Chesapeake Energy Corporation Releases Letter to Shareholders

Board of Directors Outlines Numerous Actions Taken to Enhance Corporate Governance
OKLAHOMA CITY--()--The Board of Directors of Chesapeake Energy Corporation (NYSE:CHK) today released a letter to shareholders addressing certain issues recently raised by the Comptroller of the City of New York, John C. Liu, who oversees New York City pension funds that beneficially own less than 0.25% of Chesapeake’s common shares outstanding. The letter, which outlines numerous recent actions the Board has taken to enhance Chesapeake’s corporate governance and further strengthen its financial position, was issued in advance of the Company’s Annual Meeting of Shareholders to be held Friday, June 8, 2012. The full text of the letter follows:
May 23, 2012
Dear Fellow Shareholder:
You may have recently seen a letter from the Comptroller of the City of New York, John C. Liu, who oversees New York City pension funds that beneficially own less than 0.25% of Chesapeake’s common shares outstanding. While the Board of Directors appreciates constructive input from our shareholders, we wish to address issues raised by Mr. Liu and reiterate important steps the Board and Company have been taking as we approach our 2012 Annual Meeting of Shareholders.
CHESAPEAKE’S BOARD HAS IMPLEMENTED SIGNIFICANT COMPENSATION CHANGES AND IMPROVED GOVERNANCE WITH INTENTION TO SEPARATE POSITIONS OF CHAIRMAN AND CEO
As noted in our 2012 proxy statement, we have made significant changes to the Company’s executive compensation program in consultation with an independent compensation advisor and, on May 18, 2012, we announced that the Board adopted a new compensation arrangement for outside directors. These measures are responsive to shareholder feedback and ensure that Chesapeake’s compensation programs are fully aligned with peers while reinforcing the link between directors’ and executive officers’ interests and those of shareholders. Among the measures we have taken over the past year are:

Harrison County Hub Site Officially Announced

From the Times Leader:
North Township Trustee Danny Henry attended the Harrison County Board of Commissioners Wednesday, stating that he had been authorized by Utica East Ohio Midstream to officially announce that the company will build the Harrison hub facility on Ohio 151, just northwest of Scio. 
Chesapeake Energy Corp. last week announced the execution of definitive agreements to build the largest integrated midstream service complex in eastern Ohio. Chesapeake, through affiliates of its wholly owned subsidiary, Chesapeake Midstream Development, L.P., has entered into a partnership with M3 Midstream LLC and EV Energy Partners, L.P. to develop the midstream services complex. 
The complex will provide necessary infrastructure to process natural gas and natural gas liquids (NGL) in the liquids-rich Utica Shale play in eastern Ohio. The complex will consist of natural gas gathering and compression facilities constructed and operated by CMD, as well as processing, NGL fractionation, loading and terminal facilities constructed and operated by Momentum. The state-of-the-art cryogenic processing facility will be located in Columbiana County and have an initial capacity of 600 million cubic feet per day. NGLs will be delivered to a central NGL hub complex in Harrison County that will feature an initial NGL storage capacity of 870,000 barrels and fractionation capacity of 90,000 barrels per day, as well as a substantial rail-loading facility.
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Natural Gas Prices Beginning to Bounce Back - Is That Enough to Brace Up Chesapeake?

From Seeking Alpha:
The price of natural gas continues to recover: The short-term future price has reached its highest level since the end of January 2012. This price hike in natural gas is also reflected in the spike in United States Natural Gas (UNG). Will this rise in natural gas help curb the fall of Chesapeake Energy (CHK)? 
Chesapeake has been on the news lately, mainly due to the downgrade in the company's stock following the $4 billion short-term loan the company had taken at an 8.5% rate to stay afloat. 
During April and May, the price of natural gas bounced back from its tumble during the first quarter of the year. During May, the Henry Hub short-term future increased by 15.8% and the price of United States Natural Gas rose by 17%. The natural gas storage levels are still high (the natural gas weekly update will be published by EIA tomorrow), even though the injections are below last year's injections; I still think natural gas prices won't keep their upward trend for long, but let's assume for now natural gas will continue to trade up. Will this rise curb the downward trend of Chesapeake Energy? After all, Chesapeake is the second-largest natural gas producer in the U.S., so there should be some strong positive effects on the recent rise in natural gas prices.
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University at Buffalo Removes "Peer-Reviewed" Label From Shale Study

University says "peer-reviewed" label was misleading
We previously referenced a University at Buffalo study that suggested environmental problems in the PA Marcellus Shale "were isolated, mostly minor, and on decline."

Now the university has removed the label "peer-reviewed" from the study.

From WGRZ Channel 2:
The University at Buffalo has removed the "peer-reviewed" label from a document touting a recent study on natural-gas drilling and hydraulic fracturing, acknowledging that it may have given an "incorrect impression." 
Last week, the UB Shale Resources and Society Institute released its first study, which analyzed more than three years of regulatory violations in Pennsylvania's portion of the gas-rich Marcellus Shale formation. The authors concluded the number of environmental fouls compared to the total number of wells drilled dropped from 58.2 percent in 2008 to 30.5 percent in 2010. 
Originally, the university touted the study as "peer reviewed, a process of self-regulation to maintain standards and provide greater credibility." By Wednesday, an "editor's note" was attached to the top of the original news release that detailed the study. 
"An earlier version of this story described the report as 'peer-reviewed,'" the note reads. "This description may have given readers an incorrect impression." 
In general, peer-reviewed studies are submitted to a scholarly journal and subjected to a lengthy oversight process by scholars. 
The news release was edited to read that drafts of the UB study were "reviewed by several individuals with expertise in related areas, who provided comments to the authors." The edit was made to "more accurately describe the process by which the report's authors gathered comments before finalizing their report," according to the editor's note.  
UB spokesman John DellaContrada said in an email Wednesday: "We clarified the term 'peer-reviewed' as described in the press release after receiving feedback from faculty."

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Forum at Walsh University Considers Ohio's Energy Future

From the Canton Repository:

The Utica shale is the most talked-about segment of Ohio’s energy future, but it’s just part of the puzzle, one expert told a Walsh University crowd Wednesday night. 
As dozens of energy companies try to reap the benefits of oil and natural gas trapped 6,500 feet underground within the Utica shale, farmers on the surface are looking at plants that will be used as biomass for energy generation in the future, said Dale Arnold, director of energy utility and local government policy for the Ohio Farm Bureau Federation. 
“They won’t be growing corn and beans,” Arnold said. Those plants don’t have the complicated hydrocarbons that companies are looking for to replace coal and natural gas as fuels burned to generate electricity. 
But biomass and shale oil are just some of the many options being considered as planners ponder the energy future, Arnold said. Energy demand will increase in the future. Arnold said there is no silver bullet to solve the problem, but there is a “silver buckshot” option. 
Arnold was one of four speakers who made presentations Wednesday during an energy development forum organized by U.S. Rep. Jim Renacci, R-Wadsworth. 
About 165 people attended, with many of them coming from area businesses that are part of the growing drilling business. There also were opponents of drilling who raised questions with some of the panelists.

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Wednesday, May 23, 2012

UPDATED: New Quick Links of the Day

UPDATES:

Baker opens new office in Canton to serve oil and gas industry in the area.

Learn about the history of shale gas development.

Columbiana County Port Authority leases land to Chesapeake.

Ohio State Medical Association doesn't agree with provision protecting fracking chemical disclosure.

PA man appeals DEP's ruling that well water was not contaminated by gas drilling.

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As More Sources Attempt to Obtain FACTS About Fracking, the Question is: Do the FACTS Even Matter?

From Wealth Daily:
Earlier this month, the U.S. Environmental Protection Agency said drinking water is safe to consume in a small Pennsylvania town that has attracted national attention after residents complained about hydraulic fracturing for natural gas. 
The EPA recently completed testing water at 61 homes in Dimock, Pennsylvania, in the Marcellus Shale region, where residents have complained since 2009 of cloudy, foul-smelling water. 
Dimock became popular after amateur film-maker Josh Fox released the documentary Gasland, which highlights footage of residents who were able to light their tap water on fire just by holding a flame next to a running spigot. 
It should be noted that methane has been found seeping to the surface in parts of the Marcellus Shale in Pennsylvania since the late 1790s. 
According to historical records of Susquehanna County, Pennsylvania: 
Early reports from those who settled the area indicate that plenty of methane (in addition to brine) found its way up to the surface as well — so much methane, in fact, that records suggest the water was flammable dating as far back as 1795. 
Susquehanna County isn’t the only place in the Marcellus where this has been occurring for centuries... 
William Hart is credited with drilling the world’s first natural gas well in 1825 in Fredonia, New York. (Fredonia is about a four-hour drive northwest from Susquehanna County.) 
Drilling a well 27 feet deep into shallow shale rock, Hart struck gas. 
How did he know where to drill? 
He listened to the Indians, who identified a place known as "Burning Creek" where methane had been bubbling up and igniting for decades. 
I doubt any of this will change the minds of the anti-fracking crowd. They're true believers. 
As I’ve said many times before, if God Himself came down from the heavens and declared fracking safe — and that it would be done in the future using fairy dust, unicorns and rainbows — the environmentalists would accuse Him of being bought off by the fossil fuel industry.
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There is no question that fracking is the cause of the moment.  I don't think any amount of facts revealing fracking to be safe when done correctly will convince the fracktivists to change course.  Wrong or right, they are going to be stubborn and continue seeking attention for themselves and their cause, claiming as fact any theory that says fracking is risky.  On the other hand, the oil and gas industry is never going to accept any report, study, or ruling that states fracking contributed to contaminated water - and they have the means and media resources to throw facts and assertions out and muddy the issue regardless of what the other side of the debate produces.
Sooner or later, the facts are going to make things clear.  So far, final conclusions of tests and studies and reports by government agencies have consistently stated that fracking has not contaminated water and is safe.  Every time, the fracktivists claim the test was mishandled or just allege corruption - but that argument is already starting to wear thin.  Meanwhile, the industry alleges the same bias and corruption when considering the conclusions of any study that declares fracking dangerous, for the very valid reason that these studies are consistently bought and paid for by activist groups.  Of course, studies that are leaned on by the oil and gas industry are paid for by the industry.
The odds are that whatever side you currently fall on in this debate is the side you'll stay on, regardless of what the facts reveal.  That's typically what happens when money and emotion enter into a debate and overpower all sense of reason or objectivity. 
For our part, we'll just continue to try and report what gets published on the fracking debate.  If you are interested in gathering information and making an educated decision about whether you support or oppose oil and gas drilling, hopefully we can help you to access the information you need to do so.

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Old Leases Preventing Columbiana County Landowners From Cashing In on Shale Boom

From the Cleveland Plain Dealer:
An invisible line traces a 25,000-acre oval in the hills of Columbiana County that separates the haves from the have-nots. 
Outside the line are instantly wealthy corn, soybean and dairy farmers. Inside are folks waiting for their windfall. 
Dozens of the landowners are blocked from cashing in on energy-rich shale below their property because of an underground gas storage field between the more than mile-deep shale and their pastures. 
Many of the farmers were surprised to learn that their acres sit on top of a sandstone repository called the Brinker Storage Field that is leased by Columbia Gas Transmission.Jill McNicol, a veterinarian, and her husband Patrick, a high school math teacher, didn't know about the storage field when Oklahoma City-based Chesapeake Energy swept through Columbiana County in the summer of 2010. The energy giant moved at lightning speed, nailing down as much promising shale terrain as possible. 
The McNicols, who live on a rolling spread they call Cool Springs Farm with their two children, five dogs, some sturdy Connermara ponies and other animals, agreed on a signing bonus from Chesapeake. They were in line for more than $375,000 to lease the mineral rights under their 65 acres near the village of Leetonia, about 25 miles south of Youngstown. But the deal was on the condition that Chesapeake got clear title to the mineral rights. 
When Chesapeake circled back for more thorough property research, it found that land in the Brinker region was encumbered by long-standing gas leases.
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